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Newsroom – Permian Co-Investment

U.S. Energy Announces Participation in a $77 Million Development of its ‘Echo’ Project in New Mexico

April 30, 2019 – Arlington, Texas – U.S. Energy Development Corporation, one of the largest sponsors of direct-ownership oil and gas investments, has announced that the company is participating in a $77 million development of its Echo project acreage. The project will co-invest with three other companies and includes an interest in 8 oil wells for a net investment of $5.5 million. Current development is expected to create additional cash flow while potentially increasing the future divestment value on the more than 2,700 net acres owned in the Echo project.

In 2018, U.S. Energy acquired the Echo project on behalf of two of the company’s Acquisition Funds, the Strategic Energy Income Funds IV and V LP. Following the initial sale of a small portion of assets to Devon Energy, the company has moved into the development phase whereby it is participating in production from new wells. Initial revenue from the 8 wells is expected to be received in July 2019 (footnote 1).

Oil development in New Mexico has risen lately; with light, tight oil production increasing by about 70% year-over-year, from 419,000 b/d in November 2017 to 703,000 b/d in November 2018 (footnote 2), according to Rystad Energy, an independent energy research and business intelligence company. In 2018, New Mexico had the fastest growth rate among all major states with significant shale activity.

“Our confidence in the Permian Basin in New Mexico continues be supported by recent production growth and new investment,” commented Matthew Iak, who is Executive Vice President and Director for U.S. Energy (footnote 3). “The Echo project is one example of how U.S. Energy can identify and acquire a project in a strategically located area, tap into existing relationships to create immediate divestments and distributions, then deploy our own operations team to drill and/or participate in projects which create additional value.”

The Strategic Energy Income Fund V is U.S. Energy’s fifth in a series of direct investment acquisition funds (footnote 4).

A leader in oil & gas direct investments for clients with tax planning needs, U.S. Energy blends operational and financial innovation with a forward-looking approach.  Since 1980, U.S. Energy has invested in, operated, and/or drilled more than 2,400 wells in 13 states and Canada; deploying more than $1.4 billion on behalf of our partners.  Today U.S. Energy oversees daily production in excess of 7,500 barrels of oil equivalent (BOE) and holds numerous drilling records across south Texas.

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Important Disclosures
Past performance is not an indication of future results. This information contained in this document is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any security. Such offers can only be made by a Private Placement Memorandum to accredited investors. Oil and gas investments involve a high degree of risk and are not suitable for all investors. You should purchase these securities only if you can afford a complete loss of your investment. Please refer to the Risk Factors section of any specific Private Placement Memorandum. The equipment pictured in this brochure is not owned by, and will not be owned by U.S. Energy Development Corporation or its partnership(s), unless otherwise noted. The assets pictured within this brochure accurately represent the assets U.S. Energy or its partnerships may own. Please refer to the Areas of Operation section of any specific Private Placement Memorandum.

footnote 1 – Distributions are not guaranteed as the completion and/or operation of wells in the future is uncertain and may not come to pass.
footnote 2 – https://www.rystadenergy.com/newsevents/news/press-releases/NAPE-Special-Focus-Three-trends-that-will-sway-shale-growth-in-2019/
footnote 3 – Mr. Iak is President of Westmoreland Capital Corporation. Securities sponsored by U.S. Energy Development Corporation offered through Westmoreland Capital Corporation, Member FINRA/SIPC.
footnote 4 – The offering referenced is for Accredited Investors only.

Securities sponsored by U.S. Energy Development Corporation are offered through Westmoreland Capital Corporation (CRD 11469), Member FINRA/SIPC – an affiliate of U.S. Energy Development Corporation.