U.S. Energy Development Corporation Reflects on Historic Year of Growth
Oil and gas direct investment leader reports most successful year in company’s 40-year history
ARLINGTON, TEXAS – In spite of a global pandemic and oil prices reaching historic lows in 2020, U.S. Energy Development Corporation (U.S. Energy), an exploration & production (E&P) firm which provides direct investments in energy, enjoyed its most successful year in business since its founding in 1980.
At the onset of COVID-19 and resulting decline in energy demand, oil prices plummeted to negative $37 per barrel in April 2020. During this time, the firm took immediate and swift action to protect its partners. Measures performed by U.S. Energy included temporarily shutting-in unprofitable wells and reducing corporate expenses by 30%. Additional operational transparency activities allowed U.S. Energy to view, in real-time, the economic profitability of its operated wells. In total, these actions allowed U.S. Energy to remain free cash flow positive, while reducing the potential for capital losses. In response to the firm’s strong financial position, U.S. Energy borrowing capacity was increased by $12 million during 2020.
In 2020, U.S. Energy enjoyed multiple successes in its oil and gas operations, as well as its capital deployment. In the early part of the year, U.S. Energy’s ability to delay the completion of more than $50 million in assets allowed the firm to defer production until higher oil prices could be realized. The firm also reduced completion costs by an average of 25% on its new operated wells. In the second half of 2020, as the market fundamentals for oil and natural gas production improved, U.S. Energy strategically deployed more than $40 million to acquire ownership interests in fast-cycle, high-quality energy assets in the Permian and Powder River Basins. Most of U.S. Energy’s newly acquired assets are scheduled to go into production in early 2021. In total, U.S. Energy reviewed more than 200 new projects with over 20 offers submitted. By the end of 2020, U.S. Energy grew its production by approximately 15%.
“Rather than focusing on the obstacles created by the pandemic, we were focused on continuing to provide value and strategic opportunities for our partners,” said Jordan Jayson, chairman and CEO, U.S. Energy. “Our investor-first mentality, coupled with our ability to remain flexible and empathetic in times of uncertainty, allowed us to remain innovative in our approach to energy investments and projects. We stand committed to providing profitable opportunities to our investment partners.”
In addition to its record year, U.S. Energy updated its approach to Environmental Stewardship, Social Responsibility and Corporate Governance (ESG) criteria, which includes a set of standards that the firm uses in its daily activity and decision making process. In 2020 alone, U.S. Energy saved 300,000 barrels of fresh water, reduced fuel usage by 34,736 gallons, lowered carbon emissions by 389 tons and implemented an ESG committee within the firm. U.S. Energy is one of the first direct investment companies in energy to implement such comprehensive ESG standards.
“Energy production does not need to come at the cost of the environment. We aim to invest in valuable projects, while simultaneously prioritizing the reduction of our environmental footprint,” said Matthew Iak, executive vice president and director, U.S. Energy. “As an oil and gas direct investment firm, it is our responsibility to make environmentally conscious decisions and incorporate ESG standards into processes and plans.”
U.S. Energy is a leader in direct energy investment design and structure providing multiple direct investment funds annually, which solve specific income and tax planning needs. The firm is credited as an innovator of several new direct investment structures, most recently pioneering an Opportunity Zone Fund in energy.
About U.S. Energy Development Corporation
U.S. Energy Development Corporation is a privately held oil and gas operator established in 1980 which provides direct investments in energy. The firm was named the Best Investment Company in North America by World Finance in its 2020 Oil & Gas Awards. Over the past 40 years, the firm has invested in, operated and/or drilled more than 2,400 wells in 13 states and Canada. The firm has deployed more than $1.5 billion on behalf of its partners. Today, U.S. Energy is one of the largest sponsors of direct energy investments.
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