US Energy Corp (market cap $4 million) has moved its head office from Denver to the Galleria area. The company has revenues of $6 million, primarily from producing assets in North Dakota and Texas.
The company has had a rough couple of years. During 2018, the board of directors consisted of only four directors, including Chairman & CEO David Veltri. As a result the board often ended up deadlocked on important votes.
43% of the company is owned by APEG II, an Austin-based investment firm. They sent a letter to the board on February 2019, urging the company to create a seven-person independent board, establish a business plan and reduce general and administrative expenses. They also happened to be the company’s secured lender at the time.
Two weeks later, APEG withdrew access to the bank accounts and the board (excluding Mr Veltri) voted to fire the CEO for cause for using company funds in excess of authority granted by the board. The CEO and APEG then sued each other on various issues. The litigation takes up three pages of the recent quarterly report!
In May 2019, the Colorado Federal Court issued an order, appointing Randel Lewis as Custodian of the company and interim CEO.
CFO becomes CEO
On December 10, the company appointed CFO Ryan Smith to be its new CEO. Mr Smith will continue to be the CFO, a role he has held for the past three years.
The company currently has a share price of 31 cents. Back in June it was notified by Nasdaq that it was not in compliance with the $1 minimum share price. It was granted 180 days to comply. That expires on December 16, 2019.
While US Energy was moving its head office to Bering Drive, another small E&P company, Lilis Energy, was moving its head office from Bering Drive to Fort Worth. Lilis also has a troubled history.
The company only moved to Houston from San Antonio in June 2018. The company has a market cap of $12 million. It, too, has a delisting notice from NYSE for having a share price below $1.
Joe Daches was recently appointed CEO, having served in an interim capacity since June 2019. Like Ryan Smith at US Energy, he is also the CFO of the company as well.
You can see the complete list of Houston-area public companies on my blog here.
SEC filing – US Energy Corp – new CEO