Big Sky Industrial Inc. (NASDAQ: USEG)

U. S. Energy Corp. is an industrial gas and energy company focused on the acquisition and development of industrial gases, oil and natural gas producing properties in the continental United States. The company’s principal properties and operations are located in the Rockies region (Montana and Wyoming), the Mid Continent (Oklahoma, and North and East Texas), and the Gulf Coast region. It participates in oil and natural gas projects primarily as an operator and is developing an industrial gas project on the Kevin Dome in Toole County, Montana. The company’s portfolio consists mainly of operated, producing, oil focused assets, and it has divested legacy oil and natural gas holdings to redirect capital toward the industrial gas initiative. The company’s fiscal year ends on December 31. The company continually evaluates strategic alternatives, including acquisitions and divestitures, to enhance stockholder value.

The company generates revenue primarily from the sale of oil and natural gas produced from its operated properties. As of December 31, 2025, its average net production was 451 barrels of oil equivalent per day, comprised of 75% oil and 25% natural gas. The company’s proved reserves totaled 1,451,821 barrels of oil equivalent with a standardized measure of value of $16.7 million based on an oil price of $65.34 per barrel and a natural gas price of $3.39 per Mcf. In addition, the company received net cash proceeds of approximately $5.2 million from the divestment of South Texas assets in April 2024, $6.8 million from the sale of East Texas properties in November 2024, and $1.2 million from the disposition of Mid Continent properties in Kansas and Oklahoma, which were used to fund the development of the Montana industrial gas project and for general corporate purposes. While the industrial gas project is still under development and does not yet produce sales, it is intended to generate future revenue from carbon dioxide and waste gases once processing facilities and offtake agreements are completed.

The company operates through the following segments.

• Oil and Natural Gas Operations: This segment consists of the company’s operated oil and gas properties where it holds varying working interests, and as of December 31, 2025 it operated 231 gross (209 net) producing wells on 160,714 gross acres and 134,025 net acres, delivering average net production of 451 barrels of oil equivalent per day from proved reserves of 1,451,821 barrels of oil equivalent valued at $16.7 million using oil price of $65.34 per barrel and natural gas price of $3.39 per Mcf.

• Industrial Gas Operations: This segment encompasses the Kevin Dome project in Toole County, Montana, where the company holds approximately 144,000 acres acquired in June 2024 plus an additional 24,000 net acres acquired in January 2025, has drilled and completed two industrial gas wells in 2025, is advancing the detailed design of a processing facility, gathering and transportation system, power infrastructure, is securing rights of way and injection agreements, and is negotiating an offtake agreement with a third party for future carbon dioxide and waste gas sales.

Within the oil and natural gas industry, U. S. Energy Corp. competes with independent operators and small to intermediate sized companies for property acquisitions and operational services, while its strategy of acquiring operated, producing assets and divesting non core positions aims to enhance liquidity and focus capital on high growth areas such as industrial gas. The company’s competitive advantages include its operated property base, a diversified geographic footprint spanning the Rockies, Mid Continent and Gulf Coast regions, and its early stage position in the emerging industrial gas market on the Kevin Dome, which provides potential for future revenue streams distinct from traditional hydrocarbon sales. Its focus on operated properties allows direct control over development timing and capital expenditures, differentiating it from partners that rely on third party operators.

The company sells its oil and natural gas production to competing buyers, including large oil refining companies and independent marketers, under agreements tied to prevailing commodity prices with regional differential adjustments. Its industrial gas project is under development and, once completed, intends to supply carbon dioxide and waste gases to an offtake partner whose specific name has not been disclosed in the filing. In addition, the company’s divestiture transactions in 2024 involved sales to various private equity backed firms and energy companies, although the purchaser identities are not detailed in the report. The company has no significant delivery commitments as of the latest reporting date.