US Energy (USEG) stock rocketed higher on Monday after the integrated energy company announced a five-year helium sales agreement with a global, investment-grade industrial gas company. The company noted that the helium in this deal will be produced at its Big Sky Carbon Hub in Montana.
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Here’s a quick breakdown of the new helium deal US Energy just signed.
- Investment-Grade Counterparty
- Five-Year, 100% Take-or-Pay Contract
- Fully Contracted Phase 1 Helium Volumes
- Fixed $285/MCF Plant-Gate Pricing
- Annual CPI-Linked Price Escalation
- Year-Three Price Redetermination with Right of First Refusal
Ryan Smith, president and CEO of US Energy, said, “This contract establishes long-term, contracted helium revenues and meaningfully de-risks Phase 1 commercial operations at Big Sky. It also reflects the strength we’re seeing in the helium market today, where constrained global supply and increasing demand for reliable volumes are supporting a step up in long-term pricing.”
US Energy Stock Movement Today
US Energy stock was up 52.09% in premarket trading on Monday, following a 2.77% rally on Friday. The shares have gained 0.44% year-to-date but were still down 20.76% over the past 12 months.
With today’s news came heavy trading of USEG stock, as more than 75 million shares changed hands. For perspective, the company’s three-month average daily trading volume was about 5.43 million shares.
Is US Energy Stock a Buy, Sell, or Hold?
Turning to Wall Street, traditional analyst coverage of US Energy stock is lacking. Fortunately, TipRanks’ AI analyst Spark has it covered. Spark rates USEG stock as Neutral with a 90-cent price target. It cites “widening TTM losses and significant cash burn, plus concerning TTM balance-sheet figures” as reasons for this stance.
