US Energy to reduce workforce by 15%

US Energy Corp. (Nasdaq: USEG), in light of the ongoing oil price environment, has taken measures to reduce general and administrative (G&A) costs by 20%. The cost reductions include a 15% reduction in workforce, along with a reduction in annual compensation for all remaining employees.

All officers and directors of the company have agreed to take a 20% cut in salaries and fees, respectively. The total compensation savings is in excess of $600,000 on an annualized basis. The company also anticipates a further reduction of $500,000 in G&A costs by the end of 2015.

US Energy is a natural resource exploration and development company with a primary focus on the exploration and development of its oil and gas assets. The company also owns the Mount Emmons molybdenum deposit located in west central Colorado.

In response to US Energy’s cost-cutting measures, analysts from Global Hunter Securities commented, “Right sizing the workforce can be a difficult decision, but the current low price environment requires a sharp focus on the bottom line and strict controls on controllable costs. The reduction in fixed costs should help USEG preserve its balance sheet and provide incremental liquidity as the company seeks to grow through the current downturn.”

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