U.S. Energy Corp. (USEG) experienced a significant surge in its stock price Monday, climbing 20.8% to close at $1.12 on heavy trading volume, after the company announced a five-year helium supply agreement with an undisclosed global industrial gas company. The deal effectively secures a buyer for the output from its planned Big Sky Carbon Hub in Montana, transforming the project from a concept into a revenue-generating venture.
The Houston-based energy firm, which is pivoting toward industrial gases, revealed that the contract covers up to 1.2 million cubic feet of helium per month at a fixed price of $285 per thousand cubic feet. The agreement includes inflation adjustments beginning in March 2028. At maximum monthly output, the base price translates to approximately $342,000 per month, or roughly $4.1 million annually, before any future price escalations.
The transaction is structured as a take-or-pay arrangement, meaning the buyer is obligated to either take delivery of the contracted volumes or pay for them. U.S. Energy noted that the counterparty will handle pickup at the plant, effectively shifting downstream costs for shipping, processing, and distribution to the buyer. The company’s CEO, Ryan Smith, described the deal as a “defining milestone” that “meaningfully de-risks” the first phase of commercial operations at Big Sky.
Shares of U.S. Energy traded as high as $1.64 during the session before settling back, with turnover ballooning to approximately 183 million shares. The company’s market capitalization stood near $38.5 million. The stock’s rally came on the heels of an expanded $20 million senior secured debt facility closed on April 20, which, combined with earlier equity proceeds, is expected to fully fund Phase 1 of the Big Sky project. Management also announced a pause on new draws from its equity line of credit, a move intended to address dilution concerns.
Helium, while not as large a market as oil or copper, remains a critical industrial gas used in laboratories, specialty gas manufacturing, fiber optics, semiconductors, MRI machines, and aerospace applications. According to the U.S. Geological Survey, domestic Grade-A and gaseous helium sales totaled 81 million cubic meters in 2025, representing approximately $970 million. Recent supply disruptions, including issues at Qatar’s natural gas operations, have pushed helium spot prices higher, with some reports indicating a doubling in prices earlier this year.
Despite the positive news, U.S. Energy’s financial performance remains challenged. For the full year 2025, the company reported revenue of $7.35 million, a steep 64% decline from 2024, and a net loss of $14.4 million. The drop was primarily attributed to falling oil and gas production following asset sales. The company’s industrial gas segment has yet to contribute meaningfully to revenue, and its annual report notes that the assets are still in an early phase and may not achieve commercially viable volumes.
Execution risks persist. The company has flagged processing and transportation costs, commodity price volatility, and financing challenges as potential headwinds. Separately, U.S. Energy is pursuing carbon dioxide recovery and sequestration, with plans to seek Section 45Q tax credits. The company is moving forward with Monitoring, Reporting and Verification plans with the U.S. Environmental Protection Agency, which are critical for qualifying for those credits.
Investors will get further clarity on the project’s timeline on May 7, when U.S. Energy reports first-quarter results. The focus will likely be on plant construction progress, EPA approvals, and any updated timeline for the Big Sky Carbon Hub, rather than the company’s legacy oil operations.
