(By Balaseshan) U.S. Energy Corp. (NASDAQ:USEG), a natural resource exploration and development company, said it will sell its Remington Village Apartment Complex located in Gillette, Wyoming, by entering into a Letter of Intent with an undisclosed buyer.
The buyer has offered to pay $16.0 million for the Apartment Complex. The Letter of Intent (LOI) is non-binding and is subject to due diligence and the execution of a purchase and sale agreement (PSA) which is expected to take place within 15 days.
U.S. Energy expects to record a non-cash impairment of $1.97 million in the second quarter of 2012. After selling costs, the company expects to net $15.76 million from this sale and will retire the $9.8 million note related to this asset with the proceeds from the sale.
Under the terms of the LOI, the purchase is not subject to third party financing and closing is anticipated to take place within 90 days of signing the PSA.
Remington Village is classified in the company's historical financial statements as held for sale and its operations have been reflected as discontinued operations. The current cost basis for Remington Village is $17.73 million.
Chief Executive Keith Larsen said the divestiture of this non-core asset will allow the company to significantly enhance its balance sheet and also allow it to further direct focus on managing and growing its oil and gas portfolio.
USEG is trading up 3.02% at $2.39 on Thursday. The stock has been trading between $1.87 and $4.60 for the past 52 weeks.