XML 71 R21.htm IDEA: XBRL DOCUMENT
v2.4.1.9

COMMITMENTS, CONTINGENCIES AND OTHER | 12 Months Ended
--- | ---
Dec. 31, 2014
COMMITMENTS, CONTINGENCIES AND OTHER [Abstract] |
COMMITMENTS, CONTINGENCIES AND OTHER | M. COMMITMENTS, CONTINGENCIES AND OTHER Legal Proceedings From time to time, we are party to certain legal actions and claims arising in the ordinary course of business. While the outcome of these events cannot be predicted with certainty, management does not expect these matters to have a materially adverse effect on our financial position or results of operations. Following are currently pending legal matters: Water Rights Litigation –Mt. Emmons Project On July 25, 2008, we filed an Application for Finding of Reasonable Diligence with the Colorado Water Court ("Water Diligence Application") concerning the conditional water rights associated with the Mt. Emmons Project (Case No. 2008CW81). The conditional water decree ("Decree") required the Company to file its proposed plan of operations and associated permits with the Forest Service and BLM within six years of entry of the Decree, or within six years of the final determination of the pending patent application, whichever occurred later. The BLM issued the mineral patents on April 2, 2004. Although the issuance of the patents was appealed, on April 30, 2007, the United States Supreme Court made a final determination (by denial of certiorari) upholding BLM's issuance of the mineral patents. The Company filed a plan of operations on March 31, 2010. On August 11, 2010, High Country Citizen's Alliance, Crested Butte Land Trust and Star Mountain Ranch Association, Inc. ("Opposers") filed a motion for summary judgment alleging that the plan of operations did not comply with the USFS regulations and did not satisfy certain "reality check" limitations contained in the Decree. On November 24, 2010, the District Court Judge denied the Opposers's motion for summary judgment and held that Company had until April 30, 2013 to comply with the reality check provision of the Decree, which is six years after the Supreme Court denied certiorari in the judicial proceeding. On October 10, 2012, the Company filed a Plan of Operations with the USFS in compliance with the reality check provision of the Decree. The question of the adequacy of the Water Diligence Application is pending. We have settled with every Opposer except Crested Butte Land Trust. The claims of Crested Butte land Trust have been referred to the Colorado Water Court for further proceedings. Brigham Oil & Gas, L.P. On June 8, 2011, Brigham Oil & Gas, L.P. ("Brigham"), as the operator of the Williston 25-36 #1H Well, filed an action in the State of North Dakota, County of Williams, in District Court, Northwest Judicial District, Case No. 53-11-CV-00495 to interplead to the court with respect to the undistributed suspended royalty funds from this well to protect itself from potential litigation. Brigham became aware of an apparent dispute with respect to ownership of the mineral interest between the ordinary high water mark and the ordinary low water mark of the Missouri River. Brigham suspended payment of certain royalty proceeds of production related to the minerals in and under this property pending resolution of the apparent dispute. Energy One owns a working interest, not royalty interest, in this well so no funds owed to Energy One have been withheld. On January 28, 2013, the District Court Northwest Judicial District issued an Order for Partial Summary Judgment holding that the State of North Dakota as part of its title to the beds of navigable waterways owns the minerals in the area between the ordinary high and low watermarks on these waterways, and that this public title excludes ownership and any proprietary interest by riparian landowners. This issue has been appealed to the North Dakota Supreme Court. Energy One's legal position is aligned with Brigham, who will continue to provide legal counsel in this case for the benefit of all working interest owners. Quiet Title Action – Dimmit County, TX On October 4, 2013, Dimmit Wood Properties, Ltd. ("Dimmit") filed a Quiet Title Action against Chesapeake Exploration, LLC ("Chesapeake"), Crimson Exploration Operating, Inc. ("Crimson"), EXCO Operating Company, LP, OOGC America, Inc., Energy One and Liberty Energy, LLC ("Liberty") (jointly referred to as "Defendants") concerning an 800.77 gross acre oil and gas lease ("Lease") located in Dimmit County, Texas. Crimson, Energy One and Liberty received an assignment from Chesapeake of the Lease, in which Energy One has a 30% working interest. Dimmit alleges that the Lease has terminated due to the failure to achieve production in paying quantities. On October 28, 2013, the Defendants filed an answer, asserting that production in paying quantities was achieved in the primary term of the Lease with an existing producing well and that the Lease has remained in good standing and has not terminated. The Defendants also filed Counterclaims against Dimmit, including but not limited to breach of contract. No new wells have been drilled by the Defendants on the Lease. Crimson, Energy One and Liberty filed a declaratory judgment action in the District Court of Dimmit County in 2014 regarding similar allegations relating to a lease on adjacent acreage that was also assigned to those parties by Chesapeake. The lessors in that case are Dr. Darrell Willerson, Sue Willerson and Willerson Energy Partners, L.P. Crimson, Energy One and Liberty are seeking a determination from the court that the lease remains valid and in effect. Mining Permits The Mt. Emmons molybdenum property is located on fee property within the boundary of USFS land. Although mining of the mineral resource will occur on the fee property, associated ancillary activities will occur on USFS land. USE submitted a full mine plan of operations in part to satisfy the requirements of the conditional water rights decree on October 10, 2012. Under the procedures mandated by National Environmental Protection Act ("NEPA"), the USFS will prepare an environmental analysis in the form of an Environmental Assessment and/or and Environmental Impact Statement to evaluate the predicted environmental and social economic impacts of the proposed development and mining of the Mt. Emmons molybdenum property. The NEPA process provides for public review and comment of the proposed plan. Obtaining and maintaining the various permits for the mining operations at Mt. Emmons will be complex, time-consuming, and expensive. Changes in a mine's design, production rates, quality of material mined, and many other matters, often require submission of the proposed changes for agency approval prior to implementation. In addition, changes in operating conditions beyond our control, or changes in agency policy and Federal and State law, could further affect the successful permitting of the mine operations. Although USE believes that the plan of operations for Mt. Emmons will ultimately be approved by the USFS, this cannot be guaranteed. Moreover, the timing and cost, and ultimate success of the mining operation, cannot be predicted. 401(K) Plan The Board of Directors of USE adopted the U.S. Energy Corp. 401(K) Plan in 2004. USE matches 50% of an employee's salary deferrals up to a maximum contribution per employee of $4,000 annually. USE expensed $48,000, $46,000, and $54,000 for the years ended December 31, 2014, 2013 and 2012, respectively, related to these contributions. Executive Officer Compensation Executive Retirement Plan. On October 20, 2005, the Board of Directors adopted an Executive Retirement Policy (the "Retirement Plan") for the then Chairman/CEO, President/COO and CFO/Treasurer/V.P. Finance. Under the terms of the Retirement Plan, upon retirement, the executive will receive payments equaling 50% of the greater of (i) the amount of compensation the officer received as base cash pay on his/her final regular pay check or (ii) the average annual pay rate, less all bonuses, he/she received over the last five years of his/her employment with Company. To be eligible for this benefit, the executive officer must have served in one of the designated executive offices for 15 years, reached the age of 60 and been an employee of USE on December 31, 2010. During 2007, the Board of Directors voted unanimously to fund the retirement benefit for the then active officers who qualified under the plan. The funding is held in a separate trust account that is managed by an independent trustee and is subject only to the claims of creditors in the event of insolvency of USE. At December 31, 2014, USE had funded the executive retirement account with the amount calculated by a third party actuary, of $1.3 million, which is recorded as Other Long Term Assets. Additional amounts will be deposited annually until each executive's 60th birthday. On June 30, 2011, the CFO/Treasurer/V.P. Finance retired. During the years ended December 31, 2014, 2013 and 2012 that former officer received annual payments of $122,000 from the Retirement Plan. In addition, pursuant to the former CFO/Treasurer/V.P. Finance's employment contract, USE agreed to pay for health insurance for the executive and his spouse from his date of retirement until he becomes eligible for Medicare. On December 31, 2014, the President/COO retired. Upon announcement of his retirement, the Board of Directors voted unanimously to waive the minimum age eligibility requirement for this officer. As a result, this former officer will receive annual payments of $152,000 beginning January 1, 2015 through December 31, 2019. In addition, pursuant to the former President/COO's employment contract, USE agreed to pay for health insurance for the executive and his spouse for a period of 18 months from his date of retirement. Compensation expense for executives under the Retirement Plan for the years ended December 31, 2014, 2013 and 2012 was $599,000, $99,000, and $80,000, respectively. The total accrued liability for executive retirement under all plans at December 31, 2014, 2013, and 2012 was $1.3 million, $865,000, and $903,000, respectively. Health Insurance Retirement Benefit. Pursuant to employment agreements with the current CEO and CFO, USE has agreed to pay for health insurance for the retiring executive and his spouse for a period of 18 months from the date of retirement. 2001 Stock Compensation Plan. In December 2001, the Board of Directors adopted (and the shareholders subsequently approved) the 2001 Stock Compensation Plan (the "2001 SCP") to compensate its executive officers. The 2001 SCP terminated on April 20, 2013 with the shareholder approval of the 2012 Equity Plan at the 2012 annual meeting. The last shares issued under the 2001 SCP were issued in April 2013. Under the plan, 20,000 shares were issued annually to each officer during his employment. During the years ended December 31, 2013 and 2012, USE collectively issued 30,000 and 60,000 shares of stock to these officers, respectively. In consideration of this agreement, USE agreed to pay all taxes due on the shares granted to the officers. Operating Leases USE is the lessor of portions of the office buildings and building improvements that it owns. USE occupies the majority of its main office building. The leases are accounted for as operating leases and provide for minimum monthly receipts of $5,000 through December 31, 2015. Rental income under the agreements was $95,000, $96,000, and $170,000 for the years ended December 31, 2014, 2013 and 2012, respectively. Future minimum receipts for non-cancelable operating leases are $76,000 for the year ended December 31, 2015.

X
- Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.25) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=25496072&loc=d3e14435-108349 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308 + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration