U.S. Energy secures five-year helium offtake deal, ensuring stable revenues and supporting Big Sky Phase 1 operations.
U.S. Energy Corp., an integrated energy company focused on building a diversified platform across industrial gases, energy production, and carbon management, has announced a major milestone with the signing of a five-year helium sales agreement with a leading global industrial gas company. The counterparty is an investment-grade organization and one of the world’s prominent helium distributors, reinforcing both the commercial strength and financial reliability of the agreement.
Under this contract, helium produced from U.S. Energy’s Big Sky Carbon Hub project in Montana will be sold under a long-term arrangement that supports the company’s Phase 1 commercial operations. The first phase of the project remains on schedule, with operations expected to begin in the first quarter of 2027. This agreement significantly strengthens the project’s financial foundation by creating predictable contracted revenue and reducing exposure to market volatility.
One of the key highlights of the deal is its five-year, 100% take-or-pay structure. This means the buyer is obligated to either purchase the full helium output or pay for it regardless of whether the volumes are physically taken. Such an arrangement greatly minimizes both demand uncertainty and volume risk for U.S. Energy, ensuring dependable cash flow from the beginning of operations.
The agreement covers the entire expected helium production capacity of Phase 1, with contracted volumes reaching up to 1.2 million cubic feet (MMCF) per month, equivalent to 14.4 MMCF annually. These volumes reflect the full processing capability of the initial phase. Importantly, this does not include the company’s planned Phase 2 expansion, which is expected to increase processing capacity by two to three times and is projected to come online in 2029, further enhancing future growth potential.
Pricing under the agreement is fixed at $285 per thousand standard cubic feet (MCF) of contained helium on a plant-gate basis. This all-in pricing structure means there are no deductions for U.S. Energy, while the buyer assumes responsibility for transportation, downstream processing, and all related logistics costs. This creates a highly transparent and predictable revenue stream for the company while eliminating additional downstream cost exposure.
Additionally, the pricing includes annual escalation tied to inflation. Beginning March 1, 2028, the helium price will increase annually based on the U.S. Consumer Price Index for All Urban Consumers (CPI-U), ensuring inflation-protected revenue growth over the life of the contract.
The contract also includes a year-three price redetermination clause. Either party may request a pricing review during the third year. If U.S. Energy receives a more favorable third-party offer, the current buyer retains a right of first refusal and can match that offer with a 5% premium to maintain the agreement. Any revised pricing would become effective from the first day of year four, offering both flexibility and competitive market protection.
Ryan Smith, President and Chief Executive Officer of U.S. Energy, described the agreement as a transformative step for the company. He stated that securing a partnership with an investment-grade industrial gas company with global distribution capabilities validates years of development work at Big Sky. According to him, the agreement not only locks in long-term helium revenues but also substantially reduces the risk associated with Phase 1 operations.
He further emphasized that the current helium market is benefiting from tight global supply and increasing demand for dependable helium volumes, creating stronger long-term pricing conditions. By locking in the fixed $285 per MCF pricing with no downstream obligations, U.S. Energy secures strong netback returns and operational certainty.
This agreement also complements the company’s recently expanded senior secured credit facility announced on April 20, 2026. Together, the financing and contracted helium revenues provide a fully funded capital structure for Phase 1 and establish a strong foundation for commercialization.
Beyond helium production, the Big Sky Carbon Hub continues to support U.S. Energy’s carbon management strategy. Carbon dioxide recovery, sequestration, and Section 45Q tax credit generation remain separate revenue streams and are not included within the helium offtake agreement. The company is also progressing with two Monitoring, Reporting, and Verification (MRV) plan submissions to the U.S. Environmental Protection Agency, with approvals expected during the summer of 2026.
With this development, Big Sky moves from being a development-stage project to a contracted industrial gas platform, positioning U.S. Energy strategically within the global industrial gas and critical minerals supply chain.
