James W. Denny III
About James W. Denny III
Independent director (Class Two) at U.S. Energy Corp. since December 2019; age 77. Petroleum engineer with 45+ years of upstream operating leadership (EVP Operations, President of regional divisions), registered professional engineer (Louisiana), and member of multiple industry associations. Education: B.S. in Petroleum Engineering, University of Louisiana–Lafayette. Tenure marked by Audit Committee service (since Jan 2022), Nominating & Governance Committee membership, and participation on Special and Operations Committees formed for transaction oversight and operational supervision .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Lilis Energy | Executive Vice President of Operations | Apr 2018 – Jul 2019 | Senior operating leadership |
| Siltstone | Vice President | Jan 2016 – Mar 2018 | Operations and asset management |
| Magnum Hunter Resource Corp. | EVP Operations; President, Appalachian Division | 2007 – Sep 2015 | Led operations and regional strategy |
| Gulf Energy Management (Harken Energy subsidiary) | President & CEO | 2002 – 2007 | Full North American operations responsibility |
External Roles
| Organization | Role | Notes |
|---|---|---|
| American Petroleum Institute | Member | Professional association |
| National Society of Professional Engineers | Member | Professional association |
| Society of Petroleum Engineers | Member | Professional association |
| Society of Petroleum Evaluation Engineers | Member | Professional association |
Board Governance
- Independence: Board affirmatively determined Denny is independent under Nasdaq rules; majority of board independent .
- Committees: Audit Committee member (since Jan 2022); Nominating & Governance Committee member; Operations Committee member (established Mar 2025; chaired by Duane H. King); served on Special Committee (Jun 2024) reviewing Synergy Offshore related-party transaction (Chair: Randall D. Keys) .
- Attendance: 100% attendance at Board and committee meetings in FY2024; all directors attended the 2024 annual meeting in person or via phone .
- Executive sessions: Independent directors meet in executive session at least annually .
- Board activity levels: Board met four times in 2024; Audit met four times; Compensation met four times; Nominating & Governance met four times .
Fixed Compensation
| Year | Cash Fees ($) | Committee/Chair Fees Included | Total Cash ($) |
|---|---|---|---|
| 2024 | 118,000 | Includes annual retainer and committee fees; special committee meeting fees possible per policy | 118,000 |
Director compensation policy (effective Mar 19, 2024): $75,000 annual cash retainer to directors; $150,000 for Chairman; Chair fees—Audit $25,000, Compensation $16,000, Nominating & Governance $16,000; long-term equity grants to all directors; special committee participation compensated as disclosed .
Performance Compensation
| Grant | Grant Date | Shares | Vesting | Fair Value Disclosure |
|---|---|---|---|---|
| Annual director RS grant | 2024 | Included within 30,000 unvested as of 12/31/2024 | Per director policy; time-based | 2024 stock awards value $60,600 |
| Annual director RS grant | Feb 14, 2025 | 40,000 | 50% on Jul 1, 2025; 50% on Jan 1, 2026 | Not disclosed |
- No director option awards during the period presented; equity grants are time-based without disclosed performance metrics (e.g., TSR/EBITDA targets) .
Other Directorships & Interlocks
- Other public company boards: None disclosed for Denny; only Mr. Smith serves on 180 Life Sciences Corp. (ATNF) .
- Compensation committee interlocks: Company reports no interlocking relationships requiring disclosure (note concerns relate to Mr. Smith’s external role, not Denny) .
Expertise & Qualifications
- Registered professional engineer (Louisiana); certified earth scientist; memberships in major petroleum engineering bodies. Extensive upstream operational leadership across public and private E&Ps, including divisional president roles and executive operations oversight .
Equity Ownership
| Holder | Total Beneficial Shares | Fully Vested | Unvested/Subject to Vesting | Ownership % |
|---|---|---|---|---|
| James W. Denny III | 203,913 | 163,913 | 40,000 (1/2 on Jul 1, 2025; 1/2 on Jan 1, 2026; service-based) | <1% (“*”) |
- Company equity ownership policy: No formal director ownership guidelines (company-wide) .
- Anti-hedging/pledging: Company prohibits short sales and derivative hedging; pledging restricted unless pledgor has clear financial capacity to repay without resort to pledged securities .
Governance Assessment
- Committee roles and engagement: Strong governance engagement—Denny serves on Audit and Nominating & Governance and was appointed to the Operations Committee; his participation on the Special Committee addressing a related-party acquisition (Synergy Offshore LLC) is a positive process control mitigating conflict risk .
- Independence and attendance: Independence affirmed and 100% attendance in 2024—supports board effectiveness and fiduciary oversight .
- Director pay mix and alignment: Balanced cash ($118k) and equity (2024 grant value $60.6k; 30k unvested at year-end), with additional 40k RS in 2025 vesting over two dates; time-based vesting aligns partially with service continuity but lacks disclosed performance conditions for directors (common in small-cap E&P boards) .
- Potential conflicts and controls: Board disclosed a significant related-party transaction with Synergy (controlled by directors Weinzierl and King) and used a Special Committee of independent directors (including Denny) and an Audit Committee review framework for related-party policies—good governance practice amid heightened conflict risk .
- Structural considerations: Nominating and Voting Agreement grants nomination rights to legacy sellers/affiliates, potentially concentrating influence; board notes Nasdaq independence requirements and “Disqualified Person” safeguards—ongoing oversight essential; Denny’s role on Nominating & Governance positions him to influence slate integrity .
- Shareholder feedback: 2024 say‑on‑pay passed (11,704,076 for; 476,835 against; 49,143 abstain; 7,297,058 broker non‑votes), indicating general investor support for compensation practices; continued monitoring recommended .
RED FLAGS
- Related-party exposure at board level (Synergy Offshore LLC – controlled by directors Weinzierl and King) necessitates persistent independent committee oversight; Special Committee participation by Denny is mitigating but ongoing scrutiny remains prudent .
- No formal director ownership guidelines—reduced explicit alignment framework versus peers; however, Denny holds a meaningful personal stake with scheduled vesting .
Positive Signals
- Full meeting attendance, independent status, and active committee participation (Audit; Nominating & Governance; Special Committee; Operations Committee) support board effectiveness and investor confidence .