Basically energy is a quantity that is conserved through time. If the energy is the sum of two terms:
$$
E = U + K
$$
Then it is obvious that the total value of $E$ will be divided between $U$ and $K$. If one loses energy the other one has to gain it and viceversa. Is that simple. Note that in the case of a collision, it has to be elastic, if not, energy would be lost via heat (and your equation wont work).
Work (usually denoted with $W$) is defined as quantity that measures how much a given displacement on an object goes with a force that is being applied to it. If your displacement goes in the direction of the force then: $W > 0$, if it is in the opposite direction: $W < 0$, and if it is perpendicular: $W = 0$. Work is done by the object following a path in which it suffers a force.
Potentials arise when your force is conservative (such as gravity and electrostatic forces). By the definition given before, you could interpret the potential as how much work you should do, to move a particle from a given point to $r \to \infty$ following that conservative force (only in the case of central forces, with and inverse relation).
Here is an example to understand it better. In the case of a particle moving from $r_1 \rightarrow r_2$ under the influence of gravity:
$$
W_{1\rightarrow 2} = U(r_1) - U(r_2)
$$
$$
U(r) = -\frac{GMm}{r}
$$
Case 1: $r_1 < r_2$
$$
W_{1\rightarrow 2} = U(r_1) - U(r_2)
$$
because $U(r) \propto -1/r$ it is obvious that:
$$
U(r_1) < U(r_2)
$$
then:
$$
W = U(r_1) - U(r_2) < 0
$$
which means negative work. If you think it, it make sense, because to reach a higer $r$ value, you need to do work against the gravitational force.
Case 2: $r_1 > r_2$
$$
W_{1\rightarrow 2} = U(r_1) - U(r_2)
$$
because $U(r) \propto -1/r$ it is obvious that:
$$
U(r_1) > U(r_2)
$$
then:
$$
W = U(r_1) - U(r_2) > 0
$$
which, again, it make sense. Positive work indicates work done with the force. If $r_2 < r_1$, that means that the particle has fall (apparently) by the influence of the gravitational force.
Case 3: $r_2 \to \infty$
$$
W_{1\rightarrow 2} = U(r_1) - U(r_2)
$$
$$
U(r_2 \to \infty) = 0
$$
$$
W_{1\rightarrow \infty} = U(r_1)
$$
which as said before, is the definition of the potential.