August 9, 2010

U.S. Energy Corp. Reports Second Quarter 2010 Financial Results

RIVERTON, Wyo., Aug 9, 2010 (GlobeNewswire via COMTEX News Network) -- U.S. Energy Corp. (Nasdaq:USEG) ("USE" or the "Company"), a natural resources exploration and development company with interests in molybdenum, oil and gas, geothermal, and real estate assets, today reported highlights and financial results for the second quarter ended June 30, 2010.

Selected Highlights for the Second Quarter and Period Subsequent to June 30, 2010

Highlights for the period include:

  --  Production for second quarter ended June 30, 2010 totaling 72,601
      barrels of oil and condensate and 163,996 MCF of gas or 99,900 BOE.
      Total daily production for the period averaged 1,100 BOED;

  --  The Company has received an updated reserve report for its Bakken wells
      for the period ended June 30, 2010. The reserve report indicated an
      addition of approximately 510,000 BOE in reserves from wells completed
      in the Williston Basin in 2010;

  --  Initial production rate from the Jack Erickson 6-31 #1H well, completed
      and operated by Brigham Exploration Company (Nasdaq:BEXP) ("Brigham" or
      "BEXP"), of approximately 2,323 barrels of oil and 1.98 MMCF of natural
      gas per day or 2,652 BOE/D during an early 24-hour flow back period;

  --  Initial production rate from the Sedlacek Trust 33-4 #1H well, completed
      and operated by Brigham, of approximately 2,413 barrels of oil and 1.69
      MMCF of natural gas per day or 2,695 BOE/D during an early 24-hour flow
      back period;

  --  The spudding of the first infill well with Brigham, the Brad Olson 9-16
      #2H; as well as the spudding of the first well targeting the Three Forks
      formation with Brigham, the State 36-1 #2H;

  --  Successful drilling of the ALMI # 8 well, operated by PetroQuest Energy,
      L.L.C. ("PetroQuest") (NYSE:PQ) and located in the South Chauvin Field
      in Terrebonne Parish, Louisiana. The well encountered approximately 64
      feet (TVD) of net pay (Miocene sand) in two zones. USE participated for
      53.3% of the drilling costs (50% after casing point), in order to earn a
      36% net revenue interest in the prospect;

  --  Expansion of the relationship with Houston Energy, with U.S. Energy
      entering into an agreement to acquire a 10% after casing point working
      interest in initial test wells in up to five prospect areas in the
      Permian Basin in west Texas. The first well under the agreement, the
      Aspen prospect, has spud;

  --  Successful drilling of a well with Yuma Exploration and Production
      Company ("Yuma"), the Weyerhaeuser 57 #2 (Olympic prospect) well located
      in southern Louisiana, which was deemed productive after two zones with
      an estimated 18 to 34 feet of net pay were encountered;

  --  Receipt of a cash distribution of $1.1 million from Standard Steam Trust
      ("SST") resulting from a sale by SST of one of their prospects to an
      undisclosed third party for an undisclosed amount; and

  --  The addition of the Company's shares to the Russell 3000 Index and the
      Russell Global Index.

Financial Highlights

The following table sets forth selected financial information for the six months ended June 30, 2010 and the relevant period in 2009:

                  U.S. ENERGY CORP.
   (Amounts in thousands, except per share amounts)

                            June 30,        31,

                              2010         2009
                           -----------  -----------
  Balance Sheet:
   Cash, equivalents &
    U.S. treasury bills       $ 40,538     $ 55,462
   Current assets             $ 45,887     $ 62,100
   Current liabilities         $ 2,824      $ 8,672
   Working capital            $ 43,063     $ 53,428
   Total assets              $ 144,293    $ 146,723
   Long-term obligations       $ 1,665      $ 1,573
   Shareholders' equity      $ 131,625    $ 129,133

                              For the six months
                               through June 30,

                              2010         2009
                           -----------  -----------
  Income Statement:
   Operating revenues         $ 15,174      $ 2,907
   Income (loss) from
    continuing operations      $ 1,045    $ (5,621)
   Other income &
    (expenses)                 $ 1,292       $ (34)
   Deferred (provision
    for) benefit from
   income taxes                $ (940)        $ 423
   Net income/(loss)           $ 1,397    $ (5,232)
   Net income/(loss) per

    Basic                       $ 0.05     $ (0.24)
                           ===========  ===========

    Diluted                     $ 0.05     $ (0.24)
                           ===========  ===========
   Shares outstanding

    Basic                   26,611,583   21,481,944
                           ===========  ===========

    Diluted                 27,813,215   21,481,944
                           ===========  ===========

The Company had $1.51 per outstanding common share at June 30, 2010 in cash, equivalents and U.S. Treasury Bills.

The U.S. Energy Corp. logo is available at

                       Forward-Looking Statements

This news release includes statements which may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect,""target," "goal," or similar expressions. Forward looking statements in this release relate to, among other things, USE's drilling of wells with Brigham Exploration, Houston Energy, Yuma, PetroQuest, and other partners, its ownership interests in those wells and their expected costs, and the oil and natural gas targets or goals for the wells. There is no assurance that any of the wells (referenced in this press release) will be productive. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, future trends in commodity and/or mineral prices, the availability of capital, competitive factors, and other risks described in the Company's filings with the SEC (including, without limitation, the Form 10-K for the year ended December 31, 2009 and the Form 10-Q filed May 10, 2010. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revision or changes after the date of this release.

This news release was distributed by GlobeNewswire,

SOURCE: U.S. Energy Corp.

CONTACT:  U.S. Energy Corp.
Reggie Larsen, Director of Investor Relations
The Equicom Group
Investor Relations
Nick Hurst

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