U.S. Energy Corp. Announces the Spudding of Its First Well With Houston Energy L.P.

RIVERTON, Wyo., May 11, 2009 (GLOBE NEWSWIRE) -- 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 announced the spudding of its first well under a previously
announced Participation Agreement with Houston, Texas based Houston Energy L.P.
("HE") whereby USE acquired a 10% working interest in an oil and gas prospect
located in Southeast Texas. HE is the operator of the project.

The well is located in Matagorda County, TX and it is the first of up to three
prospects that may be drilled on the leasehold. HE believes the first well has a
resource potential of 6.6 BCF and 1,296 MBO. The well will be drilled to an
initial depth of approximately 11,100 feet and USE's commitment is approximately
$216,000 to a casing point decision. Drilling is expected to be completed in 30
days after initial spud.

Under the terms of the agreement, USE is responsible for 10% of the costs to
drill an initial test well (ITW) to earn an 8.5% after casing point (ACP)
working interest (6.2% net revenue interest). There is also a 10% after prospect
payout (APO) back-in working interest due the operator, which would reduce USE's
working interest to 7.65% (5.6% net revenue interest) APO.

"Drilling this initial test well is an important step forward in our
relationship with Houston Energy and key to our strategy to increase production
by leveraging the expertise of our partners," stated Keith Larsen, CEO of U.S.
Energy Corp. "Depending on the success of this well, we'll look at additional
opportunities to participate in projects with Houston Energy on a going forward
basis," he added.

Note Regarding Mcfe

In this press release, Mcfes are derived by converting oil to gas in the ratio
of one barrel of oil to six thousand cubic feet of gas (1 bbl:6 Mcf). One
thousand cubic feet of gas equivalent ("Mcfe") amounts may be misleading,
particularly if used in isolation. A Mcfe conversion ratio of 1 bbl of oil to 6
Mcf of natural gas is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value of equivalency at
the well head.

About U.S. Energy Corp.

U.S. Energy Corp. is a diversified natural resource company with interests in
molybdenum, oil and gas, geothermal and real estate assets. The Company is
headquartered in Riverton, Wyoming, and its common stock is listed on The NASDAQ
Capital Market under the symbol "USEG."

The U.S. Energy Corp. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5043

Disclosure Regarding Mineral Resources Under SEC and Canadian Regulations; and
Forward-Looking Statements

The Company owns or may come to own stock in companies which are traded on
foreign exchanges, and may have agreements with some of these companies to
acquire and/or develop the Company's mineral properties. An example is Sutter
Gold Mining Inc. These other companies are subject to the reporting requirements
of other jurisdictions.

United States residents are cautioned that some of the information available
about our mineral properties, which is reported by the other companies in
foreign jurisdictions, may be materially different from what the Company is
permitted to disclose in the United States.

This news release includes statements which may constitute "forward-looking"
statements, usually containing the words "believe," "estimate," "project,"
"expect," or similar expressions. 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 mineral prices, the availability of capital,
competitive factors, and other risks. 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.

For further information on the differences between the reporting limitations of
the United States, compared to reports filed in foreign jurisdictions, and also
concerning forward-looking statements, please see the Company's Form 10-K
("Disclosure Regarding Forward-Looking Statements"; "Disclosure Regarding
Mineral Resources under SEC and Canadian Regulation"; and "Risk Factors"); and
similar disclosures in the Company's Forms 10-Q.

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CONTACT: U.S. Energy Corp.
Reggie Larsen, Director of Investor Relations
1-800-776-9271
Reggie@usnrg.com

The Equicom Group
Investor Relations
Nick Hurst
1-403-538-4845
nhurst@equicomgroup.com