U.S. Energy Corp. Announces Completion of Quality Assurance/Quality Control Program at "Lucky Jack" Molybdenum Project

RIVERTON, WY and its partner, Kobex Resources Ltd. (Kobex) (TSX-V: KBX), are pleased to provide the following update on the Lucky Jack Molybdenum Project:

Kobex has completed a quality assurance/quality control (QA/QC) program on sample rejects from the historical diamond drilling completed by Amax on the Mt. Emmons molybdenum deposit. Kobex's QA/QC program included the following steps:

--  Establishment and certification of standard reference materials for the
    Project.
    --  A total of three standard reference materials were generated from
        assay rejects from the previous drilling programs.  A fourth
        standard reference material (blank) was generated using
        unmineralized material from off site.
    --  These four standards (one blank and three molybdenum grade based
        standards) were prepared by CDN Labs and certified by Smee &
        Associates Consulting Ltd.
    --  The analytical method employed in the certification stage and
        subsequent QA/QC assaying stage involved four acid digestion
        followed by ICP-ES finish for molybdenum determination.  The
        historical database was based on acid digestion with colorometric
        finish with assays reported as MoS2.  This procedure is no longer
        practiced and has been replaced by industry standard procedures
        such as the one employed by this program.  The current QA/QC
        program used molybdenum grades that were converted to MoS2 grades
        using a factor of 1.6681 in order to make comparisons to the
        historical assay data.
--  A total of 619 samples of assay rejects from the historical core
    drilling were selected, representing the overall molybdenum deposit at
    Mt. Emmons.  Standards and blanks were inserted into the suite of assay
    rejects.
--  The assay rejects samples and standards and blanks were analyzed by ALS
    Chemex while Skyline Assayers & Laboratories analyzed assay reject
    samples only.

The results of the QA/QC program show that the molybdenite grade reported in the historical database is verified with assays by independent laboratories using modern analytical techniques and the requisite QA/QC procedures for exploration. The results of the program are summarized below.

Lab        Number of Samples   Amax mean value     QA/QC mean value
                                   (% MoS2)            (% MoS2)
Chemex           619                0.346               0.322
Skyline          616                0.346               0.328

In general, the outcome of the QA/QC program confirms the validity of the existing historical assay database. All standards submitted with the check assay samples fell within the allowed limits established for the standards, therefore the original assays are also accurate within industry accepted limits.

Maurice Tagami, Kobex COO, stated, "The results of this recent QA/QC program show that the historical assay data is verifiable and that previous estimates of the grade of molybdenum at the Lucky Jack Project are justifiable."

Keith G. Larsen, CEO of U.S. Energy Corp., stated, "We are pleased that Kobex has confirmed the verifiability of the historical assay data and also justified the previous estimates of molybdenum grade at the Lucky Jacky Project."

Zofia Ashby, P. Eng., a consultant to Kobex, supervised the QA/QC program and has reviewed the information in this release. Ms. Ashby is a Qualified Person as defined under National Instrument 43-101.

About U.S. Energy Corp.

U.S. Energy Corp. is a diversified natural resource company with interests in molybdenum, oil and gas, gold, and real estate. As a transitional owner of assets, U.S. Energy Corp. acquires properties on favorable terms, adds value through the application of its expertise, and exits the investment through a joint venture or sale to a strategic buyer. While the Company's primary emphasis is upon investments in the natural resources sector, it is also broadening its business interests to include cash-flow-generating investments driven by surging growth created by energy and mining activity in the intermountain west region of the United States.

The Company is headquartered in Riverton, Wyoming, and its common stock is listed on The NASDAQ Capital Market under the symbol "USEG."

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. Examples of these other companies are Sutter Gold Mining Inc. and Kobex Resources Ltd. 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.

For further information, please contact: Keith G. Larsen CEO Mark J. Larsen President U.S. Energy Corp. [phone] 877 North 8th West Riverton, WY 82501 USA Ph: [phone] Fx: [phone] www.usnrg.com