U.S. Energy Corp. Announces Acquisition, Exploration and Development Agreement

U.S. Energy Corp. USEG today announced it has entered into an acquisition, exploration and development agreement with a private party in an oil and gas prospect located in Southeast Colorado. Under the terms of the agreement, the Company acquired an 80% working interest in approximately 3,000 net acres. The Company has also agreed to carry the seller for their 20% working interest to casing point in the initial well. The dry hole cost of the well is estimated to be $250,000. USE will be the operator of the project and the initial well is planned to be spud in the second quarter of 2011. All subsequent wells will be drilled on a heads up basis. The prospect is a Mississippian target with an expected total drilling depth of approximately 6,500 feet.