U.S. Energy Corp. Provides Operational Update

U.S. Energy Corp. USEG, today announced an update on its oil and gas drilling programs. Colorado Operated Program – 3,000 gross / 2,400 acres net to USEG The Thompson 9-1-4 well spud on June 18th and is currently drilling towards its target depth of ~6,000 ft. The target objective is the Mississippian formation. The Company anticipates reaching total depth in late June. If successful, the Company plans to produce the well for a period of time to evaluate well performance and plan for further drilling initiatives as warranted. Williston Basin, North Dakota Rough Rider Program – 19,200 gross / 5,500 acres net to USEG U.S. Energy Corp. has 18 producing wells in the Rough Rider acreage block under the drilling program with Brigham Exploration. To date, all fifteen of the Company's 1,280 acre spacing units are held by production and 4 additional infill wells are scheduled to be drilled and completed in the second half of 2011. Completed wells during the second quarter of 2011. The Brad Olson 9-16 #3H well was completed with 32 fracture stimulation stages and had an early 24-hour flow back rate of 2,375 BOE/D. The well began flowing to sales in early May, 2011. The Company has an approximate 31% working interest ("WI") and 25% net revenue interest ("NRI") in this well. The Kalil Farms 14-23 #1H well was completed with 33 fracture stimulation stages and had an initial flow back rate of 1,603 BOE/D. The well began flowing to sales in late May, 2011. The Company has an approximate 20% WI and 16% NRI in this well. The MacMaster 11-2 #1H well was completed with 34 fracture stimulation stages and had an initial flow back rate of 1,129 BOE/D. The well began flowing to sales in late May, 2011. The Company has an approximate 41% WI and 32% NRI in this well. Completion initiatives are currently underway at the Hovde 33-4 #1H well, and the well is currently flowing to sales. The Company has an approximate 25% WI and 20% NRI in this well. Note: During the second quarter of 2011, production and completion operations in the Rough Rider area have been hampered by one of the worst winters in North Dakota history along with one of the wettest springs on record. Significant rainfall and flooding have continued to impact road travel, trucking of produced oil and access to numerous flooded sites in the basin. Thus far, only the Sedlacek Trust well (~48% WI/~38% NRI) has experienced site flooding, which will continue to impact production from that well until the water has receded in the Missouri and Yellowstone River flood plains. Yellowstone and SE HR Programs – 39,680 gross / 6,200 acres net to USEG First three wells drilled are scheduled to be completed in Q3 2011 Operator Zavanna LLC has drilled three wells to total depth ("TD") under the initial drilling program with USEG, the Cheryl 14-23 #1H, the Olson 8-15 #1H and the Koufax 3-10 #1H. The Company has an approximate 39% WI / 30% NRI in the Cheryl 14-23 #1H well. The Company has an approximate 30% WI / 23% NRI in the Olson 8-15 #1H well. The Company has an approximate 20% WI / 15.4 % NRI in the Koufax 3-10 #1H well. As previously announced, the Company is also participating in a Murex Petroleum Corporation-operated well in the Yellowstone acreage block. The Amy Michelle 16-23 #1H well was drilled to depth and completion initiatives took place in early June 2011. The well was completed with 15 fracture stimulation stages using a sliding sleeve and had an initial production rate of ~750 BOE/D over the first 5 days of production. The Company has an approximate 8.9% WI and 6.9% NRI in the well.