U.S. Energy Announces Highest Initial Production Rate Bakken Well to Date in Williston Basin Drilling Program

U.S. Energy Corp. USEG today provided an update on its oil and gas drilling initiatives in the Williston Basin of North Dakota. U.S. Energy Corp. currently has 14 completed wells, 3 wells scheduled for completion in February and one well being drilled in the Williston Basin of North Dakota under the Drilling Participation Agreement ("DPA") with Brigham Exploration Company BEXP. To date our average initial production rate for the first 14 wells drilled under the DPA is 2,567 BOED. U.S. Energy Corp. currently has 14 completed wells, 3 wells scheduled for completion in February and one well being drilled in the Williston Basin of North Dakota under the Drilling Participation Agreement ("DPA") with Brigham Exploration Company BEXP ("Brigham" or "BEXP"). To date our average initial production rate for the first 14 wells drilled under the DPA is 2,567 BOED. The Company announced an additional participation agreement in the Williston Basin in McKenzie County, North Dakota with private operator, Zavanna LLC in mid December 2010. The Company paid $10.95 million to acquire approximately 6,200 net mineral acres or 35% of Zavanna's collective working interest in two contiguous lease parcels known as the Yellowstone and SE HR prospects. Under the new program with Zavanna, the Company anticipates participating in 31 gross 1,280 acre spacing units (at various working interests up to 35%) with the potential of 93 gross Bakken and 93 gross Three Forks wells (based on three wells per formation per unit).