U.S. Energy Corp. Announces Earnings for 2005

RIVERTON, Wyo., April 13 /PRNewswire-FirstCall/ — U.S. Energy Corp , a natural resources exploration and development company, today announced its financial results for 2005.

For the twelve months ended December 31, 2005, the Company reported net income of $8,841,500, or $0.55 per share, compared with a net loss of $6,248,700, or $0.48 per diluted share, in 2004. Net income for 2005 included a gain of $15,533,500 from the sale of USEG’s Rocky Mountain Gas, Inc. subsidiary during the quarter ended June 30, 2005. The Company reported an operating loss for the year ended December 31, 2005 of $6,066,900, reflecting the holding costs associated with various mineral properties that management hopes to place into production in the future. These properties include uranium, molybdenum and gold resources.

The Company’s balance sheet improved significantly during 2005. As of December 31, 2005, USEG’s current ratio stood at a healthy 6.4-to-1.0; the Company had approximately $7.0 million of cash in the bank, and long-term debt outstanding had been reduced to $1,036,800, of which $156,500 is reported as the current portion of long term debt. The long-term debt is secured by assets that have a greater market value than the principal balances outstanding. Cash balances increased by $3.2 million and USEG reduced its outstanding debt by approximately $7.4 million during 2005. Additionally, approximately $3.5 million in debt owed by Rocky Mountain Gas, Inc. was retired with the sale of the coalbed methane subsidiary. For more information regarding the December 31, 2005 financial statements please refer to our web page at http://www.usnrg.com/.

Mark Larsen, President of U.S. Energy Corp. stated, “Last year was one in which we significantly enhanced shareholder value, strengthened our balance sheet, and improved our liquidity by ‘monetizing’ our coalbed methane subsidiary. It was truly a banner year for the Company. We were also very pleased to end the year with a strong cash position and a substantial reduction in long-term debt outstanding. When our cash position is combined with USEG’s valuable equity position in Enterra Energy Trust, we believe the Company is well-positioned financially to pursue the development of its North American uranium, molybdenum and gold properties.”

“Surging commodity prices have validated USEG’s strategy of accumulating natural resources during periods of slack demand and holding such assets until market conditions can support placing the properties into profitable production,” observed Keith Larsen, Chief Executive Officer of U.S. Energy Corp. “For the first time in many years, our prospects for joint ventures with global mining and trading companies have become significantly enhanced. The underlying liquidity provided by a strong cash position and our ownership in securities that will become marketable within the next two months should allow USEG to pursue strategic alternatives that have the greatest potential to maximize shareholder value in coming years. We expect to move forward on a number of fronts in 2006.”

ABOUT U.S. ENERGY CORP. AND CRESTED CORP.

U.S. Energy Corp. and its majority-owned subsidiary, Crested Corp., are engaged in a joint venture to conduct various business operations as USECC. Through their subsidiaries, Sutter Gold Mining Inc., Plateau Resources Limited, Inc., U.S. Moly Corp, U.S. Uranium Ltd. and USECC, they own various interests or properties prospective for gold, uranium, vanadium and molybdenum.

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.

The profitable mining and processing of uranium and vanadium will depend on many factors: Obtaining properties in proximity to the Shootaring mill in southeastern Utah to keep transportation costs economic; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for uranium oxide and vanadium; obtaining the capital required to upgrade the Shootaring mill and add a vanadium circuit, and obtaining and continued compliance with operating permits.

The profitable mining and processing of gold will depend on many factors, including receipt of final permits and keeping in compliance with permit conditions; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for gold, and obtaining the capital required to initiate and sustain mining operations, and build and operate a gold processing mill.

We have not yet obtained feasibility studies on any of our mineral properties. These studies would establish the economic viability, or not, of the different properties based on extensive drilling and sampling; the design and costs to build and operate gold and uranium/vanadium mills; the cost of capital, and other factors. Feasibility studies can take many months to complete. We have not established any reserves (economic deposits of mineralized materials) on any of our uranium/vanadium or gold properties, and future studies may indicate that some or all of the properties will not be economic to put into production. The molybdenum property has had extensive work conducted by prior owners to establish the deposits of molybdenum, mine planning and other ancillary activities. This data will have to be updated to determine the viability of starting mining and milling operations. Obtaining mining and other permits to begin mining the molybdenum property may be very difficult, and, like any mining operation, capital requirements for a molybdenum mining operations will be substantial.

By making these forward-looking statements, the Companies undertake no obligation to update these statements for revision or changes after the date of this release.

U.S. Energy Corp

CONTACT: Keith G. Larsen, CEO, or Mark Larsen, President, both of U.S.Energy Corp., +1-307-856-9271

Web site: http://www.usnrg.com/