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U.S. Energy Corp. And Crested Corp. Hire Firm to Open Dialogue About Lucky Jack Molybdenum Project

Posted on: Friday, 12 May 2006, 12:04 CDT

RIVERTON, Wyo., May 12 /PRNewswire-FirstCall/ -- U.S. Energy Corp. and Crested Corp. ("Crested") (BULLETIN BOARD: CBAG) d/b/a USECC, today announced that USEG and Crested have engaged MGA Communications, Inc. ("MGA") of Denver, Colorado to conduct an initial research project for its Lucky Jack molybdenum project located in west-central Colorado.

USECC retained MGA to speak with business and community leaders in the region. MGA's involvement provides third-party objectivity in the discussions about mining, tourism and other important local issues. Those interviewed will be able to voice their opinions to MGA representatives without being identified, if they request it.

"We are very pleased to welcome MGA to the USEG and Crested family of strategic partners. In the future, we expect MGA to play an important role in supporting our commitment to open communication with the community, civic leaders and stakeholders throughout the development of the Lucky Jack molybdenum project," noted Mark Larsen, President of U.S. Energy Corp. "As we move forward with permitting the project, we intend to fully engage the local communities and to work closely with all agencies involved. This will be aimed at understanding community concerns, minimizing environmental impacts and educating the public at large about the significant economic benefits that could be realized when the mine is brought into production."

Keith Larsen, USEG's CEO added, "We look forward to presenting our ideas and business plans to community leaders and the public as they are developed. Our long-term strategy is to make this project a win/win situation for all parties involved to the maximum extent practical."

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, 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 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.

The profitable mining and processing of molybdenum property will depend on many factors, including compliance requirements of the Colorado regulatory requirements which we will have to comply with to operate a water treatment plant on the properties, whether adequate water rights for mine development and operation will be obtained, and whether permits and bonding for a mine can be obtained, and whether U. S. Energy Corp. and Crested Corp. can raise the necessary capital and/or enter into a joint venture or other arrangement with a third party to put the property into production.

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, molybdenum or gold properties, and future studies may indicate that some or all of the properties will not be economic to put into production. The properties have 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 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 operation 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/

Source: PRNewswire-FirstCall

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