U.S. Energy Corp. Updates Burro Canyon Drilling

RIVERTON, Wyo., March 22 /PRNewswire-FirstCall/ — U.S. Energy Corp is pleased to announce highly encouraging results from the recently completed drilling program on the Burro Canyon uranium project in San Miguel County, Colorado. A total of 17 holes were drilled, for a cumulative total of 20,303 feet. Of the 16 holes that reached the target Salt Wash formation, 9 encountered significant mineralization, and two can be considered to be well-mineralized. In addition, zones of anomalous radioactivity up to 65 feet in thickness were encountered.

The Burro Canyon project is a 50:50 joint venture with Uranium Power Corp (“UPC” – TSX-V). UPC is responsible for the first $500,000 of expenditures on the project.

The program was designed as a first test of the area, with widely-spaced holes (400 to 800 feet apart). The primary objective was to define the depositional environment prior to more closely-spaced drilling. The thick zones of anomalous radioactivity, located within sandstone horizons, are indicative of a sand channel with reducing capacity, a characteristic that is essential for the deposition of uranium. The substantial thicknesses encountered in the current drill program, when combined with the significant mineralization in 9 of the holes, represent highly encouraging results.

The holes were drilled by Bob Beeman Drilling, of Moab UT, using standard rotary drilling techniques. All holes were geophysically logged by Century Geophysical, of Tulsa, OK. Uranium contents were calculated from the gamma ray log, producing a record of eU3O8 (equivalent U3O8), an industry standard method for evaluating uranium mineralization. To date, no coring has been carried out on the project. Coring will be necessary at a later date to determine whether or not the uranium is in equilibrium. The equilibrium state is an indication of the reliability of gamma ray logging. Typically the older the mineralization, the less likely it is that disequilibrium will affect the relationship between equivalent and the true uranium content. Significant disequilibrium is not expected for this project.

   The drilling results are summarized in the following table:    Hole #     TD      Intercept data    SR-1001    1240    830.0-832.5      2.0 ft @ 0.026% eU3O8   SR-1002    1200    854.5-857.0      2.5 ft @ 0.038% eU3O8   SR-1003    1220    no significant mineralization   SR-1004    860     no significant mineralization   SR-1005    1100    no significant mineralization   SR-1006    1160    987.0-991.5      4.5 ft @ 0.046% eU3O8   SR-1007    1150    946.5-951.5      5.0 ft @ 0.091% eU3O8   SR-1008    1100    no significant mineralization   SR-1009    1100    no significant mineralization   SR-1010    1150    367.0-369.0      2.0 ft @ 0.015% eU3O8   SR-1011    1050    abandoned   SR-1012    1265    1144.0-1146.0    2.0 ft @ 0.094% eU3O8   SR-1013    1280    1142.0-1145.5    3.5 ft @ 0.55% eU3O8 and                      1152.5-1156.0    5.5 ft @ 0.19% eU3O8   SR-1014    1360    no significant mineralization   SR-1015    1312    no significant mineralization   SR-1016    1356    1193.5-1195.0    1.5 ft @ 0.058% eU3O8   SR-1017    1400    1180.0-1184.0    4.0 ft @ 0.29% eU3O8     

USE, the project operator is currently evaluating the results and will develop a proposal to the joint venture for the next phase of drilling.

Mark Larsen, President of U.S. Energy Corp commented; “We are pleased by these very encouraging results at such an early stage in the exploration of this project. The potential for the discovery of a significant uranium deposit has been clearly enhanced by this drilling, and we look forward to commencing our Phase 2 close spaced drilling in the near future. Our drilling plans are progressing nicely in conjunction with our efforts to start the Shootaring Mill.”

                                 * * * * *                   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.

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 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