U.S. Energy Corp. Reports First Quarter 2013 Highlights and Selected Financial Results

U.S. Energy Corp. Reports First Quarter 2013 Highlights and Selected Financial
Results

Provides an Operational Update

RIVERTON, Wyo., May 10, 2013 (GLOBE NEWSWIRE) -- U.S. Energy Corp.
(Nasdaq:USEG) (the "Company"), today reported its first quarter 2013
highlights and selected financial results for the quarter ended March 31,
2013, and also provided an operational update.

Selected Highlights for the First Quarter of 2013

Financial and Operational Results

  *Produced 98,674 BOE during the quarter, or 1,096 BOE/D from 87 gross
    (15.30 net) producing wells at March 31, 2013.
  *Recognized $7.9 million in revenue during the quarter ended March 31,
    2013.
  *At March 31, 2013, the Company had $2.5 million in cash and cash
    equivalents on hand. Working capital (current assets minus current
    liabilities) was $10.4 million.
  *During the three months ended March 31, 2013, we received an average of
    $2.6 million per month from our producing wells with an average operating
    cost of $655,000 per month (excluding workover costs), and production
    taxes of $278,000 before non-cash depletion expense, for an average cash
    flow of $1.7 million per month from oil and gas production.
  *During the three months ended March 31, 2013, the Company sold its
    corporate aircraft and related facilities for $2.6 million. As a result of
    these sales, we recorded a gain on the sale of assets during the quarter
    in the amount of $696,000.
  *During the quarter ended March 31, 2013 we recorded a net loss after taxes
    of $5.9 million, or $0.21 per share basic and diluted, as compared to a
    net loss after taxes of $381,000, or $0.01 per share basic and diluted,
    during the same period of 2012. During the three months ended March 31,
    2013, the Company recorded a proved property impairment of $5.8 million
    related to its oil and gas assets. The impairment was primarily due to a
    decline in the price of oil, additional capitalized costs and changes in
    production. There were no proved property impairments recorded during the
    first three months of 2012.
  *Earnings before interest, income taxes, depreciation, depletion and
    amortization, accretion of discount on asset retirement obligations,
    non-cash impairments, unrealized derivative gains and losses and non-cash
    stock compensation expense ("Modified EBITDAX"), which is a non-GAAP
    performance measure, was $4.3 million for the quarter ended March 31,
    2013, an increase of 33.4% from $3.2 million for the same period of 2012.*

2013 Capital Budget

Under our $27.1 million capital expenditures budget for 2013, we spent
approximately $5.9 million to fund our 2013 oil and gas drilling programs
during the quarter ended March 31, 2013. The remaining $21.2 million in
capital expenditure is budgeted to be spent on exploration and acquisition
initiatives in the Williston Basin of North Dakota and in Texas.

Funds allocated to our drilling programs are contingent upon timing, well
costs and success. If our drilling initiatives in any program are not
initially successful, or do not progress as timely as projected, funds
allocated for those drilling programs may be allocated to other drilling
initiatives in due course.

Subsequent Event

Mount Emmons Molybdenum Project

On April 22, 2013, the Company received a letter from the U.S. Forest Service
notifying the Company that it had completed a review of the Mine Plan of
Operations ("MPO") for the Mount Emmons Molybdenum Project in Colorado and
that it has determined that the MPO "does contain sufficient information and
clarity to form the basis for a proposed action to initiate scoping and
analysis under the National Environmental Policy Act." The letter also states,
"U.S. Energy has met the requirements of the Reality Check provision granting
conditional water rights for the Mt. Emmons Molybdenum Project by filing the
Plan for the Mt. Emmons Mine with the Forest Service. No other special use
permits or rights-of-way for the water facilities are required because they
are addressed in the Plan." The MPO provides an in-depth description of the
proposed construction, mining, processing, and reclamation operations for the
Project and a link to the MPO can be found on the Company's website at
www.usnrg.com.

Operations Update

Williston Basin, North Dakota

Initial Production Rate of the Pirate 1-2-11 H Well

The Pirate 1-2-11H well was completed with 35 fracture stimulation stages
mid-March with an initial peak 24 hour production rate of 1,801 BOE/D. The
well produced 30,485 BOE during the first 30 days of production or an average
of 1,025 BOE/D. The company has an approximate 3.67% working interest and a
2.75% net revenue interest in the well.

The operator is scheduled to fracture stimulate the Caper 1-15-22H, the
Mongoose 1-8-5H, and the Slugger 1-16-21H wells in succession beginning in
June of 2013.

Williston Basin Wells in Progress:

                                           Working  Net
Well Name          Operator    Formation   Interest Revenue  Status
                                                    Interest
Rogers 1-12 #1TFH  Zavanna LLC Three Forks 9.36%    7.30%    Completing well
Dobias             Liberty
152-103-32-29-1H   Resources   Bakken      1.91%    1.49%    Completing well
                   LLC
Dobias             Liberty
152-103-32-29-11   Resources   Three Forks 1.91%    1.49%    Completing well
TFH                LLC
                   EOG                                       Completion
Van Hook 19-2523H  Resources   Bakken      0.36%    0.27%    pending May 2013
                   Inc.
                   EOG                                       Completion
Van Hook 126-2523H Resources   Bakken      0.36%    0.27%    pending May 2013
                   Inc.
Caper 1-15-22H     Emerald Oil Bakken      1.30%    1.02%    Completion
                   Inc.                                      pending June 2013
Mongoose 1-8-5H    Emerald Oil Bakken      0.29%    0.23%    Completion
                   Inc.                                      pending June 2013
Slugger 1-16-21H   Emerald Oil Bakken      0.36%    0.28%    Completion
                   Inc.                                      pending July 2013
State 36-1 #4TFH   Brigham Oil Three Forks 3.64%    2.88%    Completion
                   & Gas, L.P.                               pending
Hovde 33-4 2TFH    Brigham Oil Three Forks 2.47%    1.95%    Completion
                   & Gas, L.P.                               pending
Young 31-30 #1H    Zavanna LLC Bakken      2.69%    2.13%    Drilling Lateral
                             Average:    2.24%    1.76%    

South Texas

Buda Limestone formation

The Beeler #2H well located in our Booth-Tortuga acreage block in Dimmit
County, Texas was drilled in April, 2013.The Beeler #2H well is the Company's
first well targeting the Buda Limestone formation.The well was drilled to a
total measured depth of 11,013', which included an approximate 3,700' lateral,
and was completed without fracture stimulation.The operator of the well,
Crimson Exploration, anticipates full flow back operations to commence by
mid-May and upon evaluation of the early flow back rates, plans to announce
the well results in the coming weeks.The total cost to drill and complete the
Beeler #2H well was below the preliminary cost estimate of $4 million.

Although it is early, the Company remains encouraged about the Buda Limestone
potential in the Booth Tortuga acreage block.Nearby industry data suggests
very favorable well economics in this region and we are confident in the
overall development potential in the area.Crimson plans to spud a second well
targeting the Buda Limestone formation early in the third quarter of 2013 and
has indicated that it will commit to a full time drilling rig for this project
upon the completion of its announced merger with Contango Oil and Gas Company
in the third quarter of 2013, if favorable results are realized.

East Texas

Wilcox Sand formation

The Fender #1 well located in Anderson County, Texas was drilled in April,
2013.The well was drilled to a depth of 1,545' targeting oil bearing zones of
the Wilcox sands.Initial results are encouraging and indicate the presence of
multiple stacked Wilcox sands.The well is currently being flowed back and
tested for initial flow rates.If this test confirms a commercial Wilcox
discovery, there is a possibility of a multi-well field development, although
it is too early to determine at this time.The Company has an approximate
19.8% WI and 15.4% NRI in this project.

Asset Held for Sale: Remington Village

On March 5, 2013, the Company entered into a Purchase and Sale Agreement with
an undisclosed buyer to sell its Remington Village apartment complex located
in Gillette, Wyoming for $15.0 million.The transaction is now anticipated to
close in June, 2013, subject to further due diligence by the purchaser.There
is no assurance that the transaction will close at that time.

CEO Statement

"We are very encouraged by the early flow back data on the Beeler #2 well and
we are looking forward to drilling a second well in the acreage block in July
of this year to further confirm the potential of this program.Our initial
results and nearby industry data suggest that this program has the potential
to develop into a significant growth catalyst for the Company," said Keith
Larsen, CEO of U.S. Energy Corp."Additionally, we are continuing to seek out
growth opportunities in the oil and gas sector and we have begun our initial
scoping meetings with the U.S. Forest Service to continue the advancement of
the Mount Emmons Project," he added.

Financial Highlights

The following table sets forth selected financial information for the quarters
ended March 31, 2013 and 2012.This information is derived from the financial
statements filed with Company's Form 10-Q for the quarter ended March 31,
2013, and should be read in conjunction with the financial statements
contained therein, including the notes to the financial statements.

U.S. ENERGY CORP.
CORPORATE PRESENTATIONS
(Unaudited)
(Amounts in thousands, except per share amounts)
                                                      
                                     March 31,         December 31,
                                     2013              2012
Balance Sheets:                                        
Cash and cash equivalents             $2,547          $2,825
Current assets                        $24,282         $26,015
Current liabilities                   $13,882         $13,253
Working capital                       $10,400         $12,762
Total assets                          $135,565        $140,827
Long-term obligations                 $11,448         $11,457
Shareholders' equity                  $110,235        $116,117
                                                      
Shares Outstanding                    27,667,602       27,409,908
                                                      
                                     For the three months ended March 31,
                                     2013              2012
Statements of Operations:                              
Operating revenues                    $7,879          $8,335
Loss from continuing operations       $(6,160)        $(712)
Other income & expenses               $30             $(121)
Benefit from income taxes             $--             $388
Discontinued operations, net of taxes $232            $64
Net loss                              $(5,898)        $(381)
Net loss per share                                     
Basic and diluted                     $(0.21)         $(0.01)
Weighted average shares outstanding                    
Basic and diluted                     27,667,102       27,438,584

*Non-GAAP Financial Measures

Modified EBITDAX

In addition to reporting net income (loss) as defined under GAAP, in this
release we also present net earnings before interest, income taxes,
depreciation, depletion, and amortization, accretion of discount on asset
retirement obligations, non-cash impairments, unrealized derivative gains and
losses and non-cash stock compensation expense ("Modified EBITDAX"), which is
a non-GAAP performance measure.Modified EBITDAX excludes certain items that
the Company believes affect the comparability of operating results and can
exclude items that are generally one-time or whose timing and/or amount cannot
be reasonably estimated. Modified EBITDAX is a non-GAAP measure that is
presented because the Company believes that it provides useful additional
information to investors, as a performance measure.Modified EBITDAX does not
represent, and should not be considered an alternative to, GAAP measurements,
such as net income (loss) (its most directly comparable GAAP measure), or as a
measure of liquidity, and our calculations thereof may not be comparable to
similarly titled measures reported by other companies.We also believe that
Modified EBITDAX is useful to investors because similar measures are
frequently used by securities analysts, investors, and other interested
parties in their evaluation of companies in similar industries.Our management
uses Modified EBITDAX to manage our business, including preparation of our
annual operating budget and financial projections.Our management does not
view Modified EBITDAX in isolation and also uses other measurements, such as
net income (loss) and revenues, to measure operating performance.The
following table provides a reconciliation of net income (loss) to Modified
EBITDAX for the periods presented (in thousands):

                                         For the three months ended March 31,
                                         2013                2012
Net (loss)                                $(5,898)          $ (381)
Impairment of oil and natural gas         5,828              --
properties
Accretion of asset retirement obligation  9                  9
Non-cash compensation expense             114                73
Unrealized (gain) loss on commodity       616                59
derivatives
Benefit from income taxes                 --                 (388)
Interest expense                          80                 39
Depreciation, depletion and amortization  3,532              3,798
Modified EBITDAX (Non-GAAP) ^(*)          $4,281            $3,209

About U.S. Energy Corp.

U.S. Energy Corp. is a natural resource exploration and development company
with a primary focus on the exploration and development of its oil and gas
assets.The Company also owns the Mount Emmons molybdenum deposit located in
west central Colorado.The Company is headquartered in Riverton, Wyoming and
trades on the NASDAQ Capital Market under the symbol "USEG".

To view the Company's Financial Statements and Management's Discussion and
Analysis, please see the Company's 10-Q for the quarter ended March 31, 2013
which is available at www.sec.gov and www.usnrg.com.

The U.S. Energy Corp. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5043

                Disclosure Regarding Forward-Looking Statement

This news release includes statements which may constitute "forward-looking"
statements, usually containing the words "will," "anticipates," "believe,"
"estimate," "project," "expect," "target," "goal," or similar
expressions.Forward looking statements in this release relate to, among other
things, U.S. Energy's expected future production and capital expenditures and
projects, its drilling and fracing of wells with industry partners and
potential additional drilling opportunities, its ownership interests in those
wells, the oil and natural gas targets or goals for the wells, future capital
expenditures (including the availability of funds to make such expenditures)
and projects, future expenses, production, costs and sale transactions, and
activities relating to the Mount Emmons project.There is no assurance that
any of the wells referenced in this press release will be economic.Initial
and current production results from a well are not necessarily indicative of
its longer-term performance.Future transactions may not close on the terms we
anticipate or at all. Results from exploration and development activities
conducted on properties near properties in which the Company has an interest
may not be indicative of the results the Company will generate from its
properties or the value of those properties.The forward-looking 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, dry holes and other
unsuccessful development activities, higher than expected expenses or decline
rates from production wells, future trends in commodity and/or mineral prices,
the availability of capital, competitive factors, and other risks described in
the Company's filings with the SEC (including, without limitation, the Form
10-K for the year ended December 31, 2012 and the Form 10-Q for the quarter
ended March 31, 2013) all of which descriptions are incorporated herein by
reference.By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revision or changes after the
date of this release.

CONTACT: Reggie Larsen
         Director of Investor Relations
         U.S. Energy Corp.
         1-800-776-9271
         Reggie@usnrg.com

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