Reported by WEN Staff

RIVERTON - U.S. Energy Corp. (Nasdaq:USEG) announced that Standard Steam Trust LLC (”SST”) has embarked on a 22-hole temperature gradient drilling (TGD) program at one of its geothermal prospects in an area of known geothermal potential in Idaho. .This process is a preliminary step in determining the commercial viability of the property.

Results from the first five temperature gradient drill holes
have already been received and indicate an increase in water
temperature of 5-7 F degrees per 100 feet. These increases
indicate that commercial water temperatures may be found
between 3,500 to 5,000 ft.

SST has targeted this area in Idaho due to its historical
production of hot water from local water wells, previous deep
hot water drill hole tests, access to transmission capacity and
a leasehold that is comprised mostly of fee and leased state
land.

If the TGD program continues to produce results similar to the
first five wells, a production test drilling program will
follow, with the goal of generating sufficient data to support
an industry standard reserve report detailing megawatt
production potential for the property.

“Increasingly aggressive state and federal targets for renewable energy generation are resulting in a growing governmental commitment to geothermal energy development ranging from the opening of new permitting offices, a streamlined leasing application process and a $400 million allocation under the American Recovery and Reinvestment Act,” stated Keith Larsen, CEO of U.S. Energy Corp. “Our temperature gradient drilling program in Idaho is a first substantial step in proving up a commercially viable geothermal resource. ”

In December 2008, U.S. Energy announced it had acquired a 25%
interest in Standard Steam Trust LLC, a private geothermal
exploration and development company based in Denver, Colorado.
At that time, SST had approximately 60,000 acres of BLM, state
and fee leases in six prospect areas in three states. Since
then, SST has acquired an additional 13,500 acres of new leases
with geothermal potential.

SST’s overall goal is to have approximately 140,000 total net
acres under lease by year end 2009.