May 19, 2009 (FinancialWire) — U.S. Energy Corp. (NASDAQ: USEG) has entered into an additional participation agreement with Houston, Texas-based Houston Energy L.P. to acquire a 11.11% working interest in an oil and gas prospect located in southeastern Texas.

HE, a privately held independent oil and gas company exploring the Offshore Gulf of Mexico, southern Louisiana, Texas Gulf Coast, western Texas, and southeastern New Mexico, will be the operator of the contract area.

U.S. Energy has paid sunk land costs and a prospect fee of approximately $12,900 and will be responsible for 11.11% of the costs to drill an initial test well to earn an 8.33% after casing point working interest (6.1% net revenue interest). The initial commitment under the agreement is approximately $96,000 to the casing point. Spudding of the well is expected to take place in June 2009 with an initial planned drilling depth of approximately 8,000 feet. HE believes this well has a resource potential of 4 BCF and 280 MBO.

Headquartered in Riverton, Wyoming, U.S. Energy Corp. is a diversified natural resource company with interests in molybdenum, oil and gas, geothermal and real estate assets.

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