June 3, 2009 (FinancialWire) — U.S. Energy Corp. (NASDAQ: USEG) announced that Standard Steam Trust LLC has embarked on a 22-hole temperature gradient drilling program at one of its geothermal prospects in an area of known geothermal potential in Idaho.

The program consists of drilling twenty-two 500-ft holes and is scheduled to run through midsummer 2009. The purpose of the TGD program is to define downhole temperature gradients across a broad spectrum of the lease hold. Data from the TGD program will be used to further identify resource potential and production test drilling targets. 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 and 5,000 ft.

SST’s total current leasehold position is approximately 73,500 acres. This prospect area consists of approximately 7,900 of those acres. 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 consisting of three large diameter wells will follow, with the goal of generating sufficient data to support an industry standard reserve report detailing megawatt production potential for the property.

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.

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

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