August 26, 2009 (FinancialWire) — U.S. Energy Corp. (NASDAQ: USEG) (USE” or the “company), a natural resources exploration and development company with interests in molybdenum, oil and gas, and real estate assets, said its partner, Houston Energy, L.P. has advised that an initial production test from the Stoddard #1 well (first well drilled with HE) in Southeast Texas resulted in approximately 3.9 MMCF and 240 barrels of oil per day or an equivalent of 5.34 MMCFE/D.

Upon reaching contract depth on the Stoddard #1 well in June, HE encountered two productive zones with approximately 35 feet of net pay in the Tex-Miss and F3 Frio sands. Sales expected to commence within the next 60 days. Optimal production flow rates to sales will be determined once hooked up to sales lines. U.S. Energy Corp. has an 8.5% after casing point working interest (6.2% net revenue interest). There is also a 10% after prospect payout back-in working interest due the operator, which would reduce USE’s working interest to 7.65% (5.6% net revenue interest) APO.

“We are very pleased with the initial production rates of the Stoddard well,” stated Keith Larsen, CEO of U.S. Energy Corp. “With the company’s strong balance sheet we continue to seek out additional oil and gas opportunities, while working towards our stated goals of further establishing recurring revenues and cash flow in order to enhance shareholder value,” he added.

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