December 16, 2009 (FinancialWire) — U.S. Energy Corp. (NASDAQ: USEG), a natural resources exploration and development company with interests in oil and gas, molybdenum, geothermal, and real estate assets, announced the initial production rate from its Williston 25-36 #1H well and provided an operations update regarding its Williston Basin drilling program with Brigham Exploration Company (NASDAQ: BEXP) (Brigham” or “BEXP).

The Williston 25-36 #1H well, which is operated by Brigham Exploration company, produced approximately 2,769 barrels of oil and 3.75 MMCF of natural gas per day or 3,394 BOE/D during an early 24 hour flow back period. The well was completed with swell packers and 32 fracture stimulation stages. To USE’s knowledge, this completion is the highest number of fracture stimulation stages ever attempted in the Williston Basin. U.S. Energy’s initial working interest in this well is approximately 65% (~51% net revenue interest). Oil sales from this well have commenced, and natural gas sales will commence upon connection to a gathering system, which is estimated to take approximately 90-120 days.

Completion work is currently underway on the State 36-1 #1H well, which is the sixth well to be drilled under the previously announced Drilling Participation Agreement with Brigham. The well is being completed with swell packers and 30 fracture stimulation stages. USE’s initial working interest in this well is approximately 28% (~22% net revenue interest), and Brigham has informed USE that it expects to complete and test the well for production before year end.

On November 30, 2009, and subsequent to providing the initial production rate on the fourth well, the Strand 16-9 #1H, Brigham notified USE pursuant to the terms of the Drilling Participation Agreement that the company was required to give notice to Brigham whether the company would elect to participate in the second group of four wells, and that Brigham was electing to have the maximum 50% of the working interest available to Brigham in the second group of wells. On December 2, 2009, USE notified Brigham of its election to participate in these four wells for the remaining 50% working interest available to Brigham in these wells.

The Jack Erickson 6-31 #1H well (~21% initial working interest) will be the seventh well drilled under the Drilling Participation Agreement with Brigham. The well is expected to be spud in the next several days and it is anticipated that it will be completed in approximately 60 days.

“We are extremely delighted to see our first 3,000 plus BOE/D initial production rate well, and we continue to be impressed with Brigham’s management and operations,” stated Keith Larsen, CEO of U.S. Energy Corp. “I look forward to a marked increase in our revenue in 2010,” he added.

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

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