2011-03-02-2011-02-22

To acquire 30% WI in leases in Zavala County covering approximately 4,675 gross contiguous acres in the Eagle Ford shale oil window.

U.S. Energy Corp., Riverton, Wyo., (Nasdaq: USEG) plans to acquire a 30% working interest in an oil prospect and associated leases in Zavala County, Texas, from Houston-based Crimson Exploration Inc. (Nasdaq: CXPO) for an undisclosed price.

U.S. Energy will earn a 30% working interest (22.5% net revenue interest) in approximately 4,675 gross contiguous acres (1,402.5 net acres) in the Eagle Ford shale oil window through a combination of a cash payment and commitment well carry. All future drilling and leasing will be on a heads-up basis.

Crimson will operate and tentatively plans to spud the first well in the area during second-quarter 2011. The well is expected to be drilled to a total depth of approximately 12,500 feet, and to be completed with 14 frac stages.

If successful, the well is planned to be put on production for several months to evaluate well performance and in order to properly plan and budget for an aggressive 2012 drilling program. It is estimated under current spacing that there is a potential for up to 26 gross (7.8 net) drilling locations on the acreage. The prospect also has potential in the Austin chalk, Buda, Georgetown and Pearsall formations.

Looking ahead, U.S. Energy and Crimson have identified and plan to jointly seek additional opportunities in the Eagle Ford oil window.

"We are pleased to announce another oil venture with a proven horizontal operator with a strong presence in Texas. This initial prospect provides us with the potential for multiple drilling locations over the next two to three years," says Keith Larsen, chief executive, U.S. Energy Corp.