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[logo.jpg]877 North 8th West, Riverton, WY  82501   (307) 856-9271, Fx:  (307)
857-3050  www.usnrg.com

For Immediate Release

U.S. ENERGY CORP. COMPLETES SALE OF INTEREST IN SUTTER GOLD MINING INC. TO RMB
RESOURCES LTD.

RIVERTON, Wyoming – August 22, 2008 – U.S. Energy Corp. (NASDAQ Capital Market:
“USEG”) (“USE” or the “Company”), today announced that it has completed the sale
of an aggregate of 39,062,720 common shares (the “Purchased Shares”) of Sutter
Gold Mining Inc. (TSX-V:  SGM) (“SGMI”) representing approximately 49.9% of the
outstanding common shares of SGMI to RMB Resources Ltd. (“RMB”), as trustee for
the Telluride Investment Trust, for an aggregate purchase price of approximately
Cdn. $5.4 million, or Cdn $0.138/share in accordance with the terms of a share
purchase agreement (the “Purchase Agreement”) previously announced on June 13,
2008. Under the terms of the agreement, USE retained an equity position of
approximately 3,550,361 shares and a Net Profits Royalty on the project.

In conjunction with the closing of the sale of the shares by USE to RMB, USE
also participated in a non-brokered private placement by SGMI with the purchase
of approximately 4,545,455 units at Cdn. $0.11 per unit for total cash
consideration of Cdn. $500,000.  USE also received 24-month warrants to purchase
an additional 2,272,728 common shares of SGMI at a price of $0.15 per share as
part of the private placement.  All securities issued under the private
placement will be subject to a four-month hold period.

Upon completion of both transactions USE will own approximately 8,095,816 shares
of SGMI.  USE also has retained a 5% Net Profits Royalty on the project, which
will be reduced to a 1% Net Profits Royalty on the project after USE receives an
additional US $4.6 million from production.

“With the sale of our controlling equity position in SGMI we continue to
successfully execute our strategy to monetize non-core assets to support
investment in other areas of our business,” stated Mark Larsen, President of
U.S. Energy Corp.  “In this instance, however, we have chosen to enhance our
residual equity position by making an additional investment in SGMI’s private
placement so we can participate to a greater extent in any future upside
potential,” he added.

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Press Release
August 22, 2008
Page 2 of 2
 

 
About U.S. Energy Corp.

U.S. Energy Corp. is a diversified natural resource company with interests in
molybdenum, oil and gas, gold, and real estate.  While the Company primarily
invests in the natural resource sector, it is also broadening its business
interests to include cash flow generating investments driven by surging growth
created by energy and mining activity in the intermountain west region of the
United States.  The Company is headquartered in Riverton, Wyoming, and its
common stock is listed on The NASDAQ Capital Market under the symbol
“USEG”.  For more information on U.S. Energy Corp., visit its website at
http://www.usnrg.com.

About RMB
 
RMB is a wholly owned unit of the Rand Merchant Bank division of FirstRand
Bank.  The registered office of RMB is Level 13, 60 Castlereagh Street, Sydney,
NSW, Australia.
 
 

 
 
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Disclosure Regarding Mineral Resources
Under SEC and Canadian Regulations;
and Forward-Looking Statements

The Company owns or may come to own stock in companies which are traded on
foreign exchanges, and may have agreements with some of these companies to
acquire and/or develop the Company’s mineral properties.  An example is Sutter
Gold Mining Inc.  These other companies are subject to the reporting
requirements of other jurisdictions.

United States residents are cautioned that some of the information available
about our mineral properties, which is reported by the other companies in
foreign jurisdictions, may be materially different from what the Company is
permitted to disclose in the United States.

This news release includes statements which may constitute “forward-looking”
statements, usually containing the words “believe,” “estimate,” “project,”
“expect," or similar expressions.  These statements are made pursuant to the
safe harbor provision of the Private Securities Litigation Reform Act of
1995.  Forward-looking statements inherently involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements.  Factors that would cause or contribute to such differences include,
but are not limited to, future trends in mineral prices, the availability of
capital, competitive factors, and other risks.  By making these forward-looking
statements, the Company undertakes no obligation to update these statements for
revision or changes after the date of this release.

For further information on the differences between the reporting limitations of
the United States, compared to reports filed in foreign jurisdictions, and also
concerning forward-looking statements, please see the Company’s Form 10-K
(“Disclosure Regarding Forward-Looking Statements”; “Disclosure Regarding
Mineral Resources under SEC and Canadian Regulation”; and “Risk Factors”); and
similar disclosures in the Company’s Forms 10-Q.

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For further information, please contact:
Keith G. Larsen, CEO or Mark J. Larsen, President
U.S. Energy Corp. (307) 856-9271