EXCHANGE AGREEMENT

     THIS  EXCHANGE  AGREEMENT  (this  "Agreement") is made as of the 3rd day of
June,  2003  by  and  between  U.S.  Energy  Corp.(the  "Company" or "USEG") and
                             ("Holder").
----------------------------

     WHEREAS,  pursuant  to that certain Subscription Agreement, dated as of the
date  hereof,  by and between Holder, Rocky Mountain Gas, Inc. ("RMG") and USEG,
Holder  agreed  to  purchase, on the terms and conditions described therein, (i)
44,444  shares  of  RMG  common  stock  at  a price of $2.25 per share (the "RMG
Shares")  for  an  aggregate  purchase  price  of  $100,000.00, (ii) warrants to
purchase  up  to  8,333 shares of RMG common stock (the "RMG Warrant") and (iii)
warrants to purchase up to 6,250 shares of USEG common stock (the "USEG Warrant"
and,  together  with  the RMG Shares and the RMG Warrant, the "Securities"); and

     WHEREAS,  the  parties  hereto  have  agreed  that  the RMG Shares shall be
exchangeable  for  shares of USEG common stock ("USEG Common Stock") as provided
for  in  this  Agreement.

     NOW  THEREFORE,  in  consideration of the premises and the mutual covenants
contained  in  this  Agreement,  the  parties to this Agreement, intending to be
legally  bound,  hereby  agree  as  follows:

     1.     Exchange.
            --------

          a.   Optional  Exchange.  Upon the terms and subject to the conditions
               ------------------
set  forth herein, each of the RMG Shares then outstanding may, at the option of
Holder,  be  exchanged  at  any time, and from time to time, into fully-paid and
nonassessable  shares  of  USEG  Common  Stock  (each, an "Exchange"); provided,
however,  that  there  shall  be no more than three such Exchanges, which may be
twice  in  amounts of 14,814 Shares and once for 14,815 Shares, or other amounts
at  Holder'  election, so long as there are no more than three Exchanges. Shares
of  RMG  common  stock  issued  upon  exercise  of  the  RMG Warrant will not be
exchangeable  for  shares  of  USEG  Common  Stock.

          b.   Expiration  of Exchange Rights. If the Market Price (as that term
               ------------------------------
is  defined herein) exceeds $7.50 per share for twenty (20) consecutive business
days,  Holder  may,  at  her option, notify USEG of that fact, whereupon Holder'
right  to effectuate an Exchange will expire if not exercised within twenty (20)
business  days  after  Holder  provides  such  notice  to  USEG.

          c.   USEG Common Stock Issuable Upon Exchange. The number of shares of
               ------------------------------------------
USEG  Common  Stock  that  Holder  shall be entitled to receive upon an Exchange
shall  be  equal  to the quotient obtained by dividing (i) the Exchange Value of
the RMG Shares being exchanged (determined as provided in Section 1(d) below) by
(ii)  the  Exchange  Rate then in effect (determined as provided in Section 1(e)
below).

          d.   Exchange  Value.  The "Exchange Value" of any RMG Shares that are
               ---------------
the  subject  of  an Exchange shall be equal to the product of (i) the number of
RMG Shares being exchanged by (ii) the Effective Purchase Price (as that term is
defined  in  the  Exchange  Agreement)  in  effect at the time of such Exchange.

          e.   Exchange  Rate.  The  "Exchange Rate" with respect to an Exchange
               --------------
shall  be  equal to the product of (i) the Market Price for each of the five (5)
consecutive  business  days  prior  to  such  Exchange  multiplied by (ii) 0.85;
provided,  however,  that  if  the  Exchange  Rate  with respect to any Exchange
calculated  pursuant to this paragraph (d) exceeds $5.00, then the Exchange Rate
with  respect  to  such  Exchange  shall  be  deemed  to  be  equal  to  $5.00.

          f.   Market  Price.
               -------------

               (1)  If  shares  of  USEG  Common  Stock are listed on a national
securities  exchange,  are  admitted  to  unlisted trading privileges on such an
exchange,  or  are  listed  for  trading on a trading system of The Nasdaq Stock
Market,  Inc.,  then the "Market Price" shall be the last reported sale price of
shares  of USEG Common Stock during normal business hours on such an exchange or
system;  or

               (2)  If  shares  of  USEG  Common Stock are not so listed on such
exchange  or system or admitted to unlisted trading privileges, then the "Market
Price"  shall  be  the  average  of  the  last reported bid prices during normal
business  hours  reported  by  the  National  Quotation  Bureau,  Inc.;  or

               (3)  If shares of USEG Common Stock are not so listed or admitted
to  unlisted trading privileges and if bid and asked prices are not so reported,
then the "Market Price" shall be an amount, not less than book value, determined
in  such  reasonable  manner  as  may  be  mutually  agreed upon by the board of
directors  of  the  Company  and  Holder.

          g.   Mechanics  of  Exchange. The rights of Exchange set forth Section
               -----------------------
1(a)  shall be exercised by Holder giving written notice (the "Exchange Notice")
to  USEG that Holder elects to effectuate an Exchange. Upon Holder' giving of an
Exchange  Notice,  Holder will surrender to USEG the certificate or certificates
(the  "Exchange Certificates") representing the RMG Shares being exchanged, duly
endorsed in blank or accompanied by an effective stock power; provided, however,
that  the  failure of the holder to surrender the required Exchange Certificates
shall  not  render  ineffective  any  such  Exchange and, in such event, the RMG
Shares  that  are  the  subject  of  such Exchange shall thereafter be deemed no
longer  to  be  outstanding  and  to  represent  only  the  right  to  receive a
certificate  or  certificates  for shares of USEG Common Stock upon surrender of
the  Exchange  Certificates  as  provided  in  Section  1(g)(2).

               (1) Each Exchange Notice shall include a statement of the name or
names  (with  address), subject to compliance with applicable laws to the extent
such  designation  shall  involve  a  transfer,  in  which  the  certificate  or
certificates for shares of USEG Common Stock shall be issued, and shall be given
to  the  Company  at  its principal office at any time during its usual business
hours  on  the  date  set  forth  in  such  notice.

               (2)  Within  three  (3)  business  days  after the receipt by the
Company  of an Exchange Notice pursuant to an Optional Exchange and surrender of
the Exchange Certificates, the Company shall cause to be issued and delivered to
Holder  or  her  designee  a certificate or certificates for the number of whole
shares  of  USEG  Common Stock issuable upon such Exchange. The certificates for
such  USEG  Common Stock shall be registered in such name or names as Holder may
direct,  subject  to  compliance  with  applicable  laws  to  the  extent  such
designation  shall  involve  a  transfer.

               (3) To the extent permitted by law, each Exchange shall be deemed
to  have  been  effected,  and  the Exchange Rate shall be determined, as of the
close  of  business  on  the date on which an Exchange Notice is sent by Holder.

          h.   Fractional  Shares.  If any Exchange would result in the issuance
               ------------------
of  any  fractional  shares  of USEG Common Stock, the Company shall, in lieu of
issuing  any  fractional  share,  pay cash equal to the product of such fraction
multiplied  by  the  Market  Price  on  the  date  of  exchange.

          i.   Balance  Certificates.  In  the event some but not all of the RMG
               ---------------------
Shares  are  not  exchanged  pursuant  to  an  Exchange, USEG shall cause RMG to
execute  and  deliver to or on the order of Holder, at the expense of RMG, a new
certificate  representing  the  number  of  RMG Shares which were not exchanged.

          j.   Lost  Certificates.  Upon  receipt  by  the  Company  of evidence
               ------------------
satisfactory  to  it  of  the  loss,  theft,  destruction  or  mutilation of any
certificates  for RMG Shares, and (in the case of loss, theft or destruction) of
reasonably  satisfactory indemnification, and upon surrender and cancellation of
any  certificates  for  RMG  Shares,  if mutilated, the Company will execute and
deliver  one  or  more  new  certificates  of  like  tenor  and  date.

     2.     Registration  Covenant.
            ----------------------

          a.  Holder  enters  into this Agreement in reliance upon the Company's
assurance  of  providing  to Holder the benefits of a registration statement and
the  prospectus  to be contained therein, to permit Holder to sell all shares of
USEG  Common  Stock  issuable  upon an exchange or an exercise of the Securities
under  circumstances  involving  a  public  offering,  as  soon  as  reasonably
practicable  after such exchange or exercise. To that end, the Company covenants
and  agrees  with  Holder that the Company shall, on behalf of Holder, (1) under
Section  6  of  the Securities Act of 1933, as amended (the "Act"), file, within
thirty  (30)  days  of  the date hereof, a registration statement on Form S-3 (a
"Registration  Statement")  with  (and  use  its  best  efforts  to  cause  such
registration  statement  to be declared effective as promptly as practicable by)
the  United  States  Securities  and  Exchange Commission (the "SEC"), to permit
offers and sales involving a public offering (as such term is interpreted by the
SEC)  under  Section  5  of the Act by Holder of the Registrable Shares (as that
term  is  defined  herein) in accordance with this Agreement; provided, however,
that  if  Form  S-3 is not available at that time, then the Company shall file a
registration  statement  on such form then available to effect a registration of
the Registrable Shares, subject to the consent of Holder, which consent will not
be  unreasonably  withheld;  and  (2)  qualify  such  offers  and  sales  of the
Registrable  Shares  under  the  securities  laws  of  the state of residence of
Holder.  The  Registration  Statement  under  clause  (1)  above may be only for
Holder'  Registrable  Shares,  or may be for Holder' Registrable Shares and also
for  shares  registered  for  resale  by  other  persons.

          b.  For purposes of this Agreement, "Registrable Shares" means any and
all  shares of USEG Common Stock that are issued or are issuable pursuant to the
Subscription  Agreement,  the  Warrants  or  this  Agreement.  The  number  of
Registrable  Shares  shall  initially  be  set at 100,000, based upon an assumed
Exchange  Rate of approximately $1.00. In the event that, from time to time, the
number  of  shares  USEG Common Stock issued or issuable upon Exchange of Shares
pursuant  to  Section 1 hereof and upon exercise of the USEG Warrant exceeds the
number  of  Registrable  Shares  previously registered under this Section 2, the
Company  shall file with the SEC, as soon as practicable, one or more additional
registration  statements  contemplated by paragraph (a) above (each, in addition
to  the  Registration  Statement  referred  to  in  paragraph  (a)  above,  a
"Registration Statement") to increase the number of Registrable Shares such that
a  sufficient number of shares are registered to cover all shares of USEG Common
Stock  issued  or issuable upon such Exchange or exercise. In the event that the
number  of shares of USEG Common Stock issued upon the completed Exchange of all
of  the Shares is less than the number of shares of USEG Common Stock previously
registered under Section 6 of the Act, the number of shares of USEG Common Stock
representing  such difference may, at the option of the Company, be deregistered
by  filing  an  amendment  to  the  Registration  Statement  with  the  SEC.

          c.  If  after  the date hereof the Company issues additional shares of
USEG  Common  Stock  to  which  Holder is entitled as a result of a stock split,
stock  dividend,  recapitalization,  combination or similar event, the Company's
registration covenant contained in this Section 2 shall extend to and cover such
additional  shares  of  USEG  Common  Stock  received  by  Holder.

          d.  In  furtherance  of  implementing  such  covenant, the Company and
Holder  agree  that:

               (1) The Company shall pay all expenses of registration, including
filing  fees,  printing  fees,  fees and costs of counsel, fees and costs of the
Company's  audit  firm  incurred in review of and providing consent to filing of
the  Registration  Statement,  and  qualification  fees (and associated costs of
counsel) of the sale of the Registrable Shares under the laws of the state where
Holder  resides.  The  Company  shall  not  pay  commissions owed on sale of the
Registrable  Shares.

               (2)  Holder  shall  provide  the  Company  with  all  information
reasonably  required  by the Company to comply with the rules and regulations of
the  SEC  in  respect  of information about Holder to be included in the initial
filing  of the Registration Statement on Form S-3, and thereafter for so long as
the  Registration  Statement  is  effective  under  paragraph  (4)  below.

               (3) The Company shall prepare and file the Registration Statement
with  the  SEC  within  thirty  (30)  days of the date hereof. The Company shall
provide  to  counsel  for  Holder  pre-filing drafts of the initial Registration
Statement,  all  comments  received  from  the  staff of the SEC concerning such
filing  and  drafts  of  any  subsequent  amendments  or  supplements  to  the
Registration  Statements  on  a pre-filing basis. The Company shall use its best
efforts  to  respond  to  any comments from the staff as soon as practicable, by
filing amendments to the Registration Statement or otherwise, with the objective
of  having  the Registration Statement declared effective as soon as practicable
after  initial  filing.  The  Company  shall  inform  Holder in writing, through
counsel, of the Registration Statement's effective date when granted, and of the
effective  date of qualification for offer and sale of the Registrable Shares by
the  securities  law  administrator  of  the  state  wherein Holder resides. The
Company  also shall register and qualify the Registrable Shares under applicable
state  securities  laws  and  list  such  Registrable Shares on The Nasdaq Stock
Market  National Market if shares of the Company's common stock are so listed at
the  time  the  Registration  Statement  becomes  effective, and take such other
actions  as  are  reasonable or necessary to comply with the requirements of the
Act  and  the  regulations thereunder, or the reasonable request of Holder, with
respect  to  the  registration  and  distribution  of  the  Registrable  Shares.

               (4)  The  Company  shall  maintain  the  effectiveness  of  the
Registration  Statement  and  the  current  and  complete  status of the related
prospectus,  at  its  sole  expense,  until  the  earlier  of  the  sale  of all
Registrable  Shares  by Holder or other persons pursuant to paragraph (5) below,
subject  to  the  provisions  of  paragraph  (a)  above.

               (5)  The registration covenant is only for the benefit of Holder,
and  such  other persons who may come to own the Registrable Shares prior to the
effective  date  of  the Registration Statement, provided subsequent owners have
become  such  in  compliance  with  the  Act to be established to the reasonable
satisfaction  of  the  Company.

     3.     Indemnification.
            ---------------

           a.   By Holder. Holder agrees  to indemnify and hold  harmless  USEG,
                ---------  ------
and  each other person who controls USEG within the meaning of Section 15 of the
Act,  against  any and all loss, liability, claim, damage and expense whatsoever
(including,  but  not  limited  to,  any  and all expenses whatsoever reasonably
incurred  in  investigating,  preparing  or  defending  against  any  litigation
commenced  or  threatened  or any claim whatsoever) arising out of or based upon
any  materially false or misleading representation or information made by Holder
                                                                          ------
to  the  Company  in connection with information or representations furnished by
Holder  expressly  for  use  in  connection  with  the  Registration  Statement.

          b.   By  USEG.  USEG agrees to indemnify and hold harmless Holder, and
               --------
each  other  person  who controls Holder within the meaning of Section 15 of the
Act,  against  any and all loss, liability, claim, damage and expense whatsoever
(including,  but  not  limited  to,  any  and all expenses whatsoever reasonably
incurred  in  investigating, preparing or defending against any litigation which
is commenced or threatened or any claim whatsoever) arising out of or based upon
any  materially false or misleading statement or any misrepresentation or untrue
statement  made  by  the  Company  in  the Registration Statement. However, this
indemnification  shall  not  extend  to and shall not cover any loss, liability,
claim,  damage  or expense in connection with any materially false or misleading
statement,  misrepresentation  or  untrue statement made in reliance upon and in
conformity  with  written  information  furnished  to  USEG  by  Holder which is
specifically  intended  by Holder for use in the preparation of the Registration
Statement  or  the preliminary prospectus or prospectus to be contained therein.

          c.   Procedures.  Promptly after receipt by an indemnified party under
               ----------
this  Section  3  of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may  make  a claim under this Section 3, such indemnified party shall deliver to
the  indemnifying  party  a  written  notice of the commencement thereof and the
indemnifying  party  shall  have the right to participate in, and, to the extent
the  indemnifying  party  so  desires, jointly with any other indemnifying party
similarly  noticed,  to  assume  the  defense  thereof  with  counsel reasonably
satisfactory  to  the  indemnified party; provided, however, that an indemnified
party  shall have the right to retain its own counsel at its own expense (except
as  specifically  provided  below). The failure to deliver written notice to the
indemnifying  party  within  a reasonable time following the commencement of any
such  action  shall  not relieve such indemnifying party of any liability to the
indemnified  party  under  this  Section  3  unless  and  to the extent that the
indemnifying  party  is  actually  prejudiced  thereby, but in no event shall it
relieve  the  indemnifying  party  of  any  liability  that  it  may have to any
indemnified  party  otherwise  than  pursuant  to  this  Section 3. Any fees and
expenses  incurred  by  the  indemnified  party (including any fees and expenses
incurred  in connection with investigating or preparing to defend such action or
proceeding)  shall  be  paid to the indemnified party, as incurred, within sixty
(60)  days  of  written  notice thereof to the indemnifying party (regardless of
whether it is ultimately determined that an indemnified party is not entitled to
indemnification  hereunder,  but in such event such amounts shall be immediately
refunded).  Any  such  indemnified party shall have the right to employ separate
counsel  in  any  such  action,  claim  or  proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of  such  indemnified  party unless (i) the indemnifying party has agreed to pay
such  fees  and  expenses  or  (ii)  the indemnifying party shall have failed to
promptly  assume  the  defense  of such action, claim or proceeding or (iii) the
named  parties  to any such action, claim or proceeding (including any impleaded
parties)  include  both  such  indemnified party and the indemnifying party, and
such  indemnified party shall have been advised by counsel that there may be one
or  more  legal defenses available to it which are different from or in addition
to  those  available  to  the  indemnifying party and that the assertion of such
defenses  would  create a conflict of interest such that counsel employed by the
indemnifying  party  could  not  faithfully  represent the indemnified party, it
being  understood, however, that the indemnifying party shall not, in connection
with  any  one  such  action,  claim or proceeding or separate but substantially
similar  or  related  actions,  claims  or  proceedings in the same jurisdiction
arising  out of the same general allegations or circumstances, be liable for the
reasonable  fees  and  expenses  of  more  than  one  separate firm of attorneys
(together  with  appropriate local counsel) at any time for all such indemnified
parties.  No  indemnifying party shall be liable to an indemnified party for any
settlement of any action, proceeding or claim without the written consent of the
indemnifying  party,  which  consent  shall  not  be  unreasonably  withheld.

          d.   Contribution.  If  the indemnification required by this Section 3
               ------------
from  the indemnifying party is unavailable to an indemnified party hereunder in
respect  of  any losses, claims, damages, liabilities or expenses referred to in
this  Section  3,  (i)  the  indemnifying  party,  in  lieu of indemnifying such
indemnified  party,  shall  contribute  to  the  amount  paid or payable by such
indemnified  party  as  a result of such losses, claims, damages, liabilities or
expenses  (x)  in  such  proportion  as  is  appropriate to reflect the relative
benefits  received by the indemnifying party on the one hand and the indemnified
party or parties on the other or (y) if the allocation provided by clause (x) is
not  permitted  by applicable law, in such proportion as to reflect not only the
relative  benefits  received  by  the indemnifying party on the one hand and the
indemnified  party  or  parties on the other, but also the relative fault of the
indemnifying  party and indemnified parties in connection with the actions which
resulted  in  such  losses, claims, damages, liabilities or expenses, as well as
any  other  relevant  equitable  considerations.  The  relative  fault  of  such
indemnifying  party and indemnified parties shall be determined by reference to,
among other things, whether any has been committed by, or relates to information
supplied  by,  such  indemnifying party or indemnified parties, and the parties'
relative  intent, knowledge, access to information and opportunity to correct or
prevent  such  materially  false or misleading representation, warranty or other
information;  and  (ii)  USEG  and  Holder  agree  that it would not be just and
equitable  if  contribution pursuant to this Section 3(d) were determined by pro
rata  allocation  or  by any other method of allocation which does not take into
account  the  equitable considerations referred to in Section 3(d)(i) hereof. No
person  guilty  of  fraudulent  misrepresentation  within the meaning of Section
11(f)  of  the Act shall be entitled to contribution from any Person who was not
guilty  of such fraudulent misrepresentation. The obligations of the Company and
the Subscriber under this Section 3 shall survive the completion of any offering
of  securities  pursuant  to  the  Registration  Statement.

     4.     Rule  144;  Exchange  Act Filings.  The Company covenants and agrees
            ---------------------------------
that  it  will  file  as  and  when  applicable,  on a timely basis, all reports
required  to  be  filed  by it under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act").  If, for any reason the Company is not required to
file  reports  pursuant to the Exchange Act, the Company shall at the request of
Holder  make publicly available the information specified in subparagraph (c)(2)
of  Rule  144  of  the  Act,  and  take such further action as may be reasonably
required  from  time  to time and as may be within the reasonable control of the
Company,  to  enable  Holder  to transfer the Securities to a transferee without
registration  under  the Act within the limitation of the exemptions provided by
Rule  144  under  the Securities Act or any similar rule or regulation hereafter
adopted by the Commission. The Company further covenants and agrees that it will
furnish  to Holder so long as Holder owns the Securities, promptly upon request,
(i)  a  written statement by the Company as to the status of its compliance with
the  reporting  requirements  of  Rule 144, the Act and the Exchange Act, (ii) a
copy of the most recent annual or quarterly report of the Company and such other
reports  and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit Holder to sell such Securities pursuant
to  Rule  144  without  registration.

     5.     Modification.  Neither  this Agreement  nor  any  provisions  hereof
            ------------
shall  be  modified, discharged or terminated except by an instrument in writing
signed  by  the party against whom enforcement of any modification, discharge or
termination  is  sought.

     6.     Legend.  Each  certificate representing  the  shares of  USEG Common
            ------
Stock  issuable  upon exchange of the Shares or exercise of the USEG Warrant, as
the  case may be, will be imprinted with a legend in substantially the following
form:

     "THE  SECURITIES  REPRESENTED  BY  THIS INSTRUMENT HAVE NOT BEEN REGISTERED
     UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
     STATE  SECURITIES  LAWS,  AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR
     SALE  OR  TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT
     AND  OTHER  APPLICABLE  SECURITIES  LAWS WITH RESPECT TO SUCH SECURITIES IS
     THEN  IN  EFFECT,  OR  IN AN OPINION OF COUNSEL OF THE REGISTERED OWNER AND
     ADDRESSED  TO  THE  ISSUER  AND  IN  FORM AND SUBSTANCE SATISFACTORY TO THE
     ISSUER,  SUCH  REGISTRATION  UNDER  THE SECURITIES ACT AND OTHER APPLICABLE
     SECURITIES  LAWS  IS  NOT  REQUIRED."

     7.     Notices.  All  notices  required  to  be given to any of the parties
            -------
hereunder  shall  be  in  writing  and shall be deemed to have been sufficiently
given  for  all  purposes  when  presented  personally  to such party or sent by
certified  or  registered  mail,  return receipt requested, to such party at its
address  set  forth  below:

     If  to  the  Company:             U.S.  Energy  Corp.
     --------------------
                                       877  North  8th  West
                                       Riverton,  Wyoming  82501
                                       Attn:  Keith  Larsen
                                       Fax:  307-857-3050

     With  a  copy  to:                The  Law  Offices of  Stephen  E.  Rounds
     -----------------
                                       1544  York  Street,  Suite  110
                                       Denver,  Colorado  80206
                                       Attn:  Stephen  E.  Rounds,  Esq.
                                       Fax:  303-377-0231


     If  to  the  Holder:              Holder
     -------------------



     Such  notice  shall  be  deemed  to  be  given  when  received if delivered
personally  or  two  (2)  business  days  after  the date sent by FedEx or other
delivery  service, with delivery specified to be not later than 'second business
day.'  Any  notice  of  any  change  in  such address shall also be given in the
manner  set  forth above.  Whenever the giving of notice is required, the giving
of  such  notice  may be waived in writing by the party entitled to receive such
notice.

     8.     Counterparts.  This  Agreement  may  be  executed through the use of
            ------------
separate  signature  pages,  which  taken  together shall constitute one binding
agreement.

     9.     Section  and  Other  Headings.  The  section  and  other  headings
            -----------------------------
contained  herein  are  for  reference  purposes  only  and shall not affect the
meaning  or  interpretation  of  the  Agreement.

     10.     Survival.  All  representations, warranties and covenants contained
             --------
in  the  Agreement  shall survive all changes in the transactions, documents and
instruments  described  herein that are not material or which are to the benefit
of  Holder.

     11.     Notification  of  Changes.  Holder hereby  covenants  and agrees to
             -------------------------
notify  the  Company  upon  the  occurrence  of any event prior to the Company's
execution  and acceptance of this Agreement that would cause any representation,
warranty,  or  covenant  of  Holder  contained  in  the Agreement to be false or
incorrect.

     12.     Binding  Effect.  This Agreement shall be binding upon and inure to
             ---------------
the  benefit  of  and be enforceable by each of the parties and their respective
successors  and  assigns.

     13.     Entire Agreement.  This instrument contains the entire agreement of
             ----------------
the  parties  with  respect  to  the  subject  matter  of  this  Agreement.

     14.     Assignability.  This  Agreement  may  not  be  assigned  by  either
             -------------
party without  the  prior  written  consent  of  the  other  party.

     15.     Applicable  Law.  This Agreement shall be governed by and construed
             ---------------
in  accordance  with the laws of the State of Wyoming as applied to residents of
that  state  entering  into  contracts  wholly  to  be  performed in that state,
notwithstanding  the  jurisdiction  wherein  it  is  signed  by  Holder.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
this  date  above  first  written.


                                        U.S.  ENERGY  CORP.


                                   By:
                                      ------------------------------------------
                                   Name:
                                        ----------------------------------------
                                   Title:
                                         ---------------------------------------



                                       -----------------------------------------
                                       Holder