exhibit10-1.htm


    
      

    

     

     

    
      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.

      


      *
* * * *

      


      For
further information, please contact:

      Keith
G. Larsen, CEO or Mark J. Larsen, President

      U.S.
Energy Corp. (307) 856-9271