----

| x      | Quarterly      report pursuant to section 13 or 15(d) of the Securities Exchange Act of      1934  |
|--------|----------------------------------------------------------------------------------------------------|
|   | For      the quarter ended September 30, 2008 or                                                   |
|   |                                                                                               |
| o      | Transition      report pursuant to section 13 or 15(d) of the Securities Exchange Act of      1934 |
|   | For      the transition period from ___________ to  ____________                                   |

| U.S.      ENERGY CORP.                                  |
|---------------------------------------------------------|
| (Exact      Name of Company as Specified in itsCharter) |

| Wyoming                                               |   | 83-0205516               |
|-------------------------------------------------------|--------|--------------------------|
| (State      or other jurisdiction of                  |   | (I.R.S.      Employer    |
| incorporation      or organization)                   |   | Identification      No.) |
|                                                  |   |                     |
| 877      North 8th      West, Riverton, WY            |   | 82501                    |
| (Address      of principal executive offices)         |   | (Zip      Code)          |
|                                                  |   |                     |
| Company's      telephone number, including area code: |   | (307)      856-9271      |

| Not      Applicable                                                      |
|--------------------------------------------------------------------------|
| Former      name, address and fiscal year, if changed since last  report |

----

| Class                             |   | Outstanding      Shares at November 6, 2008 |
|-----------------------------------|--------|---------------------------------------------|
| Common      stock, $.01 par value |   | 22,389,050                                  |

----

|          |                                                                                                                                    | Page      No.     |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------|-------------------|
| PART      I.  | FINANCIAL      INFORMATION                                                                                                              |              |
|          |                                                                                                                                    |              |
| ITEM      1.  | Financial      Statements.                                                                                                              |              |
|          |                                                                                                                                    |              |
|          | Condensed Balance Sheet as of September 30, 2008 and      Condensed Consolidated Balance Sheet as of December 31, 2007      (unaudited) | 4-5               |
|          |                                                                                                                                    |              |
|          | Condensed Statements of Operations for the Three      and Nine Months Ended September 30, 2008 and    2007(unaudited)                   | 6-7               |
|          |                                                                                                                                    |              |
|          | Condensed Statements of Cash Flows for the Nine      Months Ended September 30, 2008 and 2007 (unaudited)                               | 8-9               |
|          |                                                                                                                                    |              |
|          | Notes to Condensed Financial Statements      (unaudited)                                                                                | 10-25             |
|          |                                                                                                                                    |              |
| ITEM      2.  | Management’s Discussion and Analysis of Financial      Condition and Results of Operations                                        | 26-37             |
|          |                                                                                                                                    |              |
| ITEM      3.  | Quantitative and Qualitative Disclosures about      Market Risk                                                                         | 37                |
|          |                                                                                                                                    |              |
| ITEM      4.  | Controls and Procedures                                                                                                                 | 37                |
|          |                                                                                                                                    |              |
| PART      II. | OTHER      INFORMATION                                                                                                                  |              |
|          |                                                                                                                                    |              |
| ITEM      1.  | Legal Proceedings                                                                                                                       | 38-40             |
|          |                                                                                                                                    |              |
| ITEM      1A. | Risk Factors                                                                                                                            | 40                |
|          |                                                                                                                                    |              |
|          |                                                                                                                                    |              |
| ITEM      2.  | Changes in Securities and Use of Proceeds                                                                                               | 40-41             |
|          |                                                                                                                                    |              |
| ITEM      3.  | Defaults Upon Senior Securities                                                                                                         | 41                |
|          |                                                                                                                                    |              |
| ITEM      4.  | Submission of Matters to a Vote of      Shareholders                                                                                    | 41                |
|          |                                                                                                                                    |              |
| ITEM      5.  | Other Information                                                                                                                       | 41                |
|          |                                                                                                                                    |              |
| ITEM      6.  | Exhibits and Reports on Form 8-K                                                                                                        | 42                |
|          |                                                                                                                                    |              |
|          | Signatures                                                                                                                              | 43                |
|          |                                                                                                                                    |              |
|          | Certifications                                                                                                                          | See      Exhibits |

----

| U.S.      ENERGY CORP.                         |   |
|------------------------------------------------|--------|
| CONDENSED      BALANCE SHEETS                  |   |
| ASSETS                                         |   |
| (Unaudited)                                    |   |
|                                           |   |   |   |   |   |   |
|                                           |   | September      30, |   |   | December      31, |   |
|                                           |   | 2008 |   |   | 2007 |   |
| CURRENT      ASSETS:                           |   |   |   |   |   |   |
| Cash      and cash equivalents                 |   | $ | 1,146,900 |   |   | $ | 72,292,200 |   |
| Marketable      securities                     |   |   |   |   |   |   |   |   |
| Held      to maturity - treasuries             |   |   | 68,561,100 |   |   |   | -- |   |
| Available      for sale securities             |   |   | 892,800 |   |   |   | 480,200 |   |
| Accounts      receivable                       |   |   |   |   |   |   |   |   |
| Trade                                          |   |   | 120,400 |   |   |   | 171,700 |   |
| Reimbursable      project costs                |   |   | 128,500 |   |   |   | 782,100 |   |
| Dissolution      of subsidiaries               |   |   | -- |   |   |   | 197,600 |   |
| Income      taxes                              |   |   | 5,316,500 |   |   |   | 902,900 |   |
| Restricted      investments                    |   |   | 4,928,400 |   |   |   | 6,624,700 |   |
| Assets      held for sale                      |   |   | -- |   |   |   | 1,112,600 |   |
| Real      estate held for sale                 |   |   | 590,700 |   |   |   | -- |   |
| Deferred      tax assets                       |   |   | 601,800 |   |   |   | 59,700 |   |
| Prepaid      expenses and other current assets |   |   | 101,600 |   |   |   | 105,200 |   |
| Total      current assets                      |   |   | 82,388,700 |   |   |   | 82,728,900 |   |
|                                           |   |   |   |   |   |   |   |   |
| PROPERTIES      AND EQUIPMENT:                 |   |   | 66,475,500 |   |   |   | 52,785,200 |   |
| Less      accumulated depreciation,            |   |   |   |   |   |   |   |   |
| depletion      and amortization                |   |   | (4,873,800 | ) |   |   | (4,691,700 | ) |
| Net      properties and equipment              |   |   | 61,601,700 |   |   |   | 48,093,500 |   |
|                                           |   |   |   |   |   |   |   |   |
| OTHER      ASSETS:                             |   |   |   |   |   |   |   |   |
| Restricted      investments                    |   |   | 367,800 |   |   |   | 375,500 |   |
| Deposits      and other                        |   |   | 548,700 |   |   |   | 206,500 |   |
| Total      other assets                        |   |   | 916,500 |   |   |   | 582,000 |   |
| Total      assets                              |   | $ | 144,906,900 |   |   | $ | 131,404,400 |   |
|                                           |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                              |   |
|-----------------------------------------------------|--------|
| CONDENSED      BALANCE SHEETS                       |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                |   |
| (Unaudited)                                         |   |
|                                                |   |   |   |   |   |   |
|                                                |   | September      30, |   |   | December      31, |   |
|                                                |   | 2008 |   |   | 2007 |   |
| CURRENT      LIABILITIES:                           |   |   |   |   |   |   |
| Accounts      payable                               |   | $ | 1,334,800 |   |   | $ | 1,589,600 |   |
| Accrued      compensation                           |   |   | 863,900 |   |   |   | 275,200 |   |
| Short      term construction debt                   |   |   | 16,433,800 |   |   |   | 5,489,000 |   |
| Current      portion of long-term debt              |   |   | 71,900 |   |   |   | 71,900 |   |
| Other      current liabilities                      |   |   | 724,800 |   |   |   | 667,500 |   |
| Total      current liabilities                      |   |   | 19,429,200 |   |   |   | 8,093,200 |   |
|                                                |   |   |   |   |   |   |   |   |
| LONG-TERM      DEBT, net of current portion         |   |   | 133,800 |   |   |   | 190,500 |   |
|                                                |   |   |   |   |   |   |   |   |
| DEFERRED      TAX LIABILITY                         |   |   | 8,950,700 |   |   |   | 6,928,800 |   |
|                                                |   |   |   |   |   |   |   |   |
| ASSET      RETIREMENT OBLIGATIONS                   |   |   | 141,300 |   |   |   | 133,400 |   |
|                                                |   |   |   |   |   |   |   |   |
| OTHER      ACCRUED LIABILITIES                      |   |   | 855,300 |   |   |   | 958,600 |   |
|                                                |   |   |   |   |   |   |   |   |
| PREFERRED      STOCK,                               |   |   |   |   |   |   |   |   |
| $.01      par value; 100,000 shares authorized      |   |   |   |   |   |
| No      shares issued or outstanding                |   |   | -- |   |   |   | -- |   |
|                                                |   |   |   |   |   |   |   |   |
| SHAREHOLDERS'      EQUITY:                          |   |   |   |   |   |   |   |   |
| Common      stock, $.01 par value; unlimited shares |   |   |   |   |   |
| authorized;      23,018,825 and 23,592,493          |   |   |   |   |   |
| shares      issued, respectively                    |   |   | 230,200 |   |   |   | 235,900 |   |
| Additional      paid-in capital                     |   |   | 96,239,900 |   |   |   | 96,560,100 |   |
| Accumulated      surplus                            |   |   | 19,385,300 |   |   |   | 19,050,900 |   |
| Unrealized      loss on marketable securities       |   |   | (458,800 | ) |   |   | (256,500 | ) |
| Unallocated      ESOP contribution                  |   |   | -- |   |   |   | (490,500 | ) |
| Total      shareholders' equity                     |   |   | 115,396,600 |   |   |   | 115,099,900 |   |
| Total      liabilities and shareholders' equity     |   | $ | 144,906,900 |   |   | $ | 131,404,400 |   |
|                                                |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                     |   |
|--------------------------------------------|--------|
| CONDENSED      STATEMENTS OF OPERATIONS    |   |
| (Unaudited)                                |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   | Three      months ended September 30, |   |   | Nine      months ended September 30, |   |
|                                       |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| OPERATING      REVENUES:                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remington      Village real estate         |   | $ | 497,100 |   |   | $ | -- |   |   | $ | 873,100 |   |   | $ | -- |   |
| Other      real estate                     |   |   | 66,500 |   |   |   | 569,400 |   |   |   | 121,800 |   |   |   | 738,600 |   |
| Management      fees and other             |   |   | 5,100 |   |   |   | 56,800 |   |   |   | 51,700 |   |   |   | 198,000 |   |
|                                       |   |   | 568,700 |   |   |   | 626,200 |   |   |   | 1,046,600 |   |   |   | 936,600 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING      COSTS AND EXPENSES:         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remington      Village real estate         |   |   | 232,100 |   |   |   | -- |   |   |   | 474,400 |   |   |   | -- |   |
| Other      real estate                     |   |   | 78,600 |   |   |   | 80,300 |   |   |   | 237,200 |   |   |   | 247,700 |   |
| Mineral      holding costs                 |   |   | 1,208,600 |   |   |   | 238,300 |   |   |   | 2,282,100 |   |   |   | 1,353,700 |   |
| General      and administrative            |   |   | 1,697,500 |   |   |   | 2,150,200 |   |   |   | 5,968,600 |   |   |   | 11,469,500 |   |
|                                       |   |   | 3,216,800 |   |   |   | 2,468,800 |   |   |   | 8,962,300 |   |   |   | 13,070,900 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LOSS      BEFORE INVESTMENT AND            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PROPERTY      TRANSACTIONS                 |   |   | (2,648,100 | ) |   |   | (1,842,600 | ) |   |   | (7,915,700 | ) |   |   | (12,134,300 | ) |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      INCOME & (EXPENSES):        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      gain on sales of assets        |   |   | 12,400 |   |   |   | 400 |   |   |   | (16,600 | ) |   |   | 1,822,600 |   |
| Loss      on sale of marketable securities |   |   | -- |   |   |   | (2,227,000 | ) |   |   | -- |   |   |   | (8,318,400 | ) |
| Gain      (loss) on foreign exchange       |   |   | -- |   |   |   | (72,600 | ) |   |   | -- |   |   |   | 430,000 |   |
| Gain      on sale of uranium assets        |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 111,728,200 |   |
| Loss      from dissolution of subsidiaries |   |   | -- |   |   |   | (78,700 | ) |   |   | -- |   |   |   | (78,700 | ) |
| Dividends                                  |   |   | -- |   |   |   | 17,100 |   |   |   | -- |   |   |   | 22,700 |   |
| Interest      income                       |   |   | 324,100 |   |   |   | 1,195,600 |   |   |   | 1,174,500 |   |   |   | 2,047,000 |   |
| Interest      expense                      |   |   | (146,300 | ) |   |   | (14,000 | ) |   |   | (254,100 | ) |   |   | (63,400 | ) |
|                                       |   |   | 190,200 |   |   |   | (1,179,200 | ) |   |   | 903,800 |   |   |   | 107,590,000 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN BEFORE MINORITY           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST,      PROVISION FOR               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  INCOME      TAXES AND                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DISCONTINUED      OPERATIONS               |   |   | (2,457,900 | ) |   |   | (3,021,800 | ) |   |   | (7,011,900 | ) |   |   | 95,455,700 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MINORITY      INTEREST IN LOSS (GAIN)      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OF      CONSOLIDATED SUBSIDIARIES          |   |   | -- |   |   |   | 147,200 |   |   |   | -- |   |   |   | (3,551,400 | ) |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN BEFORE PROVISION          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FOR      INCOME TAXES AND                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DISCONTINUED      OPERATIONS               |   |   | (2,457,900 | ) |   |   | (2,874,600 | ) |   |   | (7,011,900 | ) |   |   | 91,904,300 |   |

----

| U.S.      ENERGY CORP.                           |   |
|--------------------------------------------------|--------|
| CONDENSED      STATEMENTS OF OPERATIONS          |   |
| (Unaudited)                                      |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   | Three      months ended September 30, |   |   | Nine      months ended September 30, |   |
|                                             |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| INCOME      TAXES:                               |   |   |   |   |   |   |   |   |   |   |   |   |
|  Current      benefit from (provision for)  |   |   | 1,881,000 |   |   |   | 1,995,200 |   |   |   | 4,003,200 |   |   |   | (18,625,100 | ) |
|  Deferred      benefit from (provision for) |   |   | (819,000 | ) |   |   | 526,400 |   |   |   | (1,563,400 | ) |   |   | (14,512,700 | ) |
|                                             |   |   | 1,062,000 |   |   |   | 2,521,600 |   |   |   | 2,439,800 |   |   |   | (33,137,800 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN FROM CONTINUING                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATIONS                                       |   |   | (1,395,900 | ) |   |   | (353,000 | ) |   |   | (4,572,100 | ) |   |   | 58,766,500 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DISCONTINUED      OPERATIONS                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from discontinued operations           |   |   | (210,800 | ) |   |   | (397,000 | ) |   |   | (501,100 | ) |   |   | (1,539,300 | ) |
| Gain      on sale of discontinued                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| operations      (net of taxes)                   |   |   | 5,407,600 |   |   |   | -- |   |   |   | 5,407,600 |   |   |   | -- |   |
|                                             |   |   | 5,196,800 |   |   |   | (397,000 | ) |   |   | 4,906,500 |   |   |   | (1,539,300 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET      (LOSS) INCOME                           |   | $ | 3,800,900 |   |   | $ | (750,000 | ) |   | $ | 334,400 |   |   | $ | 57,227,200 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PER      SHARE DATA                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      (loss) earnings                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| from      continuing operations                  |   | $ | (0.06 | ) |   | $ | (0.02 | ) |   | $ | (0.19 | ) |   | $ | 2.94 |   |
| Basic      earnings (loss)                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| from      discontinued operations                |   |   | 0.22 |   |   |   | (0.02 | ) |   |   | 0.20 |   |   |   | (0.08 | ) |
| Basic      (loss) earnings per share             |   | $ | 0.16 |   |   | $ | (0.04 | ) |   | $ | 0.01 |   |   | $ | 2.86 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      (loss) earnings                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| from      continuing operations                  |   | $ | (0.06 | ) |   | $ | (0.02 | ) |   | $ | (0.19 | ) |   | $ | 2.68 |   |
| Diluted      (loss) earnings                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| from      discontinued operations                |   |   | 0.22 |   |   |   | (0.02 | ) |   |   | 0.20 |   |   |   | (0.07 | ) |
| Diluted      (loss) earnings per share           |   | $ | 0.16 |   |   | $ | (0.04 | ) |   | $ | 0.01 |   |   | $ | 2.61 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BASIC      WEIGHTED AVERAGE                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SHARES      OUTSTANDING                          |   |   | 23,505,340 |   |   |   | 20,558,882 |   |   |   | 23,629,490 |   |   |   | 20,024,465 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DILUTED      WEIGHTED AVERAGE                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SHARES      OUTSTANDING                          |   |   | 23,505,340 |   |   |   | 20,558,882 |   |   |   | 23,629,490 |   |   |   | 21,901,936 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                                |   |
|-------------------------------------------------------|--------|
| STATEMENTS      OF CASH FLOWS                         |   |
| (Unaudited)                                           |   |
|                                                  |   |   |   |   |   |   |
|                                                  |   | For      the nine months ended September 30, |   |
|                                                  |   | 2008 |   |   | 2007 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:            |   |   |   |   |
| Net      income                                       |   | $ | 334,400 |   |   | $ | 57,227,200 |   |
| Gain      on the sale of SGMI stock                   |   |   | (5,407,600 | ) |   |   | -- |   |
| Loss      from discontinued operations                |   |   | 501,100 |   |   |   | 1,539,300 |   |
| Net      (loss) gain from continuing operations       |   |   | (4,572,100 | ) |   |   | 58,766,500 |   |
| Reconcile      net loss from continuing operations    |   |   |   |   |   |
| to      net cash used in operations                   |   |   |   |   |   |   |   |   |
| Minority      interest in the loss of subsidiaries    |   |   | -- |   |   |   | 3,551,400 |   |
| Depreciation                                          |   |   | 688,500 |   |   |   | 302,700 |   |
| Accretion      of asset retirement obligations        |   |   | -- |   |   |   | 6,900 |   |
| Accretion      of discount on treasury investments    |   |   | (991,900 | ) |   |   | -- |   |
| Noncash      interest income                          |   |   | -- |   |   |   | (1,274,000 | ) |
| Income      tax receivable                            |   |   | (3,399,100 | ) |   |   | -- |   |
| Deferred      income taxes                            |   |   | 1,563,400 |   |   |   | 14,512,700 |   |
| Income      tax payable                               |   |   | -- |   |   |   | 1,569,700 |   |
| Gain      on sale of assets to Uranium One            |   |   | -- |   |   |   | (111,728,100 | ) |
| Loss      (gain) on sale of assets                    |   |   | 16,600 |   |   |   | (1,860,800 | ) |
| Gain      on foreign exchange                         |   |   | -- |   |   |   | (443,300 | ) |
| Loss      on sales of marketable securities           |   |   | -- |   |   |   | 8,318,400 |   |
| Warrant      extension and repricing                  |   |   | -- |   |   |   | 156,500 |   |
| Noncash      compensation                             |   |   | 2,135,400 |   |   |   | 1,089,700 |   |
| Noncash      services                                 |   |   | 23,600 |   |   |   | -- |   |
| Net      changes in assets and liabilities:           |   |   | 186,700 |   |   |   | 345,700 |   |
|                                                  |   |   |   |   |   |   |   |   |
| NET      CASH USED IN OPERATING ACTIVITIES            |   |   | (4,348,900 | ) |   |   | (26,686,000 | ) |
|                                                  |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:            |   |   |   |   |   |
| Proceeds      from sale of marketable securities      |   | $ | -- |   |   | $ | 92,250,700 |   |
| Proceeds      from sale of uranium assets             |   |   | -- |   |   |   | 14,022,700 |   |
| Proceeds      from sale of property and equipment     |   |   | 1,097,000 |   |   |   | 1,294,200 |   |
| Acquisition      & development of real estate     |   |   | (11,001,400 | ) |   |   | (6,595,200 | ) |
| Acquisition      of unproved oil & gas properties |   |   | (4,533,600 | ) |   |   | (2,894,100 | ) |
| Acquisition      & development                    |   |   |   |   |   |   |   |   |
| of      unproved mining claims                        |   |   | (517,800 | ) |   |   | (224,200 | ) |
| Acquisition      of property and equipment            |   |   | (55,700 | ) |   |   | (5,584,300 | ) |
| Maturities      of treasury investments               |   |   | 206,320,000 |   |   |   | -- |   |
| Acquisitions      of treasury investments             |   |   | (273,889,200 | ) |   |   | (70,000,000 | ) |
| Net      change in restricted investments             |   |   | 1,704,000 |   |   |   | -- |   |
| Net      change in notes receivable                   |   |   | -- |   |   |   | 560,500 |   |
| Net      change in investments in affiliates          |   |   | -- |   |   |   | (79,500 | ) |
| NET      CASH (USED IN) PROVIDED                      |   |   |   |   |   |   |   |   |
| BY      INVESTING ACTIVITIES                          |   |   | (80,876,700 | ) |   |   | 22,750,800 |   |

----

| U.S.      ENERGY CORP.                              |   |
|-----------------------------------------------------|--------|
| STATEMENTS      OF CASH FLOWS                       |   |
| (Unaudited)                                         |   |
|                                                |   |   |   |   |   |   |
|                                                |   | For      the nine months ended September 30, |   |
|                                                |   | 2008 |   |   | 2007 |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:          |   |   |   |   |
| Issuance      of common stock                       |   |   | 1,527,600 |   |   |   | 2,284,100 |   |
| Issuance      of subsidiary stock                   |   |   | -- |   |   |   | 342,000 |   |
| Payment      of cash dividend                       |   |   | -- |   |   |   | (2,108,300 | ) |
| Restricted      investment for credit facility      |   |   | -- |   |   |   | (4,725,000 | ) |
| Tax      benefit from the exercise of stock options |   |   | 170,400 |   |   |   | 1,415,400 |   |
| Proceeds      from long term debt                   |   |   | 10,944,800 |   |   |   | 164,100 |   |
| Repayments      of long term debt                   |   |   | (56,700 | ) |   |   | (1,089,200 | ) |
| Stock      buyback program                          |   |   | (2,831,500 | ) |   |   | (1,047,300 | ) |
| NET      CASH PROVIDED BY                           |   |   |   |   |   |   |   |   |
| FINANCING      ACTIVITIES                           |   |   | 9,754,600 |   |   |   | (4,764,200 | ) |
|                                                |   |   |   |   |   |   |   |   |
| Net      cash used in operating                     |   |   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | (76,500 | ) |   |   | (1,415,100 | ) |
| Net      cash provided by (used in) investing       |   |   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | 4,402,200 |   |   |   | (37,400 | ) |
|                                                |   |   |   |   |   |   |   |   |
| NET      DECREASE IN                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   | (71,145,300 | ) |   |   | (10,151,900 | ) |
|                                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   |   |   |   |   |   |   |
|  AT      BEGINNING OF PERIOD                   |   |   | 72,292,200 |   |   |   | 16,973,500 |   |
|                                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   |   |   |   |   |   |   |
| AT      END OF PERIOD                               |   | $ | 1,146,900 |   |   | $ | 6,821,600 |   |
|                                                |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURES:                      |   |   |   |   |   |   |   |   |
| Income      tax (received) paid                     |   | $ | (944,900 | ) |   | $ | 15,640,000 |   |
|                                                |   |   |   |   |   |   |   |   |
| Interest      paid                                  |   | $ | 47,800 |   |   | $ | 63,800 |   |
|                                                |   |   |   |   |   |   |   |   |
| NON-CASH      INVESTING AND FINANCING ACTIVITIES:   |   |
|                                                |   |   |   |   |   |   |   |   |
| Issuance      of subsidiary stock to acquire        |   |   |   |   |   |   |   |   |
| mining      claims                                  |   | $ | -- |   |   | $ | 33,700 |   |
|                                                |   |   |   |   |   |   |   |   |
| Receipt      of marketable securities               |   |   |   |   |   |   |   |   |
| from      the sale of assets                        |   | $ | -- |   |   | $ | 99,400,600 |   |
|                                                |   |   |   |   |   |   |   |   |
| Unrealized      loss/gain                           |   | $ | 458,800 |   |   | $ | 195,800 |   |
|                                                |   |   |   |   |   |   |   |   |

----

1)  

----

----

|                                     |   |   |       |   | Accumulated        |   |            |   |
|------------------------------------------|--------|--------|------------|--------|--------------------|--------|-----------------|--------|
|                                     |   |   |       |   | Amortization       |   |            |   |
|                                     |   |   |       |   | Depletion      and |   | Net             |   |
|                                     |   | Cost   |       |   | Depreciation       |   | Book      Value |   |
|  Oil      & Gas properties      |   | $      | 7,468,400  |   |               | $      | -               |   |   | $ | 7,468,400 |   |
|  Mining      properties             |   |   | 21,566,100 |   |               |   | -               |   |   |   | 21,566,100 |   |
|  Rental      properties             |   |   | 22,681,800 |   |               |   | (256,400        | )      |   |   | 22,425,400 |   |
|  Buildings,      land and equipment |   |   | 14,759,200 |   |               |   | (4,617,400      | )      |   |   | 10,141,800 |   |
|  Totals                             |   | $      | 66,475,500 |   |               | $      | (4,873,800      | )      |   | $ | 61,601,700 |   |
|                                     |   |   |       |   |               |   |            |   |   |   |   |   |

----

| Machinery      and equipment    |                                           |
|---------------------------------|------------------------------------------------|
|                            | Office      Equipment                          | 3      to 5 years |
|                            | Aircraft                                       | 10      years |
|                            | Field      Tools and Hand Equipment            | 5      to 7 years |
|                            | Vehicles      and Trucks                       | 3      to 7 years |
|                            | Heavy      Equipment                           | 7      to 10 years |
| Buildings      and improvements |                                           |
|                            | Service      BuildingsMultifamily      Housing | 20      years25      years |
|                            | Corporate      Headquarters' Building          | 45      years |

----

|                                          |   | For      the three months |      |   | For      the nine months ending |   |
|-----------------------------------------------|--------|---------------------------|-----------|--------|---------------------------------|--------|
|                                          |   | September      30,        |      |   | September      30,              |   |
|                                          |   | 2008                      |      |   | 2007                            |   |   | 2008 |   |   | 2007 |   |
| Net      gain/(loss)                          |   | $                         | 3,800,900 |   |                            | $      | (750,000 | ) |   | $ | 334,400 |   |   | $ | 57,227,200 |   |
|                                          |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      loss from the              |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| unrealized      loss on marketable securities |   |                      | (110,400  | )      |                            |   | (4,335,800 | ) |   |   | (284,900 | ) |   |   | (324,000 | ) |
|                                          |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification      adjustment for gains    |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| included      in net income                   |   |                      | --        |   |                            |   | -- |   |   |   | -- |   |   |   | (305,100 | ) |
|                                          |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Deferred      income taxes                    |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| on      marketable securities                 |   |                      | 39,000    |   |                            |   | 1,410,400 |   |   |   | 83,600 |   |   |   | 127,300 |   |
|                                          |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      gain/(loss)                |   | $                         | 3,729,500 |   |                            | $      | (3,675,400 | ) |   | $ | 133,100 |   |   | $ | 56,725,400 |   |
|                                          |   |                      |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |

|                                                                              |   | Three      Months Ended |       |   | Nine      Months Ended |   |
|-----------------------------------------------------------------------------------|--------|-------------------------|------------|--------|------------------------|--------|
|                                                                              |   | September      30,      |       |   | September      30,     |   |
|                                                                              |   | 2008                    |       |   | 2007                   |   |   | 2008 |   |   | 2007 |   |
| Book      Income/(Loss) before Income Tax                                         |   | $                       | 2,738,900  |   |                   | $      | (3,271,600 | ) |   | $ | (2,105,400 | ) |   | $ | 90,365,000 |   |
| Reverse      income from discontinued operations                                  |   |                    | (5,196,800 | )      |                   |   |   |   |   |   | (4,906,500 | ) |   |   |   |   |
| Equity      income from non consolidated tax sub                                  |   |                    |       |   |                   |   | (160,100 | ) |   |   |   |   |   |   | 3,551,400 |   |
| Add      back losses from non consolidated tax subs                               |   |                    |       |   |                   |   | 391,300 |   |   |   |   |   |   |   | 1,545,400 |   |
| Tax      impact of change in asset classification                                 |   |                    | (549,300   | )      |                   |   |   |   |   |   | (549,300 | ) |   |   |   |   |
| Prior      year true-up and rate change                                           |   |                    | (171,400   | )      |                   |   | (265,100 | ) |   |   | (171,400 | ) |   |   | (265,100 | ) |
| Permanent      differences                                                        |   |                    | 411,200    |   |                   |   | (1,755,600 | ) |   |   | 1,028,700 |   |   |   | (1,517,300 | ) |
|                                                                              |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable      (loss)/income                                                        |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
|    before      temporary differences                               |   | $                       | (2,767,400 | )      |                   | $      | (5,061,100 | ) |   | $ | (6,703,900 | ) |   | $ | 93,679,400 |   |
|                                                                              |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Expected      federal income tax expense (benefit) 35%                            |   | $                       | (968,500   | )      |                   | $      | (1,771,500 | ) |   | $ | (2,346,300 | ) |   | $ | 32,787,800 |   |
|                                                                              |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
|      Federal      deferred income tax expense (benefit)  |   | $                       | 819,000    |   |                   | $      | (526,400 | ) |   | $ | 1,563,400 |   |   | $ | 14,512,700 |   |
|      Federal      current expense (benefit)              |   |                    | (1,787,500 | )      |                   |   | (1,245,200 | ) |   |   | (3,909,700 | ) |   |   | 18,275,100 |   |
| Total      federal income tax expense (benefit)                                   |   |                    | (968,500   | )      |                   |   | (1,771,600 | ) |   |   | (2,346,300 | ) |   |   | 32,787,800 |   |
|     Current      state income tax expense net of              |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |
|        federal      tax benefit                |   |                    | (93,500    | )      |                   |   | (750,000 | ) |   |   | (93,500 | ) |   |   | 350,000 |   |
|     Total      provision (benefit) from Continuing Operations |   | $                       | (1,062,000 | )      |                   | $      | (2,521,600 | ) |   | $ | (2,439,800 | ) |   | $ | 33,137,800 |   |
|                                                                              |   |                    |       |   |                   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                         |   | September      30, |       |   | December      31, |   |
|--------------------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                                         |   | 2008               |       |   | 2007              |   |
|                                                         |   |               |       |   |              |   |
| Current      deferred tax assets:                            |   |               |       |   |              |   |
| Tax      basis in excess of book                             |   | $                  | 439,300    |   |              | $      | - |   |
| Non-deductible      reserves and other                       |   |               | 162,500    |   |              |   | 59,700 |   |
| Total      net current deferred tax assets/(liabilities)     |   | $                  | 601,800    |   |              | $      | 59,700 |   |
|                                                         |   |               |       |   |              |   |   |   |
| Non-current      deferred tax assets:                        |   |               |       |   |              |   |   |   |
| Deferred      compensation                                   |   | $                  | 626,800    |   |              | $      | 436,300 |   |
| Accrued      reclamation                                     |   |               | 49,500     |   |              |   | 38,500 |   |
| Tax      basis in excess of book                             |   |               | -          |   |              |   | 200,400 |   |
| Total      noncurrent deferred tax assets                    |   |               | 676,300    |   |              |   | 675,200 |   |
|                                                         |   |               |       |   |              |   |   |   |
| Non-current      deferred tax liabilities:                   |   |               |       |   |              |   |   |   |
| Book      basis in excess of tax basis                       |   |               | (9,616,100 | )      |              |   | (7,604,000 | ) |
| Accrued      reclamation                                     |   |               | (10,900    | )      |              |   |   |   |
| Total      deferred tax liabilities                          |   |               | (9,627,000 | )      |              |   | (7,604,000 | ) |
|                                                         |   |               |       |   |              |   |   |   |
| Total      net non-current deferred tax assets/(liabilities) |   | $                  | (8,950,700 | )      |              | $      | (6,928,800 | ) |
|                                                         |   |               |       |   |              |   |   |   |

----

|  Short-term      construction debt      |   | $      | 16,433,800 |   |
|----------------------------------------------|--------|--------|------------|--------|
|                                         |   |   |       |   |
|  Current      portion of long-term debt |   |   | 71,900     |   |
|                                         |   |   |       |   |
|  Long-term      debt                    |   |   | 133,800    |   |
|  Total                                  |   | $      | 16,639,500 |   |
|                                         |   |   |       |   |

----

|                                |   | For      the nine months ending September 30, |    |
|-------------------------------------|--------|-----------------------------------------------|---------|
|                                |   | 2008                                          |    |   | 2007 |   |
| Balance      January 1,             |   | $                                             | 133,400 |   |   | $ | 124,400 |   |
|                                |   |                                          |    |   |   |   |   |   |
| Accretion      of estimated ARO     |   |                                          | 6,600   |   |   |   | 6,900 |   |
|                                |   |                                          |    |   |   |   |   |   |
| Initial      valuation of ARO       |   |                                          | 24,600  |   |   |   | -- |   |
|                                |   |                                          |    |   |   |   |   |   |
| Deconsolidation      of Sutter Gold |   |                                          | (23,300 | ) |   |   | -- |   |
| Balance      September 30,          |   | $                                             | 141,300 |   |   | $ | 131,300 |   |
|                                |   |                                          |    |   |   |   |   |   |

----

|                                                             |   | September      30, 2008     |      |
|------------------------------------------------------------------|--------|-----------------------------|-----------|
|                                                             |   | Employee      Stock Options |      |   | Stock      Purchase Warrants |   |
|                                                             |   |                        |      |   | Weighted |   |   |   |   |   | Weighted |   |
|                                                             |   |                        |      |   | Average |   |   |   |   |   | Average |   |
|                                                             |   |                        |      |   | Exercise |   |   |   |   |   | Exercise |   |
|                                                             |   | Options                     |      |   | Price |   |   | Warrants |   |   | Price |   |
| Outstanding      at beginning                                    |   |                        |      |   |   |   |   |   |   |   |   |   |
| Outstanding      balance at December 31, 2007                    |   |                        | 3,819,927 |   |   | $ | 3.75 |   |   |   | 1,445,585 |   |   | $ | 3.58 |   |
| Granted                                                          |   |                        | 562,500   |   |   | $ | 2.52 |   |   |   | 170,000 |   |   | $ | 2.59 |   |
| Forfeited                                                        |   |                        | (5,333    | ) |   | $ | 4.97 |   |   |   | - |   |   | $ | - |   |
| Expired                                                          |   |                        | (284,020  | ) |   | $ | 3.62 |   |   |   | (57,500 | ) |   | $ | 3.66 |   |
| Exercised                                                        |   |                        | -         |   |   | $ | - |   |   |   | (446,698 | ) |   | $ | 3.42 |   |
| Outstanding      at September 30, 2008                           |   |                        | 4,093,074 |   |   | $ | 3.59 |   |   |   | 1,111,387 |   |   | $ | 3.49 |   |
| Exercisable      at September 30, 2008                           |   |                        | 2,507,245 |   |   | $ | 3.27 |   |   |   | 951,887 |   |   | $ | 3.64 |   |
|                                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      Average Remaining Contractual Life - Years         |   |                        |      | 6.22 |   |   |   |   |   |   |   | 3.09 |   |
|                                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Aggregate      intrinsic value of options / warrants outstanding |   |                        | $         | 273,300 |   |   |   |   |   |   | $ | 27,400 |   |
|                                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                  |   |              |       |   |    |   |    | Additional |   |
|-------------------------------------------------------|--------|-------------------|------------|--------|---------|--------|---------|------------|--------|
|                                                  |   | Common      Stock |       |   | Paid-In |   |
|                                                  |   | Shares            |       |   | Amount  |   |    | Capital    |   |
|                                                  |   |              |       |   |    |   |    |       |   |
|  Balance      December 31, 2007                  |   |              | 23,592,493 |   |    | $      | 235,900 |       |   | $ | 96,560,100 |   |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  2001      stock compensation plan               |   |              | 65,000     |   |    |   | 700     |       |   |   | 231,500 |   |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  Exercise      of warrants                       |   |              | 446,698    |   |    |   | 4,500   |       |   |   | 1,523,100 |   |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  Expense      of employee options                |   |              | -          |   |    |   | -       |       |   |   | 1,042,300 |   |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  Stock      options issued to outside directors  |   |              | -          |   |    |   | -       |       |   |   | 1,500 |   |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  Expense      of company warrants issued         |   |              | -          |   |    |   | -       |       |   |   | 22,100 |   |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  Common      stock buy back program              |   |              | (929,555   | )      |    |   | (9,300  | )          |   |   | (2,822,200 | ) |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  Cancellation      of common stock from the ESOP |   |              | (155,811   | )      |    |   | (1,600  | )          |   |   | (488,900 | ) |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |
|  Deferred      taxes on FAS 123R compensation    |   |              | -          |   |    |   | -       |       |   |   | 170,400 |   |
|                                                  |   |              | 23,018,825 |   |    | $      | 230,200 |       |   | $ | 96,239,900 |   |
|                                                  |   |              |       |   |    |   |    |       |   |   |   |   |

----

| 1.   | At      TCM’s election, within 36 months of incurring a minimum of $15 million in      expenditures on or related to Lucky Jack (including the option payments to      the Company), TCM may acquire an undivided working interest of 15% in the      Property and the business of theproject. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| $ | 500,000    |   | Option      Payment | Paid      at Closing   |
|---|------------|--------|---------------------|------------------------|
| $ | 2,000,000  |   | Expenditures        | December      31, 2008 |
| $ | 1,000,000  |   | Option      Payment | January      1, 2009   |
| $ | 4,000,000  |   | Expenditures        | December      31, 2009 |
| $ | 1,000,000  |   | Option      Payment | January      1, 2010   |
| $ | 4,000,000  |   | Expenditures        | December      31, 2010 |
| $ | 1,000,000  |   | Option      Payment | January      1, 2011   |
| $ | 1,500,000  |   | Expenditures        | June      30, 2011     |
| $ | 15,000,000 |   |                |                   |

| 2.   | If,      by July 31, 2018, TCM has incurred a total of at least $43.5 million of      expenditures (including amounts during the first stage) and paid the      Company the $6.5 million of option payments (for a total of $50 million),      TCM may elect to acquire an additional 35% (for a total of 50%)      concurrently or after it exercises its option to acquire a 15% working      interest.  None of the interests acquired by TCM will be subject      to any overriding royalty to theCompany. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| U.S.      ENERGY CORP.                      |   |
|---------------------------------------------|--------|
| SEGMENT      INFORMATION                    |   |
| (Unaudited)                                 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                        |   | For      the three months ended |   |   | For      the nine months ended |   |
|                                        |   | September      30, |   |   | September      30, |   |
|                                        |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| Revenues:                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate                            |   | $ | 563,600 |   |   | $ | 569,400 |   |   | $ | 994,900 |   |   | $ | 738,600 |   |
| Mineral      properties, management         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| fees      & other                       |   |   | 5,100 |   |   |   | 56,800 |   |   |   | 51,700 |   |   |   | 198,000 |   |
| Total      revenues:                        |   |   | 568,700 |   |   |   | 626,200 |   |   |   | 1,046,600 |   |   |   | 936,600 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      expenses:                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate                            |   |   | 310,700 |   |   |   | 80,300 |   |   |   | 711,600 |   |   |   | 247,700 |   |
| Mineral      properties                     |   |   | 1,208,600 |   |   |   | 238,300 |   |   |   | 2,282,100 |   |   |   | 1,353,700 |   |
| Total      operating expenses:              |   |   | 1,519,300 |   |   |   | 318,600 |   |   |   | 2,993,700 |   |   |   | 1,601,400 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate                            |   |   | 131,700 |   |   |   | -- |   |   |   | 206,300 |   |   |   | -- |   |
| Mineral      properties                     |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Total      interest expense:                |   |   | 131,700 |   |   |   | -- |   |   |   | 206,300 |   |   |   | -- |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      gain before investment and      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| property      transactions:                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate                            |   |   | 121,200 |   |   |   | 489,100 |   |   |   | 77,000 |   |   |   | 490,900 |   |
| Mineral      properties                     |   |   | (1,203,500 | ) |   |   | (181,500 | ) |   |   | (2,230,400 | ) |   |   | (1,155,700 | ) |
| Loss      before investment                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and      property transactions:             |   |   | (1,082,300 | ) |   |   | 307,600 |   |   |   | (2,153,400 | ) |   |   | (664,800 | ) |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate      other revenues and expenses: |   |   | (1,375,600 | ) |   |   | (3,182,200 | ) |   |   | (4,858,500 | ) |   |   | 92,569,100 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      gain before discontinued        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| operations      and income taxes            |   | $ | (2,457,900 | ) |   | $ | (2,874,600 | ) |   | $ | (7,011,900 | ) |   | $ | 91,904,300 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      expense:                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      estate                            |   | $ | 184,300 |   |   | $ | 20,300 |   |   | $ | 332,500 |   |   | $ | 40,500 |   |
| Mineral      properties, management         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| fees      & other                       |   |   | 9,000 |   |   |   | 19,000 |   |   |   | 26,900 |   |   |   | 30,400 |   |
| Corporate                                   |   |   | 88,000 |   |   |   | 60,400 |   |   |   | 329,100 |   |   |   | 231,800 |   |
| Total      depreciation expense             |   | $ | 281,300 |   |   | $ | 99,700 |   |   | $ | 688,500 |   |   | $ | 302,700 |   |
|                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                    |   | As      of         |        |
|-----------------------------------------|--------|--------------------|-------------|
|                                    |   | September      30, |        |   | December      31, |   |
|                                    |   | 2008               |        |   | 2007 |   |
| Assets      by segment                  |   |               |        |   |   |   |
| Real      estate                        |   | $                  | 28,279,000  |   |   | $ | 18,951,700 |   |
| Mineral      / Oil & Gas properties |   |               | 25,283,200  |   |   |   | 26,817,100 |   |
| Corporate      assets                   |   |               | 91,344,700  |   |   |   | 85,635,600 |   |
| Total      assets                       |   | $                  | 144,906,900 |   |   | $ | 131,404,400 |   |
|                                    |   |               |        |   |   |   |   |   |

----

| ·   | The      Company and PetroQuest began drilling a second well in which the Company      is participating in as a 20% working interest partner.  Drilling      resulted in a dry hole which will be plugged and abandoned.  The      estimated abandonment cost to the Company for the well is      $81,700. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Through      November 6, 2008, the Company purchased an additional 785,586 shares under      the terms of its stock buyback program.  The total shares      repurchased as of November 6, 2008 under the stock buyback plan is      1,943,141 shares for a total of $5,804,000 or an average of $2.99 per      share. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      October 7, 2008, the Company entered into a Lease Purchase and Drilling      Agreement with a private, Texas-based oil and gas company to acquire a 25%      non-operating working interest in an oil prospect located in east      Texas.  Under the terms of the agreement, the Company paid a      $45,000 prospect fee and will be responsible for 33% of the costs for the      first well to the tanks, if successful.  The initial commitment under      the agreement is approximately $360,000, and dry hole costs are estimated      at $230,000 net to the Company. Subsequent wells will be drilled on a      "heads-up" basis, with the Company responsible for 25% of all      costs.  Drilling of the first well is expected to commence in      late 2008 or the 1st quarter of 2009 with a planned drilling depth of      approximately 6,000 feet. The currently envisioned drilling program could      include up to 10 wells. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      October 15, 2008, Basin Electric Power Cooperative (“Basin”) provided      notice to the Company that it was exercising its right to terminate the      Agreement for Apartments dated July 2, 2007.  Basin paid the      Company the $100,000 termination fee required by the agreement, which was      sent to the commercial bank providing construction financing to be applied      to the principal of the loan.  Basin’s decision is not expected      to affect the construction loan and also should not affect the 20      apartments currently occupied by Basin employees or      contractors.  However, it will have a temporary adverse impact      upon rent revenues, as the current and future unleased apartments      allocated to Basin are now free of Basin’s payment      obligations.  The Company’s real estate management company at      Remington Village has begun leasing these freed up units to the general      public.  Given the continued strong demand for housing in      Gillette, WY, we expect that the loss of the Basin Agreement for      Apartments will not have a material, or long lasting impact either upon      the project or the Company. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

ITEM 2.

| ·   | Near      and Mid-Term Investments.  This segment includes investment in      selected oil and gas exploration and development  projects. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Long-Term      Investments.  This segment includes the identification,      acquisition and development of mineral properties and is particularly      focused on development of the Lucky Jack molybdenum    project. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Cash      decreased by $71,145,300 as a result of investing $67,569,200 in      marketable securities, namely U.S. Treasuries, with maturities greater      than three months from the date of purchase.  The Company also      used cash in operations, mineral property holding expenses, permitting and      engineering study costs, and oil and gas exploration.  Please      see discussion below regarding cash flows for the nine months ended      September 30, 2008. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Accounts      receivable trade, reimbursable project costs and the dissolution of      subsidiaries decreased $902,500.  This reduction was as a result      of the collection of $782,100 paid by the Company on the Lucky Jack      project and reimbursed by Kobex, collection of $197,600 due the Company      upon the dissolution of its subsidiaries and a reduction of accounts      receivable trade of $51,300.  These reductions in accounts      receivable were offset by an increase in reimbursable project costs      relating to the Lucky Jack property in the amount of    $128,500. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During      the nine months ended September 30, 2008, the Company received payments      totaling $944,900 as partial payment of the amount due from the Internal      Revenue Service at December 31, 2007.  The loss incurred during      the nine months ended September 30, 2008 resulted in an increase in the      amount of the account receivable from the Internal Revenue Service of      $5,358,500 as a result of that loss being carried back against taxes paid      during 2007, resulting in a net change of $4,413,600 in the account      receivable for income taxes. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company’s restricted investments, cash held in an interest bearing      account, decreased by $1,704,000 due to the release of funds held in      escrow for a potential tax free real estate exchange at December 31,      2007.  Additionally, cash deposits held as collateral for      reclamation obligations in the amount of $136,200 were released during the      nine months ended September 30, 2008.  The remaining restricted      investments at September 30, 2008 earned $143,900 in interest during the      nine months ended September 30,2008. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Accounts      payable decreased by $254,800 during the nine months ended September 30,      2008.  The decrease was a result of the Company funding an early      retirement benefit in the amount of $600,000, the payment of $285,100 in      sales taxes due on the purchase of an aircraft, and the payment of accrued      accounts payable.  Increases in accounts payable in the amount      of $630,300 are principally related to drilling costs on the Company’s oil      projects and engineering studies on LuckyJack. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Accrued      compensation expense increased by $588,700 during the nine months ended      September 30, 2008.  This increase reflects a onetime bonus      accrued to an officer of the Company for past performance in the amount of      $500,000 plus taxes, to be paid out quarterly over a two year period      beginning in March 2008. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      construction loan associated with our multifamily housing development in      Gillette, Wyoming increased by $10,944,800 to $16,433,800 at September 30,      2008. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operations      consumed $4,348,900, Investing Activities consumed $80,876,700 and      Financing Activities provided $9,754,600.  The vast majority of      the cash consumed from investing activities, was a net of $67,569,200 was      the investment of cash in Government Treasuries with a maturity of more      than 90 days from purchase date.  These Government Treasuries      are not considered cash for accounting purposes but held to maturity      marketable securities. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | For      a discussion on cash consumed in Operations please refer to Results of      Operations below. |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | Cash      provided by Investing Activities: |
|--------|--------|---------------------------------------------|

| ·   | Net      proceeds from the sale of a used corporate aircraft and miscellaneous      equipment in the amount of$1,097,000. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | An increase of      $1,847,900 in cash as a result of restricted cash investments being      released less $143,900 interest earned on restricted cash investments for      a net increase in cash from restricted investments of      $1,704,000. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Company invested $11,001,400 in its multifamily housing development in      Gillette, Wyoming during the nine months ended September 30,      2008. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Company paid $2,065,000 for its portion of oil and gas acquisition costs      subject to its agreement on properties in the U.S. gulf coast and paid      $2,468,600 of drilling costs and expenses on its first well for a total      cash investment increase of$4,533,600. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company      invested $1,238,600 in its mineral properties during the nine months ended      September 30, 2008.  This investment amount was reduced by the      receipt of $500,000 from Thompson Creek Metals Company USA pursuant to the      terms of the Exploration, Development and Mine Operating Agreement, the      abandonment of certain options on uranium leases and the cancellation of a      finder’s fee on the Lucky Jack project for a net increase in mineral      properties of $517,800. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Company received a total of $206,320,000 from maturities of investments in      Government Treasuries and reinvested $273,889,200 in U.S. Treasuries for a      net investment of $67,569,200 in U.S. Treasuries.  The      Treasuries are classified as marketable securities rather than cash as      they have maturities longer than three months from the date of      purchase. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Cash      provided by Financing Activities: |
|--------|--------|---------------------------------------------|

| ·   | $10,944,800      additional funds were drawn against the construction loan for our      multifamily housing development in Gillette,  Wyoming. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A      total of $1,527,600 was received as the result of the cash exercise of      446,698 warrants. |
|--------------------|------------------------------------------------------------------------------------------------------|

|   | · | Cash      consumed in Financing Activities: |
|--------|--------|---------------------------------------------|

| ·   | Payment      of long term debt of $56,700 relating primarily to the payment on notes      related to various pieces ofequipment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | On      June 22, 2007 the Company announced a stock buyback plan to purchase up to      $5.0 million of its common stock.  This plan was amended on      September 19, 2008 increasing the total purchase amount to $8.0      million.  During the nine months ended September 30, 2008 the      Company purchased 929,555 shares under the buyback plan for $2,831,500 or      an average price of $3.05 per share.  From inception of the      stock buyback plan through September 30, 2008, the Company has purchased      1,157,555 shares at an average price per share of $3.35 or      $3,878,800. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| ·   | Lucky      Jack molybdenum property – |
|--------------------|---------------------------------------------|

| ·   | Gulf      Coast Gas Wells |
|--------------------|---------------------------|

----

----

----

----

----

|                             |   | Payments      due by period |       |
|----------------------------------|--------|-----------------------------|------------|
|                             |   |                        |       |   | Less |   |   | One      to |   |   | Three      to |   |   | More      than |   |
|                             |   |                        |       |   | than      one |   |   | Three |   |   | Five |   |   | Five |   |
|                             |   | Total                       |       |   | Year |   |   | Years |   |   | Years |   |   | Years |   |
| Short-term      debt obligations |   | $                           | 16,433,800 |   |   | $ | 16,433,800 |   |   | $ | -- |   |   | $ | -- |   |   | $ | -- |   |
|                             |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term      debt obligations  |   |                        | 205,700    |   |   |   | 71,900 |   |   |   | 133,800 |   |   |   | -- |   |   |   | -- |   |
|                             |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      long-term liabilities |   |                        | 141,300    |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 141,300 |   |
|                             |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Totals                           |   | $                           | 16,780,800 |   |   | $ | 16,505,700 |   |   | $ | 133,800 |   |   | $ | -- |   |   | $ | 141,300 |   |
|                             |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

ITEM 3

ITEM 4

----

ITEM 1.  

| 1.   | Concerning the Application for      Water Rights of the Town of Crested      Butte, Case No.      02CW63.  This case involves an application filed by the Town of      Crested Butte to provide for an alternative point of      diversion.  MEMCO filed a Statement of Opposition to ensure that      the final decree to be issued by the Water Court contains terms and      conditions sufficient to protect MEMCO’s water rights from material      injury.  The Town of Crested Butte and the Company reached a      settlement to protect the Company’s water rights and filed a signed      Stipulation and Proposed Decree with the Water Court on July 24,      2007.  No protests were filed over the Final Decree during the      statutory period, and this case isclosed. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Concerning the      Application of the United States of      America      in the Gunnison River, Gunnison County, Case      No. 99CW267.  This case involves an application filed by the      United States of America to appropriate 0.033 cubic feet per second of      water for wildlife use and for incidental irrigation of riparian      vegetation at the Lucky Jack Iron Bog Spring, located in the vicinity of      the Lucky Jack property.  MEMCO filed a Statement of Opposition      to protect proposed mining operations against any adverse impacts by the      water requirements of the Iron Bog on such operations.  This      case is pending while the parties attempt to reach a settlement on the      proposed decree terms andconditions. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.   | Concerning the      Application for Water Rights of the United States of America for      Quantification of Reserved Right for Black Canyon of Gunnison National      Park, Case No. 01CW05.  This case involves an application      filed by the United States of America to make absolute conditional water      rights claimed in the Gunnison River in relation to the Black Canyon of      the Gunnison National Park for, and to quantify in-stream flows for the      protection and reproduction of fish and to preserve the recreational,      scenic and aesthetic conditions.  MEMCO and over 350 other      parties filed Statements of Opposition to protect their existing water      rights.  USECC and most other Opposers have taken the position      that the flows claimed by the United States should be subordinated to the      historical operations of the federally owned and operated Aspinall Unit,      and are subject to the provisions contained in the Aspinall Unit      Subordination Agreement between the federal government and water districts      which protect junior water users in the Upper Gunnison River      Basin.  This case is pending while the parties negotiate terms      and conditions for incorporation into Stipulations among the parties and      into Proposed Decree for presentation to the Water Court for      approval. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4.   | Concerning the      Application of U.S. Energy, Case      No. 2008CW81.  On July 25, 2008, the Company filed an      Application for Finding of Reasonable Diligence with the Water Court      concerning the conditional water rights associated with the Lucky Jack      Molybdenum Project.  The conditional water decree (“Decree”)      requires the Company to file its proposed plan of operations and      associated permits (“Plan”) with the Forest Service and BLM within six      years of entry of the 2002 Decree, or within six years of the final      determination in the Applicant’s pending patent application, whichever      occurs later.  Although the BLM issued the mineral patents on      April 2, 2004, the patents remained subject to a challenge by High Country      Citizens’ Alliance, the Town of Crested Butte, and the Board of County      Commissioners of Gunnison County (collectively      “Protestors”).  The Company vigorously defended this legal      action through the Federal District Court for the District of Colorado and      the Tenth Circuit Court of Appeals.  On April 30, 2007, the      United States Supreme Court made a final determination upholding BLM’s      issuance of the mineral patents through denial of      certiorari.  The Company believes that the deadline for filing      the Plan specified by the Decree is April 30, 2013 (six years from the      final determination of issuance of the mineral patents by the United      States Supreme Court).  The Forest Service has indicated that      the deadline should be April 2, 2010 (six years from the issuance of the      mineral patents by BLM).  The United States, on behalf of the      Forest Service and BLM, filed a Statement of Opposition on this specific      issue only.  Statements of Opposition were also filed by six      other parties including the City of Gunnison, the State of Colorado, and      High Country Citizens’ Alliance in September for various reasons,      including requesting the Company be put on strict proof as to      demonstrating evidence of reasonable diligence in developing the      conditional water rights.  Although, the Company and TCM      will be prepared to file a Plan by the April 2, 2010 proposed deadline,      the Company and TCM will pursue a ruling from the Water Court that the      deadline specified in the Decree requires the filing of the Plan by the      April 30, 2013. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

ITEM 1A

ITEM 2.  

----

|                                               |   | Number         |      |   | Average        |   |   | Total      shares |   |   | Maximum              |      |
|----------------------------------------------------|--------|----------------|-----------|--------|----------------|--------|--------|-------------------|--------|--------|----------------------|-----------|
|                                               |   | of      shares |      |   | per      share |   |   | purchased         |   |   | value      of shares |      |
|  Period                                       |   | purchased      |      |   | price          |   |   | under      plan   |   |   | to      be purchased |      |
| Inception      - June 22, 2007                     |   |           |      |   |           |   |   |              |   |   | $                    | 8,000,000 |   |
|                                               |   |           |      |   |           |   |   |              |   |   |                 |      |   |
|  July      1, through December 31, 2007       |   |           | 228,000   |   |           | $      | 4.59   |              |   |   | 228,000              |      |   | $ | 6,952,700 |   |
|                                               |   |           |      |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|  January      1, 2008 through March 31, 2008  |   |           | 196,960   |   |           | $      | 4.16   |              |   |   | 424,960              |      |   | $ | 6,132,400 |   |
|                                               |   |           |      |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|  April      1, 2008 through June 30, 2008     |   |           | 354,235   |   |           | $      | 3.03   |              |   |   | 779,195              |      |   | $ | 5,060,700 |   |
|                                               |   |           |      |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|  July      1, 2008 through September 30, 2008 |   |           | 378,360   |   |           | $      | 2.48   |              |   |   | 1,157,555            |      |   | $ | 4,121,200 |   |
|                                               |   |           |      |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|  Totals                                       |   |           | 1,157,555 |   |           | $      | 3.35   |              |   |   |                 |      |   |   |   |   |
|                                               |   |           |      |   |           |   |   |              |   |   |                 |      |   |   |   |   |

ITEM 3. 

ITEM 4. 

ITEM 5.

----

ITEM 6.

|   | (a)    | Exhibits. |                                                                                                                                                                                                          |
|--------|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |      |                                                                                                                                                                                                          |
|   |   | 10.1      | Exploration,      Development and Mine Operating Agreement for the Lucky Jack      property.  (Portions of this Agreement have been omitted      pursuant to a request for confidential treatment.) |
|   |   | 31.1      | Certification      of Chief Executive Officer Pursuant to Rule 13a-15(e) / Rule      15d-15(e)                                                                                                                |
|   |   | 31.2      | Certification      of Chief Financial Officer Pursuant to Rule 13a-14(a) / Rule      15(e)/15d-15(e)                                                                                                          |
|   |   | 32.1      | Certification      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted      by Section 906 of the Sarbanes-Oxley Act of 2002                                                            |
|   |   | 32.2      | Certification      of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted      by Section 906 of the Sarbanes-Oxley Act of 2002                                                            |
|   |   |      |                                                                                                                                                                                                          |

|   | (b)    | Reports on Form      8-K.  The Company filed five (5) reports on Form 8-K for      the quarter ended September 30, 2008.  The events reported were      as follows: |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                    |   |
|   |   | 1.                                                                                                                                                                                      | The      report filed on July 9, 2008, under Item .01 referenced engagement of      consulting firm in connection with preparation of 43-101 report for TSX      Listing Application. |
|   |   |                                                                                                                                                                                    |   |
|   |   | 2.                                                                                                                                                                                      | The      report filed on July 18, 2008, under Item 8.01 referenced the appeal of      Colorado Mined Land Reclamation Board Order Denying      Jurisdiction. |
|   |   |                                                                                                                                                                                    |   |
|   |   | 3.                                                                                                                                                                                      | The      report filed on August 20, 2008, under Item 1.01 referenced the Entry into      a Material Definitive Agreement with Thompson Creek Metals Company for the      Lucky Jack Project. |
|   |   |                                                                                                                                                                                    |   |
|   |   | 4.                                                                                                                                                                                      | The      report filed on August 22, 2008, under Item 8.01 referenced the sale of      interest in Sutter Gold Mining Inc. to RMB Resources  Ltd. |
|   |   |                                                                                                                                                                                    |   |
|   |   | 5.                                                                                                                                                                                      | The      report filed on September 19, 2008, under Item 8.01 referenced the      approval if increase in the Stock Buyback  Program. |

----

SIGNATURES

|                        |   | U.S.      ENERGY CORP. |
|-----------------------------|--------|------------------------|
|                        |   | (Company)              |
|                        |   |                   |   |   |
|                        |   |                   |   |   |
|                        |   |                   |   |   |
| Date:      November 7, 2008 |   | By:                    | /s/      Keith G. Larsen |   |
|                        |   |                   | KEITH      G. LARSEN, |   |
|                        |   |                   | Chairman      and CEO |   |
|                        |   |                   |   |   |
|                        |   |                   |   |   |
|                        |   |                   |   |   |
|                        |   |                   |   |   |
| Date:      November 7, 2008 |   | By:                    | /s/      Robert Scott Lorimer |   |
|                        |   |                   | ROBERT      SCOTT LORIMER |   |
|                        |   |                   | Principal      Financial Officer and |   |
|                        |   |                   | Chief      Accounting Officer |   |

----