----

| x      | Quarterly      report pursuant to section 13 or 15(d) of the Securities Exchange Act of      1934  |
|--------|----------------------------------------------------------------------------------------------------|
|   | For      the quarter ended June 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 August 8, 2008 |
|-----------------------------------|--------|-------------------------------------------|
| Common      stock, $.01 par value |   | 23,552,996                                |

----

INDEX

|          |                                                                                                                                                     | Page      No.     |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|
| PART      I.  | FINANCIAL      INFORMATION                                                                                                                               |              |
|          |                                                                                                                                                     |              |
| ITEM      1.  | Financial      Statements                                                                                                                                |              |
|          |                                                                                                                                                     |              |
|          | Condensed Balance Sheet as of June 30, 2008      and  Condensed Consolidated Balance Sheet as of      December  31, 2007 (unaudited) | 4-5               |
|          |                                                                                                                                                     |              |
|          | Condensed Statements of Operations for the Three      and Six Months Ended June 30, 2008 and 2007 (unaudited)                                            | 6-7               |
|          |                                                                                                                                                     |              |
|          | Condensed Statements of Cash Flows for the Six      Months Ended June 30, 2008 and 2007 (unaudited)                                                      | 8-9               |
|          |                                                                                                                                                     |              |
|          | Notes to Condensed Financial Statements      (unaudited)                                                                                                 | 10-22             |
|          |                                                                                                                                                     |              |
| ITEM      2.  | Management’s Discussion and Analysis of Financial      Condition and Results of Operations                                                         | 23-35             |
|          |                                                                                                                                                     |              |
| ITEM      3.  | Quantitative and Qualitative Disclosures about Market      Risk                                                                                          | 35                |
|          |                                                                                                                                                     |              |
| ITEM      4.  | Controls and Procedures                                                                                                                                  | 36                |
|          |                                                                                                                                                     |              |
| PART      II. | OTHER      INFORMATION                                                                                                                                   |              |
|          |                                                                                                                                                     |              |
| ITEM      1.  | Legal Proceedings                                                                                                                                        | 37-39             |
|          |                                                                                                                                                     |              |
| ITEM      1A. | Risk Factors                                                                                                                                             | 39                |
|          |                                                                                                                                                     |              |
| ITEM      2.  | Changes in Securities and Use of      Proceeds                                                                                                           | 39                |
|          |                                                                                                                                                     |              |
| ITEM      3.  | Defaults Upon Senior Securities                                                                                                                          | 39                |
|          |                                                                                                                                                     |              |
| ITEM      4.  | Submission of Matters to a Vote of      Shareholders                                                                                                     | 40                |
|          |                                                                                                                                                     |              |
| ITEM      5.  | Other Information                                                                                                                                        | 40                |
|          |                                                                                                                                                     |              |
| ITEM      6.  | Exhibits and Reports on Form 8-K                                                                                                                         | 40-41             |
|          |                                                                                                                                                     |              |
|          | Signatures                                                                                                                                               | 41                |
|          |                                                                                                                                                     |              |
|          | Certifications                                                                                                                                           | See      Exhibits |

----

| U.S.      ENERGY CORP.                         |   |
|------------------------------------------------|--------|
| CONDENSED      BALANCE SHEETS                  |   |
| ASSETS                                         |   |
| (Unaudited)                                    |   |
|                                           |   |   |   |   |   |   |
|                                           |   | June      30, |   |   | December      31, |   |
|                                           |   | 2008 |   |   | 2007 |   |
| CURRENT      ASSETS:                           |   |   |   |   |   |   |
| Cash      and cash equivalents                 |   | $ | 9,900,600 |   |   | $ | 72,292,200 |   |
| Marketable      securities                     |   |   |   |   |   |   |   |   |
| Held      to maturity - treasuries             |   |   | 60,298,100 |   |   |   | -- |   |
| Available      for sale securities             |   |   | 109,200 |   |   |   | 480,200 |   |
| Accounts      receivable                       |   |   |   |   |   |   |   |   |
| Trade                                          |   |   | 67,700 |   |   |   | 171,700 |   |
| Reimbursable      project costs                |   |   | -- |   |   |   | 782,100 |   |
| Dissolution      of subsidiaries               |   |   | -- |   |   |   | 197,600 |   |
| Income      taxes                              |   |   | 2,243,800 |   |   |   | 902,900 |   |
| Restricted      investments                    |   |   | 4,879,600 |   |   |   | 6,624,700 |   |
| Real      estate held for sale                 |   |   | 550,400 |   |   |   | -- |   |
| Assets      held for sale                      |   |   | 1,624,200 |   |   |   | 1,112,600 |   |
| Deferred      tax assets                       |   |   | 297,400 |   |   |   | 59,700 |   |
| Prepaid      drilling costs                    |   |   | 944,300 |   |   |   | -- |   |
| Prepaid      expenses and other current assets |   |   | 177,100 |   |   |   | 105,200 |   |
| Total      current assets                      |   |   | 81,092,400 |   |   |   | 82,728,900 |   |
|                                           |   |   |   |   |   |   |   |   |
| PROPERTIES      AND EQUIPMENT:                 |   |   | 59,618,100 |   |   |   | 52,785,200 |   |
| Less      accumulated depreciation,            |   |   |   |   |   |   |   |   |
| depletion      and amortization                |   |   | (4,608,400 | ) |   |   | (4,691,700 | ) |
| Net      properties and equipment              |   |   | 55,009,700 |   |   |   | 48,093,500 |   |
|                                           |   |   |   |   |   |   |   |   |
| OTHER      ASSETS:                             |   |   |   |   |   |   |   |   |
| Restricted      investments                    |   |   | 372,700 |   |   |   | 375,500 |   |
| Deposits      and other                        |   |   | 542,500 |   |   |   | 206,500 |   |
| Total      other assets                        |   |   | 915,200 |   |   |   | 582,000 |   |
| Total      assets                              |   | $ | 137,017,300 |   |   | $ | 131,404,400 |   |
|                                           |   |   |   |   |   |   |   |   |

----

Index

| U.S.      ENERGY CORP.                              |   |
|-----------------------------------------------------|--------|
| CONDENSED      BALANCE SHEETS                       |   |
| LIABILITIES      AND SHAREHOLDERS' EQUITY           |   |
| (Unaudited)                                         |   |
|                                                |   |   |   |   |   |   |
|                                                |   | June      30, |   |   | December      31, |   |
|                                                |   | 2008 |   |   | 2007 |   |
| CURRENT      LIABILITIES:                           |   |   |   |   |   |   |
| Accounts      payable                               |   | $ | 276,300 |   |   | $ | 1,589,600 |   |
| Accrued      compensation expense                   |   |   | 717,300 |   |   |   | 275,200 |   |
| Short      term construction debt                   |   |   | 13,922,900 |   |   |   | 5,489,000 |   |
| Current      portion of long-term debt              |   |   | 71,900 |   |   |   | 71,900 |   |
| Liabilities      held for sale                      |   |   | 141,500 |   |   |   | -- |   |
| Other      current liabilities                      |   |   | 670,600 |   |   |   | 667,500 |   |
| Total      current liabilities                      |   |   | 15,800,500 |   |   |   | 8,093,200 |   |
|                                                |   |   |   |   |   |   |   |   |
| LONG-TERM      DEBT, net of current portion         |   |   | 152,800 |   |   |   | 190,500 |   |
|                                                |   |   |   |   |   |   |   |   |
| DEFERRED      TAX LIABILITY                         |   |   | 7,868,300 |   |   |   | 6,928,800 |   |
|                                                |   |   |   |   |   |   |   |   |
| ASSET      RETIREMENT OBLIGATIONS                   |   |   | 114,500 |   |   |   | 133,400 |   |
|                                                |   |   |   |   |   |   |   |   |
| OTHER      ACCRUED LIABILITIES                      |   |   | 1,057,800 |   |   |   | 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;      23,532,996 and 23,592,493          |   |   |   |   |   |   |   |   |
| shares      issued, respectively                    |   |   | 235,300 |   |   |   | 235,900 |   |
| Additional      paid-in capital                     |   |   | 97,080,600 |   |   |   | 96,560,100 |   |
| Accumulated      surplus                            |   |   | 15,584,400 |   |   |   | 19,050,900 |   |
| Unrealized      loss on marketable securities       |   |   | (386,400 | ) |   |   | (256,500 | ) |
| Unallocated      ESOP contribution                  |   |   | (490,500 | ) |   |   | (490,500 | ) |
| Total      shareholders' equity                     |   |   | 112,023,400 |   |   |   | 115,099,900 |   |
| Total      liabilities and shareholders' equity     |   | $ | 137,017,300 |   |   | $ | 131,404,400 |   |
|                                                |   |   |   |   |   |   |   |   |

----

Index

| U.S.      ENERGY CORP.                           |   |
|--------------------------------------------------|--------|
| CONDENSED      STATEMENTS OF OPERATIONS          |   |
| (Unaudited)                                      |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   | Three      months ended June 30, |   |   | For      the six months ended June 30, |   |
|                                             |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| OPERATING      REVENUES:                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Remington      Village real estate               |   | $ | 288,600 |   |   | $ | -- |   |   | $ | 376,000 |   |   | $ | -- |   |
| Other      real estate                           |   |   | 23,900 |   |   |   | 143,900 |   |   |   | 55,300 |   |   |   | 169,200 |   |
| Management      fees and other                   |   |   | 15,900 |   |   |   | 86,900 |   |   |   | 46,600 |   |   |   | 141,200 |   |
|                                             |   |   | 328,400 |   |   |   | 230,800 |   |   |   | 477,900 |   |   |   | 310,400 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING      COSTS AND EXPENSES:               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Remington      Village real estate               |   |   | 151,300 |   |   |   | -- |   |   |   | 242,300 |   |   |   | -- |   |
| Other      real estate                           |   |   | 82,500 |   |   |   | 2,300 |   |   |   | 158,600 |   |   |   | 167,400 |   |
| Mineral      holding costs                       |   |   | 943,700 |   |   |   | 682,200 |   |   |   | 1,073,500 |   |   |   | 1,115,400 |   |
| General      and administrative                  |   |   | 1,650,300 |   |   |   | 7,906,200 |   |   |   | 4,271,100 |   |   |   | 9,319,200 |   |
|                                             |   |   | 2,827,800 |   |   |   | 8,590,700 |   |   |   | 5,745,500 |   |   |   | 10,602,000 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LOSS      BEFORE INVESTMENT AND                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PROPERTY      TRANSACTIONS                       |   |   | (2,499,400 | ) |   |   | (8,359,900 | ) |   |   | (5,267,600 | ) |   |   | (10,291,600 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      INCOME & (EXPENSES):              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss)      gain on sales of assets              |   |   | (29,000 | ) |   |   | 1,821,200 |   |   |   | (29,000 | ) |   |   | 1,822,200 |   |
| Loss      on sale of marketable securities       |   |   | -- |   |   |   | (6,828,800 | ) |   |   | -- |   |   |   | (6,091,400 | ) |
| Gain      on foreign exchange                    |   |   | -- |   |   |   | 502,500 |   |   |   | -- |   |   |   | 502,500 |   |
| Gain      on sale of uranium assets              |   |   | -- |   |   |   | 111,728,200 |   |   |   | -- |   |   |   | 111,728,200 |   |
| Dividends                                        |   |   | -- |   |   |   | 2,700 |   |   |   | -- |   |   |   | 5,600 |   |
| Interest      income                             |   |   | 296,800 |   |   |   | 636,400 |   |   |   | 850,400 |   |   |   | 851,300 |   |
| Interest      expense                            |   |   | (88,800 | ) |   |   | 6,200 |   |   |   | (107,800 | ) |   |   | (49,400 | ) |
|                                             |   |   | 179,000 |   |   |   | 107,868,400 |   |   |   | 713,600 |   |   |   | 108,769,000 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN BEFORE MINORITY                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST,      PROVISION FOR                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  INCOME      TAXES AND                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DISCONTINUED      OPERATIONS                     |   |   | (2,320,400 | ) |   |   | 99,508,500 |   |   |   | (4,554,000 | ) |   |   | 98,477,400 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MINORITY      INTEREST IN LOSS OF                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CONSOLIDATED      SUBSIDIARIES                   |   |   | -- |   |   |   | (3,716,800 | ) |   |   | -- |   |   |   | (3,698,600 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN BEFORE PROVISION                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FOR      INCOME TAXES AND                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DISCONTINUED      OPERATIONS                     |   |   | (2,320,400 | ) |   |   | 95,791,700 |   |   |   | (4,554,000 | ) |   |   | 94,778,800 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME      TAXES:                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Current      benefit from (provision for)  |   |   | 1,494,200 |   |   |   | (20,968,600 | ) |   |   | 2,122,200 |   |   |   | (20,620,300 | ) |
|  Deferred      benefit from (provision for) |   |   | (790,100 | ) |   |   | (15,039,000 | ) |   |   | (744,400 | ) |   |   | (15,039,000 | ) |
|                                             |   |   | 704,100 |   |   |   | (36,007,600 | ) |   |   | 1,377,800 |   |   |   | (35,659,300 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN FROM CONTINUING                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATIONS                                       |   |   | (1,616,300 | ) |   |   | 59,784,100 |   |   |   | (3,176,200 | ) |   |   | 59,119,500 |   |

----

Index

| U.S.      ENERGY CORP.                         |   |
|------------------------------------------------|--------|
| CONDENSED      STATEMENTS OF OPERATIONS        |   |
| (Unaudited)                                    |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Three      months ended June 30, |   |   | For      the six months ended June 30, |   |
|                                           |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
| LOSS      FROM DISCONTINUED                    |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATIONS  (net      of taxes)      |   |   | (133,600 | ) |   |   | (488,700 | ) |   |   | (290,300 | ) |   |   | (1,142,300 | ) |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET      (LOSS) INCOME                         |   | $ | (1,749,900 | ) |   | $ | 59,295,400 |   |   | $ | (3,466,500 | ) |   | $ | 57,977,200 |   |
| PER      SHARE DATA                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      (loss) earnings                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| from      continuing operations                |   | $ | (0.07 | ) |   | $ | 2.98 |   |   | $ | (0.14 | ) |   | $ | 2.99 |   |
| Basic      loss from discontinued operations   |   |   | -- |   |   |   | (0.03 | ) |   |   | (0.01 | ) |   |   | (0.05 | ) |
| Basic      (loss) earnings per share           |   | $ | (0.07 | ) |   | $ | 2.95 |   |   | $ | (0.15 | ) |   | $ | 2.94 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      (loss) earnings                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| from      continuing operations                |   | $ | (0.07 | ) |   | $ | 2.67 |   |   | $ | (0.14 | ) |   | $ | 2.68 |   |
| Diluted      loss from discontinued operations |   |   | -- |   |   |   | (0.02 | ) |   |   | (0.01 | ) |   |   | (0.05 | ) |
| Diluted      (loss) earnings per share         |   | $ | (0.07 | ) |   | $ | 2.65 |   |   | $ | (0.15 | ) |   | $ | 2.63 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BASIC      WEIGHTED AVERAGE                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SHARES      OUTSTANDING                        |   |   | 23,615,657 |   |   |   | 20,087,999 |   |   |   | 23,682,357 |   |   |   | 19,752,827 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DILUTED      WEIGHTED AVERAGE                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SHARES      OUTSTANDING                        |   |   | 23,615,657 |   |   |   | 22,378,861 |   |   |   | 23,682,357 |   |   |   | 22,036,586 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Index

| U.S.      ENERGY CORP.                                 |   |
|--------------------------------------------------------|--------|
| STATEMENTS      OF CASH FLOWS                          |   |
| (Unaudited)                                            |   |
|                                                   |   |   |   |   |   |   |
|                                                   |   | For      the six months ended June 30, |   |
|                                                   |   | 2008 |   |   | 2007 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:             |   |   |   |   |
| Net      (loss) income                                 |   | $ | (3,466,500 | ) |   | $ | 57,977,200 |   |
| Reconcile      net loss to net cash used in operations |   |   |   |   |   |   |   |   |
| Minority      interest in the loss of                  |   |   |   |   |   |   |   |   |
| consolidated      subsidiaries                         |   |   | -- |   |   |   | 3,698,600 |   |
| Depreciation                                           |   |   | 407,200 |   |   |   | 203,000 |   |
| Accretion      of asset retirement obligations         |   |   | 4,400 |   |   |   | 4,100 |   |
| Income      tax receivable                             |   |   | (1,340,900 | ) |   |   | 19,906,200 |   |
| Deferred      income taxes                             |   |   | 744,400 |   |   |   | 15,039,000 |   |
| Gain      on sale of assets to sxr                     |   |   | -- |   |   |   | (111,728,200 | ) |
| Loss      (gain) on sale of assets                     |   |   | 29,000 |   |   |   | (1,822,200 | ) |
| Gain      on foreign exchange                          |   |   | -- |   |   |   | (516,400 | ) |
| Gain      (loss) on sales of marketable securities     |   |   | -- |   |   |   | 6,091,500 |   |
| Warrant      extension and repricing                   |   |   | -- |   |   |   | 116,300 |   |
| Noncash      compensation                              |   |   | 1,567,300 |   |   |   | 207,500 |   |
| Noncash      services                                  |   |   | 7,600 |   |   |   | -- |   |
| Net      changes in assets and liabilities:            |   |   | (1,808,800 | ) |   |   | (1,863,100 | ) |
| NET      CASH USED IN                                  |   |   |   |   |   |   |   |   |
| OPERATING      ACTIVITIES                              |   |   | (3,856,300 | ) |   |   | (12,686,500 | ) |
|                                                   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:             |   |   |   |   |   |   |   |   |
| Proceeds      from sale of marketable securities       |   | $ | -- |   |   | $ | 62,497,000 |   |
| Proceeds      from sale of uranium assets              |   |   | -- |   |   |   | 14,022,700 |   |
| Proceeds      from sale of property and equipment      |   |   | 1,084,600 |   |   |   | 1,027,000 |   |
| Acquisition      & development of real estate      |   |   | (8,415,000 | ) |   |   | (1,549,700 | ) |
| Acquisition      of unproved oil & gas properties  |   |   | (740,800 | ) |   |   | (2,747,400 | ) |
| Acquisition      of unproved mining claims             |   |   | (43,100 | ) |   |   | (224,200 | ) |
| Acquisition      of property and equipment             |   |   | (27,200 | ) |   |   | (102,100 | ) |
| Investment      in treasury bills                      |   |   | (60,298,100 | ) |   |   | (70,330,100 | ) |
| Net      change in restricted investments              |   |   | 1,747,900 |   |   |   | -- |   |
| Net      change in notes receivable                    |   |   | -- |   |   |   | 560,500 |   |
| Net      change in investments in affiliates           |   |   | -- |   |   |   | 140,100 |   |
| NET      CASH (USED IN) PROVIDED                       |   |   |   |   |   |   |   |   |
| BY      INVESTING ACTIVITIES                           |   |   | (66,691,700 | ) |   |   | 3,293,800 |   |
|                                                   |   |   |   |   |   |   |   |   |

----

Index

| U.S.      ENERGY CORP.                              |   |
|-----------------------------------------------------|--------|
| STATEMENTS      OF CASH FLOWS                       |   |
| (Unaudited)                                         |   |
|                                                |   |   |   |   |   |   |
|                                                |   | For      the six months ended June 30, |   |
|                                                |   | 2008 |   |   | 2007 |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:          |   |   |   |   |
| Issuance      of common stock                       |   |   | 1,527,600 |   |   |   | 1,783,300 |   |
| Deferred      taxes from stock options              |   |   | -- |   |   |   | 714,100 |   |
| Proceeds      from long term debt                   |   |   | 8,433,900 |   |   |   | 164,100 |   |
| Repayments      of long term debt                   |   |   | (37,700 | ) |   |   | (1,019,100 | ) |
| Stock      buyback program                          |   |   | (1,892,100 | ) |   |   | -- |   |
| NET      CASH PROVIDED BY                           |   |   |   |   |   |   |   |   |
| FINANCING      ACTIVITIES                           |   |   | 8,031,700 |   |   |   | 1,642,400 |   |
|                                                |   |   |   |   |   |   |   |   |
| Net      cash (used in) provided by operating       |   |   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | 66,700 |   |   |   | (186,100 | ) |
| Net      cash (used in) provided by investing       |   |   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | 92,800 |   |   |   | (88,700 | ) |
| Net      cash (used in) provided by financing       |   |   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | (34,800 | ) |   |   | -- |   |
|                                                |   |   |   |   |   |   |   |   |
| NET      INCREASE (DECREASE) IN                     |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   | (62,391,600 | ) |   |   | (8,025,100 | ) |
|                                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   |   |   |   |   |   |   |
|  AT      BEGINNING OF PERIOD                   |   |   | 72,292,200 |   |   |   | 16,973,500 |   |
|                                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   |   |   |   |   |   |   |
| AT      END OF PERIOD                               |   | $ | 9,900,600 |   |   | $ | 8,948,400 |   |
|                                                |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURES:                      |   |   |   |   |   |   |   |   |
| Income      tax refund                              |   | $ | (800,000 | ) |   | $ | -- |   |
|                                                |   |   |   |   |   |   |   |   |
| Interest      paid                                  |   | $ | 107,800 |   |   | $ | 49,700 |   |
|                                                |   |   |   |   |   |   |   |   |
| NON-CASH      INVESTING AND FINANCING ACTIVITIES:   |   |   |   |   |   |
|                                                |   |   |   |   |   |   |   |   |
| Development      of assets through issuance of debt |   | $ | 8,433,900 |   |   | $ | -- |   |
|                                                |   |   |   |   |   |   |   |   |
| 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                           |   | $ | 95,700 |   |   | $ | 2,619,400 |   |
|                                                |   |   |   |   |   |   |   |   |

----

Index

1)  

----

Index

----

Index

|                                     |   |   |       |   | Accumulated        |   |       |            |   |
|------------------------------------------|--------|--------|------------|--------|--------------------|--------|------------|-----------------|--------|
|                                     |   |   |       |   | Amortization       |   |       |            |   |
|                                     |   |   |       |   | Depletion      and |   |       | Net             |   |
|                                     |   | Cost   |       |   | Depreciation       |   |       | Book      Value |   |
|                                     |   |   |       |   |               |   |       |            |   |
|  Oil      & Gas properties      |   | $      | 3,651,000  |   |               | $      | -          |            |   | $ | 3,651,000 |   |
|  Mining      properties             |   |   | 21,078,700 |   |               |   | -          |            |   |   | 21,078,700 |   |
|  Buildings,      land and equipment |   |   | 34,888,400 |   |               |   | (4,608,400 | )               |   |   | 30,280,000 |   |
|  Totals                             |   | $      | 59,618,100 |   |               | $      | (4,608,400 | )               |   | $ | 55,009,700 |   |
|                                     |   |   |       |   |               |   |       |            |   |   |   |   |

----

Index

| 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 ending June 30, |       |   | For      the six months ending June 30, |   |
|-----------------------------------------------|--------|-------------------------------------------|------------|--------|-----------------------------------------|--------|
|                                          |   | 2008                                      |       |   | 2007                                    |   |   | 2008 |   |   | 2007 |   |
| Net      (loss)/gain                          |   | $                                         | (1,749,900 | )      |                                    | $      | 59,295,400 |   |   | $ | (3,466,500 | ) |   | $ | 57,977,200 |   |
|                                          |   |                                      |       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      loss from the              |   |                                      |       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| unrealized      loss on marketable securities |   |                                      | (55,800    | )      |                                    |   | (4,335,800 | ) |   |   | (174,500 | ) |   |   | (4,335,800 | ) |
|                                          |   |                                      |       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Deferred      income taxes                    |   |                                      |       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| on      marketable securities                 |   |                                      | 21,500     |   |                                    |   | 1,410,400 |   |   |   | 44,600 |   |   |   | 1,410,400 |   |
|                                          |   |                                      |       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      (loss)/gain                |   | $                                         | (1,784,200 | )      |                                    | $      | 56,370,000 |   |   | $ | (3,596,400 | ) |   | $ | 55,051,800 |   |
|                                          |   |                                      |       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |

----

Index

| 8) | Income      Taxes |
|----|-------------------|

|                                                                       |   |                             |       |      |                  |   |       |   |   |   |       |      |
|----------------------------------------------------------------------------|--------|----------------------------------|------------|-----------|-----------------------|--------|------------|--------|--------|--------|------------|-----------|
|                                                                       |   | Three      Months Ended June 30, |       |      | Six      Months Ended |   |
|                                                                       |   | 2008                             |       |      | 2007                  |   |       | 2008   |   |   | 2007       |      |
| Consolidated      book income before income tax                            |   | $                                | (2,454,000 | )         |                  | $      | 95,303,000 |   |   | $      | (4,844,300 | )         |   | $ | 93,636,500 |   |
|                                                                       |   |                             |       |      |                  |   |       |   |   |   |       |      |   |   |   |   |
| Add      back equity loss from non consolidated tax subsidiary             |   |                             | $          | 3,729,700 |                  |   |       |   |   |   |       | 3,711,500 |   |
| Add      back losses from non consolidated tax subsidiaries                |   | $                                | 133,600    |      |                  | $      | 1,154,100  |   |   | $      | 290,300    |      |   |   | 1,154,100 |   |
| Permanent      differences                                                 |   |                             | 308,800    |      |                  |   | (451,200   | )      |   |   | 617,500    |      |   |   | 238,300 |   |
| Taxable      income before temporary differences                           |   | $                                | (2,011,600 | )         |                  | $      | 99,735,600 |   |   | $      | (3,936,500 | )         |   | $ | 98,740,400 |   |
|                                                                       |   |                             |       |      |                  |   |       |   |   |   |       |      |   |   |   |   |
| Expected      federal income tax expense (benefit) 35%                     |   | $                                | (704,100   | )         |                  | $      | 34,907,600 |   |   | $      | (1,377,800 | )         |   | $ | 34,559,300 |   |
|                                                                       |   |                             |       |      |                  |   |       |   |   |   |       |      |   |   |   |   |
|     Federal      deferred income tax expense (benefit) |   | $                                | 790,100    |      |                  | $      | 15,039,000 |   |   | $      | 744,400    |      |   | $ | 15,039,000 |   |
|     Federal      current expense (benefit)             |   |                             | (1,494,200 | )         |                  |   | 19,868,600 |   |   |   | (2,122,200 | )         |   |   | 19,520,300 |   |
| Total      federal income tax expense (benefit)                            |   |                             | (704,100   | )         |                  |   | 34,907,600 |   |   |   | (1,377,800 | )         |   |   | 34,559,300 |   |
|    Current      state income tax expense net of             |   |                             |       |      |                  |   |       |   |   |   |       |      |   |   |   |   |
|        federal      tax benefit         |   |                             | -          |      |                  |   | 1,100,000  |   |   |   | -          |      |   |   | 1,100,000 |   |
|    Total      provision (benefit)                           |   | $                                | (704,100   | )         |                  | $      | 36,007,600 |   |   | $      | (1,377,800 | )         |   | $ | 35,659,300 |   |
|                                                                       |   |                             |       |      |                  |   |       |   |   |   |       |      |   |   |   |   |

----

Index

|                                                         |   | June      30, |       |   | December      31, |   |
|--------------------------------------------------------------|--------|---------------|------------|--------|-------------------|--------|
|                                                         |   | 2008          |       |   | 2007              |   |
|                                                         |   |          |       |   |              |   |
| Current      deferred tax assets:                            |   |          |       |   |              |   |
| Tax      basis in excess of book                             |   | $             | 206,100    |   |              | $      | - |   |
| Non-deductible      reserves and other                       |   |          | 91,300     |   |              |   | 59,700 |   |
| Total      net current deferred tax assets/(liabilities)     |   | $             | 297,400    |   |              | $      | 59,700 |   |
|                                                         |   |          |       |   |              |   |   |   |
| Non-current      deferred tax assets:                        |   |          |       |   |              |   |   |   |
| Deferred      compensation                                   |   | $             | 605,800    |   |              | $      | 436,300 |   |
| Accrued      reclamation                                     |   |          | 40,100     |   |              |   | 38,500 |   |
| Tax      basis in excess of book                             |   |          | -          |   |              |   | 200,400 |   |
| Total      noncurrent deferred tax assets                    |   |          | 645,900    |   |              |   | 675,200 |   |
|                                                         |   |          |       |   |              |   |   |   |
| Non-current      deferred tax liabilities:                   |   |          |       |   |              |   |   |   |
| Book      basis in excess of tax basis                       |   |          | (8,514,200 | )      |              |   | (7,604,000 | ) |
| Total      deferred tax liabilities                          |   |          | (8,514,200 | )      |              |   | (7,604,000 | ) |
|                                                         |   |          |       |   |              |   |   |   |
| Total      net non-current deferred tax assets/(liabilities) |   | $             | (7,868,300 | )      |              | $      | (6,928,800 | ) |
|                                                         |   |          |       |   |              |   |   |   |

----

Index

----

Index

|  Short      term construction debt      |   | $      | 13,922,900 |   |
|----------------------------------------------|--------|--------|------------|--------|
|                                         |   |   |       |   |
|  Current      portion of long term debt |   |   | 71,900     |   |
|                                         |   |   |       |   |
|  Long      term debt                    |   |   | 152,800    |   |
|                                         |   | $      | 14,147,600 |   |
|                                         |   |   |       |   |

|                                |   | For      the six months ending June 30, |    |
|-------------------------------------|--------|-----------------------------------------|---------|
|                                |   | 2008                                    |    |   | 2007 |   |
| Balance      January 1,             |   | $                                       | 133,400 |   |   | $ | 124,400 |   |
| Accretion      Expense              |   |                                    | 4,400   |   |   |   | 2,100 |   |
| Deconsolidation      of Sutter Gold |   |                                    | (23,300 | ) |   |   | -- |   |
| Balance      June 30,               |   | $                                       | 114,500 |   |   | $ | 126,500 |   |
|                                |   |                                    |    |   |   |   |   |   |

----

Index

|                                                             |   | June      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                                                          |   |                        | -         |   |   | $ | - |   |   |   | 40,000 |   |   | $ | 2.81 |   |
| Forfeited                                                        |   |                        | -         |   |   | $ | - |   |   |   | - |   |   | $ | - |   |
| Expired                                                          |   |                        | (211,571  | ) |   | $ | 3.92 |   |   |   | (45,000 | ) |   | $ | 3.88 |   |
| Exercised                                                        |   |                        | -         |   |   | $ | - |   |   |   | (446,698 | ) |   | $ | 3.42 |   |
| Outstanding      at June 30, 2008                                |   |                        | 3,608,356 |   |   | $ | 3.74 |   |   |   | 993,887 |   |   | $ | 3.61 |   |
| Exercisable      at June 30, 2008                                |   |                        | 2,585,027 |   |   | $ | 3.26 |   |   |   | 953,887 |   |   | $ | 3.64 |   |
|                                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      Average Remaining Contractual Life - Years         |   |                        |      | 5.79 |   |   |   |   |   |   |   | 2.41 |   |
|                                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Aggregate      intrinsic value of options / warrants outstanding |   |                        | $         | 865,700 |   |   |   |   |   |   | $ | 150,100 |   |
|                                                             |   |                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

Index

|                                               |   |              |       |   |    |   |    |       |   |
|----------------------------------------------------|--------|-------------------|------------|--------|---------|--------|---------|------------|--------|
|                                               |   |              |       |   |    |   |    | Additional |   |
|                                               |   | Common      Stock |       |   | Paid-In |   |
|                                               |   | Shares            |       |   | Amount  |   |    | Capital    |   |
|                                               |   |              |       |   |    |   |    |       |   |
|  Balance      December 31, 2007               |   |              | 23,592,493 |   |    | $      | 235,900 |       |   | $ | 96,560,100 |   |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |
|  2001      stock compensation plan            |   |              | 45,000     |   |    |   | 400     |       |   |   | 169,600 |   |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |
|  Exercise      of warrants                    |   |              | 446,698    |   |    |   | 4,500   |       |   |   | 1,523,100 |   |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |
|  Expense      of employee options             |   |              | -          |   |    |   | -       |       |   |   | 688,100 |   |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |
|  Expense      of company warrants issued      |   |              | -          |   |    |   | -       |       |   |   | 7,600 |   |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |
|  Buy      Back Program                        |   |              | (551,195   | )      |    |   | (5,500  | )          |   |   | (1,886,600 | ) |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |
|  Deferred      taxes on FAS 123R compensation |   |              | -          |   |    |   | -       |       |   |   | 18,700 |   |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |
|  Balance      as of June 30, 2008             |   |              | 23,532,996 |   |    | $      | 235,300 |       |   | $ | 97,080,600 |   |
|                                               |   |              |       |   |    |   |    |       |   |   |   |   |

----

Index

----

Index

----

Index

|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |
|---------------------------------------------|--------|------------------------------------------|------------|--------|----------------------------------------|--------|------------|--------|--------|---------------|-------------|--------|
|                                        |   | For      the three months ended June 30, |       |   | For      the six months ended June 30, |   |
|                                        |   | 2008                                     |       |   | 2007                                   |   |       | 2008   |   |          | 2007        |   |
| Revenues:                                   |   |                                     |       |   |                                   |   |       |   |   |          |        |   |
| Real      estate                            |   | $                                        | 312,500    |   |                                   | $      | 143,900    |   |   | $             | 431,300     |   |   | $ | 169,200 |   |
| Mineral      properties, management         |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| fees      & other                       |   |                                     | 15,900     |   |                                   |   | 86,900     |   |   |          | 46,600      |   |   |   | 141,200 |   |
| Total      revenues:                        |   |                                     | 328,400    |   |                                   |   | 230,800    |   |   |          | 477,900     |   |   |   | 310,400 |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Operating      expenses:                    |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Real      estate                            |   |                                     | 233,800    |   |                                   |   | 2,300      |   |   |          | 400,900     |   |   |   | 167,400 |   |
| Mineral      properties                     |   |                                     | 943,700    |   |                                   |   | 682,200    |   |   |          | 1,073,500   |   |   |   | 1,115,400 |   |
| Total      operating expenses:              |   |                                     | 1,177,500  |   |                                   |   | 684,500    |   |   |          | 1,474,400   |   |   |   | 1,282,800 |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Interest      expense                       |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Real      estate                            |   |                                     | 74,600     |   |                                   |   | --         |   |   |          | 74,600      |   |   |   | -- |   |
| Mineral      properties                     |   |                                     | --         |   |                                   |   | --         |   |   |          | --          |   |   |   | -- |   |
| Total      interest expense:                |   |                                     | 74,600     |   |                                   |   | --         |   |   |          | 74,600      |   |   |   | -- |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| (Loss)      gain before investment and      |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| property      transactions:                 |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Real      estate                            |   |                                     | 4,100      |   |                                   |   | 141,600    |   |   |          | (44,200     | )      |   |   | 1,800 |   |
| Mineral      properties                     |   |                                     | (927,800   | )      |                                   |   | (595,300   | )      |   |          | (1,026,900  | )      |   |   | (974,200 | ) |
| Loss      before investment                 |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| and      property transactions:             |   |                                     | (923,700   | )      |                                   |   | (453,700   | )      |   |          | (1,071,100  | )      |   |   | (972,400 | ) |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Corporate      other revenues and expenses: |   |                                     | (1,396,700 | )      |                                   |   | 96,245,400 |   |   |          | (3,482,900  | )      |   |   | 95,751,200 |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| (Loss)      gain before discontinued        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| operations      and income taxes            |   | $                                        | (2,320,400 | )      |                                   | $      | 95,791,700 |   |   | $             | (4,554,000  | )      |   | $ | 94,778,800 |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Depreciation      expense:                  |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Real      estate                            |   | $                                        | 97,500     |   |                                   | $      | 10,100     |   |   | $             | 148,200     |   |   | $ | 20,200 |   |
| Mineral      properties, management         |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| fees      & other                       |   |                                     | 7,500      |   |                                   |   | 5,700      |   |   |          | 17,900      |   |   |   | 11,400 |   |
| Corporate                                   |   |                                     | 117,400    |   |                                   |   | 66,900     |   |   |          | 241,100     |   |   |   | 171,400 |   |
| Total      depreciation expense             |   | $                                        | 222,400    |   |                                   | $      | 82,700     |   |   | $             | 407,200     |   |   | $ | 203,000 |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   | As      of    |        |
|                                        |   |                                     |       |   |                                   |   |       |   |   | June      30, |        |   | December      31, |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   | 2008          |        |   | 2007 |   |
| Assets      by segment                      |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |
| Real      estate                            |   |                                     |       |   |                                   |   |       |   |   | $             | 28,181,300  |   |   | $ | 18,951,700 |   |
| Mineral      / Oil & Gas properties     |   |                                     |       |   |                                   |   |       |   |   |          | 25,276,200  |   |   |   | 26,817,100 |   |
| Corporate      assets                       |   |                                     |       |   |                                   |   |       |   |   |          | 83,559,800  |   |   |   | 85,635,600 |   |
| Total      assets                           |   |                                     |       |   |                                   |   |       |   |   | $             | 137,017,300 |   |   | $ | 131,404,400 |   |
|                                        |   |                                     |       |   |                                   |   |       |   |   |          |        |   |   |   |   |   |

----

Index

ITEM 2

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

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

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Index

| ·   | Cash      decreased by $62,391,600 as a result of investing $60,298,100 in      marketable securities, U.S. Treasuries, with maturities greater than three      months.  The Company also used cash in operations, mineral      property holding, permitting and engineering study costs, and oil and gas      exploration.  Please see discussion below regarding cash flows      for the six months ended June 30,2008. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Accounts      receivable trade, reimbursable project costs and the dissolution of      subsidiaries decreased $1,083,700.  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 $104,000. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | During      the six months ended June 30, 2008, the Company received a partial payment      of $800,000 of the amount due from the Internal Revenue Service at      December 31, 2007.  The loss incurred during the six months      ended June 30, 2008 resulted in an increase in the amount of the account      receivable from the Internal Revenue Service of $2,140,900 as a result of      that loss being carried back against taxes paid during    2007. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company’s restricted investments, cash held in an interest bearing      account, decreased by $1,745,100 due to the release of funds held in      escrow at December 31, 2007 .  The remaining restricted      investments at June 30, 2008 earned $94,100 in interest during the six      months ended June 30, 2008. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

|   | · | The      Company reported $1,624,200 in assets held for sale at June 30, 2008 and      $1,112,600 at December 31, 2007.  Assets held for sale at June      30, 2008 are assets related to Sutter Gold Mining Company, Inc. (“SGMI”)      and are offset by $141,500 in SGMI liabilities also held for      sale.  On June 13, 2008 the Company entered into a private      agreement to sell an aggregate of 39,062,720 common shares SGMI, or 49.9%      of the outstanding shares of SGMI, to RMB Resources Ltd. (“RMB”), as      trustee for the Telluride Investment Trust, for an aggregate purchase      price of approximately Cdn. $5.4 million, in accordance with the terms of      a Share Purchase Agreement. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Company advanced $1,206,700 in prepaid drilling costs, and was invoiced      $262,400 for expenses during June 2008 for the drilling of the first well.      The amount of prepaid drilling expensed in excess of the invoiced amount,      $944,300, is carried as prepaid drilling costs at June 30,      2008.  The Company has a 20% working interest in this well that      is being drilled by PetroQuest Energy, LLC (the operator of the      well).  The well is projected to be completed in August      2008.  As the operator of the well invoices the Company for its      proportionate share of drilling costs, prepaid drilling costs will be      reclassified to properties and equipment as oil and gas      properties.  Although the $1,206,700 represents the anticipated      cost to the Company for the drilling of the well, the ultimate cost may      exceed or be less than that amount depending on conditions of the drilling      and any difficulties encountered. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Accounts      payable decreased by $1,313,300 during the six months ended June 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. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Accrued      compensation expense increased by $442,100 during the six months ended      June 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 $8,433,900 to $13,922,900 at June 30,      2008. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Operations      consumed $3,856,300, Investing Activities consumed $66,691,700 and      Financing Activities provided $8,031,700.  The vast majority of      the cash consumed from investing activities, $60,298,100 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$1,084,600. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | An      increase of $1,842,000 in cash as a result of restricted cash investments      being released less $94,100 interest earned on restricted cash investments      for a net increase in cash from restricted investments of      $1,747,900. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

|   | · | Cash      consumed in investing activities: |
|--------|--------|---------------------------------------------|

|   | · | The      Company invested $8,415,000 in its multifamily housing development in      Gillette, Wyoming during the six months ended June 30,    2008. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Company paid $478,400 as for its portion of oil and gas acquisition costs      subject to its agreement on properties in the U.S. gulf coast and paid      $262,400 of drilling costs and expenses on its first well.  The      Company also advanced $944,300 in prepaid drilling costs discussed above      in liquidity. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company      invested $257,800 in its mineral properties during the six months ended      June 30, 2008.  This investment amount was reduced by the      abandonment of certain options on uranium leases and the cancellation of a      finders fee on the Lucky Jack project for a net increase in mineral      properties of $43,100. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      Company invested $60,298,100 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: |
|--------|--------|---------------------------------------------|

|   | · | $8,433,900      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 $37,700 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.  During the three and six months ended June 30,      2008 the Company purchased 354,235 and 551,195 shares respectively under      the buyback plan for $1,892,100 during the six months ended June 30, 2008      or an average price of $3.43 per share.  From inception of the      stock buyback plan through June 30, 2008, the Company has purchased      779,195 shares at an average price per share of $3.77 or      $2,939,300. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

|                                   |   | 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 |   | $                           | 13,922,900 |   |   | $ | 13,922,900 |   |   | $ | -- |   |   | $ | -- |   |   | $ | -- |   |
|                                   |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Long-term      debt obligations  |   |                        | 224,700    |   |   |   | 71,900 |   |   |   | 152,800 |   |   |   | -- |   |   |   | -- |   |
|                                   |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Other      long-term liabilities |   |                        | 114,500    |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |   |   | 114,500 |   |
|                                   |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Totals                           |   | $                           | 14,262,100 |   |   | $ | 13,994,800 |   |   | $ | 152,800 |   |   | $ | -- |   |   | $ | 114,500 |   |
|                                   |   |                        |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

ITEM 3

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ITEM 4

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Index

ITEM 1.  

|   | 1. | Concerning the      Application for Water Rights of Virgil and Lee Spann Ranches, Inc.,      Case No. 03CW033, 03CW034, 03CW035, 03CW036 and      03CW037.  These related cases involve the Spann Ranches, Inc.’s      Water Court applications to change the point of diversion through      alternative points for the purpose of rotating a portion of their senior      water rights between ditches to maximize beneficial use in the event of a      major downstream senior call.  MEMCO filed Statements of      Opposition to ensure that the final decrees to be issued by the Water      Court contain terms and conditions sufficient to protect MEMCO’s water      rights from material injury.  On May 12, 2008, the Water Court      entered an Order for Dismissal without prejudice on these pending cases      for inactivity.  The Applicant Spann Ranch failed to submit      proposed decrees to the parties. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | 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 USE have reached a      settlement to protect USE’s water rights pursuant to a proposed final      decree, which will be submitted with a Stipulation signed by the parties      to the Water Court for itsapproval. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | 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 Mt. Emmons 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. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

|   | 4. | 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 the future final decree to be issued by the Water      Court.  Future Water Court proceedings in this case will involve      quantification of the in-stream flows claimed for the      Black Canyon Park. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

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                    |   |           |    |   |           |   |   |              |   |   | $                    | 5,000,000 |   |
|                                              |   |           |    |   |           |   |   |              |   |   |                 |      |   |
|  July      1, through December 31, 2007      |   |           | 228,000 |   |           | $      | 4.59   |              |   |   | 228,000              |      |   | $ | 3,952,700 |   |
|                                              |   |           |    |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|  January      1, 2008 through March 31, 2008 |   |           | 196,960 |   |           | $      | 4.16   |              |   |   | 424,960              |      |   | $ | 3,132,400 |   |
|                                              |   |           |    |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|  April      1, 2008 through June 30, 2008    |   |           | 354,235 |   |           | $      | 3.03   |              |   |   | 779,195              |      |   | $ | 2,060,700 |   |
|                                              |   |           |    |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|                                              |   |           |    |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|                                              |   |           |    |   |           |   |   |              |   |   |                 |      |   |   |   |   |
|  Totals                                      |   |           | 779,195 |   |           | $      | 3.77   |              |   |   |                 |      |   |   |   |   |
|                                              |   |           |    |   |           |   |   |              |   |   |                 |      |   |   |   |   |

ITEM 3. 

----

Index

ITEM 4.  

| Name      of Director     |   | Votes      For |   | Votes      Against |   | Abstain |
|---------------------------|--------|----------------|--------|--------------------|--------|---------|
| Robert      Scott Lorimer |   | 15,135,221     |   | 1,031,261          |   | 78,728  |
| H.      Russell Fraser    |   | 14,854,004     |   | 1,359,839          |   | 31,367  |
| Michael      Feinstein    |   | 14,759,875     |   | 1,400,310          |   | 85,025  |

|                                                                    |   | Votes      For |   | Votes      Against |   | Abstain |
|-------------------------------------------------------------------------|--------|----------------|--------|--------------------|--------|---------|
| Adoption      of the 2008 Stock Option Plan for non-employee directors. |   | 5,265,973      |   | 1,423,482          |   | 71,735  |

|                                                                                                         |   | Votes      For |   | Votes      Against |   | Abstain |
|--------------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------------------|--------|---------|
| Ratification      of appointment of Moss Adams LLP as independent auditors for the current      fiscal year. |   | 15,607,715     |   | 615,574            |   | 21,921  |

ITEM 5.

ITEM 6.  

|   | (a)    | Exhibits. |                                                                                                                                               |
|--------|--------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |      |                                                                                                                                               |
|   |   | 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 |
|   |   |      |                                                                                                                                               |
|   |   |      |                                                                                                                                               |

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Index

|   | (b)    | Reports on Form      8-K.  The Company filed seven (7) reports on Form 8-K for      the quarter ended June 30, 2008.  The events reported were as      follows: |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                |   |
|   |   | 1.                                                                                                                                                                                  | The      report filed on April 1, 2008, under Item 1.02 referenced Kobex Resources      Ltd. termination of Exploration, Operating and Mine Development      Agreement. |
|   |   |                                                                                                                                                                                |   |
|   |   | 2.                                                                                                                                                                                  | The      report filed on April 30, 2008, under Item 8.01 referenced the engagement      of an engineering firm for the Lucky Jack Project. |
|   |   |                                                                                                                                                                                |   |
|   |   | 3.                                                                                                                                                                                  | The      report filed on May 12, 2008, under Item 8.01 referenced the operations      update and conference call. |
|   |   |                                                                                                                                                                                |   |
|   |   | 4.                                                                                                                                                                                  | The      report filed on May 14, 2008, under Item 8.01 referenced the purchase of      4.55% working interest in a South Louisiana oil and gas area of mutual      interest. |
|   |   |                                                                                                                                                                                |   |
|   |   | 5.                                                                                                                                                                                  | The      report filed on June 13, 2008, under Item 8.01 referenced the Agreement      for USE to sell shares in Sutter Gold Mining, Inc. |
|   |   |                                                                                                                                                                                |   |
|   |   | 6.                                                                                                                                                                                  | The      report filed on June 19, 2008, under Item 8.01 referenced the decision of      the Colorado Mined Land Reclamation Board regarding the Lucky Jack      Project. |
|   |   |                                                                                                                                                                                |   |
|   |   | 7.                                                                                                                                                                                  | The      report (8-K/A) filed on June 19, 2008, under Item 8.01 is an amendment to      the report noted in 6 above. |

SIGNATURES

|                      |   | U.S.      ENERGY CORP. |
|---------------------------|--------|------------------------|
|                      |   | (Company)              |
|                      |   |                   |   |   |
|                      |   |                   |   |   |
|                      |   |                   |   |   |
| Date:      August 8, 2008 |   | By:                    | /s/      Keith G. Larsen |   |
|                      |   |                   | KEITH      G. LARSEN, |   |
|                      |   |                   | Chairman      and CEO |   |
|                      |   |                   |   |   |
|                      |   |                   |   |   |
|                      |   |                   |   |   |
|                      |   |                   |   |   |
| Date:      August 8, 2008 |   | By:                    | /s/      Robert Scott Lorimer |   |
|                      |   |                   | ROBERT      SCOTT LORIMER |   |
|                      |   |                   | Principal      Financial Officer and |   |
|                      |   |                   | Chief      Accounting Officer |   |

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