----

| x      | Quarterly      report pursuant to section 13 or 15(d) of the Securities Exchange Act of      1934  |
|--------|----------------------------------------------------------------------------------------------------|
|   | For      the quarter ended March 31, 2009 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 May 6, 2009 |
|-----------------------------------|--------|----------------------------------------|
| Common      stock, $.01 par value |   | 21,285,129                             |

----

|          |                                                                                                                       | Page      No.     |
|---------------|----------------------------------------------------------------------------------------------------------------------------|-------------------|
| PART      I.  | FINANCIAL      INFORMATION                                                                                                 |              |
|          |                                                                                                                       |              |
| ITEM      1.  | Financial      Statements                                                                                                  |              |
|          |                                                                                                                       |              |
|          | Condensed      Balance Sheets as of  March 31, 2009 (unaudited)      and  December  31, 2008 | 4-5               |
|          |                                                                                                                       |              |
|          | Condensed      Statements of Operations for the Three Months Ended March 31, 2009 and      2008 (unaudited)                | 6-7               |
|          |                                                                                                                       |              |
|          | Condensed      Statements of Cash Flows for the Three Months Ended March 31, 2009 and      2008 (unaudited)                | 8-9               |
|          |                                                                                                                       |              |
|          | Notes      to Condensed Financial Statements (unaudited)                                                                   | 10-17             |
|          |                                                                                                                       |              |
| ITEM      2.  | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations                      | 18-25             |
|          |                                                                                                                       |              |
| ITEM      3.  | Quantitative      and Qualitative Disclosures about Market Risk                                                            | 25                |
|          |                                                                                                                       |              |
| ITEM      4.  | Controls      and Procedures                                                                                               | 26                |
|          |                                                                                                                       |              |
| PART      II. | OTHER      INFORMATION                                                                                                     |              |
|          |                                                                                                                       |              |
| ITEM      1.  | Legal      Proceedings                                                                                                     | 26                |
|          |                                                                                                                       |              |
| ITEM      1A. | Risk      Factors                                                                                                          | 26                |
|          |                                                                                                                       |              |
| ITEM      2.  | Changes      in Securities and Use of Proceeds                                                                             | 27                |
|          |                                                                                                                       |              |
| ITEM      3.  | Defaults      Upon Senior Securities                                                                                       | 27                |
|          |                                                                                                                       |              |
| ITEM      4.  | Submission      of Matters to a Vote of Shareholders                                                                       | 27                |
|          |                                                                                                                       |              |
| ITEM      5.  | Other      Information                                                                                                     | 27                |
|          |                                                                                                                       |              |
| ITEM      6.  | Exhibits      and Reports on Form 8-K                                                                                      | 28                |
|          |                                                                                                                       |              |
|          | Signatures                                                                                                                 | 29                |
|          |                                                                                                                       |              |
|          | Certifications                                                                                                             | See      Exhibits |

----

| U.S.      ENERGY CORP.                                    |   |
|-----------------------------------------------------------|--------|
| CONDENSED      BALANCE SHEETS                             |   |
| ASSETS                                                    |   |
| (Amounts      in thousands)                               |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   | March      31, |   |   | December      31, |   |
|                                                      |   | 2009 |   |   | 2008 |   |
|                                                      |   | (Unaudited) |   |   |   |   |
| CURRENT      ASSETS:                                      |   |   |   |   |   |   |
| Cash      and cash equivalents                            |   | $ | 2,985 |   |   | $ | 8,434 |   |
| Marketable      securities                                |   |   |   |   |   |   |   |   |
| Held      to maturity - treasuries                        |   |   | 41,771 |   |   |   | 51,152 |   |
| Available      for sale securities                        |   |   | 1,030 |   |   |   | 576 |   |
| Accounts      receivable                                  |   |   |   |   |   |   |   |   |
| Trade                                                     |   |   | 368 |   |   |   | 600 |   |
| Reimbursable      project costs                           |   |   | 110 |   |   |   | 442 |   |
| Income      taxes                                         |   |   | 6,573 |   |   |   | 5,896 |   |
| Restricted      investments                               |   |   | -- |   |   |   | 4,929 |   |
| Prepaid      expenses and other current assets            |   |   | 676 |   |   |   | 738 |   |
| Total      current assets                                 |   |   | 53,513 |   |   |   | 72,767 |   |
|                                                      |   |   |   |   |   |   |   |   |
| INVESTMENT                                                |   |   | 3,364 |   |   |   | 3,455 |   |
|                                                      |   |   |   |   |   |   |   |   |
| PROPERTIES      AND EQUIPMENT:                            |   |   |   |   |   |   |   |   |
| Oil      & gas properties under full cost method, net |   |   | 7,279 |   |   |   | 7,906 |   |
| Undeveloped      mining claims                            |   |   | 22,952 |   |   |   | 23,950 |   |
| Commercial      real estate, net                          |   |   | 23,861 |   |   |   | 23,998 |   |
| Property,      plant and equipment, net                   |   |   | 9,557 |   |   |   | 9,639 |   |
| Net      properties and equipment                         |   |   | 63,649 |   |   |   | 65,493 |   |
|                                                      |   |   |   |   |   |   |   |   |
| OTHER      ASSETS                                         |   |   | 995 |   |   |   | 916 |   |
| Total      assets                                         |   | $ | 121,521 |   |   | $ | 142,631 |   |
|                                                      |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                              |   |
|-----------------------------------------------------|--------|
| CONDENSED      BALANCE SHEETS                       |   |
| LIABILITIES      AND SHAREHOLDERS' EQUITY           |   |
| (Amounts      in thousands)                         |   |
|                                                |   |   |   |   |   |   |
|                                                |   | March      31, |   |   | December      31, |   |
|                                                |   | 2009 |   |   | 2008 |   |
|                                                |   | (Unaudited) |   |   |   |   |
| CURRENT      LIABILITIES:                           |   |   |   |   |   |   |
| Accounts      payable                               |   | $ | 925 |   |   | $ | 898 |   |
| Accrued      compensation                           |   |   | 781 |   |   |   | 682 |   |
| Short      term construction debt                   |   |   | -- |   |   |   | 16,813 |   |
| Current      portion of long-term debt              |   |   | 200 |   |   |   | 875 |   |
| Other      current liabilities                      |   |   | 254 |   |   |   | 715 |   |
| Total      current liabilities                      |   |   | 2,160 |   |   |   | 19,983 |   |
|                                                |   |   |   |   |   |   |   |   |
| LONG-TERM      DEBT, net of current portion         |   |   | 800 |   |   |   | 1,000 |   |
|                                                |   |   |   |   |   |   |   |   |
| DEFERRED      TAX LIABILITY                         |   |   | 8,510 |   |   |   | 8,945 |   |
|                                                |   |   |   |   |   |   |   |   |
| ASSET      RETIREMENT OBLIGATIONS                   |   |   | 147 |   |   |   | 144 |   |
|                                                |   |   |   |   |   |   |   |   |
| OTHER      ACCRUED LIABILITIES                      |   |   | 726 |   |   |   | 726 |   |
|                                                |   |   |   |   |   |   |   |   |
| SHAREHOLDERS'      EQUITY:                          |   |   |   |   |   |   |   |   |
| Common      stock, $.01 par value; unlimited shares |   |   |   |   |   |   |   |   |
| authorized;      21,425,829 and 21,935,129          |   |   |   |   |   |   |   |   |
| shares      issued, respectively                    |   |   | 214 |   |   |   | 219 |   |
| Additional      paid-in capital                     |   |   | 93,353 |   |   |   | 93,951 |   |
| Accumulated      surplus                            |   |   | 15,316 |   |   |   | 17,663 |   |
| Unrealized      gain on marketable securities       |   |   | 295 |   |   |   | -- |   |
| Total      shareholders' equity                     |   |   | 109,178 |   |   |   | 111,833 |   |
| Total      liabilities and shareholders' equity     |   | $ | 121,521 |   |   | $ | 142,631 |   |
|                                                |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                             |   |
|----------------------------------------------------|--------|
| CONDENSED      STATEMENTS OF OPERATIONS            |   |
| (Unaudited)                                        |   |
| (Amounts      in thousands, except per share data) |   |
|                                               |   |   |   |   |   |   |
|                                               |   | Three      months ended March 31, |   |
|                                               |   | 2009 |   |   | 2008 |   |
| OPERATING      REVENUES:                           |   |   |   |   |   |   |
| Real      estate                                   |   | $ | 734 |   |   | $ | 118 |   |
| Oil      & gas                                 |   |   | 674 |   |   |   | -- |   |
| Management      fees and other                     |   |   | 5 |   |   |   | 31 |   |
|                                               |   |   | 1,413 |   |   |   | 149 |   |
|                                               |   |   |   |   |   |   |   |   |
| OPERATING      COSTS AND EXPENSES:                 |   |   |   |   |   |   |   |   |
| Real      estate                                   |   |   | 512 |   |   |   | 167 |   |
| Oil      and gas                                   |   |   | 812 |   |   |   | -- |   |
| Impairment      of oil and gas properties          |   |   | 1,063 |   |   |   | -- |   |
| Water      treatment plant                         |   |   | 443 |   |   |   | -- |   |
| Mineral      holding costs                         |   |   | -- |   |   |   | 171 |   |
| General      and administrative                    |   |   | 2,005 |   |   |   | 2,580 |   |
|                                               |   |   | 4,835 |   |   |   | 2,918 |   |
|                                               |   |   |   |   |   |   |   |   |
| OPERATING      LOSS                                |   |   | (3,422 | ) |   |   | (2,769 | ) |
|                                               |   |   |   |   |   |   |   |   |
| OTHER      INCOME & (EXPENSES):                |   |   |   |   |   |   |   |   |
| Gain      on sales of assets                       |   |   | 5 |   |   |   | -- |   |
| Equity      loss                                   |   |   | (91 | ) |   |   | -- |   |
| Interest      income                               |   |   | 87 |   |   |   | 554 |   |
| Interest      expense                              |   |   | (38 | ) |   |   | (19 | ) |
|                                               |   |   | (37 | ) |   |   | 535 |   |
|                                               |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN BEFORE PROVISION                  |   |   |   |   |   |   |   |   |
| FOR      INCOME TAXES AND                          |   |   |   |   |   |   |   |   |
| DISCONTINUED      OPERATIONS                       |   |   | (3,459 | ) |   |   | (2,234 | ) |
|                                               |   |   |   |   |   |   |   |   |
| INCOME      TAXES:                                 |   |   |   |   |   |   |   |   |
|  Current      benefit from (provision for)    |   |   | 677 |   |   |   | 628 |   |
|  Deferred      benefit from (provision for)   |   |   | 435 |   |   |   | 46 |   |
|                                               |   |   | 1,112 |   |   |   | 674 |   |
|                                               |   |   |   |   |   |   |   |   |
| (LOSS)      GAIN FROM CONTINUING                   |   |   |   |   |   |   |   |   |
| OPERATIONS                                         |   |   | (2,347 | ) |   |   | (1,560 | ) |
|                                               |   |   |   |   |   |   |   |   |
| DISCONTINUED      OPERATIONS                       |   |   |   |   |   |   |   |   |
| Loss      from discontinued operations             |   |   | -- |   |   |   | (157 | ) |
|                                               |   |   |   |   |   |   |   |   |
| NET      (LOSS) INCOME                             |   | $ | (2,347 | ) |   | $ | (1,717 | ) |
|                                               |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                             |   |
|----------------------------------------------------|--------|
| CONDENSED      STATEMENTS OF OPERATIONS            |   |
| (Unaudited)                                        |   |
| (Amounts      in thousands, except per share data) |   |
|                                               |   |   |   |   |   |   |
|                                               |   | Three      months ended March 31, |   |
|                                               |   | 2009 |   |   | 2008 |   |
| PER      SHARE DATA                                |   |   |   |   |   |   |
| Basic      and diluted loss                        |   |   |   |   |   |   |
| from      continuing operations                    |   | $ | (0.11 | ) |   | $ | (0.06 | ) |
| Basic      and diluted loss                        |   |   |   |   |   |   |   |   |
| from      discontinued operations                  |   |   | -- |   |   |   | (0.01 | ) |
| Basic      and diluted loss per share              |   | $ | (0.11 | ) |   | $ | (0.07 | ) |
|                                               |   |   |   |   |   |   |   |   |
| Basic      and diluted weighted                    |   |   |   |   |   |   |   |   |
| average      shares outstanding                    |   |   | 21,654,519 |   |   |   | 23,749,056 |   |
|                                               |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                                 |   |
|--------------------------------------------------------|--------|
| STATEMENTS      OF CASH FLOWS                          |   |
| (Unaudited)                                            |   |
| (Amounts      in thousands)                            |   |
|                                                   |   |   |   |   |   |   |
|                                                   |   | For      the three months ended March 31, |   |
|                                                   |   | 2009 |   |   | 2008 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:             |   |   |   |   |
| Net      loss                                          |   | $ | (2,347 | ) |   | $ | (1,560 | ) |
| Loss      from discontinued operations                 |   |   | -- |   |   |   | (157 | ) |
| Net      loss from continuing operations               |   |   | (2,347 | ) |   |   | (1,717 | ) |
| Reconcile      net loss to net cash used in operations |   |   |   |   |   |   |   |   |
| Depreciation,      depletion & amortization        |   |   | 1,089 |   |   |   | 172 |   |
| Accretion      of discount on treasury investment      |   |   | (94 | ) |   |   | -- |   |
| Impairment      of oil and gas properties              |   |   | 1,063 |   |   |   | -- |   |
| Equity      loss from Standard Steam                   |   |   | 91 |   |   |   | -- |   |
| Income      tax receivable                             |   |   | (677 | ) |   |   | 153 |   |
| Deferred      income taxes                             |   |   | (435 | ) |   |   | (46 | ) |
| Gain      on sale of assets                            |   |   | (5 | ) |   |   | -- |   |
| Noncash      compensation                              |   |   | 387 |   |   |   | 1,161 |   |
| Noncash      services                                  |   |   | 19 |   |   |   | -- |   |
| Net      changes in assets and liabilities             |   |   | (317 | ) |   |   | (491 | ) |
|                                                   |   |   |   |   |   |   |   |   |
| NET      CASH USED IN OPERATING ACTIVITIES             |   |   | (1,226 | ) |   |   | (768 | ) |
|                                                   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:             |   |   |   |   |   |
| Net      investment in treasury investments            |   | $ | 9,475 |   |   | $ | (24,886 | ) |
| Acquisition      & development of real estate      |   |   | (90 | ) |   |   | (4,914 | ) |
| Acquisition      of oil & gas properties           |   |   | (1,149 | ) |   |   | (82 | ) |
| Minining      property option payment                  |   |   | 1,000 |   |   |   | -- |   |
| Acquisition      of property and equipment             |   |   | (66 | ) |   |   | (4 | ) |
| Proceeds      from sale of property and equipment      |   |   | 5 |   |   |   | 17 |   |
| Net      change in restricted investments              |   |   | 5,298 |   |   |   | 1,792 |   |
| NET      CASH PROVIDED BY                              |   |   |   |   |   |   |   |   |
| (USED      IN) INVESTING ACTIVITIES                    |   |   | 14,473 |   |   |   | (28,077 | ) |
|                                                   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:             |   |   |   |   |   |
| Issuance      of common stock                          |   |   | -- |   |   |   | 1,528 |   |
| Proceeds      from short term construction debt        |   |   | -- |   |   |   | 4,742 |   |
| Repayments      of debt                                |   |   | (17,688 | ) |   |   | (31 | ) |
| Stock      buyback program                             |   |   | (1,008 | ) |   |   | (998 | ) |
| NET      CASH (USED IN) PROVIDED BY                    |   |   |   |   |   |   |   |   |
| FINANCING      ACTIVITIES                              |   |   | (18,696 | ) |   |   | 5,241 |   |
|                                                   |   |   |   |   |   |   |   |   |

----

| U.S.      ENERGY CORP.                              |   |
|-----------------------------------------------------|--------|
| STATEMENTS      OF CASH FLOWS                       |   |
| (Unaudited)                                         |   |
| (Amounts      in thousands)                         |   |
|                                                |   |   |   |   |   |   |
|                                                |   | For      the three months ended March 31, |   |
|                                                |   | 2009 |   |   | 2008 |   |
| Net      cash (used in) operating                   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | -- |   |   |   | (1 | ) |
| Net      cash provided by investing                 |   |   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | -- |   |   |   | 97 |   |
| Net      cash provided by financing                 |   |   |   |   |   |   |   |   |
| activities      of discontinued operations          |   |   | -- |   |   |   | 23 |   |
|                                                |   |   |   |   |   |   |   |   |
| NET      DECREASE IN                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   | (5,449 | ) |   |   | (23,485 | ) |
|                                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   |   |   |   |   |   |   |
|  AT      BEGINNING OF PERIOD                   |   |   | 8,434 |   |   |   | 72,292 |   |
|                                                |   |   |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS                      |   |   |   |   |   |   |   |   |
| AT      END OF PERIOD                               |   | $ | 2,985 |   |   | $ | 48,807 |   |
|                                                |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURES:                      |   |   |   |   |   |   |   |   |
| Interest      paid                                  |   | $ | 19 |   |   | $ | 18 |   |
|                                                |   |   |   |   |   |   |   |   |
| NON-CASH      INVESTING AND FINANCING ACTIVITIES:   |   |   |   |   |   |
|                                                |   |   |   |   |   |   |   |   |
| Development      of assets through issuance of debt |   | $ | -- |   |   | $ | 10,945 |   |
|                                                |   |   |   |   |   |   |   |   |
| Unrealized      gain/(loss)                         |   | $ | 454 |   |   | $ | (282 | ) |
|                                                |   |   |   |   |   |   |   |   |

----

----

|  (Amounts      in thousands)       |   |
|-----------------------------------------|--------|
|                                    |   |   |   |   | Accumulated |   |   |   |   |
|                                    |   |   |   |   | Depreciation |   |   |   |   |
|                                    |   |   |   |   | Depletion      and |   |   |   |   |
|                                    |   | Cost |   |   | Amortization |   |   | Net      Book Value |   |
|  Oil      & Gas properties     |   |   |   |   |   |   |   |   |   |
|  Unevaluated                       |   | $ | 3,455 |   |   | $ | -- |   |   | $ | 3,455 |   |
|  Evaluated                         |   |   | 4,919 |   |   |   | (1,095 | ) |   |   | 3,824 |   |
|                                    |   |   | 8,374 |   |   |   | (1,095 | ) |   |   | 7,279 |   |
|  Mining      properties            |   |   | 22,952 |   |   |   | -- |   |   |   | 22,952 |   |
|  Commercial      real estate       |   |   | 24,562 |   |   |   | (701 | ) |   |   | 23,861 |   |
|  Building,      land and equipment |   |   | 14,461 |   |   |   | (4,904 | ) |   |   | 9,557 |   |
|  Totals                            |   | $ | 70,349 |   |   | $ | (6,700 | ) |   | $ | 63,649 |   |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |

----

| (Amounts      in thousands)                |   |
|--------------------------------------------|--------|
|                                       |   |   |   |   |   |   |
|                                       |   | For      the three months ending March 31, |   |
|                                       |   | 2009 |   |   | 2008 |   |
|                                       |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |
| Beginning      asset retirement obligation |   | $ | 144 |   |   | $ | 133 |   |
|                                       |   |   |   |   |   |   |   |   |
| Accretion      of estimated ARO            |   |   | 3 |   |   |   | 3 |   |
|                                       |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |
| Ending      asset retirement obligation    |   | $ | 147 |   |   | $ | 136 |   |
|                                       |   |   |   |   |   |   |   |   |

----

| (Amounts      in thousands)                   |   |
|-----------------------------------------------|--------|
|                                          |   |   |   |   |   |   |
|                                          |   | For      the three months ending March 31, |   |
|                                          |   | 2009 |   |   | 2008 |   |
| Net      loss                                 |   | $ | (2,347 | ) |   | $ | (1,717 | ) |
|                                          |   |   |   |   |   |   |   |   |
| Comprehensive      gain/(loss) from the       |   |   |   |   |   |   |   |   |
| unrealized      gain on marketable securities |   |   | 454 |   |   |   | (282 | ) |
|                                          |   |   |   |   |   |   |   |   |
| Deferred      income taxes                    |   |   |   |   |   |   |   |   |
| on      marketable securities                 |   |   | (159 | ) |   |   | 187 |   |
|                                          |   |   |   |   |   |   |   |   |
| Comprehensive      loss                       |   | $ | (2,052 | ) |   | $ | (1,812 | ) |
|                                          |   |   |   |   |   |   |   |   |

|  (Amounts      in thousands)                |   |
|--------------------------------------------------|--------|
|                                             |   | March      31, |   |   | December      31, |   |
|                                             |   | 2009 |   |   | 2008 |   |
|  Short      term Debt                       |   |   |   |   |   |   |
|  Construction      note - collateralized by |   |   |   |   |   |   |
|  property,      interest at 2.71%           |   | $ | -- |   |   | $ | 16,813 |   |
|                                             |   |   |   |   |   |   |   |   |
|  Long      term Debt                        |   |   |   |   |   |   |   |   |
|  Real      estate note - collateralized by  |   |   |   |   |   |   |   |   |
|  property,      interest at 6%              |   | $ | 1,000 |   |   | $ | 1,875 |   |
|                                             |   |   |   |   |   |   |   |   |
|  Less      current portion                  |   |   | (200 | ) |   |   | (875 | ) |
|  Totals                                     |   | $ | 800 |   |   | $ | 1,000 |   |
|                                             |   |   |   |   |   |   |   |   |

----

| (Amounts      in thousands, except for share amounts) |   |
|-------------------------------------------------------|--------|
|                                                  |   |   |   |   |   |   |   |   |   |
|                                                  |   |   |   |   |   |   |   | Additional |   |
|                                                  |   | Common      Stock |   |   | Paid-In |   |
|                                                  |   | Shares |   |   | Amount |   |   | Capital |   |
|                                                  |   |   |   |   |   |   |   |   |   |
|  Balance      December 31, 2008                  |   |   | 21,935,129 |   |   | $ | 219 |   |   | $ | 93,951 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|  2001      stock compensation plan               |   |   | 20,000 |   |   |   | - |   |   |   | 34 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|  Expense      of employee options                |   |   | - |   |   |   | - |   |   |   | 352 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|  Stock      options issued to outside directors  |   |   | - |   |   |   | - |   |   |   | 14 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|  Expense      of company warrants issued         |   |   | - |   |   |   | - |   |   |   | 5 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|  Common      stock buy back program              |   |   | (529,300 | ) |   |   | (5 | ) |   |   | (1,003 | ) |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |   | 21,425,829 |   |   | $ | 214 |   |   | $ | 93,353 |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

| (Amounts      in thousands)                 |   |
|---------------------------------------------|--------|
|                                        |   |   |   |   |   |   |
|                                        |   | For      the three months ended March 31, |   |
|                                        |   | 2009 |   |   | 2008 |   |
| Revenues:                                   |   |   |   |   |   |   |
| Real      estate                            |   | $ | 734 |   |   | $ | 118 |   |
| Oil      & gas                          |   |   | 674 |   |   |   | -- |   |
| Other                                       |   |   | 5 |   |   |   | 31 |   |
| Total      revenues:                        |   |   | 1,413 |   |   |   | 149 |   |
|                                        |   |   |   |   |   |   |   |   |
| Operating      expenses:                    |   |   |   |   |   |   |   |   |
| Real      estate                            |   | $ | 512 |   |   | $ | 167 |   |
| Oil      and gas                            |   |   | 812 |   |   |   | -- |   |
| Iimpairment      of oil and gas properties  |   |   | 1,063 |   |   |   | -- |   |
| Mineral      properties                     |   |   | 443 |   |   |   | 171 |   |
| Total      operating expenses:              |   |   | 2,830 |   |   |   | 338 |   |
|                                        |   |   |   |   |   |   |   |   |
| Interest      expense                       |   |   |   |   |   |   |   |   |
| Real      estate                            |   | $ | 19 |   |   | $ | -- |   |
| Oil      & gas                          |   |   | -- |   |   |   | -- |   |
| Mineral      properties                     |   |   | -- |   |   |   | -- |   |
| Total      interest expense:                |   |   | 19 |   |   |   | -- |   |
|                                        |   |   |   |   |   |   |   |   |
| Operating      gain/(loss)                  |   |   |   |   |   |   |   |   |
| Real      estate                            |   | $ | 203 |   |   | $ | (49 | ) |
| Oil      & gas                          |   |   | (1,201 | ) |   |   | -- |   |
| Mineral      properties                     |   |   | (438 | ) |   |   | (140 | ) |
| Operating      (loss)                       |   |   | (1,436 | ) |   |   | (189 | ) |
|                                        |   |   |   |   |   |   |   |   |
| Corporate      other revenues and expenses: |   |   | (2,023 | ) |   |   | (2,045 | ) |
|                                        |   |   |   |   |   |   |   |   |
| (Loss)      before discontinued             |   |   |   |   |   |   |   |   |
| operations      and income taxes            |   | $ | (3,459 | ) |   | $ | (2,234 | ) |
|                                        |   |   |   |   |   |   |   |   |
| Depreciation      expense:                  |   |   |   |   |   |   |   |   |
| Real      estate                            |   | $ | 232 |   |   | $ | 51 |   |
| Oil      & gas                          |   |   | 713 |   |   |   | -- |   |
| Mineral      properties                     |   |   | 15 |   |   |   | 10 |   |
| Corporate                                   |   |   | 129 |   |   |   | 124 |   |
| Total      depreciation expense             |   | $ | 1,089 |   |   | $  | 185 |   |

----

|                          |   | As      of     |    |
|-------------------------------|--------|----------------|---------|
|                          |   | March      31, |    |   | December      31, |   |
|                          |   | 2009           |    |   | 2008 |   |
| Assets      by segment        |   |           |    |   |   |   |
| Real      estate              |   | $              | 24,043  |   |   | $ | 30,980 |   |
| Oil      & Gas properties |   |           | 8,239   |   |   |   | 8,523 |   |
| Mineral      properties       |   |           | 24,597  |   |   |   | 24,927 |   |
| Corporate      assets         |   |           | 64,642  |   |   |   | 78,201 |   |
| Total      assets             |   | $              | 121,521 |   |   | $ | 142,631 |   |
|                          |   |           |    |   |   |   |   |   |

----

| ·   | Operations      consumed $1.2 million, Investing Activities provided $14.5 million and      Financing Activities consumed $18.7 million for a net decrease in cash of      $5.4 million. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | Cash      provided by investing activities was generated primarily through the      redemption of U.S. Government Treasury Bills, $9.5 million, and restricted      cash investments held as collateral for a construction loan, $5.3 million,      for a total of $14.8 million. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Additional      cash was provided by investing activities as a result of the Company’s      receipt of the first of six payments of $1.0 million from Thompson Creek      Metals USA, (“TCM”) as an option payment on the Mount Emmons      property. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Investing      activities also consumed cash through the completion of the development of      its multifamily housing unit in Gillette, Wyoming, $90,000, the      acquisition and development of oil and gas properties, $1.1 million, and      the purchase of property and equipment,$66,000. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The      Company retired $17.7 million in debt during the quarter ended March 31,      2009.  This debt consisted of $16.8 million for the construction      of the Company’s multifamily housing property in Gillette, Wyoming and      $875,000 for the joint purchase with TCM of a parcel of      property. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company also purchased 529,300 shares of its common stock pursuant to its      stock buyback plan which consumed $1.0 million during the quarter ended      March 31, 2009. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                      |   |                    |    |   |     |   |   | 2009      Period Compared to 2008 Period |   |
|-------------------------------------------|--------|-------------------------|---------|--------|----------|--------|--------|------------------------------------------|--------|
|                                      |   | Three      Months Ended |    |   |     |   |   | %                                        |   |
|                                      |   | March      31,          |    |   | Increase |   |   | Increase                                 |   |
|                                      |   | 2009                    |    |   | 2008     |   |   | (Decrease)                               |   |   | (Decrease) |   |
| Production      volumes                   |   |                    |    |   |     |   |   |                                     |   |   |   |   |
| Oil      and condensate (Bbls)            |   |                    | 3,618   |   |     |   | --     |                                     |   |   | 3,618 |   |   |   | 100 | % |
| Natural      gas (Mcf)                    |   |                    | 119,259 |   |     |   | --     |                                     |   |   | 119,259 |   |   |   | 100 | % |
| Average      sales prices                 |   |                    |    |   |     |   |   |                                     |   |   |   |   |   |   |   |   |
| Oil      and condensate (Bbls)            |   | $                       | 38.15   |   |     | $      | --     |                                     |   | $ | 38.15 |   |   |   | 100 | % |
| Natural      gas (Mcf)                    |   |                    | 4.94    |   |     |   | --     |                                     |   |   | 4.94 |   |   |   | 100 | % |
| Operating      revenues (in thousands)    |   |                    |    |   |     |   |   |                                     |   |   |   |   |   |   |   |   |
| Oil      and condensate                   |   | $                       | 121     |   |     | $      | --     |                                     |   | $ | 121 |   |   |   | 100 | % |
| Natural      gas                          |   |                    | 553     |   |     |   | -      |                                     |   |   | 553 |   |   |   | 100 | % |
| Total      Operating Revenue              |   |                    | 674     |   |     |   | -      |                                     |   |   | 674 |   |   |   | 100 | % |
| Lease      Operating Expense              |   |                    | (99     | )      |     |   |   |                                     |   |   | (99 | ) |   |   |   |   |
| Impairment      of Oil and Gas Properties |   |                    | (1,063  | )      |     |   | -      |                                     |   |   | (1,063 | ) |   |   | 100 | % |
| Gain      before DD&A                 |   |                    | (488    | )      |     |   | -      |                                     |   |   | (488 | ) |   |   | 100 | % |
| DD&A                                  |   |                    | (713    | )      |     |   | -      |                                     |   |   | (713 | ) |   |   | 100 | % |
| Gain      (Loss)                          |   | $                       | (1,201  | )      |     | $      | -      |                                     |   | $ | (1,201 | ) |   |   | 100 | % |
|                                      |   |                    |    |   |     |   |   |                                     |   |   |   |   |   |   |   |   |

----

----

----

| (Amounts      in thousands)            |   |
|----------------------------------------|--------|
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   | Payments      due by period |   |
|                                   |   |   |   |   | Less |   |   | One      to |   |   | Three      to |   |   | More      than |   |
|                                   |   |   |   |   | than      one |   |   | Three |   |   | Five |   |   | Five |   |
|                                   |   | Total |   |   | Year |   |   | Years |   |   | Years |   |   | Years |   |
|  Long-term      debt obligations  |   |   | 1,000 |   |   |   | 200 |   |   |   | 600 |   |   |   | 200 |   |   |   | -- |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Other      long-term liabilities |   |   | 147 |   |   |   | -- |   |   |   | -- |   |   |   | 26 |   |   |   | 121 |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Totals                           |   | $ | 1,147 |   |   | $ | 200 |   |   | $ | 600 |   |   | $ | 226 |   |   | $ | 121 |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| i.   | That      the Company’s disclosure controls and procedures are designed to ensure      (a) that information required to be disclosed by the Company in the      reports it files or submits under the Exchange Act is recorded,      processed,  summarized and reported, within the time periods      specified in the SEC’s rules and forms, and (b) that such information is      accumulated and communicated to the Company’s management, including the      Chief Executive Officer and Chief Financial Officer, as appropriate to      allow timely decisions regarding required disclosure;  and |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii.   | That      the Company’s disclosure controls and procedures are      effective. |
|-----------------|--------------------------------------------------------------------------------------|

----

----

|   | (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                                                            |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   | (b)    | Reports on Form      8-K.  The Company filed four reports on Form 8-K for the      quarter ended March 31, 2009.  The events reported were as      follows: |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   |   | 1.                                                                                                                                                                              | The      report filed on January 8, 2009, under Item 8.01 referenced the signing of      an oil & gas agreement.                                                                                          |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   |   | 2.                                                                                                                                                                              | The      report filed on January 12, 2009, under Item 8.01 referenced the milestone      payment received from Thompson Creek Metals CompanyInc.                                                              |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   |   | 3.                                                                                                                                                                              | The      report filed on January 20, 2009, under Item 8.01 referenced the      retirement of August 2007 construction loan.                                                                                   |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   |   | 4.                                                                                                                                                                              | The      report filed on February 4, 2009, under Item 8.01 referenced the update of      drilling program with Ridgeland Wyoming Inc.                                                                         |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   |   | 5.                                                                                                                                                                              | The      report filed on March 4, 2009, under Item 8.01 referenced U.S. Energy Corp.      engaging SMH Capital Inc. to seek oil and gas  acquisitions.                                                   |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   |   | 6.                                                                                                                                                                              | The      report filed on March 16, 2009, under Item 8.01 referenced the reporting      of 2008 highlights and financial results.                                                                              |
|   |   |                                                                                                                                                                            |                                                                                                                                                                                                          |
|   |   | 7.                                                                                                                                                                              | The      report filed on March 19 2009, under Item 8 referenced the amendment to      company bylaws concerning the addition of advance notice provisions for      proposals to be considered byshareholders. |

----

|                   |   | U.S.      ENERGY CORP. |
|------------------------|--------|------------------------|
|                   |   | (Company)              |
|                   |   |                   |
|                   |   |                   |
|                   |   |                   |
| Date:      May 8, 2009 |   | By:                    | /s/      Keith G. Larsen |
|                   |   |                   | KEITH      G. LARSEN, |
|                   |   |                   | Chairman      and CEO |
|                   |   |                   |   |
|                   |   |                   |   |
|                   |   |                   |   |
|                   |   |                   |   |
| Date:      May 8, 2009 |   | By:                    | /s/      Robert Scott Lorimer |
|                   |   |                   | ROBERT      SCOTT LORIMER |
|                   |   |                   | Principal      Financial Officer and |
|                   |   |                   | Chief      Accounting Officer |

----