EXHIBIT  4.25

SA-1-YS
SA/CS
                                                             FORM DATE: 9/1/1999

           VOID AFTER 3:30 P.M., MOUNTAIN TIME, ON SEPTEMBER 19, 2002

                        WARRANT TO PURCHASE COMMON SHARES

                                U.S. ENERGY CORP.

     This is to Certify That, FOR VALUE RECEIVED, [FIRST NAME] [LAST NAME],
[Address1], [City], [State] [PostalCode] ("Holder"), is entitled to purchase,
subject to the provisions of this Warrant, from U.S. ENERGY CORP. ("Company"), a
Wyoming corporation, at any time until 3:30 P.M., Mountain Time, on September
19, 2002 ("Expiration Date"), [No. of Shares] Common Shares of the Company at a
purchase price per share of $3.64 during thE period this Warrant is exercisable.
The number of Common Shares to be received upon the exercise of this Warrant and
the price to be paid for a Common Share may be adjusted from time to time as
hereinafter set forth. The purchase price of a Common Share in effect at any
time and as adjusted from time to time is hereinafter sometimes referred to as
the "Exercise Price." This Warrant is or may be one of a series of warrants
identical in form issued by the Company to purchase an aggregate of 67,025
Common Shares of the Company and the term "Warrants" as used herein means all
such Warrants (including this Warrant). The Common Shares, as adjusted from time
to time, underlying the Warrants are hereinafter sometimes referred to as
"Warrant Shares" and include all Common Shares that have been issued upon the
exercise of the Warrants and all unissued Common Shares underlying the Warrants.

     (A) EXERCISE OF WARRANT. This Warrant may be exercised in whole or in part
at any time or from time to time until the Expiration Date or if the Expiration
Date is a day on which banking institutions are authorized by law to close, then
on the next succeeding day which shall not be such a day, by presentation and
surrender hereof to the Company or at the office of its stock transfer agent, if
any, with the Purchase Form annexed hereto duly executed and accompanied by
payment of the Exercise Price for the number of shares specified in such Form,
together with all federal and state taxes applicable upon such exercise. The
Company agrees not to merge, reorganize or take any action that would terminate
this Warrant unless provisions are made as part of such merger, reorganization
or other action which would provide the holders of this Warrant with an
equivalent of this Warrant as specified in Section (i) hereof. The Company
agrees to provide notice to the Holder that any tender offer is being made for
the Company's Common Shares no later than three business days after the day the
Company becomes aware that any tender offer is being made for outstanding Common
Shares of the Company. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the right of the Holder to purchase the balance
of the Common Shares purchasable hereunder. Upon receipt by the Company of this
Warrant at the office of the Company or at the office of the Company's stock
transfer agent, in proper form for exercise and accompanied by the Exercise
Price, the Holder shall be deemed to be the holder of record of the Common
Shares issuable upon such


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Warrant to Purchase Common Shares
Page 2


exercise, notwithstanding that the stock transfer books of the Company shall
then be closed or that certificates representing such Common Shares shall not
then be actually delivered to the Holder.

     (B) RESERVATION OF SHARES. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Warrant such number of Common Shares as shall be required for issuance or
delivery upon exercise of this Warrant.

     (C) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a Common Share called for upon any exercise hereof,
the Company shall, upon receipt by the Company or the Company's stock transfer
agent of the Exercise Price on such fractional share, pay to the Holder an
amount in cash equal to such fraction multiplied by the current market value of
such fractional share, determined as follows:

          (1) If the Common Shares are listed on a national securities exchange
     or a foreign exchange, are admitted to unlisted trading privileges on such
     an exchange, or are listed for trading on a trading system of the National
     Association of Securities Dealers, Inc. ("NASD") such as Regular NASDAQ
     ("NASDAQ") or NASDAQ/NMS ("NMS") or the OTC Bulletin Board, then the
     current value shall be the last reported sale price of the Common Shares on
     such an exchange or system on the last business day prior to the date of
     exercise of this Warrant or if no such sale is made on such day, the
     average of the closing bid prices for the Common Shares for such day on
     such exchange or such system shall be used; or

          (2) If the Common Shares are not so listed on such exchange or system
     or admitted to unlisted trading privileges, the current value shall be the
     average of the last reported bid prices reported by the National Quotation
     Bureau, Inc. on the last business day prior to the date of the exercise of
     this Warrant; or

          (3) If the Common Shares are not so listed or admitted to unlisted
     trading privileges and if bid prices are not so reported, the current value
     shall be an amount, not less than book value, determined in such reasonable
     manner as may be prescribed by the board of directors of the Company.

     (D) EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company or at the office of its stock transfer agent, if any, for
other Warrants of different denominations entitling the Holder thereof to
purchase (under the same terms and conditions as provided by this Warrant) in
the aggregate the same number of Common Shares purchasable hereunder. This
Warrant may not be sold, transferred, assigned, or hypothecated except in
compliance with federal and state securities laws. Any transfer or assignment
shall be made by surrender of this Warrant to the Company or at the office of
its stock transfer agent, if any, with the Assignment Form annexed hereto duly
executed

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Warrant to Purchase Common Shares
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and with funds sufficient to pay any transfer tax; whereupon the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant" as used herein
includes any warrants issued in substitution for or replacement of this Warrant,
or into which this Warrant may be divided or exchanged. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Subject to such right of indemnification, any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.

     (E) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.

     (F) ADJUSTMENT PROVISIONS.

          (1) Adjustments of the Exercise Price.

               (A) If the Company subdivides its outstanding Common Shares into
          a greater number of Common Shares, the Exercise Price in effect
          immediately prior to such subdivision shall be proportionately
          reduced. Conversely, if the Company combines its outstanding Common
          Shares into a lesser number of Common Shares, the Exercise Price in
          effect immediately prior to such combination shall be proportionally
          increased. In case of a subdivision or combination, the adjustment of
          the Exercise Price shall be made as of the effective date of the
          applicable event. A distribution on Common Shares, including a
          distribution of Convertible Securities, to shareholders of the Company
          on a pro rata basis shall be considered a subdivision of Common Shares
          for the purposes of this subsection (1)(A) of this Section, except
          that the adjustment will be made as of the record date for such
          distribution and any such distribution of Convertible Securities shall
          be deemed to be a distribution of the Common Shares underlying such
          Convertible Securities.

               (B) If the Company shall at any time distribute or cause to be
          distributed to its shareholders, on a pro rata basis, cash, assets, or
          securities of any entity other than the Company, then the Exercise
          Price in effect immediately prior to such

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Warrant to Purchase Common Shares
Page 4

          distribution shall automatically be reduced by an amount determined by
          dividing (x) the amount (if cash) or the value (if assets or
          securities) of the holders' of Warrants (as such term is defined in
          the first paragraph hereof) pro rata share of such distribution
          determined assuming that all holders of Warrants had exercised their
          Warrants on the day prior to such distribution, by (y) the number of
          Common Shares issuable upon the exercise of Warrants (as such term is
          defined in the first paragraph hereof) by the holders thereof on the
          day prior to such distribution.

               (3) No Adjustment for Small Amounts. Anything in this Section (f)
          to the contrary notwithstanding, the Company shall not be required to
          give effect to any adjustment in the Exercise Price unless and until
          the net effect of one or more adjustments, determined as above
          provided, shall have required a change of the Exercise Price by at
          least one cent, but when the cumulative net effect of more than one
          adjustment so determined shall be to change the actual Exercise Price
          by at least one cent, such change in the Exercise Price shall
          thereupon be given effect.

               (4) Number of Shares Adjusted. Upon any adjustment of the
          Exercise Price, the Holder of this Warrant shall thereafter (until
          another such adjustment) be entitled to purchase, at the new Exercise
          Price, the number of Common Shares, calculated to the nearest full
          share, obtained by multiplying the number of Common Shares initially
          issuable upon exercise of this Warrant by the Exercise Price specified
          in the first paragraph hereof and dividing the product so obtained by
          the new Exercise Price.

               (5) Definitions.

                    (A) Whenever reference is made in this Section (f) to the
               distribution of Common Shares, the term "Common Shares" shall
               mean the Common Shares of the Company authorized as of the date
               hereof and any other class of stock ranking on a parity with such
               Common Shares. However, subject to the provisions of Section (i)
               hereof, Common Shares issuable upon exercise hereof shall include
               only Common Shares of the class designated as Common Shares of
               the Company as of the date hereof.

                    (B) Whenever reference is made in this Section (f) to the
               distribution of Convertible Securities, the term "Convertible
               Securities" shall mean options or warrants or rights for the
               purchase of Common Shares of the Company or for the purchase of
               any stock or other securities convertible into or exchangeable
               for Common Shares of the Company.

               (6) AntiDilution Provisions.

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                    (A) Adjustments of Exercise Price. If the Company should at
               any time or from time to time hereafter issue or sell any of its
               Common Shares (other than Common Shares issued upon the exercise
               of Convertible Securities outstanding on March 5, 1999, which
               Common Shares shall be referred to herein as the "Excluded Common
               Shares") without consideration or for a consideration per share
               less than the Exercise Price in effect immediately prior to the
               time of such issue or sale, then forthwith upon such issue or
               sale, the Exercise Price shall be automatically adjusted to a
               price (computed to the nearest cent) determined by dividing (i)
               the sum of (x) the number of Common Shares outstanding
               immediately prior to such issue or sale multiplied by the
               Exercise Price in effect immediately prior to such issue or sale,
               and (y) the consideration, if any, received by the Company upon
               such issue or sale, by (ii) the total number of Common Shares
               outstanding immediately after such issue or sale. For purposes of
               this Section (6)(A), the following provisions (i) and (ii) shall
               also be applicable:

                         (i) Rights, Options, or Warrants. In case at any time
                    hereafter the Company shall in any manner grant any right to
                    subscribe for or to purchase, or any option or warrant for
                    the purchase of Common Shares or for the purchase of any
                    stock or securities convertible into or exchangeable for
                    Common Shares (such convertible or exchangeable stock or
                    securities being hereinafter referred to as the "Underlying
                    Convertible Securities") and if the minimum price per share
                    for which Common Shares are issuable, pursuant to such
                    rights, options, warrants or upon conversion or exchange of
                    such Underlying Convertible Securities (determined by
                    dividing (i) the total amount, if any, received or
                    receivable by the Company as consideration for the granting
                    of such rights, options, or warrants plus the minimum
                    aggregate amount of additional consideration payable to the
                    Company upon the exercise of such rights, options, or
                    warrants under the terms of such rights, options, or
                    warrants at the time of making such computation, plus, in
                    the case of such Underlying Convertible Securities, the
                    minimum aggregate amount of additional consideration, if
                    any, payable upon the conversion or exchange thereof under
                    the terms of such Underlying Convertible Securities at the
                    time of making such computation, by (ii) the total maximum
                    number of Common Shares issuable pursuant to such rights,
                    options, or warrants or upon the conversion or exchange of
                    the total maximum amount of such Underlying Convertible
                    Securities issuable upon the exercise of such rights,
                    options, or warrants under the terms of such rights,
                    options, warrants or Underlying Convertible Securities at
                    the time of making such computation) shall be less than the
                    Exercise Price in effect immediately prior to the time of
                    the granting of such rights or options, then the total
                    maximum number of Common Shares issuable pursuant to such
                    rights, options, warrants or upon conversion or exchange of
                    the total maximum amount of such Underlying Convertible

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                    Securities issuable upon the exercise of such rights,
                    options, or warrants under the terms of such rights,
                    options, warrants or Underlying Convertible Securities at
                    the time of making such computation shall (as of the date of
                    granting of such rights, options, or warrants) be deemed to
                    be outstanding and to have been issued for said price per
                    share as so determined; provided, that no further adjustment
                    of the Exercise Price shall be made upon the actual issue of
                    Common Shares so deemed to have been issued unless the price
                    per share received by the Company upon the actual issuance
                    of Common Shares so deemed to be issued differs from the
                    price per share which was last used to adjust the Exercise
                    Price or unless by the terms of such rights, options or
                    warrants or Underlying Convertible Securities the price per
                    share which the Company will receive upon any such issuance
                    of Common Shares differs from the price per share which was
                    last used to adjust the Exercise Price, in either of which
                    events the Exercise Price shall be adjusted upon the
                    occurrence of either such event to reflect the new price per
                    share of Common Stock; and further provided, that, upon the
                    expiration of such rights (including rights to convert or
                    exchange), options or warrants (a) the number of shares of
                    Common Stock deemed to have been issued and outstanding by
                    reason of the fact that they were issuable pursuant to such
                    rights, options, or warrants (including rights to convert or
                    exchange) that were not exercised, shall no longer be deemed
                    to be issued and outstanding, and (b) the Exercise Price
                    shall forthwith be adjusted to the price which would have
                    prevailed had all adjustments been made on the basis of the
                    issue only of the Common Shares actually issued upon the
                    exercise of such rights, options, or warrants or upon
                    conversion or exchange of such Underlying Convertible
                    Securities. Such adjustments upon expiration shall have no
                    effect on Warrants exercised prior to such expiration.

                         (ii) Convertible Securities. If the Company shall in
                    any manner issue or sell any Convertible Securities other
                    than the rights, options, or warrants described in Section
                    6(A)(i) hereof and if the minimum price per share for which
                    Common Shares are issuable upon conversion or exchange of
                    such Convertible Securities (determined by dividing (i) the
                    total amount received or receivable by the Company as
                    consideration for the issue or sale of such Convertible
                    Securities, plus the minimum aggregate amount of additional
                    consideration, if any, payable to the Company upon the
                    conversion or exchange thereof under the terms of such
                    Convertible Securities at the time of making such
                    computation, by (ii) the total maximum number of Common
                    Shares issuable upon the conversion or exchange of all such
                    Convertible Securities under the terms of such Convertible
                    Securities at the time of making such computation) shall be
                    less than the Exercise Price in effect immediately prior to
                    the time of such issue or sale, then the total maximum

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U.S. Energy Corp.
Warrant to Purchase Common Shares
Page 7

                    number of Common Shares issuable upon conversion or exchange
                    of all such Convertible Securities at the time of making
                    such computation shall (as of the date of the issue or sale
                    of such Convertible Securities) be deemed to be outstanding
                    and to have been issued for said price per share as so
                    determined; provided, that no further adjustment of the
                    Exercise Price shall be made upon the actual issue of Common
                    Shares so deemed to have been issued unless the price per
                    share received by the Company upon the actual issuance of
                    Common Shares so deemed to be issued differs from the price
                    per share which was last used to adjust the Exercise Price
                    or unless by the terms of such Convertible Securities the
                    price per share which the Company will receive upon any such
                    issuance of Common Shares differs from the price per share
                    which was last used to adjust the Exercise Price, in either
                    of which events the Exercise Price shall be adjusted upon
                    the occurrence of either such event to reflect the new price
                    per share of Common Shares; and, further provided that if
                    any such issue or sale of such Convertible Securities is
                    made upon exercise of any right to subscribe for or to
                    purchase or any option to purchase any such Convertible
                    Securities for which an adjustment of the Exercise Price has
                    been or is to be made pursuant to the provisions of Section
                    6(A)(i) then no further adjustment of the Exercise Price
                    shall be made by reason of such issue or sale unless the
                    price per share received by the Company upon the conversion
                    or exchange of such Convertible Securities when actually
                    issued differs from the price per share which was last used
                    to adjust the Exercise Price or unless by the terms of such
                    Convertible Securities the price per share which the Company
                    will receive upon any such issuance of Common Shares upon
                    conversion or exchange of such Convertible Securities
                    differs from the price per share which was last used to
                    adjust the Exercise Price, in either of which events the
                    Exercise Price shall be adjusted upon the occurrence of
                    either of such events to reflect the new price per share of
                    Common Shares; and, further provided, that, upon the
                    termination of the right to convert or to exchange such
                    Convertible Securities for Common Shares, (a) the number of
                    Common Shares deemed to have been issued and outstanding by
                    reason of the fact that they were issuable upon conversion
                    or exchange of any such Convertible Securities, which were
                    not so converted or exchanged, shall no longer be deemed to
                    be issued and outstanding, and (b) the Exercise Price shall
                    forthwith be adjusted to the price which would have
                    prevailed had all adjustments been made on the basis of the
                    issue only of the number of Common Shares actually issued
                    upon conversion or exchange of such Convertible Securities.
                    Such adjustments upon expiration shall have no effect on
                    Warrants exercised prior to such expiration.

                    (B) Determination of Issue Price. In case any Common Shares
               or Convertible Securities shall be issued for cash, the
               consideration received therefor,


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Warrant to Purchase Common Shares
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               which shall be the gross sales price for such security without
               deducting therefrom any commission or other expenses paid or
               incurred by the Company for any underwriting of, or otherwise in
               connection with, the issuance thereof, shall be deemed to be the
               amount received by the Company therefor. In case any Common
               Shares or Convertible Securities shall be issued for a
               consideration part or all of which shall be other than cash,
               then, for the purpose of this Section (6), the Board of Directors
               of the Company shall determine the fair value of such
               consideration, irrespective of accounting treatment, and such
               Common Shares or Convertible Securities shall be deemed to have
               been issued for an amount of cash equal to the value so
               determined by the Board of Directors. The reclassification of
               securities other than Common Shares into securities including
               Common Shares shall be deemed to involve the issuance for a
               consideration other than cash of such Common Shares immediately
               prior to the close of business on the date fixed for the
               determination of security holders entitled to receive such Common
               Shares. In case any Common Shares or Convertible Securities shall
               be issued together with other stock or securities or other assets
               of the Company for consideration, the Board of Directors of the
               Company shall determine what part of the consideration so
               received is to be deemed to be consideration for the issue of
               such Common Shares or Convertible Securities.

                    (C) Determination of Date of Issue. In case the Company
               shall take a record of the holders of Common Shares for the
               purpose of entitling them (i) to receive a dividend or other
               distribution payable in Common Shares or in Convertible
               Securities or (ii) to subscribe for or purchase Common Shares or
               Convertible Securities, then such record date shall be deemed to
               be the date of the issue or sale of the Common Shares deemed to
               have been issued or sold upon the declaration of such dividend or
               the making of such other distribution or the date of the granting
               of such right of subscription or purchase, as the case may be.

                    (D) Treasury Shares. For the purpose of this Section (f),
               Common Shares at any relevant time owned or held by, or for the
               account of, the Company shall not be deemed outstanding.

     (G) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted as
required by the provisions of Section (f) hereof, the Company shall forthwith
file in the custody of its Secretary or an Assistant Secretary at its principal
office, and with its stock transfer and warrant agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided
and setting forth in reasonable detail the facts requiring such adjustment. Each
such officer's certificate shall be made available at all reasonable times for
inspection by the Holder and the Company shall, forthwith after each such
adjustment, deliver a copy of such certificate to the Holder. In the event the
Company does not comply with the provisions of this Section (g), each Holder
shall be entitled to demand and receive a payment from the Company in the amount
of $1,000 for each violation of this Section (g)


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Warrant to Purchase Common Shares
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by the Company. The Company agrees to pay such amount and to pay all of the
costs and expenses incurred by the Holder, including attorney fees, in
recovering such amount from the Company.

     (H) NOTICES TO HOLDERS. So long as this Warrant shall be outstanding and
unexercised (i) if the Company shall pay any dividend or make any distribution
upon the Common Shares or (ii) if the Company shall offer to the holders of
Common Shares for subscription or purchase by them any shares of stock of any
class or any other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then, in any such case, the Company shall
cause to be delivered to the Holder, at least 10 days prior to the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Shares of record shall be
entitled to exchange their Common Shares for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up.

     (I) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding Common
Shares of the Company (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of an issuance of
Common Shares by way of dividend or other distribution or of a subdivision or
combination), or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing corporation and which does not result in any
reclassification, capital reorganization or other change of outstanding Common
Shares of the class issuable upon exercise of this Warrant) or in case of any
sale or conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, the Company shall cause effective
provision to be made so that the Holder shall have the right thereafter, by
exercising this Warrant, to purchase the kind and amount of shares of stock and
other securities and property which the Holder would have received upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance had this Warrant been exercised prior to the consummation of
such transaction. Any such provision shall include provision for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. The foregoing provisions of this Section (i) shall
similarly apply to successive reclassifications, capital reorganizations and
changes of Common Shares and to successive consolidations, mergers, sales or
conveyances. In the event the Company spins off a subsidiary by distributing to
the shareholders of the Company as a dividend or otherwise the stock of the
subsidiary, the Company shall reserve for the life of this Warrant, shares of
the subsidiary to be delivered to the Holders of the Warrants upon exercise to
the same extent as if they

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were owners of record of the Warrant Shares on the record date for distribution
of the shares of the subsidiary.

     (J) REGISTRATION UNDER THE SECURITIES ACT OF 1933.

          (1) Within 45 days after receipt of a written request by the then
     Holder(s) of Warrants or Warrant Shares representing at least 51% of the
     total Warrant Shares made at any time within the period commencing
     September 20, 1998, and ending September 19, 2003, the Company will file,
     no more than once, a registration statement under the Securities Act of
     1933, as amended, registering the Warrants and the Warrant Shares. The
     Company will use its best efforts to cause such registration statement to
     become effective.

          (2) In addition, if at any time during the period commencing September
     20, 1998, and ending December 31, 2004, the Company should file a
     registration statement (which term shall not include any registration
     statement filed on Forms S-8 or S-4) under the Securities Act of 1933, as
     amended (the "Act"), which relates to a current offering of securities of
     the Company (except in connection with an offering (i) to employees or (ii)
     of the Company's securities solely in exchange for properties, assets or
     stock of other individuals or corporations), such registration statement
     and the prospectus included therein shall also, at the written request to
     the Company by any of the Holder(s) of the Warrants and Warrant Shares,
     relate to, and meet the requirements of the Act with respect to any public
     offering of the Warrants and Warrant Shares so as to permit the public sale
     thereof in compliance with the Act. The Company shall give written notice
     to the Holder(s) of its intention to file a registration statement under
     the Act relating to a current offering of the aforesaid securities of the
     Company 30 or more days prior to the filing of such registration statement,
     and the written request provided for in the first sentence of this
     subsection shall be made by the Holder(s) 10 or more days prior to the date
     specified in the notice as the date on which it is intended to file such
     registration statement. Neither the delivery of such notice by the Company
     nor of such request by the Holder(s) shall in any way obligate the Company
     to file such registration statement and notwithstanding the filing of such
     registration statement, the Company may, at any time prior to the effective
     date thereof, determine not to proceed to effectiveness with such
     registration statement, without liability to the Holder(s).

          (3) In addition, the Company will cooperate with the then Holder(s) of
     the Warrants and Warrant Shares in preparing and signing any registration
     statement, in addition to the registration statements discussed above,
     required in order to sell or transfer the Warrants and Warrant Shares and
     will sign and supply all information required therefor, but such additional
     registration shall be at the then Holder(s) cost and expense.

                  (4) When, pursuant to subsections (1), (2), or (3) of this
         Section, the Company shall take any action to permit a public offering
         or sale or other distribution of the Warrants and Warrant Shares, the
         Company shall:
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Warrant to Purchase Common Shares
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               (A) Supply to each selling Holder two executed copies of each
          registration statement and a reasonable number of copies of the
          preliminary, final and other prospectus in conformity with
          requirements of the Act and the Rules and Regulations promulgated
          thereunder and such other documents as the Holders shall reasonably
          request.

               (B) The Company shall bear the complete cost and expense (other
          than any selling commissions relating to the sale of the Warrants and
          Warrant Shares, which shall be paid by the sellers thereof) of such
          registrations or qualifications except those filed under subsection
          (j)(3) which shall be at the Holder(s) cost and expense.

               (C) Keep effective such registration statement until the first of
          the following events occur: (i) 36 months have elapsed after the
          effective date of such registration statement or (ii) all of the
          registered Warrant Shares issued by the Company either before or after
          the effective date of such registration statement have been publicly
          sold under such registration statement.

               (D) Indemnify and hold harmless each such Holder and each
          underwriter, within the meaning of the Act, who may purchase from or
          sell for any such Holder, any Warrants or Warrant Shares, from and
          against any and all losses, claims, damages, and liabilities
          (including but not limited to, any and all expenses whatsoever
          reasonably incurred in investigating, preparing, defending or settling
          any claim) arising from (i) any untrue or alleged untrue statement of
          a material fact contained in any registration statement furnished
          pursuant to clause (A) of this subsection, or any prospectus included
          therein or (ii) any omission or alleged omission to state therein a
          material fact required to be stated therein or necessary to make the
          statements therein not misleading (unless such untrue statement or
          omission or such alleged untrue statement or omission was based upon
          information furnished or required to be furnished in writing to the
          Company by such Holder or underwriter expressly for use therein),
          which indemnification shall include each person, if any, who controls
          any such Holder or underwriter within the meaning of the Act;
          provided, however, that the Company shall not be so obligated to
          indemnify any such Holder or underwriter or controlling person unless
          such Holder and underwriter shall at the same time indemnify the
          Company, its directors, each officer signing any registration
          statement or any amendment to any registration statement and each
          person, if any, who controls the Company within the meaning of the
          Act, from and against any and all losses, claims, damages and
          liabilities (including, but not limited to, any and all expenses
          whatsoever reasonably incurred in investigating, preparing, defending
          or settling any claim) arising from (i) any untrue or alleged untrue
          statement of a material fact contained in any registration statement
          or prospectus furnished pursuant to Clause (A) of this subsection, or
          (ii) any omission or


<PAGE>


U.S. Energy Corp.
Warrant to Purchase Common Shares
Page 12

          alleged omission to state therein a material fact required to be
          stated therein or necessary to make the statements therein not
          misleading, but the indemnity of such Holder, underwriter or
          controlling person shall be limited to liability based upon
          information furnished, or required to be furnished, in writing to the
          Company by such Holder or underwriter or controlling person expressly
          for use therein. The Company shall not be liable for amounts paid in
          settlement of any such litigation if such settlement was effected
          without the consent of the Company. The indemnity agreement of the
          Company herein shall not inure to the benefit of any such underwriter
          (or to the benefit of any person who controls such underwriter) on
          account of any losses, claims, damages, liabilities (or actions or
          proceedings in respect thereof) arising from the sale of any of such
          Warrants or Warrant Shares by such underwriter to a person if such
          underwriter failed to send or give a copy of the prospectus furnished
          pursuant to Clause (A) of this subsection, as the same may then be
          supplemented or amended (if such supplement or amendment shall have
          been furnished to the Holders pursuant to said Clause (A)), to such
          person with or prior to the written confirmation of the sale involved.

               (5) Each Holder shall supply such information as the Company may
          reasonably require from such Holder, or any underwriter for such
          Holders, for inclusion in such registration statement or posteffective
          amendment.

               (6) The Company's agreements with respect to the Warrants and
          Warrant Shares in this Section will continue in effect regardless of
          the exercise or surrender of this Warrant.

               (7) Any notices or certificates by the Company to the Holder and
          by the Holder to the Company shall be deemed delivered if in writing
          and delivered personally or sent by certified mail, return receipt
          requested, to the Holder, addressed to the Holder at the Holder's
          address as set forth on the Warrant or stockholder register of the
          Company, or, if the Holder has designated, by notice in writing to the
          Company, any other address, to such other address, and, if to the
          Company, addressed to it at 877 North 8th West, Riverton, Wyoming,
          82501. The Company may change its address by written notice to the
          Holder.

     (K) TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. The Company may
cause the following legend, or one similar thereto, to be set forth on the
Warrants and on each certificate representing Warrant Shares or any other
security issued or issuable upon exercise of this Warrant not theretofore
distributed to the public or sold to underwriters for distribution to the public
pursuant to Section (j) hereof; unless legal counsel for the Company is of the
opinion as to any such certificate that such legend, or one similar thereto, is
unnecessary:

     "The securities represented by this certificate may not be offered for
     sale, sold or otherwise transferred except pursuant to an effective
     registration statement made under the Securities Act of 1933 (the
     "Act") and under any applicable state securities

<PAGE>


U.S. Energy Corp.
Warrant to Purchase Common Shares
Page 13

     law, or pursuant to an exemption from registration under the Act and
     under any applicable state securities law, the availability of which
     is to be established to the satisfaction of the Company."

     (L) EXCHANGE PROVISIONS.

          (1) For purposes of this Section (l), this Warrant shall be
     deemed to represent the same number of Warrants as there are Warrant
     Shares underlying this Warrant. For example, if there are 10,000
     Warrant Shares underlying this Warrant, then for purposes of this
     Section (l) the Holder shall be deemed to hold 10,000 Warrants.

          (2) For purposes of this Section (l), the following terms shall
     have the following meanings:

               (A) "Current Market Value of a Warrant Share" shall be the
          value of a Warrant Share as determined under Section (c)(1) or
          (2) hereof except that the time of the determination thereunder
          shall be the last business day prior to the day the Company
          receives a notice from the Holder under this Section (l).

               (B) "Warrant Value" shall mean the Current Market Value of a
          Warrant Share minus or less the Exercise Price payable under this
          Warrant as of the close of business on the last business day
          prior to the day the Company receives a notice from the Holder
          under this Section (l).

          (3) The Holder shall have the right to exchange, in a cashless
     transaction, all or part of the Holder's Warrants for Common Shares
     issued by the Company at anytime prior to the Expiration Date of such
     Warrants by providing written notice ("Notice") to the Company. Such
     Notice may only be provided after September 20, 1998, and only at a
     time when the Company's Common Shares are listed or approved for
     trading or quotation on a domestic or foreign exchange, interdealer
     trading system, or national quotation bureau. Such Notice shall set
     forth the number of Warrants which the Holder elects to exchange for
     Common Shares.

          (4) Within 10 days after receipt of such Notice by the Company,
     the Company shall issue the number of Common Shares of the Company to
     the Holder which is determined by dividing the Warrant Value of the
     Warrants being exchanged by the Current Market Value of a Warrant
     Share as of the date the Notice is received by the Company.

          (5) The Holder shall surrender the Warrant which the Holder is
     exchanging for Common Shares upon receipt thereof. If the entire
     Warrant is being exchanged by the Holder for Common Shares, the
     Company shall cancel the entire Warrant. If less than the entire
     Warrant is being exchanged for Common Shares, the Company shall issue
     a new Warrant to the Holder representing the portion of this Warrant
     which was not exchanged for Common Shares.

<PAGE>


U.S. Energy Corp.
Warrant to Purchase Common Shares
Page 14

     (M) APPLICABLE LAW. This Warrant shall be governed by, and construed
in accordance with, the laws of the state of Colorado.


Dated: _________________, 1999.

                                            U.S. ENERGY CORP.



                                            BY: ________________________________
                                                 John L. Larsen,
                                                 Chief Executive Officer



















<PAGE>


U.S. Energy Corp.
Warrant to Purchase Common Shares
Page 15

                                  PURCHASE FORM

                                                 DATED:________________, 19_____

     The undersigned hereby irrevocably elects to exercise the Warrant to
the extent of purchasing ____________ shares of Common Shares and hereby
makes payment of $_______________ in payment of the actual exercise price
thereof.

                  INSTRUCTIONS FOR REGISTRATION OF SHARES
                  ---------------------------------------

 Name:__________________________________________________________________________
                (Please typewrite or print in block letters)

 Address:_______________________________________________________________________

 Signature:_____________________________________________________________________

                              ASSIGNMENT FORM
                              ---------------

                                                 DATED:_______________, 19______

     FOR VALUE RECEIVED, _______________________________________________________

hereby sells, assigns and transfers unto _______________________________________

Name:___________________________________________________________________________
                (Please typewrite or print in block letters)

Address:________________________________________________________________________

the right to purchase Common Shares represented by this Warrant to the extent of
Common Shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint, attorney, to transfer the same on the books of the
Company with full power of substitution in the premises.


                                       Signature:  _____________________________



<PAGE>



                                Amendment to the
                      Warrant to Purchase Common Shares of
                                         U.S. Energy Corp., which is dated
                                September 1, 1999

For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto mutually agree as follows:

     1.   U.S. Energy Corp. ("Company") issued a Warrant to Purchase Common
          Shares ("Warrant") dated September 1, 1999, to _________ ("Holder").
          The Company and the Holder are entering into this Amendment to the
          Warrant for the purpose of setting forth their agreement to change the
          Warrant. Such changes shall become legally effective at 3:00 p.m.,
          Mountain Time, on September 19, 2002 ("Effective date").

     2.   The Company and the Holder agree that the expiration date of the
          Warrant shall be extended from 3:30 p.m. Mountain Time, on September
          19, 2002, to 3:30 p.m. Mountain Time, on July 19, 2003 ("New
          Expiration Date"). The period from the Effective date of this
          Amendment to the New Expiration Date shall be referred to as the
          "Extension Period".

     3.   The Company and the Holder agree that the Holder shall be entitled to
          purchase __________ Common Shares of the Company at a purchase price
          of $3.64 per share during the Extension Period. Paragraph (f)(6) of
          the warrant provides for the adjustment of the number of Common Shares
          underlying the Warrant and for the adjustment of the purchase price of
          Common Shares underlying the Warrant upon the occurrence of certain
          dilutive events. The Holder agrees with the Company that Paragraph
          (f)(6) of the Warrant shall be void and of no legal effect during the
          Extension Period. Therefore, during the Extension Period, dilutive
          events under Paragraph (f)(6) of the warrant will not change the
          number of Common shares underlying the Warrant (__________) and will
          not change the purchase price of shares under the Warrant ($3.64 per
          share).

     4.   The Holder believes that dilutive events have occurred and may occur
          under Paragraph (f)(6) of the Warrant during the period after the
          effective date of the Amendment. As of the Effective Date of this
          Amendment, the Holder agrees to waive all of his rights to adjustments
          under Paragraph (f)(6) of the Warrant as a result of any such dilutive
          events during such period.

     5.   Paragraph (1) of the Warrant contains provisions granting the Holder
          the right to exercise the Warrant in a "cashless exercise"
          transaction. The Holder agrees with the Company that Paragraph (1) of
          the Warrant shall be void and of no legal effect during the Extension
          Period. Therefore, during the Extension Period, the Holder will not be
          entitled to exercise the Warrant in a "cashless exercise" transaction.

<PAGE>


     6.   Except as specifically provided herein, no other changes are being
          made in the Warrant or the Amendment to the Warrant. The Warrant and
          the Amendment to the Warrant shall not be changed until the Effective
          Date of this Amendment.

Date: Legally effective at 3:00 p.m. on September 19, 2002.


U.S. Energy Corp.


By:  __________________________________          ____________________
         Keith G. Larsen, President                Date Signed



     __________________________________          ____________________
                                                   Date Signed


<PAGE>


                                 LIST OF HOLDERS


                                                         NO. OF SHARES
              NAME                                    UNDERLYING WARRANTS
              ----                                    -------------------

              Mark Reinstein                                  1,760
              Michael Bagnulo                                   412
              Mike Nixson                                       704
              Robert Long                                    31,335
              Steve Smitten                                     137
              Tom Bazely                                        137
              Troy G. Taggart                                   550
              William Garmello                                  550
              Willima Gavin Kessler                             275
              William Powers                                    550
              William Todd Mauney                               137
              Andy Galy                                       1,100
              Ben Bourgeois                                     192
              Chris Donofrie, First Funding                     275
              David Berkowitz                                   412
              Donna Schulze                                     550
              Eric Stroud                                     1,100
              Greg Powers                                       165
              John P. Kanouff                                31,335
              John Shuster                                    1,788
              Kurt Novey                                        550
              Leonard Alsfeld                                   550
                                                             ------

                  Total                                      74,564