EXHIBIT 4.7

                               U.S. ENERGY CORP.
                            1996 STOCK AWARD PROGRAM
                               DECEMBER 13, 1996


               U.S. Energy Corp.  ("USE"), a Wyoming  corporation with executive
        offices at 877 North 8th West, Riverton, Wyoming 82501, adopts this 1996
        Stock Award Plan effective as of December 13, 1996.

               WHEREAS,  the Board of  Directors  of USE  agreed to  provide  an
        annual incentive compensation in the form of its common stock to certain
        officers of USE and such  compensation  arrangement  was approved by the
        shareholders of USE at its 1996 Annual Meeting on December 13, 1996.

               NOW THEREFORE,  U.S. Energy Corp. adopts the following 1996 Stock
        Award Program:

               1. An  aggregate  of 67,000  shares  per year for the years  1997
        through  2002 is  available  to be issued  to  certain  officers  of USE
        provided  USE is  profitable  and the  officer is employed by USE on the
        date of the grant.

               2. If fewer than 67,000  shares is issued  during in any year the
        unissued balance of the 67,000 share maximum will be available for issue
        in subsequent years.

               3. The  number  of  shares  to be  awarded  each year out of such
        67,000 shares  aggregate  limit will be  determined by the  Compensation
        Committee of the USE Board of Directors,  and will be based on the USE's
        earnings  per share of Common  Stock for the prior  fiscal  year.  Other
        factors  bearing  on the prior  year's  profitability  may be taken into
        consideration  by the USE  Compensation  Committee  in  determining  the
        number of shares to be issued.

               4. The actual number of shares  recommended  by the  Compensation
        Committee to be awarded to the officers  will be submitted  for approval
        by the USE shareholders at the USE Annual Meeting held subsequent to the
        end of the fiscal year.

               5. The total  number of shares  issued will be divided  among the
        officers based on the following percentages:

                      John L. Larsen             29.85%
                      Daniel P. Svilar           22.39%
                      Max T. Evans               17.91%
                      Harold F. Herron           14.93%
                      R. Scott Lorimer           14.93%



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                                                                    EXHIBIT 4.7
U.S. Energy Corp.
1996 Stock Award Program
December 13, 1996
Page 2


               6. Such shares shall be issued  annually on or before  January 15
        of each  applicable  year as long as each  officer is  employed  by USE.
        However,   the  Board  of   Directors   reserves   the  right  to  defer
        authorization  to issue  the  shares  at a later  date  during  the same
        calendar  year.  One  half of said  compensation  shall be paid by USE's
        subsidiary Crested Corp.

               7. Such  shares  shall be  registered  under the  Securities  and
        Exchange  Act  of  1933,  as  amended,  under  a Form  S-8  registration
        statement.





        /s/ Max T. Evans
        --------------------------
        MAX T. EVANS, Secretary



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