EXHIBIT 4.6

                        STOCK OPTION AGREEMENT

     STOCK OPTION  AGREEMENT  made as of this  _________  day of January,  2001,
between  U.S.  Energy  Corp.,  a Wyoming  corporation  (the  "Corporation")  and
______________________.

     In  accordance  with its 1998  Stock  Option  Plan (the  "Plan")  as now or
hereafter amended, a copy of which is attached hereto and incorporated herein by
reference,  the  Corporation  desires,  in  connection  with the services of the
Optionee, to provide the Optionee with an opportunity to acquire $.01 pare value
common  stock (the "Common  Stock") of the  Corporation  on favorable  terms and
thereby increase the Optionee's  proprietary  interest in the continued progress
and success of the business of the Corporation.

     NOW,  THEREFORE,  in  consideration  of the premises,  the mutual covenants
herein set forth and other good and valuable consideration,  the Corporation and
the Optionee agree as follows:

     1.  Confirmation  of Grant of Option.  Pursuant to a  determination  of the
Directors of the  Corporation  (the "Board") on January 10, 2001,  (the "Date of
the  Grant")  the  Corporation,  subject  to the  terms  of the Plan and of this
Agreement,  confirms that the Optionee has been irrevocably granted, as a matter
of  separate  inducement  and  agreement,  and in addition to and not in lieu of
salary or other compensation for services,  a Qualified Stock Option pursuant to
Section 6 of the Plan (the  "Qualified  Option")  to purchase  an  aggregate  of
_______________  shares  of  Common  Stock,  and a  Non-Qualified  Stock  Option
pursuant  to Section 7 of the Plan (the  "Non-Qualified  Option") to purchase an
aggregate  of  _______________  shares  of Common  Stock,  both on the terms and
conditions  herein set forth  subject to  adjustment  as  provided  in Section 8
hereof.

     2. Purchase Price.  The purchase price of shares of Common Stock covered by
the  Qualified  Option will be $2.40 per share (the  "Qualified  Option  Price")
subject to  adjustment  as provided in Section 8 hereof.  The purchase  price of
shares of Common  Stock  covered by the  Non-Qualified  Option will be $2.40 per
share (the  "Non-Qualified  Option Price")  subject to adjustment as provided in
Section 8 hereof.

     3.  Exercise of Option.  Except as  otherwise  provided in Section 8 of the
Plan,  the Option may be  exercised in whole or part at any time during the term
of the Option,  provided,  however,  no Option  shall be  exercisable  after the
expiration of the term thereof,  and no Option shall be  exercisable  unless the
holder  shall at the time of exercise  have been an employee or director of or a
consultant to the  corporation  or of any  subsidiary of the  Corporation  for a
period of at least three  months.  The Option may be exercised  only as to whole
shares in increments of 100 shares.

     The Option may be  exercised,  as provided in this Section 3, by notice and
payment to the  Corporation as provided in Section 10 hereof and Section 8(d) of
the Plan.

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     4. Term of Option.  The term of the Option will be through January 9, 2011,
subject to earlier  termination or  cancellation  as provided in this Agreement.
Except  as  otherwise  provided  in  Section 7 hereof,  the  Option  will not be
exercisable  unless the Optionee shall, at the time of exercise,  be an employee
or director of or consultant to the  Corporation or of a subsidiary.  As used in
this Agreement,  the term  "subsidiary"  refers to and includes each "subsidiary
corporation" as defined in the Plan.

     The holder of the Option will not have any rights to dividends or any other
rights of a  shareholder  with respect to any shares of Common Stock  subject to
the  Option  until  such  shares  shall  have been  issued to the  Optionee  (as
evidenced by the appropriate  actions by the transfer agent for the Corporation)
upon purchase through exercise of the Option.

     5.   Nontransferability   of  Option.  The  Option  may  not  be  assigned,
transferred  (except as provided in the next  preceding  sentence)  or otherwise
disposed of, or pledged or  hypothecated in any way (whether by operation of law
or otherwise)  otherwise  than by will or the laws of descent and  distribution,
and shall  not be  subject  to  execution,  attachment,  or other  process.  Any
assignment,  transfer, pledge,  hypothecation or other disposition of the Option
or any attempt to make any levy of  execution,  attachment or other process will
cause the Option to terminate  immediately upon the happening of any such event,
provided,  however,  that any such termination of the Option under the foregoing
provisions of this Section 5 will not prejudice any rights or remedies which the
Corporation or any subsidiary may have under this Agreement or otherwise.

     6. Exercise Upon Termination. The Optionee's rights to exercise this Option
upon  termination of employment or cessation as a director or consultant are set
forth in Section 8(f) of the Plan.

     7. Death,  Disability or Retirement of Optionee.  The Optionee's  rights to
exercise  this Option upon the death,  disability  or retirement of the Optionee
are set forth in Section 8(g) of the Plan.

     8. Adjustments.  The Option is subject to adjustment upon the occurrence of
certain events as set forth in Section 8(i) of the Plan.

     9. No  Registration.  The Optionee  understands that neither the Option nor
the shares of Common  Stock  subject  thereto  and  issuable  upon the  exercise
thereof  are  registered  under the  Securities  Act of 1933,  as  amended.  The
Optionee  represents  that the  Option  is being  acquired  by him and that such
shares  of  Common  Stock  will  be  acquired  by him  for  investment  and  all
certificates  for the shares  issued  upon  exercise of the Option will bear the
following legend:


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          The shares  represented  by this  Certificate  have not been
          registered under the Securities Act of 1933 (the "Act"), and
          are "restricted  securities" as that term is defined in Rule
          144 under the Act.  The shares may not be offered  for sale,
          sold  or  otherwise   transferred   except  pursuant  to  an
          effective   registration   statement   under  the  Act,  the
          availability   of  which  is  to  be   established   to  the
          satisfaction of the Company.

     10. Notices.  Each notice relating to this Agreement will be in writing and
delivered in person or by first class mail to the proper address. All notices to
the  Corporation  shall  be  addressed  to it at its  office  at Glen L.  Larsen
Building, 877 North 8th West, Riverton, WY 82501. All notices to the Optionee or
other person or persons then  entitled to exercise the Option shall be addressed
to the Optionee or such other person or persons at the Optionee's  address below
specified.  Anyone  to whom a  notice  may be given  under  this  Agreement  may
designate a new address by notice to that effect.

     11.  Approval of Counsel.  The  exercise of the Option and the issuance and
delivery of shares of Common Stock pursuant thereto shall be subject to approval
by the  Corporations'  counsel  of all legal  matters in  connection  therewith,
including  compliance  with the  requirements  of the Securities Act of 1933, as
amended,  the  Securities  Exchange Act of 1934,  as amended,  applicable  state
securities laws, the rules and regulations  thereunder,  and the requirements of
any stock exchange upon which the Common Stock may then be listed.

     12. Benefits of Agreement.  This Agreement will inure to the benefit of and
be binding  upon each  successor  and  assign of the  Company.  All  obligations
imposed upon the Optionee and all rights granted to the  Corporation  under this
Agreement will be binding upon the Optionee's heirs, legal  representatives  and
successors.

     13. Governmental and Other Regulations.  The exercise of the Option and the
Corporation's  obligation to sell and deliver shares upon the exercise of rights
to purchase  shares is subject to all applicable  federal and state laws,  rules
and regulations,  and to such approvals by any regulatory or governmental agency
which may, in the opinion of counsel for the Corporation, be required.

     14. Incorporation of the Plan. The Plan is attached hereto and incorporated
herein by reference. In the event that any provision in this Agreement conflicts
with a provision in the Plan, the Plan shall govern.


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     IN WITNESS  WHEREOF,  the  Corporation  has  caused  this  Agreement  to be
executed in its name by its President or a Vice  President and it corporate seal
to be hereunto affixed and attested by its Secretary or its Assistant  Secretary
and the  Optionee  has  hereunto  set his hand and seal all as of the date first
above written.

                                            U.S. ENERGY CORP.

(Seal)
                                            By:     /s/  Keith G. Larsen
                                                 -------------------------------
                                                 KEITH G. LARSEN, President

ATTEST:


---------------------------------------
DANIEL P. SVILAR, Assistant Secretary

     The undersigned Optionee understands the terms of this Option Agreement and
the attached Plan and hereby agrees to comply therewith.

Date     , 2001


                                       -----------------------------------------

                                       -----------------------------------------
                                                (Address of Optionee)


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                            SCHEDULE OF STOCK OPTIONS
                           GRANTED ON JANUARY 10, 2001


                                                  Option Type
                                       ---------------------------------
     Name                              Qualified            Nonqualified
     ----                              ---------            ------------

     Bryon G. Mowry                      10,000
     Daniel P. Svilar                    41,667                 80,233
     David R. Miller                     41,667                  8,333
     Don C. Anderson                                            10,000
     Fred Craft                          25,000
     George F. Smith                     39,400
     H. Russell Fraser                                          10,000
     Harold F. Herron                    41,667                 55,233
     John L. Larsen                      41,667                142,733
     Keith G. Larsen                     41,667                267,733
     Mark J. Larsen                      41,667                 80,233
     Nick Bebout                                                10,000
     Peter G. Schoonmaker                41,667                 30,233
     Randall R. VanVleet                 10,000
     Richard P. Larsen                   41,667                 55,233
     Robert A. Nicholas                  41,667                  8,333
     Robert Scott Lorimer                41,667                 80,233
     Robin J. Kindle                     41,667                 80,233
     William W. DeLapp                   37,500
                                        -------            -----------

          Total                         580,237                918,763




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