----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-K/A**

**[Part      III Information Only]**

| X       | Annual                report pursuant to section 13 or 15(d) of the Securities Exchange                Act of                1934 for the fiscal year ended December 31, 2006 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                          |
| ⁬ | Transition                report pursuant to section 13 or 15(d) of the Securities Exchange                Act of                1934 for the                                 |
|    | Transition                period from ___________ to                ___________                                                                                               |

| **CRESTED                CORP.**                                                  |
|-----------------------------------------------------------------------------------|
| (Exact                Name of Company as Specified in its                Charter) |

| **Colorado**                                                       |   | **84-0608126**                     |
|--------------------------------------------------------------------|--------|------------------------------------|
| (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)**      |
|                                                               |   |                               |
| Registrant's                telephone number, including area code: |   | **(307)                856-9271**  |

| Securities                registered pursuant to Section 12(b) of the Act:**None**                                          |
|-----------------------------------------------------------------------------------------------------------------------------|
| Securities                registered pursuant to Section 12(g) of the Act:**Common                Stock, $0.001 par value** |

----

----

| Class                                        |   | Outstanding                at March 30, 2007 |
|----------------------------------------------|--------|----------------------------------------------|
| Common                stock, $.001 par value |   | 17,182,704                Shares             |

----

**DISCLOSURE      REGARDING FORWARD-LOOKING STATEMENTS**

----

**PART      III**

**ITEM      10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**

**Keith      G. Larsen**

**Harold      F. Herron**

**Robert      Scott Lorimer**

**Michael      D. Zwickl**

**Kathleen      R. Martin**

**Steven      R. Youngbauer**

----

**ITEM      11. EXECUTIVE COMPENSATION**

**COMPENSATION      DISCUSSION AND ANALYSIS**

----

**Business      Environment**

**Compensation      Philosophy**

----

**Compensation      Objectives and Compensation Committee Responsibilities**

**Compensation      Committee**

**Objectives      of the Compensation Program**

| Ø   | A                substantial portion of compensation should be performance based.                This is                accomplished through periodic cash bonuses, and seeks to obtain continued                exemplary service from the executives through salary, and their equity                participation. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Ø   | A                substantial part of compensation should be delivered through equity                awards                (stock and options). Equity awards are designed to allow the executives                to                build personal and shareholder wealth. Their personal equity benefit                is                the same as the other shareholders. We do not pay stock appreciation                rights. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | **Base                Wages**                (guaranteed amount) - Determined by the Compensation Committee for                executive positions and is based on the scope of responsibilities,                seniority, our ability to replace the individual, and other primarily                judgmental factors deemed relevant by the board. Salaries, are reviewed                from time to time by the Compensation Committee and the Board, and                may be                adjusted. Any base wage equal to or in excess of $100,000 per year                is                specifically reviewed by the Compensation Committee on a case by                case                basis and, if justified, approved by that                committee. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | **Cash                Bonuses**                (short term incentive amount) - Discretionary cash bonuses are determined                by the Compensation Committee with input from Company executives                as to                total amounts and budget. In addition to periodic discretionary bonuses,                the Company has traditionally paid a cash holiday bonus to all employees,                including executives, based on a percentage of base pay. This has                ranged                from 3-10%, but may not be paid in future years of economic hardship.                All                cash bonuses are awarded by the Compensation Committee based on Company                financial condition, successful completion projects, performance                on                projects, acquisitions, and divestiture of companies and assets taking                into account staff tenure, project involvement, roles, and realized                amounts from transactions. To date, the Compensation Committee has                made                recommendations to the full board, and the Company has paid bonuses                on a                per-transaction basis. Because neither the timing of, nor the amount                of                proceeds from, any transaction can be predicted year-to-year, we                do not                set the bonus amount (by a formula or otherwise) until a short period                of                time before they are paid. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Company-Wide      Cash Bonus Paid in 2006*

| ·   | **Stock                Options**                (long term incentive amount) - The USE 2001 Incentive Stock Option                Plan                (ISOP) was approved at the 2001 annual meeting of shareholders, and                was                amended in 2004 to provide that the number of shares available for                issuance be equal to 20% of the total shares issued and outstanding                at any                point in time. The options are intended to qualify under section                422 of                the Internal Revenue Code. Options are issued at exercise prices                equal to                market price on grant dates (or for holders of 10% or more of the                outstanding stock at the time, 110% of market), and may vest (become                exercisable) at various times as determined by the Compensation Committee                and approved by the Board of Directors. Although according to the                plan,                vesting provisions may be part of any option, to date most options                have                vested immediately. Under the plan terms, however, options can’t be                exercised in the first year after their grant. All options are exercisable                for cash, or by delivery of shares of common stock (valued at market),                or                a combination of cash and stock. Options are awarded by the Compensation                Committee based on performance on projects, acquisitions, and divestiture                of companies and assets taking into account staff tenure, project                involvement, roles, and realized amounts from transactions. These                serve as                an added incentive to executives as well as all personnel involved                to                maintain healthy growth for the Company’s stock and focus on long term                stock appreciation. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Tax      effects of options *

| ·   | **Stock                Awards**                (long term incentive amount) - The shareholders approved the 2001                Stock                Compensation Plan (the "SCP") at the 2001 Annual Shareholders Meeting.                The                SCP has an initial term of seven years, with up to 10,000 shares                of                restricted common stock to be issued annually to six executives of                U.S.                Energy Corp. The executives have agreed not to sell, transfer or                pledge                these shares during employment. The number of shares issued in any                year                (up to but not more than 10,000 shares for each individual) is determined                by the Compensation Committee and approved by the full board, taking                into                account the public stock price at the date of grant and during the                prior                calendar year, the Company's financial condition and business prospects,                and other factors as deemed appropriate. The stock is paid quarterly                when                awarded and the Company pays the income taxes owed by recipients                as a                result of receipt of the stock and the commitment of the executives                not to                sell, transfer or pledge the shares. The term of the SCP and the                number of                shares issuable each year is proposed to be extended and increased                at the                USE annual meeting of shareholders in June                2007. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | **Executive                Officer Retirement Benefits**                (long term guaranteed amount) - A specific retirement plan for executives                was approved by the Board of Directors to be effective on October                20,                2005. This plan is designed to provide supplemental income to executives                for post retirement for the inordinate amount of time and effort                spent                while employed in managing the business and to require assistance                from key                personnel in transition to new executives and knowledge transfer.                Eligibility for benefits under the plan include reaching age 60 and                having                served for a minimum of 15 years as a designated executive, and being                employed by the Company on December 31, 2010. Benefits include 5                years of                payments equal to 50% of the greater of the average of the individual’s                last 5 years of base pay or the last annual base pay. Payments are                made                through bi-weekly installments. In return for this consideration,                all                executives agree to provide 1,040 post retirement consulting hours                to the                Company to assist with transition and knowledge transfer to replacements.                If a retired executive is asked to provide more than 1,040 hours,                he will                be compensated at commensurate hourly rates. In the case of death,                the                benefits are paid to the beneficiary or estate of the executive and                the                additional consulting hours are eliminated. Although the plan is                unfunded                under the definitions of ERISA, actuarial calculations are made and                appropriate liability and expense accruals are being made for applicable                amounts under the plan. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Special      Waiver of 2010 Employment Date Requirement. *

----

| ·   | **Severance                and Non-compete Agreements**                (long term guaranteed amount) - Individual severance and non-compete                agreements have been created by the Board of Directors for key positions.                These agreements are designed to ensure longevity and executive focus                on                current operations as well as maintain protection against competition                in                the event of severance of employment or change in control. Each agreement                provides that if the executive’s employment is terminated within three                years of a change in control of the Company, or severance of employment                for other than retirement or cause, the Company will be required                to pay                (i) an amount equal to three times the average annual compensation                over                the prior five years ending before the change in control, (ii) legal                fees                and expenses incurred by such persons as a result of termination;                (iii)                the difference between market value (as of the termination date)                of shares                issuable on exercise of options, and the options' exercise price;                (iv)                continued insurance coverage (life, health, medical, and disability;                (v)                any unpaid bonuses (including a pro rata based on months of service                in the                year of termination) portion of bonuses paid in the calendar year                after                termination, if he served for at least six months in the termination                year); (vi) two years of non-compete compensation up to $250,000                per year;                and (vii) a $1 million term life policy with the premiums to be paid                by                the Company and total premiums paid will be reimbursed from any death                benefits paid. Currently those executives who have severance and                non-compete agreements are Keith G. Larsen, Chairman and CEO, Robert                Scott                Lorimer, CFO, Treasurer and V. P. Finance, Mark J. Larsen, President                and                COO and Harold F. Herron, Senior Vice President. Mr. Youngbauer does                not                have a severance and non-compete agreement at the time of this report                but                in all likelihood will in the future, as he was nominated and approved                as                General Counsel upon the retirement of Mr. Daniel P.                Svilar. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | **Additional                Stock Awards in Subsidiaries or Joint Ventures**                (long term incentive amount) - Occasionally, as an added incentive,                in the                past when U.S. Energy has created a subsidiary operating company                or joint                venture, a portion of the stock issued (usually 10% or less of total                stock                issued to U.S. Energy) was issued to employees of U.S. Energy to                incentivize them in regards to successful completion of a project.                This                stock typically has no value upon issuance and recipients only realize                value upon successful completion and sale of the subsidiary or joint                venture. The realized amount is the same as received by any shareholder                of                the subsidiary or joint venture. As of April 5, 2007 the Compensation                Committee and management have agreed that this practice would cease.                Until                such time as future subsidiary companies to be formed become public                and                have their own shareholder approved equity award programs, the                subsidiaries would not issue equity to officers, directors, or employees                of U.S. Energy. Before that time, all compensation, including equity                awards, to compensate such persons for service related to the                subsidiaries, will be provided by U.S.                Energy. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**EXECUTIVE        COMPENSATION**

**Summary        Compensation Table**

| Name                    and Position                                           |   | Year   |   | Salary |   | Bonus     |   | Stock                    Awards |      | Option                    Awards |   | Non-Equity                    Incentive Compensation |   | Change                    in Pension Value & Non-Qualified Deferred Compensation                    Earnings |    | All                    Other Compensation |   | Total  |   |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|-----------|--------|---------------------------------|-----------|----------------------------------|--------|------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------|---------|-------------------------------------------|--------|--------|--------|
| Keith                    G. Larsen, Chief Executive Officer                    |   |   | 2006   |   | $      | 185,000   |   | $                               | 300,000   | (1)                         | $      | 50,200                                               | (4)    | $                                                                                                                | 28,900  | (5)                                       |   |   |   |   |   |   | $ | 364,400 | (6)(7) | $ | 928,500 |   |
|                                                                           |   |   |   |   |   |      |   |                            |      |                             |   |                                                 |   |                                                                                                             |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Robert                    Scott Lorimer, Chief Financial Officer and Treasurer |   |   | 2006   |   | $      | 175,000   |   | $                               | 319,000   | (1)(2)                           | $      | 50,200                                               | (4)    | $                                                                                                                | 28,900  | (5)                                       |   |   |   |   |   |   | $ | 155,300 | (6(7) | $ | 728,400 |   |
|                                                                           |   |   |   |   |   |      |   |                            |      |                             |   |                                                 |   |                                                                                                             |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Mark                    J. Larsen, President and COO                           |   |   | 2006   |   | $      | 170,000   |   | $                               | 300,000   | (1)                              | $      | 50,200                                               | (4)    | $                                                                                                                | 28,900  | (5)                                       |   |   |   |   |   |   | $ | 26,000 | (6) | $ | 575,100 |   |
|                                                                           |   |   |   |   |   |      |   |                            |      |                             |   |                                                 |   |                                                                                                             |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Harold                    F. Herron, Senior Vice- President                    |   |   | 2006   |   | $      | 170,000   |   | $                               | 300,000   | (1)                              | $      | 50,200                                               | (4)    | $                                                                                                                | 28,900  | (5)                                       |   |   |   |   |   |   | $ | 26,000 | (6) | $ | 575,100 |   |
|                                                                           |   |   |   |   |   |      |   |                            |      |                             |   |                                                 |   |                                                                                                             |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Steven                    R. Youngbauer, General Counsel                       |   |   | 2006   |   | $      | 120,000   |   | $                               | 150,000   | (1)                              | $      | -                                                    |   | $                                                                                                                | 5,800   | (5)                                       |   |   |   |   |   |   | $ | 26,000 | (6) | $ | 301,800 |   |
|                                                                           |   |   |   |   |   |      |   |                            |      |                             |   |                                                 |   |                                                                                                             |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Daniel                    P. Svilar, Retired General Counsel                   |   |   | 2006   |   | $      | 167,700   |   | $                               | 500,000   | (1)(3)                           | $      | 50,200                                               | (4)    | $                                                                                                                | 28,900  | (5)                                       |   |   |   |   |   |   | $ | 132,400 | (6(7) | $ | 879,200 |   |
|                                                                           |   |   |   |   |   |      |   |                            |      |                             |   |                                                 |   |                                                                                                             |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| John                    L. Larsen, Former Chairman Emeritus                    |   |   | 2006   |   | $      | 170,000   |   | $                               | 500,000   | (1)(3)                           | $      | 40,000                                               | (4)    | $                                                                                                                | 28,900  | (5)                                       |   |   |   |   |   |   | $ | 601,000 | (6)(7)(8) | $ | 1,339,900 |   |
|                                                                           |   |   |   |   | $      | 1,157,700 |   | $                               | 2,369,000 |                             | $      | 291,000                                              |   | $                                                                                                                | 179,200 |                                      | $      | -      |   | $ | - |   | $ | 1,331,100 |   | $ | 5,328,000 |   |
|                                                                           |   |   |   |   |   |      |   |                            |      |                             |   |                                                 |   |                                                                                                             |    |                                      |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | All                executives received a bonus which consisted of two components. First                was a                bonus, as recommended by the Compensation Committee and approved                by the                full board for the establishment, management and ultimate sale of                Rocky                Mountain Gas, Inc. and the sale of shares in Pinnacle. Additionally,                each                executive was given a holiday bonus of 10% of his base compensation                salary                in December 2006 as a result of the adoption of the recommendation                of the                Compensation Committee by the full Board of                Directors. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | Mr.                Lorimer was granted a one time performance bonus in the amount of                $19,000                at the recommendation of the Compensation Committee for the development                of                software to manage our reporting requirements. All members of the                accounting staff were also given a bonus. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (3)   | Mr.                John L. Larsen and Mr. Daniel P. Svilar were given a one time retirement                bonus for all their many years of service to the companies. This                bonus was                in the amount of $500,000 each, which was paid one half in September                2006                and one half in January 2007. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Each                  eligible officer received 10,000 shares of U.S. Energy’s common stock                  under the 2001 Stock Award Plan with the exception of Mr. John                  L. Larsen                  who received only 7,500 shares due to his death in during the third                  quarter of 2006. Each grant of shares was made at the beginning                  of each                  quarter and valued at market. U.S. Energy paid all applicable taxes                  on                  these shares as the executives have agreed not to sell, transfer                  or pledge                  these shares until the first of either of their retirement, total                  disability or death. The amounts do not represent cash paid by                  U.S. Energy                  to these persons. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Certain                  options granted to the executive officers in 2004 vested in 2006.                  The                  amount of compensation reported in the above table is the amount                  of                  expense recorded by U.S. Energy pursuant to SFAS 123(R). The amounts                  do                  not represent cash paid by U.S. Energy to these persons but rather                  the                  expense recognized by U.S. Energy for the vesting of the                  options. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Each                  executive officer participates in the ESOP as well as the 401(k).                  All                  officers received a $22,000 contribution to their ESOP account                  as a result                  of the Compensation Committee recommending and the full board approving                  funding of the 10% required amount for 2006 with common stock of                  the                  Company. All executives also participate in the 401(k) plan and                  all but                  Mr. Svilar received a $4,000 contribution as matching funds under                  the plan                  for their contributions. Mr. Svilar received $1,900 as a matching                  contribution. The amounts do not represent cash paid by U.S. Energy                  to                  these persons. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Certain                  of the executive officers exercised options under the established                  1998 and                  2001 Incentive Stock Option Plans (“ISOP”). Mr. Keith G. Larsen                  surrendered 47,202 shares of common stock he owned and exercised                  105,777                  of his options for which U.S. Energy recognized $338,400 in compensation                  as the spread between the exercise price and the share price on                  the date                  of exercise. Mr. Lorimer surrendered 17,730 shares of common stock                  he                  owned and exercised 40,650 of his options for which he recognized                  $129,300                  in compensation as the spread between the exercise price and the                  share                  price on the date of exercise. Mr. Svilar surrendered 30,000 shares                  of                  common stock he owned and exercised 55,653 of his options for which                  he                  $108,500 in compensation as the spread between the exercise price                  and the                  share price on the date of exercise. The amounts do not represent                  cash                  paid by U.S. Energy to these                  persons. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8) | As                  a result of the death of Mr. John L. Larsen, his estate was entitled                  to                  receive 145,200 forfeitable shares which had been issued in his                  name from                  1990 to 1997. These shares were forfeitable until Mr. Larsen retired,                  became permanently disabled or died. The value of the shares at                  time of                  release was $575,000. U.S. Energy did not pay this amount to the                  estate. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Service        on Outside Company Boards - Pinnacle Gas Resources, Inc.**

**Grants        of Plan-Based Awards**

----

|                                                                         |   |   |                        | Estimated                  Future Payouts UnderNon-Equity Incentive Plan Awards |   | Extimated                  Future Payouts Under Equity Incentive Plan Awards |   | All                  Other Stock Awards |   | All                  Other Option Awards |   | Exercise                  or Base Price of Option Awards |   |
|------------------------------------------------------------------------------|--------|--------|-----------------------------|---------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|--------|----------------------------------------------------------|--------|
| Name                  and Position                                           |   |   | Grant                  Date |                                                                            |   | Threshold                                                                    |   |                                    | Target |                                     |   | Max                                                      |   |   | Threshold |   |   | Target |   |   | Max. |   |   |   |   |   |   |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   | ($)                                                                          |   |                                    | ($)    |                                     |   | ($)                                                      |   |   | (#) |   |   | (#) |   |   | (#) |   |   | (#) |   |   | (#) |   |   | ($/SH) |   |
| Keith                  G. Larsen, Chief Executive Officer                    |   |   |                        |                                                                            |   | --                                                                           |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | 10,000 | (1) |   | -- |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |                                                                         |   |                                    |   |                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Robert                  Scott Lorimer, Chief Financial Officer and Treasurer |   |   |                        |                                                                            |   | --                                                                           |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | 10,000 | (1) |   | -- |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |                                                                         |   |                                    |   |                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mark                  J. Larsen, President and COO                           |   |   |                        |                                                                            |   | --                                                                           |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | 10,000 | (1) |   | -- |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |                                                                         |   |                                    |   |                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Harold                  F. Herron, Senior Vice- President                    |   |   |                        |                                                                            |   | --                                                                           |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | 10,000 | (1) |   | -- |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |                                                                         |   |                                    |   |                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Steven                  R. Youngbauer, General Counsel                       |   |   |                        |                                                                            |   | --                                                                           |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | - |   |   | -- |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |                                                                         |   |                                    |   |                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Daniel                  P. Svilar, Retired General Counsel                   |   |   |                        |                                                                            |   | --                                                                           |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | 10,000 | (1) |   | -- |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |                                                                         |   |                                    |   |                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| John                  L. Larsen, Former Chairman Emeritus                    |   |   |                        |                                                                            |   | --                                                                           |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | 7,500 | (1) |   | -- |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |  --                                                                     |   |                                    | --     |                                     |   | --                                                       |   |   | -- |   |   | -- |   |   | -- |   |   | 57,500 |   |   |   |   |   |   |   |
|                                                                         |   |   |                        |                                                                            |   |                                                                         |   |                                    |   |                                     |   |                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1) | Shares                  granted under the 2001 Stock Compensation                  Plan. |
|-----|------------------------------------------------------------------------------------------|

----

**Outstanding        Equity Awards at December 31, 2006**

|                                        |   | Option                    Awards                                       |      | Stock                    Awards                                        |   |
|---------------------------------------------|--------|------------------------------------------------------------------------|-----------|------------------------------------------------------------------------|--------|
|                                        |   | Number                    of Securities Underlying Unexercised Options |      | Number                    of Securities Underlying Unexercised Options |   | Equity                    Incentive Plan Awards: Number of Securities Underlying Unexercised                    Unearned Options |   | Option                    Exercise Price |   | Option                    Expiration Date |   | Number                    of shares of stock that have not vested |   | Market                    Value of shares of stock that have not vested |   | Equity                    Incentive Plan Awards: Number of unearned shares, units or other                    rights                    that have not vested |   | Equity                    Incentive Plan Awards: Market or payout value of unearned shares,                    units or                    other rights that have not vested |   |
|                                        |   | (#)                                                                    |      | (#)                                                                    |   | (#) |   | ($/SH) |   |   |   | (#) |   | ($) |   | (#) |   | ($) |   |
| Name                    and Position        |   | Exercisable                                                            |      | Unexercisable                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Keith                    G. Larsen          |   |                                                                   | 52,718    |                                                                   |   | -- |   |   | -- |   | $ | 2.00 |   |   | 09/25/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
| Chairman/CEO                                |   |                                                                   | 267,734   |                                                                   |   | -- |   |   | -- |   | $ | 2.40 |   |   | 01/09/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.90 |   |   | 12/06/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 52,556    |                                                                   |   | -- |   |   | -- |   | $ | 2.25 |   |   | 12/07/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 84,350    |                                                                   |   | -- |   |   | -- |   | $ | 2.46 |   |   | 06/30/14 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.86 |   |   | 10/13/15 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Robert                    Scott Lorimer     |   |                                                                   | 40,218    |                                                                   |   | -- |   |   | -- |   | $ | 2.00 |   |   | 09/25/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
| CFO/Treasurer                               |   |                                                                   | 80,233    |                                                                   |   | -- |   |   | -- |   | $ | 2.40 |   |   | 01/09/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.90 |   |   | 12/06/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 52,556    |                                                                   |   | -- |   |   | -- |   | $ | 2.25 |   |   | 12/07/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 84,350    |                                                                   |   | -- |   |   | -- |   | $ | 2.46 |   |   | 06/30/14 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.86 |   |   | 10/13/15 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mark                    J. Larsen           |   |                                                                   | 27,782    |                                                                   |   | -- |   |   | -- |   | $ | 2.875 |   |   | 09/25/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
| President/COO                               |   |                                                                   | 41,248    |                                                                   |   | -- |   |   | -- |   | $ | 2.40 |   |   | 01/09/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.90 |   |   | 12/06/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 97,000    |                                                                   |   | -- |   |   | -- |   | $ | 2.25 |   |   | 12/07/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 125,000   |                                                                   |   | -- |   |   | -- |   | $ | 2.46 |   |   | 06/30/14 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.86 |   |   | 10/13/15 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Harold                    F. Herron         |   |                                                                   | 20,109    |                                                                   |   | -- |   |   | -- |   | $ | 2.00 |   |   | 09/25/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
| Senior                    Vice President    |   |                                                                   | 27,617    |                                                                   |   | -- |   |   | -- |   | $ | 2.40 |   |   | 01/09/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 50,000    |                                                                   |   | -- |   |   | -- |   | $ | 3.90 |   |   | 12/06/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 26,278    |                                                                   |   | -- |   |   | -- |   | $ | 2.25 |   |   | 12/07/11 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 125,000   |                                                                   |   | -- |   |   | -- |   | $ | 2.46 |   |   | 06/30/14 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.86 |   |   | 10/13/15 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Steven                    R. Youngbauer     |   |                                                                   | 25,000    |                                                                   |   | -- |   |   | -- |   | $ | 2.46 |   |   | 06/30/14 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
| General                    Counsel          |   |                                                                   | 50,000    |                                                                   |   | -- |   |   | -- |   | $ | 3.86 |   |   | 10/13/15 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Daniel                    P. Svilar         |   |                                                                   | 34,782    |                                                                   |   | -- |   |   | -- |   | $ | 2.875 |   |   | 01/12/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
| Retired                    General Counsel  |   |                                                                   | 40,218    |                                                                   |   | -- |   |   | -- |   | $ | 2.00 |   |   | 01/12/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 110,691   |                                                                   |   | -- |   |   | -- |   | $ | 2.40 |   |   | 01/12/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.90 |   |   | 01/12/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 52,556    |                                                                   |   | -- |   |   | -- |   | $ | 2.25 |   |   | 01/12/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 125,000   |                                                                   |   | -- |   |   | -- |   | $ | 2.46 |   |   | 01/12/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.86 |   |   | 01/12/08 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| John                    L. Larsen           |   |                                                                   | 34,782    |                                                                   |   | -- |   |   | -- |   | $ | 2.875 |   |   | 09/04/07 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
| Former                    Chairman Emeritus |   |                                                                   | 77,718    |                                                                   |   | -- |   |   | -- |   | $ | 2.00 |   |   | 09/04/07 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 184,400   |                                                                   |   | -- |   |   | -- |   | $ | 2.40 |   |   | 09/04/07 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.90 |   |   | 09/04/07 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 97,000    |                                                                   |   | -- |   |   | -- |   | $ | 2.25 |   |   | 09/04/07 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 125,000   |                                                                   |   | -- |   |   | -- |   | $ | 2.46 |   |   | 09/04/07 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   | 100,000   |                                                                   |   | -- |   |   | -- |   | $ | 3.86 |   |   | 09/04/07 |   |   | N/A |   |   | N/A |   |   | N/A |   |   | N/A |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                       |   |                                                                   | 3,311,896 |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                                   |      |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Option        Exercises and Stock Vested**

|                                        |   | Option                    Awards                         |    | Stock                    Awards               |   |
|---------------------------------------------|--------|----------------------------------------------------------|---------|-----------------------------------------------|--------|
|                                        |   | Number                    of Shares Acquired on Exercise |    | Value                    Realized on Exercise |   | Number                    of Shares Acquired on Vesting |   | Value                    Realized on Vesting |   |
| Name                    and Position        |   | (#)                                                      |    | ($)                                           |   | (#) |   | ($) |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |
| Keith                    G. Larsen          |   |                                                     | 105,777 |                                          | $      | 338,400 |   |   | 10,000 |   | $ | 50,200 |   |
| Chairman/CEO                                |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
| Robert                    Scott Lorimer     |   |                                                     | 40,650  |                                          | $      | 129,300 |   |   | 10,000 |   | $ | 50,200 |   |
| CFO/Treasurer                               |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
| Mark                    J. Larsen           |   |                                                     | -       |                                          | $      | - |   |   | 10,000 |   | $ | 50,200 |   |
| President/COO                               |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
| Harold                    F. Herron         |   |                                                     | -       |                                          | $      | - |   |   | 10,000 |   | $ | 50,200 |   |
| Senior                    Vice President    |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
| Steven                    R. Youngbauer     |   |                                                     | -       |                                          | $      | - |   |   | - |   | $ | - |   |
| General                    Counsel          |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
| Daniel                    P. Svilar         |   |                                                     | 55,653  |                                          | $      | 108,500 |   |   | 10,000 |   | $ | 50,200 |   |
| Retired                    General Counsel  |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
| John                    L. Larsen           |   |                                                     | -       |                                          | $      | - |   |   | 7,500 |   | $ | 40,000 |   |
| Former                    Chairman Emeritus |   |                                                     |    |                                          |   |   |   |   | 145,200 |   | $ | 575,000 |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |
|                                        |   |                                                     | 202,080 |                                          | $      | 576,200 |   |   | 202,700 |   | $ | 866,000 |   |
|                                        |   |                                                     |    |                                          |   |   |   |   |   |   |   |   |   |

| (1)   | Value                of shares issued under the 2001 Stock Compensation Plan on date of                issue.                U.S. Energy pays all taxes due on these shares as the executive officer                recipient has agreed not to sell, transfer or pledge these shares                until                his retirement, permanent disability or                death. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | As                a result of the death of Mr. John L. Larsen his estate was entitled                to                receive 145,200 forfeitable shares which had been issued in his name                from                1990 to 1997. These shares were forfeitable until Mr. Larsen retired,                became permanently disabled or died. The value of the shares at time                of                release was $575,000 and Mr. Larsen’s estate paid the taxes due on these                shares prior to their delivery. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Restricted        Stock**

**Nonqualified        Deferred Compensation **

**Employment        Agreements**

**Future        Compensation Issues and Potential Considerations        Discussion**

----

**Potential        Payments upon Change in Control**

| ·   | the                acquisition by any person or entity of the beneficial ownership of                securities representing 25% or more of the combined voting power                of the                then outstanding voting securities, whether or not that ownership                is                coupled with or followed by election of new directors who make up                a                majority of the board; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | during                any two consecutive years, the directors at the beginning of the                period                cease to be a majority of the board; or |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | as                a result of a tender offer, merger, contested election or similar                transactions, the directors before the transaction no longer make                up a                majority of the board (unless the change in the board was approved                by                majority vote of the directors before the                transaction). |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Table        of Potential Change in Control - Termination Payments**

**(as        if termination had been December 31, 2006)**

| Name                  and Position                                                                                     |   | 300%                  of Average Compensation |      | Value                  of Option Exercise at 12-31-06 (1) |   | Value                  of Stock Awards at 12-31-06 (2) |   | Value                  of Health Insurance for Three Years |    | Total  |   |
|------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|-----------------------------------------------------------|--------|--------------------------------------------------------|--------|------------------------------------------------------------|---------|--------|--------|
|                                                                                                                   |   |                                          |      |                                                      |   |                                                   |   |                                                       |    |   |   |
| Keith                  G. Larsen, Chief                  Executive Officer Effective Date 2-14-01                      |   | $                                             | 497,200   |                                                      | $      | 1,469,900                                              |   | $                                                          | 116,500 |   | $      | 50,800 |   | $ | 2,134,400 |   |
| Robert                  Scott Lorimer, Chief Financial Officer & Treasurer Effective Date                  4-18-92 |   | $                                             | 445,200   |                                                      | $      | 934,900                                                |   | $                                                          | 116,500 |   | $      | 50,800 |   | $ | 1,547,400 |   |
| Mark.                  J. Larsen, President - Effective Date 2-14-01                                                   |   | $                                             | 413,900   |                                                      | $      | 999,100                                                |   | $                                                          | 116,500 |   | $      | 50,800 |   | $ | 1,580,300 |   |
| Harold                  F. Herron, Senior Vice-President Effective Date 2-14-01                                        |   | $                                             | 395,600   |                                                      | $      | 708,300                                                |   | $                                                          | 116,500 |   | $      | 50,800 |   | $ | 1,271,200 |   |
| Total                                                                                                                  |   | $                                             | 1,751,900 |                                                      | $      | 4,112,200                                              |   | $                                                          | 466,000 |   | $      | 203,200 |   | $ | 6,533,300 |   |
|                                                                                                                   |   |                                          |      |                                                      |   |                                                   |   |                                                       |    |   |   |   |   |   |   |   |

| (1) | Equals                  closing price on December 29, 2006 times less the strike price                  of issued                  options times the number of exercisable                  options. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Stock                  awards pursuant to the 2001 Stock Compensation                  Plan |
|-----|---------------------------------------------------------------------------------------------|

----

**Retirement        Policy**

----

| Name                  and Position        |   | Plan                  Year |   | Number                  of Years Credited Service |   | Present                  Value of Accumulated Benefit |   | Payments                  during Last Calendar Year |    |
|-------------------------------------------|--------|----------------------------|--------|---------------------------------------------------|--------|-------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                      |   |                       |   |                                              |   |                                                  |   |                                                |    |
| Keith                  G. Larsen          |   |                       | 2006   |                                              |   | 9                                                     |   | $                                                   | 235,200 |   |   |   |   |
| Chairman/CEO                              |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
|                                      |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
| Robert                  Scott Lorimer     |   |                       | 2006   |                                              |   | 15                                                    |   | $                                                   | 322,200 |   |   |   |   |
| CFO/Treasurer                             |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
|                                      |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
| Mark                  J. Larsen           |   |                       | 2006   |                                              |   | 1                                                     |   | $                                                   | 180,300 |   |   |   |   |
| President/COO                             |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
|                                      |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
| Harold                  F. Herron         |   |                       | 2006   |                                              |   | 15                                                    |   | $                                                   | 271,900 |   |   |   |   |
| Senior                  Vice President    |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
|                                      |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
| Steven                  R. Youngbauer     |   |                       | 2006   |                                              |   | --                                                    |   | $                                                   | -       |   |   |   |   |
| General                  Counsel          |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
|                                      |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
| Daniel                  P. Svilar         |   |                       | 2006   |                                              |   | 15                                                    |   | $                                                   | 379,900 |   |   |   |   |
| Retired                  General Counsel  |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
|                                      |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |
| John                  L. Larsen           |   |                       | 2006   |                                              |   | 15                                                    |   | $                                                   | 523,800 |   | $ | 52,300 |   |
| Former                  Chairman Emeritus |   |                       |   |                                              |   |                                                  |   |                                                |    |   |   |   |   |

**2006        Non-Employee Director Compensation Table**

|                                  |   | Fee                  Earned or Paid in Cash |   | Stock                  Awards |   | Options                  Awards |   | Non-Equity                  Incentive Plan Compensation |   | Change                  in Pension Value and Nonqualified Deferred Compensation                  Earnings |   | All                  Other Compensation |   | Total  |   |
|---------------------------------------|--------|---------------------------------------------|--------|-------------------------------|--------|---------------------------------|--------|---------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|--------|--------|
|                                       |   |                                        | ($)    |                          |   | ($)                             |   |                                                    | ($)    |                                                                                                      |   | ($)                                     |   |   | ($)    |   |   | ($) |   |   | ($) |   |
| Name                                  |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |
|                                  |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Michael                  J. Feinstein |   | $                                           | 12,300 |                          | $      | 4,500                           | (1)    | $                                                       | -      |                                                                                                      |   | N/A                                     |   |   | N/A    |   | $ | 22,500 | (2)  | $ | 39,300 |   |
|                                  |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Michael                  Anderson     |   | $                                           | 11,800 |                          | $      | 4,500                           | (1)    | $                                                       | -      |                                                                                                      |   | N/A                                     |   |   | N/A    |   | $ | 22,500 | (2) | $ | 38,800 |   |
|                                  |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Don                  C. Anderson      |   | $                                           | 11,300 |                          | $      | 4,500                           | (1)    | $                                                       | -      |                                                                                                      |   | N/A                                     |   |   | N/A    |   | $ | 22,500 | (2) | $ | 38,300 |   |
| (Retired                  12/31/06)   |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |
|                                  |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |
| H.                  Russel Fraser     |   | $                                           | 12,300 |                          | $      | 4,500                           | (1)    | $                                                       | -      |                                                                                                      |   | N/A                                     |   |   | N/A    |   | $ | 22,500 | (2) | $ | 39,300 |   |
|                                  |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |
|                                  |   | $                                           | 47,700 |                          | $      | 18,000                          |   | $                                                       | -      |                                                                                                      |   |                                    |   |   |   |   | $ | 90,000 |   | $ | 155,700 |   |
|                                  |   |                                        |   |                          |   |                            |   |                                                    |   |                                                                                                      |   |                                    |   |   |   |   |   |   |   |   |   |   |

----

| (1)   | Each                director is paid $4,500 in common stock for any year in which he                is a                director. The number of shares is determined by the price as of January                15th                of                each year of the next business day should that be a weekend or holiday.                Each of the above directors received 785 shares valued at $4,500                during                2006 for service in 2005. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | The                directors adopted the recommendation of Mr. Keith Larsen, as Chairman                and                CEO, that the independent directors participate in the 2006 cash                bonus for                the sale of Rocky Mountain Gas, Inc. and its interest in Pinnacle                and                received $20,000. Additionally each director was paid a $2,500 holiday                bonus. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Compensation        Committee Interlocks and Insider Participation**

**ITEM        12. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT AND RELATED        MATTERS**

**Equity        Compensation Plan Information for Crested Corp.**

|    Plan                  Category                            |   |   Number                  of securities to be issued upon exercise of outstanding options,                  warrants                  and rights(a) |                              |   Weighted                  average exercise price of outstanding options, warrants and                  rights(b) |   | Number                  of securitiesRemaining                  available for future issuance under equity compensation plans (excluding                  securities reflected in column (a))(c) |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------|------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity                  compensation plans approved by security holders(1)  |   |                                                                                                                                                          | 1,700,000                  shares |                                                                                                                         | $      | 1.71                                                                                                                                                                                             |   |   | 300,000(2) |   |
| Equity                  compensation plans not approved by security holders |   |                                                                                                                                                          | None(3)                           |                                                                                                                         |   | n/a                                                                                                                                                                                              |   |   | n/a |   |
| Total                                                                       |   |                                                                                                                                                          | 1,700,000                         |                                                                                                                         | $      | 1.71                                                                                                                                                                                             |   |   | 300,000 |   |

| (1)   | Incentive                stock option plan approved by the Crested shareholders in June                2004. |
|-----------------|--------------------------------------------------------------------------------------------------------------|

|   |  (2) | 2,000,000                  shares of common stock are reserved under the plan. At such time                  as                  options have been granted to purchase 2,000,000 shares, the number                  of                  shares available for issuance under additional options will be                  automatically increased to be a number equal to 20% of the issued                  and                  outstanding shares of common stock of Crested. Of the outstanding                  options,                  options to purchase 900,000 shares held by directors and officers                  of USE                  and Crested) :200,000 are held by each of Harold F. Herron, Keith                  G.                  Larsen, and Robert Scott Lorimer (directors of Crested); 30,000                  are held                  by each of Michael H. Feinstein, H. Russell Fraser, and Michael                  T.                  Anderson (independent directors of USE); 200,000 are held by Mark                  J.                  Larsen (an officer and director of USE); and 50,000 are held by                  Steven R.                  Youngbauer (general counsel to USE and                  Crested). |
|--------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |  (3) | The                  equity compensation plans of U.S. Energy Corp. have not been approved                  by                  the shareholders of Crested Corp. |
|--------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Security        Ownership of Certain Beneficial Owners and Management**

----

|                                         |      | Amount                  and Nature of Beneficial Ownership |   | Total                               |   |       |   |
|----------------------------------------------|-----------|------------------------------------------------------------|--------|-------------------------------------|--------|------------|--------|
| Name                  and Address            |      | Voting                  Rights                             |   | Dispositive                  Rights |   | Beneficial |   | Percent |   |
| of                  Benificial Owner         |      | Sole                                                       |   | Shared                              |   | Sole       |   | Shared |   | Ownership |   | of                  Class (1) |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |
| Keith                  G. Larsen             | (2)  |                                                       | -      |                                |   | 12,184,733 |   |   | 200,000 |   |   | 12,184,733 |   |   | 12,384,733 |   |   | 72.1 | % |
| 4045                  Valley Green Circle    |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Riverton,                  WY 82501          |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Harold                  F. Herron            | (3)       |                                                       | 3,466  |                                |   | 12,184,733 |   |   | 203,466 |   |   | 12,184,733 |   |   | 12,388,199 |   |   | 72.1 | % |
| 877                  North 8th West          |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Riverton,                  WY 82501          |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Michael                  H. Feinstein        | (4)       |                                                       | -      |                                |   | 12,024,733 |   |   | 30,000 |   |   | 12,024,733 |   |   | 12,054,733 |   |   | 70.2 | % |
| 5309                  East Paradise Lane     |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Scottsdale,                  AZ 85254        |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| H.                  Russell Fraser           | (5)       |                                                       | 29,500 |                                |   | 12,024,733 |   |   | 59,500 |   |   | 12,024,733 |   |   | 12,084,233 |   |   | 70.3 | % |
| 3453                  Southfork Road         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cody,                  WY 82414              |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mike                  Anderson               | (6)       |                                                       | -      |                                |   | 12,024,733 |   |   | 30,000 |   |   | 12,024,733 |   |   | 12,054,733 |   |   | 70.2 | % |
| 933                  Main Street             |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Lander,                  WY 82520            |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allen                  S. Winters            | (7)       |                                                       | -      |                                |   | 12,024,733 |   |   | - |   |   | 12,024,733 |   |   | 12,024,733 |   |   | 70.0 | % |
| 15                  Glacier Street           |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Story,                  WY 82842             |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Robert                  Scott Lorimer        | (8)       |                                                       | -      |                                |   | 12,184,733 |   |   | 200,000 |   |   | 12,184,733 |   |   | 12,399,733 |   |   | 72.2 | % |
| 11                  Korell Court             |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Riverton,                  WY 82501          |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mark                  J. Larsen              | (9)       |                                                       | -      |                                |   | 12,084,733 |   |   | 200,000 |   |   | 12,084,733 |   |   | 12,284,733 |   |   | 71.5 | % |
| 513                  Westchester Circle      |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Riverton,                  WY 82501          |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Steven                  R. Youngbauer        | (10)      |                                                       | -      |                                |   | 12,024,733 |   |   | 50,000 |   |   | 12,024,733 |   |   | 12,074,733 |   |   | 70.3 | % |
| 25                  Buckhorn Flats Road      |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Riverton,                  WY 82501          |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Kathleen                  M. Martin          | (11)      |                                                       | 41,722 |                                |   | -          |   |   | 41,722 |   |   | - |   |   | 41,722 |   |   | 0.2 | % |
| 309                  N. Broadway             |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Riverton,                  WY 82501          |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Michael                  D. Zwickl           | (12)      |                                                       | 14,203 |                                |   | -          |   |   | 14,203 |   |   | - |   |   | 14,203 |   |   | 0.1 | % |
| 123                  South Durbin            |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Casper,                  WY 82601            |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| All                  officers and directors  | (13)      |                                                       | 88,891 |                                |   | 12,184,733 |   |   | 1,028,891 |   |   | 12,184,733 |   |   | 13,228,624 |   |   | 76.3 | % |
| as                  a group (eleven persons) |      |                                                       |   |                                |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

**ITEM      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

**Family      Employment**
** **

|                             |   |   |    |                       |   |                        |   |          |    | Release                  of |   |                              |   |   |    |
|----------------------------------|--------|--------|---------|----------------------------|--------|-----------------------------|--------|---------------|---------|-----------------------------|--------|-----------------------------------|--------|--------|---------|
|                             |   |   |    |                       |   | Stock                       |   | Option        |    | Forfeitable                 |   | All                  Other        |   |   |    |
|                             |   | Salary |    | Bonus                  (1) |   | Awards                  (2) |   | Exercise/Vest |    | Shares                      |   | Compensation                  (3) |   | Total  |    |
| John                  L. Larsen  |   | $      | 170,000 |                       | $      | 500,000                     |   | $             | 40,000  |                        | $      | 28,900                            |   | $      | 575,000 |   | $ | 26,000 |   | $ | 1,339,900 |   |
| Keith                  Larsen    |   | $      | 185,000 |                       | $      | 300,000                     |   | $             | 50,200  |                        | $      | 367,300                           |   | $      | -       |   | $ | 26,000 |   | $ | 928,500 |   |
| Mark                  Larsen     |   | $      | 170,000 |                       | $      | 300,000                     |   | $             | 50,200  |                        | $      | 28,900                            |   | $      | -       |   | $ | 26,000 |   | $ | 575,100 |   |
| Richard                  Larsen  |   | $      | 96,500  |                       | $      | 75,000                      |   | $             | -       |                        | $      | 208,400                           |   | $      | -       |   | $ | 48,700 |   | $ | 428,600 |   |
| Reginald                  Larsen |   | $      | 37,400  |                       | $      | 50,500                      |   | $             | -       |                        | $      | 5,800                             |   | $      | -       |   | $ | 9,700 |   | $ | 103,400 |   |
| Jordan                  Larsen   |   | $      | 1,700   |                       | $      | -                           |   | $             | -       |                        | $      | -                                 |   | $      | -       |   | $ | - |   | $ | 1,700 |   |
| Tyler                  Larsen    |   | $      | 1,400   |                       | $      | -                           |   | $             | -       |                        | $      | -                                 |   | $      | -       |   | $ | - |   | $ | 1,400 |   |
| Steven                  Larsen   |   | $      | 2,200   |                       | $      | 500                         |   | $             | -       |                        | $      | -                                 |   | $      | -       |   | $ | - |   | $ | 2,700 |   |
|                             |   | $      | 664,200 |                       | $      | 1,226,000                   |   | $             | 140,400 |                        | $      | 639,300                           |   | $      | 575,000 |   | $ | 136,400 |   | $ | 3,381,300 |   |
|                             |   |   |    |                       |   |                        |   |          |    |                        |   |                              |   |   |    |   |   |   |   |   |   |   |

| (1)   | Mr.                John L. Larsen’s estate received a $500,000 death benefit for his years of                dedicated service. The bonus was granted by the Compensation Committee                and                full USE Board of Directors. Mr. Keith Larsen, Mark Larsen, Richard                Larsen                and Reggie Larsen were paid a cash bonus as a portion of Company                wide                compensation for the close of the sale of RMG and Pinnacle. Additionally                all but Mr. John L. Larsen were paid a holiday bonus of 10% of base                salary                with the exception of Steven Larsen who was paid a Christmas bonus                of                $500. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2)   | Pursuant                to the USE 2001 Stock Compensation Plan, Mr. Keith Larsen and Mr.                Mark                Larsen were granted 10,000 shares of U.S. Energy common stock and                Mr. John                L. Larsen was granted 7,500 shares of U.S. Energy common stock. The                taxes                due on these shares was paid due to the agreement by the officers                not to                sell, transfer or pledge the shares granted under this plan until                death,                retirement or total disability. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Includes                annual contribution to the ESOP in the amount of 10% of qualified                compensation and the matching contribution to the 401(k). Additionally,                Richard Larsen was paid a salary differential which was applied to                his                debt to the Company of $22,700. The debt was completely retired by                December 31, 2006. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Sutter      Gold Mining Inc.**

----

**In      General - Participation by Officers, Directors and Employees in Stock Ownership      of Subsidiaries**

----

**Application      to Specific Subsidiaries**

| ·   | U.S.                Moly Corp. (“USMC”) has issued options to purchase a total of 3,080,000                shares of common stock, at an exercise price of $0.25 per share,                to                officers, directors and employees of U.S. Energy and Crested. All                these                options have a 10 year life and vest at the rate of 20% for 5 years.                USMC                also issued 955,000 shares of its common stock to officers, directors                and                employees of U.S. Energy. Officers as of the date of this report                own a                total of 440,000 of these shares. The combined percentage ownership                of                U.S. Energy and Crested is 90%, one half to each. USMC has not yet                commenced operations. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | The                value to officers and directors of the USMC options and stock presently                is                not determinable (USMC is a private entity and has not started mining                and                processing operations). U.S. Energy and Crested have not determined                whether, or when, the molybdenum property may be transferred into                USMC. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | U.S.                Energy and Crested organized InterWest, Inc. in April 2006 for real                estate                development activities, initially focusing on residential multi-unit                projects related to the expansion of the energy industry in Wyoming.                InterWest became active in fourth quarter 2006. Employees (including                U.S.                Energy directors) own 4.4% of InterWest outstanding stock, and 48.7%                is                held by each of U.S. Energy and Crested; all shares were issued for                $0.001                cash per share. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | U.S.                Energy and Crested have signed a merger agreement for U.S. Energy                to                acquire the shares of Crested (approximately 29%) not owned by U.S.                Energy. If this agreement is approved by the minority shareholders                (and                the other conditions to completing the merger are satisfied), U.S.                Energy                will issue a total of 2,802,481 shares. The officers (and a recently                retired officer, Daniel P. Svilar, recently retired director Don                Anderson,                and the estate of John L. Larsen) and directors of U.S. Energy will                receive a total of 267,766 U.S. Energy shares for the Crested shares                they                now own (and will own when they exercise their Crested options).                Most of                these 267,766 shares will be issued in exchange for the Crested stock                underlying the Crested options they hold on 1.37 million shares (granted                in June 2005 under an incentive stock option plan (a total of 1.7                million                shares) approved by the Crested shareholders in 2004. These U.S.                Energy                shares will be issued using the same exchange ratio (1 U.S. Energy                share                for every 2 Crested shares) as will be applied to the unaffiliated                Crested                shareholders, based on the difference between the option exercise                price                ($1.71) and Crested’s $2.32 market price at December 21, 2006. The Crested                option plan will be amended to allow for exercise of options by cashless                exercise, and if the merger is to be consummated, immediately prior                to                that date, the Crested options will be so exercised. The equity ownership                in Crested by officers, directors and employees of U.S. Energy will                not be                changed, as a result of the merger, other than by the foregoing amendment                to the Crested option plan. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | U.S.                Energy and Crested Corp. (its 70.9% owned subsidiary) conduct most                activities through their equally-owned joint venture USECC. From                time to                time U.S. Energy advances funds to or makes payments on behalf of                the                joint venture, which creates intercompany debt. These advances are                approved by management and the Board of Directors from time to time,                and                ratified by the USE Audit Committee. Crested owed U.S. Energy $13,277,200                at December 31, 2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                          |   | CRESTED                CORP.        |
|-------------------------------|--------|-------------------------------------|
|                          |   | (Registrant)                        |
|                          |   |                                |
|                          |   |                                |
|                          |   |                                |
| April                30, 2007 | By:    | /s/                Harold F. Herron |
|                          |   | HAROLD                F. HERRON     |
|                          |   | PRESIDENT                           |

|                          |   |                                           |
|-------------------------------|--------|------------------------------------------------|
|                          |   |                                           |
| April                30, 2007 | By:    | /s/                Harold F. Herron            |
|                          |   | HAROLD                F. HERRON, Director      |
|                          |   |                                           |
|                          |   |                                           |
| April                30, 2007 | By:    | /s/                Keith G. Larsen             |
|                          |   | KEITH                G. LARSEN, Director       |
|                          |   |                                           |
|                          |   |                                           |
| April                30, 2007 | By:    | /s/                Robert Scott Lorimer        |
|                          |   | ROBERT                SCOTT LORIMER, Director  |
|                          |   | Principal                Financial Officer and |
|                          |   | Chief                Accounting Officer        |
|                          |   |                                           |
|                          |   |                                           |
| April                30, 2007 | By:    | /s/                Michael D. Zwickl           |
|                          |   | MICHAEL                D ZWICKL, Director      |
|                          |   |                                           |
|                          |   |                                           |
| April                30, 2007 | By:    | /s/                Kathleen R. Martin          |
|                          |   | KATHLEEN                R. MARTIN, Director    |

----