**UNITED
          STATES**
 **SECURITIES
          AND EXCHANGE COMMISSION**
 Washington,
          D.C. 20549
  **FORM
          10-QSB**
 
 [X]
          QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE
          ACT OF
          1934.
 
 For
          the
          quarterly period ended June
          30, 2006
 
 Commission
          File Number: 333-86518
 
 
 **US
          ENERGY HOLDINGS, INC.**
 (Exact
          name of registrant as specified in its charter.)
 
 
 **NEVADA**
                  (State
                    or other jurisdiction of
                  incorporation
                    or organization)
                **75-3025152**
                  (I.R.S.
                    Employer Identification No.)
 
 
 4606
            FM
            1960 West, Suite 443, Houston, Texas 77069
 (Address
          of principal executive offices)
 
 (281)
          315-8895
 (Issuer's
          telephone number)
 Check
            whether the registrant (1) filed all reports required to be filed by
            Section 13
            or 15(d) of the Exchange Act during the past 12 months (or for such shorter
            period that the registrant was required to file such reports), and (2)
            has been
            subject to such filing requirements for the past 90 days. xYes oNo
  Indicate
            by check mark whether the Registrant is a shell company (as defined in
            Rule
            12b-2 of the Securities Exchange Act of 1934) (check one): o Yes xNo
  State
            the
            number of shares outstanding of each of the issuers classes of common
            equity, as
            of the latest practicable date: 5,393,978 shares of Common Stock, as
            of May 18 , 2006.
  Transitional
            Small Business Disclosure Format (check one): xYes oNo
  -1-
 
 **US
        ENERGY HOLDINGS, INC.**
 **(FORMERLY
        PITBOSS ENTERTAINMENT, INC.)**
 **CONDENSED
        FINANCIAL STATEMENTS**
 **JUNE
        30, 2006 AND 2005**
 
 
 
 **US
        ENERGY HOLDINGS, INC.**
 **(FORMERLY
        PITBOSS ENTERTAINMENT, INC.)**
 **CONDENSED
        FINANCIAL STATEMENTS**
 **JUNE
        30, 2006 AND 2005**
 
 **TABLE
        OF CONTENTS**
 
 Page(s)
 
 Condensed
        Balance Sheet as of June 30, 2006 (Unaudited)  1
 
 Condensed
        Statements of Operations for the six and three months ended
 June
        30,
        2006 and 2005
        (Unaudited) 2
 
 Condensed
        Statements of Cash Flows for the six months ended
 June
        30,
        2006 and 2005 (Unaudited) 3
 
 Notes
        to
        the Condensed Financial Statements
        (Unaudited)  4-15
  -2-
 **US
        ENERGY HOLDINGS, INC.**
 **(FORMERLY
                  PITBOSS ENTERTAINMENT, INC)****BALANCE
                  SHEET****FOR
                  THE SIX MONTHS ENDED JUNE 30, 2006****2006****ASSETS**Current
                  Assets:Cash
              
              $
              465Intagible
                  AssetsWell
                  Rights - Oil and Gas
              
              $
              50,000**TOTAL
                  ASSETS**
              
              $
              50,465**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)****LIABILITIES**Current
                  Liability:Accounts
                  payable and accrued expenses
              
              $
              35,112Loan
                  payable - officers
              
              
              220,698Total
                  Current Liability
              
              $
              255,810**STOCKHOLDERS'
                  EQUITY (DEFICIT)**Common
                  stock, $.001 Par Value; 75,000,000 shares authorized5,393,978
                  issued and outstanding
              
              
              5,394Warrants
                  outstanding
              
              
              777,357Additional
                  paid-in capital
              
              
              2,530,442Accumulated
                  deficit
              
              
              (3,518,537
              )**Total
                  Stockholders' Equity (Deficit)**
              
              
              (205,344
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
              
              $
              50,465
   -3-
 **US
                  ENERGY HOLDINGS, INC.****(FORMERLY
                  PITBOSS ENTERTAINMENT, INC.)****CONDENSED
                  STATEMENTS OF OPERATIONS****FOR
                  THE SIX AND THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                  (UNAUDITED)**For
                  Six Months EndedJune
                  30,
              
              For
                  Three Months EndedJune
                  30,**2006**
              
              **2005**
              
              **2006**
              
              **2005****OPERATING
                  EXPENSES**General
                  and administrative expenses
              
              $
              869,117
              
              $
              -
              
              $
              7,738
              
              $
              -**Total
                  Operating Expenses**
              
              
              869,117
              
              
              -
              
              
              7,738**(LOSS)
                  BEFORE PROVISION FOR TAXES**
              
              
              (869,117
              )
              
              -
              
              
              (7,738
              )
              
              -Provision
                  for income taxes
              
              
              -
              
              
              -
              
              
              -
              
              
              -**Net
                  (loss) from continuing operations**
              
              
              (869,117
              )
              
              -
              
              
              (7,738
              )
              
              -**DISCONTINUED
                  OPERATIONS:******Loss
                  from Operations of Discontinued Segment
              
              
              -
              
              
              (76,378
              )
              
              -
              
              
              (54,843
              )**Net
                  (loss)**
              
              $
              (869,117
              )
              $
              (76,378
              )
              $
              (7,738
              )
              $
              (54,843
              )**EARNINGS
                  (LOSS) PER SHARE - BASIC**
              
              $
              (0.20
              )
              $
              (0.05
              )
              $
              (0.00
              )
              $
              (0.03
              )**WEIGHTED
                  AVERAGE NUMBER OF COMMON****SHARES
                  OUTSTANDING - BASIC**
              
              
              4,297,680
              
              
              1,660,000
              
              
              5,393,978
              
              
              1,660,000
  -4-
 **US
                  ENERGY HOLDINGS, INC.****(FORMERLY
                  PITBOSS ENTERTAINMENT, INC.)****CONDENSED
                  STATEMENTS OF CASH FLOWS****FOR
                  THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005 (UNAUDITED)****2006**
              
              **2005****CASH
                  FLOWS FROM OPERATING ACTIVITIES****Continuing
                  Operations:**Net
                  income (loss)
              
              $
              (869,117
              )
              $
              -**Adjustments
                  to reconcile net income (loss) to net cash****provided
                  by (used in) operating activities:**Common
                  shares issued for services
              
              
              686,300
              
              
              -Increase
                  in accounts payable and accrued expenses
              
              
              27,500Total
              
              
              713,800
              
              
              -**Net
                  cash provided by (used in) operating activities**
              
              
              (155,317
              )
              
              -**Discontinued
                  Operations:**(Loss)
                  from discontinued operations
              
              
              -
              
              
              (76,378
              )Gain
                  in assets disposed of
              
              
              -
              
              
              56,807Net
                  cash (used in) operating activities - discontinued
                  division
              
              
              -
              
              
              (19,571
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**(Increase)
                  in Intangable assets - Well Rights Gas and Oil
              
              
              (50,000
              )
              
              -**Net
                  cash (used in) investing activities**
              
              
              (50,000
              )
              
              -**Discontinued
                  Investing Activities:**
              
              
              
              
              
              (3,086
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES******Increase
                  in amounts due from related parties
              
              
              205,100
              
              
              -**Net
                  cash provided by financing activities**
              
              
              205,100
              
              
              -**NET
                  (DECREASE) IN CASH**
              
              
              (217
              )
              
              (22,657
              )**CASH
                  AND CASH EQUIVALENTS -****BEGINNING
                  OF PERIOD**
              
              
              683
              
              
              32,457**CASH
                  AND CASH EQUIVALENTS - END OF PERIOD**
              
              $
              466
              
              $
              9,800**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW****INFORMATION:**Interest
                  paid
              
              $
              -
              
              $
              -Income
                  taxes paid
              
              $
              -
              
              $
              -
  -5-
 **NOTE
          1-**  **BASIS
          OF PRESENTATION**
 
 The
          interim financial statements included herein, presented in accordance with
          accounting principles generally accepted in the United States have been
          prepared
          by the Company, without audit, pursuant to the rules and regulations of
          the
          Securities and Exchange Commission. Certain information and footnote disclosures
          normally included in financial statements prepared in accordance with accounting
          principles generally accepted in the United States of America have been
          condensed or omitted pursuant to such rules and regulations, although the
          Company believes that the disclosures are adequate to make the information
          present and not misleading.
 
 These
          statements reflect all adjustments, consisting of normal recurring adjustments,
          which, in the opinion of management, are necessary for fair presentation
          of the
          information contained therein. It is suggested that these interim financial
          statements be read in conjunction with the audited financial statements
          of the
          Company for the period ended December 31, 2005 and notes thereto included
          in the
          Company’s Form 10-KSB. The Company follows the same accounting policies in the
          preparation of interim reports.
 
 Results
          of operations for the interim periods are not indicative of annual
          results.
 
 **NOTE
          2-**  **HISTORY
          AND ORGANIZATION OF COMPANY**
 
 Karma
          Media, Inc. (the “Company”) was organized April 21, 1999 under the laws of the
          State of Nevada, as Le Gourmet Co. Inc.
 
 On
          March
          11, 2002, the Company amended its Articles of Incorporation to increase
          the
          number of authorized shares to 25,000,000 shares and to change the par
          value to
          $0.001.
 
 On
          March
          17, 2003, the Company amended its Articles of Incorporation to change its
          name
          to Estelle Reyna, Inc.
 
 On
          September 11, 2003, the Company amended its Articles of Incorporation to
          change
          its name to Karma Media, Inc.
 
 On
          July
          8, 2005, the Company amended its Articles of Incorporation to change its
          name to
          PitBoss Entertainment, Inc.
 
 On
          February 1, 2006, the Board of Directors Amended the Articles of Incorporation
          to change its name and address from PitBoss Entertainment,
  -6-
  Inc.
          to
          US Energy Holdings, Inc., 4606 FM 1960 W, Suite: 443, Houston, Texas 77069,
          effective March 3, 2006.
 
 **NOTE
          2-**  **HISTORY
          AND ORGANIZATION OF COMPANY** **(CONTINUED)**
 
 On
          February 3, 2006, Claude Eldridge was named Chairman/CEO. Mr. Eldridge
          will also
          assume he positions of Secretary of US Energy Holdings, formally Pitboss
          Entertainment, Inc.
 
 In
          February, 2006, the Company amended its Articles of Incorporation to increase
          the number of authorized shares to 75,000,000 shares at $0.001 par
          value.
 
 In
          March
          2006, US Energy Holdings, Inc. announced it will enter into a joint-venture
          with
          Houston-based Hawk Explorations, Inc. for the development and drilling
          of four
          oil well sites and four natural gas sites.
 
 **NOTE
          3-**  **SIGNIFICANT
          ACCOUNTING POLICIES AND PROCEDURES**
 
 **Cash
          and cash equivalents**
 
 The
          Company maintains a cash balance in a non-interest bearing account that
          currently does not exceed federally insured limits. For the purpose of
          the
          statements of cash flows, all highly liquid investments with an original
          maturity of three months or less are considered to be cash equivalents.
          Cash
          equivalents include funds held in a Paypal account. There were no such
          cash and
          cash equivalents as of June 30, 2006.
  **Fixed
          assets**
 
 Fixed
          assets are recorded at cost. Minor additions and renewals are expensed
          in the
          period incurred. Major additions and renewals are capitalized and depreciated
          over their estimated useful lives. Depreciation is calculated using half
          year
          convention over the estimated useful lives as follows:
 
 Computers
          and equipment     3
          years
 
 **Impairment
          of long-lived assets**
 
 Long-lived
          assets held and used by the Company are reviewed for possible impairment
          whenever events or circumstances indicate the carrying amount of an asset
          may
          not be recoverable or is impaired. Management has not had any impairment
          adjustments for the six and three months ended June 30, 2006 and 2005,
          respectively.
  -7-
  
  -8-
  **NOTE
          3-**  **SIGNIFICANT
          ACCOUNTING POLICIES AND PROCEDURES**
 **(CONTINUED)**
 
 **Revenue
          recognition**
 
 The
          Company as of October 2005 and January 2006 ceased its former business
          plans.
          The Company formerly recognized revenue when earned through affiliate programs.
          The affiliate programs are with various companies whereby they will pay
          a
          referral or commission for sales generated through a link on the Company’s
          website. The affiliates generally took 30 days to process the commission
          once
          the sale occurs. The Company recognized the commission once it was notified
          of
          the amount. For consulting, on-line marketing and sponsorship and appearance
          income the Company recognizes revenue as services are performed.
 
 **Advertising
          costs**
 
 The
          Company expenses all costs of advertising as incurred. The advertising
          costs are
          included in general and administrative expenses in the condensed statements
          of
          operations for the six months ended June 30, 2006 and 2005.
 
 **Earnings
          (Loss) Per Share of Common Stock**
 
 Historical
          net (loss) per common share is computed using the weighted average number
          of
          common shares outstanding. Diluted earnings per share (EPS) includes additional
          dilution from common stock equivalents, such as stock issuable pursuant
          to the
          exercise of stock options and warrants. Common stock equivalents were not
          included in the computation of diluted earnings per share when the Company
          reported a loss because to do so would be anti-dilutive for periods presented. As
          of March 31, 2005, the Company had 3,000,000 warrants available.
 
 
 
 **Oil
          and Gas Exploration and Development**
  **Property
          Acquisition Costs** **** —
Oil
          and
          gas leasehold acquisition costs are capitalized and included in the balance
          sheet caption properties, plants and equipment. Leasehold impairment is
          recognized based on exploratory experience and management’s judgment. Upon
          discovery of commercial reserves, leasehold costs are transferred to proved
          properties.
 
 
  -9-
  NOTE
          3-  SIGNIFICANT
          ACCOUNTING POLICIES AND PROCEDURES
 **(CONTINUED)**
 
 
 **Exploratory
          Costs** —
          Geological and geophysical costs and the costs of carrying and retaining
          undeveloped properties are expensed as incurred. Exploratory well costs
          are
          capitalized, or “suspended,” on the balance sheet pending further evaluation of
          whether economically recoverable reserves have been found. If economically
          recoverable reserves are not found, exploratory well costs are expensed
          as dry
          holes. If exploratory wells encounter potentially economic quantities of
          oil and
          gas, the well costs remain capitalized on the balance sheet as long as
          sufficient progress assessing the reserves and the economic and operating
          viability of the project is being made. For complex exploratory discoveries,
          it
          is not unusual to have exploratory wells remain suspended on the balance
          sheet
          for several years while we perform additional appraisal drilling and seismic
          work on the potential oil and gas field, or we seek government or co-venturer
          approval of development plans or seek environmental permitting. Once all
          required approvals and permits have been obtained, the projects are moved
          into
          the development phase and the oil and gas reserves are designated as proved
          reserves.
 
 Unlike
          leasehold acquisition costs, there is no periodic impairment assessment
          of
          suspended exploratory well costs. In addition to reviewing suspended well
          balances quarterly, management continuously monitors the results of the
          additional appraisal drilling and seismic work and expenses the suspended
          well
          costs as a dry hole when it judges that the potential field does not warrant
          further investment in the near term.
  **NOTE
          3-**  **SIGNIFICANT
          ACCOUNTING POLICIES AND PROCEDURES**
 **(CONTINUED)**
 2006
              
              2005Net
                  (Loss)
              
              $
              (869,117
              )
              $
              (76,378
              )Weighed-average
                  common sharesoutstanding
                  (Basic)
              
              
              4,297,680
              
              
              1,660,000Weighed-average
                  common sharesequivalents:Stock
                  options
              
              
              -
              
              
              -Warrants
              
              
              -
              
              
              -Weighed-average
                  common sharesoutstanding
                  (Diluted)
              
              
              4,297,680
              
              
              1,660,000
 
 **Start-up
          costs**
 
 Reporting
          on the costs of start-up activities Statement of Position 98-5 (SOP 98-5),
          “Reporting on the Costs of Start-Up Activities,” which provides guidance on the
          financial reporting of start- up costs and organizational costs, requires
          most
          costs of start-up activities and organizational costs to be expensed as
          incurred. SOP 98-5 is effective for fiscal years beginning after December
          15,
          1998. With the adoption of SOP 98-5, there has been little or no effect
          on the
          Company’s financial statements.
 
 **Estimates**
 
 The
          preparation of financial statements in conformity with accounting principles
          generally accepted in the United States of America requires management
          to make
          estimates and assumptions that affect the reported amounts of assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date of
          the financial statements and the reported amounts of revenue and expenses
          during
          the reporting period. Actual results could differ from those
          estimates.
   -10-
  **NOTE
          3-**  **SIGNIFICANT
          ACCOUNTING POLICIES AND PROCEDURES** **(CONTINUED)**
 
 **Fair
          value of financial instruments**
 
 Fair
          value of financial instruments discussed herein are based upon certain
          market
          assumptions and pertinent information available to management as of June
          30,
          2006 and 2005. The respective carrying value of certain balance sheet financial
          instruments approximated their fair values. These financial instruments
          include
          cash and equivalents, accounts receivable, prepaid expenses and accounts
          payable
          and accrued expenses. Fair values were assumed to approximate carrying
          values
          because they are short term in nature and their carrying amounts approximate
          fair values or they are payable on demand.
 
 **Reclassification**
 
 Certain
          amounts for the period ended June 30, 2005 have been reclassified to conform
          to
          the presentation of the June 30, 2006 amounts. The reclassifications have
          no
          effect on the net loss for the period ended June 30, 2006.
 
 **Income
          taxes**
 
 Deferred
          income tax assets and liabilities are computed annually for differences
          between
          the financial statement and tax basis of assets and liabilities that will
          result
          in taxable or deductible amounts in the future based on enacted tax laws
          and
          rates applicable on the periods in which the differences are expected to
          affect
          taxable income. Valuation allowances are established when necessary to
          reduce
          deferred tax assets to the amount expected to be realized. Income tax expense
          is
          the tax payable or refundable for the period plus or minus the change during
          the
          period in deferred tax assets and liabilities.
 
 **Discontinued
          Operations**
 
 In
          accordance with SFAS No. 144, “Accounting for the Impairment or disposal of
          Long-Lived Assets,” discontinued operations include components of entities or
          entire entities that, through disposal transactions, will be eliminated
          from the
          on-going operations of the Company.
 
 -11-
  **NOTE
          3-**  **SIGNIFICANT
          ACCOUNTING POLICIES AND PROCEDURES** **(CONTINUED)**
 
 **Recent
          pronouncements**
 
 In
          December 2004, the Financial Accounting Standards Board (“FASB”) issued
          Statement of Financial Accounting Standards (“SFAS”) No. 151, “Inventory
          Costs.” SFAS No. 151 requires abnormal amounts of inventory costs related
          to idle facility, freight handling and wasted material expenses to be recognized
          as current period charges. Additionally, SFAS No. 151 requires that
          allocation of fixed production overheads to the costs of conversion be
          based on
          the normal capacity of the production facilities. The standard is effective
          for
          fiscal years beginning after June 15, 2005. The adoption of SFAS
          No. 151 did not have a material impact on the Company’s financial position
          or results of operations.
  
 On
          December 16, 2004, the Financial Accounting Standards Board (“FASB”) published
          Statement of Financial Accounting Standards No. 123 (Revised 2004),
“ *Share-Based
          Payment* ”
(“SFAS
          123R”). FAS 123R requires that compensation cost related to share-based payment
          transactions be recognized in the financial statements. Share-based payment
          transactions within the scope of FAS 123R include stock options, restricted
          stock plans, performance-based awards, stock appreciation rights, and employee
          share purchase plans. The provisions of FAS 123R, as amended, are effective
          for
          small business issuers beginning as of the next fiscal year after December
          15,
          2005. Accordingly, the Company will implement the revised standard in the
          first
          quarter of fiscal year 2006. Currently, the Company accounts for its share-based
          payment transactions under the provisions of APB 25, which does not necessarily
          require the recognition of compensation cost in the financial statements
          (note
          3(e)). Management is assessing the implications of this revised standard,
          which
          may materially impact the Company’s results of operations in the first quarter
          of fiscal year 2006 and thereafter.
 
  In
          May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error
          Corrections.” SFAS No. 154 replaces Accounting Principles Board (“APB”)
          Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting
          Accounting Changes in Interim Financial Statements.” SFAS No. 154 requires
          retrospective application to prior periods’ financial statements of a voluntary
          change in accounting principle unless it is impracticable. APB No. 20
          previously required that most voluntary changes in accounting principle
          be
          recognized by including the cumulative effect of changing to the new accounting
          principle in net income in the period of the change. SFAS No. 154 is
          effective for accounting changes and corrections of errors made in fiscal
          years
          beginning after
  **NOTE
          3-**  **SIGNIFICANT
          ACCOUNTING POLICIES AND PROCEDURES** **(CONTINUED)**
 
 **Recent
          pronouncements** **(Continued)**
  December 15,
          2005. The adoption of SFAS No. 154 did not have a material impact on the
          Company’s financial position or results of operations.
 
 **Stock-Based
          Compensation**
 
 The
          Company accounts for stock-based awards to employees in accordance with
          Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
          Employees” and related interpretations and has adopted the disclosure-only
          alternative of SFAS No. 123, “Accounting for Stock-Based Compensation.” Options
          granted to consultants, independent representatives and other non-employees
          are
          accounted for using the fair value method as prescribed by SFAS No.
          123.
 
 **NOTE
          4-**  **INCOME
          TAXES**
 
 The
          Company accounts for income taxes under Statement of Financial Accounting
          Standards No. 109, “Accounting for Income Taxes” (SFAS No. 109), which requires
          use of the liability method. SFAS No. 109 provides that deferred tax assets
          and
          liabilities are recorded based on the differences between the tax bases
          of
          assets and liabilities and their carrying amounts for financial reporting
          purposes, referred to as temporary differences. Deferred tax assets and
          liabilities at the end of each period are determined using the currently
          enacted
          tax rates applied to taxable income in the periods in which the deferred
          tax
          assets and liabilities are expected to be settled or realized.
 
 At
          June
          30, 2006, deferred tax assets consisted of the following:
 Deferred
                  tax assets
              
              $
                  1,055,561Less:
                  valuation allowance
              
              (1,055,561)Net
                  deferred tax assets
              
              $
                  -
 At
          June
          30, 2006, the Company had accumulated deficits in the amount of $3,518,537
          available to offset future taxable income through 2026. The Company established
          valuation allowances equal to the full amount of the deferred tax assets
          due to
          the uncertainty of the utilization of the operating losses in future
          periods.
  -12-
  
 **NOTE
          5-**  **STOCKHOLDERS’
          EQUITY(DEFICIT)**
 
 As
          of
          June 30, 2006 the Company had 5,393,978 shares of common stock
          outstanding.
 
 On
          January 10, 2006, the Company issued 500,000 shares of its $0.001 par value
          common stock to an officer of the Company as compensation. The fair value
          was
          $100,000.
 
 On
          March
          28, 2006, the Company issued 2,255,000 shares of its $0.001 par value common
          stock to individuals in a termination agreement. The fair value was
          $586,300.
 
 The
          Company is authorized to issue 75,000,000 shares of its $0.001 par value
          common
          stock.
 
 On
          July 8
          2005, the Company reported and approved a 10 to 1 reverse split of its
          $0.001
          par value common stock.
 
 During
          2005, the Company issued 97,898 shares of its $0.001 par value common stock
          to
          individuals in a termination agreement. The fair value was $ 802,036.
 
 All
          share
          and per share amounts have been retroactively restated to reflect the splits
          discussed below.
 
 **NOTE
          6-**  **WARRANTS
          AND OPTIONS**
 
 On
          December 4, 2003, the Company issued one warrant to a consultant to purchase
          3,000,000 shares of the Company’s $0.001 par value common stock. The warrant
          exercise price is $0.50 per share of common stock and substantially all
          warrants
          will expire on or before October 31, 2013. The warrant has been determined
          to
          have a market value of $777,357 using the Black- Scholes option pricing
          model
          with a market value per common share of $0.50, a risk free rate of return
          of
          4.41%, an exercise period of ten years and a volatility of 80% and was
          discounted for the lack of marketability.
 
 During
          the six months ended June 30, 2006, no warrants have been
          exercised.
 
   -13-
  NOTE
          7-  RELATED
          PARTY TRANSACTIONS
 
 During
          the six months ended June 30, 2006 and 2005, the Company paid the president
          of
          the Company $0 and $6,500, respectively for his services.
 
 During
          the six months ended June 30, 2006 and 2005, the Company paid the secretary
          of
          the Company $0 and $12,900, respectively for her services.
 
 During
          the six months ended June 30, 2006, the Company issued 500,000 shares of
          its
          $0.001 par value common stock to an officer of the Company as compensation
          valued at $100,000.
 
 Office
          space and services were provided without charge by an officer, director
          and
          shareholder through November 2004. Such costs are immaterial to the financial
          statements and, accordingly, have not been reflected therein. The officers
          and
          directors of the Company are involved in other business activities and
          may, in
          the future, become involved in other business opportunities. If a specific
          business opportunity becomes available, such persons may face a conflict
          in
          selecting between the Company and their other business interests. The Company
          has not formulated a policy for the resolution of such conflicts.
 
 **NOTE
          8-**  **COMMITMENT** ****
 
 On
          December 4, 2003, the Company executed a consulting agreement with Christopher
          Pair to assist the Company with strategic planning and introducing potential
          business partners and customers. The agreement provides for (a) consulting
          fees
          paid quarterly based on 20% of net revenues less certain revenues attributable
          to revenues not associated with the contract and other expenses; and (b)
          issuance of one warrant to purchase up to 3,000,000 shares of the Company’s
          $0.001 par value common stock. Consulting fees associated with the warrant
          were
          based on a value of $0.50 per share. The value of the warrant was based
          on the
          then- market closing price of the Company’s common stock. The Company then
          discounted both the then- market closing price because the shares issued
          and
          options to purchase shares were restricted and the volume of trading of
          the
          Company’s common stock that was not restricted was relatively low. The resulting
          consulting expense recognized for the warrant issuance was $777,356 for
          the year
          ended December 31, 2003. During the six months ended June 30, 2006, the
          Company
          has not paid or accrued any consulting fees.
 
 
 
  -14-
  **NOTE
          9-**  **GOING
          CONCERN**
 
 As
          shown
          in the accompanying financial statements, the Company has sustained net
          operating losses for the first quarter ended June 30, 2006 and 2005, and
          has
          sustained large accumulated deficits.
 
 The
          Company’s future success is dependent upon its ability to achieve profitable
          operations and generate cash from operating activities. At June 30, 2006
          there
          is substantial doubt whether this can happen. There is no guarantee that
          the
          Company will be able to generate revenues in the near future.
 
 The
          financial statements do not include any adjustments that might result from
          the
          outcome of this uncertainty.
 
 
 **NOTE
          10-**  **DISCONTINUED
          OPERATIONS**
 
 The
          Company formerly known as Karma Media, Inc. had operations in the first
          quarter
          of 2005. The Company has ceased those operations and expects to initiate
          a new
          revenue recognition stream. The statement of operations for the second
          quarter
          of 2005 shows all operating activities as discontinued operations.
   -15-
 **ITEM
            2**
 **MANAGEMENTS
            DISCUSSION AND ANALYSIS**
   Safe
            Harbor Statement under the Private Securities Litigation Reform Act of
            1995
   Certain
            matters discussed in this interim report on Form 10-QSB are forward-looking
            statements. Such forward-looking statements contained in this report
            involve
            risks and uncertainties, including statements as to:
   our
            future operating results,
   our
            business prospects,
   our
            contractual arrangements and relationships with third parties,
   the
            dependence of our future success on the general economy and its impact
            on the
            industries in which we may be involved,
   the
            adequacy of our cash resources and working capital, and
   other
            factors identified in our filings with the SEC, press releases and other
            public
            communications.
   These
            forward-looking statements can generally be identified as such because
            the
            context of the statement will include words such as we believe, anticipate,
            expect, estimate or words of similar meaning. Similarly, statements that
            describe our future plans, objectives or goals are also forward-looking
            statements. Such forward-looking statements are subject to certain risks
            and
            uncertainties which are described in close proximity to such statements
            and
            which could cause actual results to differ materially from those anticipated
            as
            of the date of this Form 10-QSB. Shareholders, potential investors and
            other
            readers are urged to consider these factors in evaluating the forward-looking
            statements and are cautioned not to place undue reliance on such forward-looking
            statements. The forward-looking statements included herein are only made
            as of
            the date of this report and we undertake no obligation to publicly update
            such
            forward-looking statements to reflect subsequent events or circumstances. Item
            2a .
    US
            Energy
            Holdings Inc. is proud to announce that it has taken a new direction
            in the
            energy resources sector for lasting profitability and stability for its
            company
            and shareholders.
    US
            Energy
            Holdings, Inc. is an aspiring South Texas energy resource company with
            an
            emphasis on oil and gas development drilling and production. Claude Eldridge,
            US
            Energy Holdings, Inc.'s new Chairman / CEO stated "I am dedicated to
            the
            revitalization of jobs in the energy sector, as one of the world's most
            important subjects it has become increasingly important for our company
            to
            invest in our world's resources, technology, and economic future".
    Mr.
            Eldridge concluded, "US Energy Holdings, Inc. will also begin production
            in
            virgin oil and gas rich resources that have become viable development
            plays due
            to technological advances, drilling innovation and rising market prices.
            US
            Energy Holdings, Inc. will focus on the acquisition of long-life proven
            resources that offer the opportunity to increase current production on
            producing
            wells as well as begin new production on acquired properties for sites
            located
            through new technology. The production costs are predictable and the
            proven
            reserves minimize risk and ensure the protection of sustainable cash
            flow
            earnings".
    Please
            feel free to browse the new company web site located at www.usenergyholdings.com Item
            2b.
    8k
            reported on 4/19/06 - Report of unscheduled material events or corporate
            changes.
   8k
            reported on 5/15/06 - Report of unscheduled material events or corporate
            changes.
  -16-


Part
      II




Item
      1
      Exhibits




Exhibit
      31.1           
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TO SECTION
      302 OF THE SARBANES-OXLEY ACT OF 2002 PURSUANT TO REGULATION SS.240.15D-14
      AS
      PROMULAGATED BY THE SECURITIES AND EXCHANGE COMMISSION




Exhibit
      32              
CERTIFICATION
      PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
      SARBANES-OXLEY ACT OF 2002





-17-


**SIGNATURES**




Pursuant
        to the requirements of the Securities Exchange Act of 1934, the Registrant
        has
        duly caused this report to be signed on its behalf by the undersigned thereunto
        duly authorized.




**US
              ENERGY
              HOLDINGS, INC.**Date: August
              17, 2006
            By:
            /s/Claude
              EldridgeClaude
              EldridgeTitle:Chairman, Chief Executive Officer and
                Director