EXHIBIT  "B"

                          PLEDGE AND SECURITY AGREEMENT




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                          PLEDGE AND SECURITY AGREEMENT


This  PLEDGE  AND SECURITY AGREEMENT, dated as of July 30, 2004, is between U.S.
Energy  Corp.  (the  "Borrower"),  and  Rocky  Mountain Gas, Inc., ("RMG"), both
Wyoming  corporations,  and  Geddes  and  Company,  (the  "Lender")  an  Arizona
corporation,  and  is  executed  pursuant  to the Credit Agreement dated of even
date herewith (as amended, supplemented or otherwise modified from time to time,
the  "Credit  Agreement"),  among  Borrower  and  Lender.

                                    RECITALS

     WHEREAS, the Borrower and RMG have requested that the Lender provide a loan
of  up  to  $3,000,000  to  the  Borrower  (the  "Loan");  and

     WHEREAS,  the  Lender  has agreed to make such Loan subject to the terms of
the  Credit  Agreement;  and

     WHEREAS,  the  Borrower  and RMG, will receive direct and indirect benefits
from  the  Loan  under  the  Credit  Agreement;  and

     WHEREAS,  it  is  a condition precedent to the obligations of the Lender to
make  the  Loan under the Credit Agreement that the Borrower and RMG execute and
deliver  this  Agreement;

     NOW,  THEREFORE,  in consideration of the promises herein and to induce the
Lenders  to enter into the Credit Agreement and to make the Loan thereunder, and
for  other good and valuable consideration, the receipt and sufficiency of which
are  hereby  acknowledged,  the  parties  hereto  agree  as  follows:

                                    ARTICLE I
                          DEFINITIONS; TERMS GENERALLY

     Section  1.01  Definitions.   As  used  herein:

     (a)  terms  defined  above  have  the  meanings  given  such  terms  above;

     (b)  unless otherwise defined herein, terms defined in the Credit Agreement
          and  used  herein  have  the  meanings  given  to  them  in the Credit
          Agreement;

     (c)  unless  otherwise  defined  herein,  terms  defined  in  the  Uniform
          Commercial  Code  (as  defined  herein)  and used herein have the same
          meanings  herein  as  specified  therein; provided, however, that if a
          term  is  defined  in  Article  9  of  the  Uniform  Commercial  Code
          differently  than  in  another Article of the Uniform Commercial Code,
          then  such  term  has  the  meaning  specified  in  Article  9;  and


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     (d)  the  following  terms  have  the  following  meanings:

          "Agreement"  means this Pledge and Security Agreement, as the same may
           ---------
          be  amended,  supplemented  or  otherwise  modified from time to time.

          "Collateral"  has  the  meaning  given  such  term  in  Section  2.01.
           ----------

          "Obligations"  means  the  collective  reference  to  the  payment and
           -----------
          performance  when
          due  of all indebtedness, liabilities, obligations and undertakings of
          the  Borrower  (including,  without  limitation,  all Indebtedness) of
          every  kind  or  description  arising  out  of  or  outstanding under,
          advanced  or  issued pursuant to, or evidenced by, the Loan Documents.

          "Pledged  Property"  means:
           -----------------

          1.   That certain promissory note dated August 14, 2003, issued by The
               Cactus  Group, LLC to Plateau Resources Limited (and subsequently
               assigned  to  the  Borrower) (the "Ticaboo Note") and the related
               mortgage  securing such note, copies of which are attached hereto
               as  Exhibit  B-1;  and

          2.   A  1981  Citation  II  jet,  550 S/N #550-0264, FAA # N777WY, and

          3.   RMG's  working  mineral  interests in all Castle Rock CBM leases,
               consisting  of  all  Acquired  Assets (as such term is defined in
               that  certain  Agreement  for Purchase and Sale of Assets between
               RMG  and  Quantum Energy, LLC, dated January 3, 2000, as modified
               by that certain Purchase and Sale Agreement between RMG and CCBM,
               Inc.  dated  June  29,  2001), which leases are more specifically
               described  on  Exhibit  B-2  attached  hereto  (the  "Mineral
               Interests");  and

          4.   Four  million  shares  of Rocky Mountain Gas, Inc. ("RMG") Common
               Stock  (the  "RMG  Stock")  .

          "Secured  Party"  means  the  Lender.
           --------------

          "Loan  Documents"  means  the  collective  reference  to  the  Credit
           ---------------
          Agreement,  the  Secured Convertible Note, the Warrant Agreement, this
          Agreement  and  any  other  document  made,  delivered or given in
          connection  with  any  of  the  foregoing.

          "Uniform  Commercial  Code"  means the Uniform Commercial Code as from
           -------------------------
          time  to  time  in  effect  in  the  State  of  Arizona.


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     Section  1.02  Terms Generally; Rules of Construction.   The definitions of
terms  herein  shall apply equally to the singular and plural forms of the terms
defined.  Whenever  the  context  may  require,  any  pronoun  shall include the
corresponding  masculine,  feminine  and  neuter  forms.

                                   ARTICLE II
                           GRANT OF SECURITY INTEREST

     Section  2.01  Grant  of  Security Interest. As collateral security for the
prompt  and  complete  payment  and  performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Borrower and RMG
hereby  pledge  to  the  Secured Party, and hereby grant to the Secured Party, a
first priority (second priority as to the Citation aircraft) continuing security
interest  in,  lien  on and right of setoff against, all of the Pledged Property
and  all  proceeds  thereof  (the  "Collateral").

     Section  2.02  Authorization to File Financing Statements. The Borrower and
RMG  hereby irrevocably authorize the Secured Party at any time and from time to
time  to  file  in  any  filing  office in any relevant jurisdiction any initial
financing  statements  and  amendments thereto indicating the Collateral in such
form as may be required by the Secured Party. The Borrower agrees to furnish any
information reasonably requested by the Secured Party for such purposes promptly
upon  the  Secured  Party's  request.  The  Borrower  and  RMG also ratify their
authorization  for  the Secured Party to have filed in any relevant jurisdiction
any  like  initial  financing statements or amendments thereto if filed prior to
the  date  hereof. In addition, to perfect security interests by Secured Party's
possession,  Borrower  or RMG will deliver to Secured Party the original Ticaboo
Note,  with  a  separate  endorsement  signed  in  blank,  and  a  certificate
representing  the  RMG  Stock,  together  with  stock  powers  endorsed in blank
sufficient  to  effect  a  transfer  of  such stock. Upon payment in full of the
Obligations, Secured Party shall return possession of all Collateral to Borrower
and release all filed and recorded financing statements or other evidence of the
security  interests  arising  hereunder.


                                  ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

     The  Borrower  and RMG hereby represent and warrant to Secured Party, as of
the date hereof and at all times during the terms of this Agreement, as follows:

     Section 3.01 Organization. The Borrower and RMG are duly organized, validly
existing  and  in  good  standing  under the laws of Wyoming, have all requisite
power  and  authority,  and  have  all  material  governmental  licenses,
authorizations, consents and approvals necessary, to own their respective assets
and  to  carry  on  their  business  as  now  conducted.


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     Section  3.02  Authority; Enforceability. The execution and delivery by the
Borrower  and  RMG  of  this  Agreement  and  the  other  Loan Documents and the
performance  of their obligations hereunder and thereunder are within the powers
of the Borrower and RMG and have been duly authorized by all necessary corporate
Board  approval,  and do not contravene any law, regulation, or order applicable
to  the  Borrower  or  RMG or any of its properties or assets or any contractual
restriction  which may, individually or in the aggregate have a material adverse
effect  on  the business, prospects or condition (financial or otherwise) of the
Pledgor.

     Section 3.03 Perfected First Priority Liens. The security interests granted
pursuant  to  this  Agreement  (a)  upon  the  filing  of  a financing statement
describing the Collateral with the Secretary of State of Wyoming and delivery of
possession  of  the  Ticaboo  Note  and  the  RMG  Stock, shall constitute valid
perfected  security interests of the Collateral in favor of the Secured Party as
collateral  security  for  the  Obligations,  enforceable in accordance with the
terms hereof against all creditors of the Borrower and any Persons purporting to
purchase  any  Collateral  from  the Borrower and (b) except for the Citation II
aircraft there are no prior or other Liens on the Collateral in existence on the
date  hereof.

     Section  3.04 Solvency. The Borrower is not insolvent as of the date hereof
and  will  not  be  rendered  insolvent  as  a  result  of  this  Agreement.

                                   ARTICLE IV
                              AFFIRMATIVE COVENANTS

     The  Borrower  and  RMG  hereby unconditionally covenant and agree with the
Secured  Party,  until  the  entire  Obligation  shall have been paid in full as
follows:

     Section  4.01  Maintenance  of  Perfected  Security  Interest;  Further
     Documentation.

          (a)  The  Borrower  and  RMG  shall maintain the security interest and
               lien  created  by this Agreement as a perfected security interest
               and  lien having at least the priority described in Section 3.03;
               and

          (b)  The  Borrower shall promptly give notice to the Secured Party of,
               and  shall  defend  against, any suit, action, proceeding or lien
               that  involves  the Collateral or that could adversely affect the
               security  interest  and  lien  granted  by  it hereunder, and the
               Borrower  shall  defend the security interest and lien created by
               this  Agreement


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               against  the  claims  and  demands of all Persons whomsoever; and

          (c)  The  Borrower and RMG will furnish to the Secured Party from time
               to  time  statements  and  schedules  further  identifying  and
               describing  the  Collateral  and such other reports in connection
               with  the Collateral as the Secured Party may reasonably request.

          (d)  The  Borrower  and  RMG  shall timely perform and comply with all
               provisions  of  the  Loan  Documents.

                                    ARTICLE V
                               NEGATIVE COVENANTS

     Section  5.01  Restrictions  on  Sales and other Dispositions. The Borrower
shall  not  sell,  assign, convey, pledge, encumber, transfer, redeem, exchange,
substitute,  replace  or  otherwise dispose of or abandon all or any part of the
Collateral  without  the  prior  written  consent of the Secured Party, provided
however, the Borrower shall have the right to exercise good business judgment in
the  management  of  the  Mineral  Interests  including  lease  cancellation  or
expiration  so  long  as  75%  of  the  value  is  not  diminished.

     Section 5.02 Impairment of Security Interest. The Borrower will not take or
fail  to  take any action which would in any manner impair the enforceability or
priority  of the Secured Party's security interest in any Collateral, impair the
Collateral  or  the  rights,  remedies,  powers  and privileges conferred on the
Secured  Party  pursuant  to this Agreement or by operation of law or otherwise.

                                   ARTICLE VI
                                EVENT OF DEFAULT

     Section  6.01  Event  of  Default.  One  or more of the following events or
circumstances  shall  constitute  an  "Event  of  Default"  hereunder:

          A.   An  "Event  of  Default"  under the Credit Agreement or any other
               Loan  Document  shall  occur  and  be  continuing;  or

          B.   The  Borrower shall fail to pay any amount hereunder or under any
               other  Loan  Document to which it is a party when and as the same
               shall  become  due  and  payable.

                                  ARTICLE VII
                              RIGHTS AND REMEDIES

     Section  7.01  Rights  and  Remedies.  Upon  the  occurrence and during the
continuance  of an Event of Default, the Secured Party may exercise, in addition
to  all  other rights and remedies granted to it in the Secured Documents and in
any  other


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instrument or agreement securing, evidencing or relating to the Obligations, all
rights  and remedies of a secured party under the Uniform Commercial Code or any
other  applicable  law  or otherwise available at law or equity. All proceeds of
sale  of  any Collateral shall be applied to the Obligations, and Borrower shall
be  entitled  to  any  surplus  proceeds  or  Collateral  remaining  after  the
Obligations  are  paid  in  full.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     Section  8.01  Notices.  All  notices and other communications provided for
herein shall be given in the manner and subject to the terms of Section 13.01 of
the  Credit  Agreement  (including  provisions  regarding a change of address or
telecopy  number  of  a  party). The address and telecopy number for notices and
communications  with  respect  to  the  parties  is  as  follows:

U.S.  Energy  Corp.                         Rocky  Mountain  Gas,  Inc.
Attn:  Scott  Lorimer                       Attn:  Scott  Lorimer
877  North  8th  West                       877  North  8th  West
Riverton,  Wyoming  82501                   Riverton,  Wyoming  82501
(307)  856-9271                             (307)  856-9271
(307)  857-3050  (facsimile)                (307)  857-3050  (facsimile)


Geddes  and  Company
Attn:  F.  Michael  Geddes
2930  Camelback  Road,  Suite  110
Phoenix,  Arizona  85016
(602)  957-1354
(602)  468-1792  (facsimile)


     Section  8.02  Amendments. No amendment, supplement or modification of this
Agreement,  and  no  waiver of any provision of this Agreement or consent to any
departure by the Borrower there from, shall in any event be effective unless the
same  has  been  agreed  to  in  writing  by  the  parties.

     Section  8.03  Successors and Assigns.  The  provisions  of  this Agreement
shall  be  binding upon and inure to the benefit of the parties hereto and their
respective  successors  and assigns permitted hereby, except that any assignment
must  be  approved in writing by the other party. Such written consent shall not
be  unreasonably  withheld  by  either  party.

     Section  8.04  Governing  Law;  Consent  to  Jurisdiction.

          (a)  This  Agreement shall be governed by, and construed in accordance
               with,  the  laws  of  the  State  of  Arizona.


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          (b)  Any  legal action or proceeding with respect to this Agreement or
               any  other  loan  document  shall be brought in the Courts of the
               State  of  Arizona.

     Section  8.05  Entire  Agreement. This written Agreement and the other Loan
Documents  represent  the  entire  agreement among the parties as to the subject
matter  hereof.

     IN  WITNESS WHEREOF, intending to be legally bound, the Borrower has caused
this  Agreement  to  be  duly  executed  as  of  the  date  first above written.


                                        U.S.  ENERGY  CORP.

                                        By:   /s/ Keith G. Larsen
                                           -------------------------------------
                                             Keith  G.  Larsen
                                             Title:  President

                                        ROCKY  MOUNTAIN  GAS,  INC.


                                        By:   /s/ Mark J. Larsen
                                           -------------------------------------
                                             Mark  J.  Larsen
                                             President

Accepted:

GEDDES  AND  COMPANY

By:   /s/ F. Michael Geddes
   ---------------------------------
       F.  Michael  Geddes
       President


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                                EXHIBIT "B - 1"

                                     TO THE

                          PLEDGE AND SECURITY AGREEMENT


                        Ticaboo Note and Related Mortgage


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                                EXHIBIT "B - 2"

                                     TO THE

                          PLEDGE AND SECURITY AGREEMENT


                            RMG Working Interest in

                      Castle Rock Coal Bed Methane Leases


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