EXHIBIT 4.12

            VOID AFTER 3:30 P.M., MOUNTAIN TIME, ON OCTOBER 18, 2006

                  ADVISOR'S WARRANTS TO PURCHASE COMMON SHARES

                                U.S. ENERGY CORP.

     This is to Certify That, FOR VALUE RECEIVED, 1 ("Holder"), is entitled to
purchase, subject to the provisions of this Warrant, from U.S. ENERGY CORP., a
Wyoming corporation (the "Company" or "we"), at any time until 3:30 P.M.,
Mountain Time, on October 18, 2006 ("Expiration Date") 2 Common Shares of the
Company at a purchase price per share of $3.75 during the period that this
Warrant is exercisable. The number of Common Shares to be received upon the
exercise of this Warrant and the price to be paid for a Common Share may be
adjusted from time to time as hereinafter set forth. The purchase price of a
Common Share in effect at any time and as adjusted from time to time is
hereinafter sometimes referred to as the "Exercise Price." This Warrant is or
may be one of a series of warrants identical in form issued by the Company to
purchase an aggregate of 38,966 Common Shares of the Company, as partial
compensation for services provided by VentureRound Group, LLC in connection with
a private placement of the Company's securities (stock at $3.00 per share, and
warrants for those investors) which was completed as of October 18, 2001. The
term "Warrants" as used herein means all such Warrants (including this Warrant).
The Common Shares, as adjusted from time to time, underlying the Warrants are
hereinafter sometimes referred to as "Warrant Shares" and include all Common
Shares that have been issued upon the exercise of the Warrants and all unissued
Common Shares underlying the Warrants.

     (A) EXERCISE OF WARRANT. This Warrant may be exercised in whole or in part
at any time or from time to time until the Expiration Date or if the Expiration
Date is a day on which banking institutions are authorized by law to close, then
on the next succeeding day which shall not be such a day, by presentation and
surrender hereof to the Company or at the office of its stock transfer agent, if
any, with the Purchase Form annexed hereto duly executed and accompanied by cash
payment of the Exercise Price for the number of shares specified in such Form,
together with all federal and state taxes applicable upon such exercise. The
Company agrees not to merge, reorganize or take any action that would terminate
this Warrant unless provisions are made as part of such merger, reorganization
or other action which would provide the holders of this Warrant with an
equivalent of this Warrant as specified in Section (i) hereof; provided,
however, that if reasonably required by the other party or parties to such
merger, reorganization or other action, the Company may accelerate the
Expiration Date to a date prior to such merger, reorganization or other action,
provided further, however, that the Company shall give the Holder written notice
of such acceleration at least 30 days prior to such accelerated Expiration Date.
The Company agrees to provide notice to the Holder that any tender offer is
being made for the Company's Common Shares no later than three business days
after the day the Company becomes aware that any tender offer is


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being made for outstanding Common Shares of the Company. If this Warrant should
be exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the right of the
Holder to purchase the balance of the Common Shares purchasable hereunder. Upon
receipt by the Company of this Warrant at the office of the Company or at the
office of the Company's stock transfer agent, in proper form for exercise and
accompanied by the Exercise Price, the Holder shall be deemed to be the holder
of record of the Common Shares issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Common Shares shall not then be actually
delivered to the Holder.

     (B) RESERVATION OF SHARES. The Company hereby agrees that at all times
there shall be reserved for issuance and/or delivery upon exercise of this
Warrant such number of Common Shares as shall be required for issuance or
delivery upon exercise of this Warrant.

     (C) FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a Common Share called for upon any exercise hereof,
the Company shall, upon receipt by the Company or the Company's stock transfer
agent of the Exercise Price on such fractional share, pay to the Holder an
amount in cash equal to such fraction multiplied by the current market value of
such fractional share, determined as follows:

               (1) If the Common Shares are listed on a national securities
          exchange, are admitted to unlisted trading privileges on such an
          exchange, or are listed for trading on a trading system of the
          National Association of Securities Dealers, Inc. ("NASD") such as
          Regular NASDAQ ("NASDAQ") or NASDAQ/NMS ("NMS"), then the current
          value shall be the last reported sale price of the Common Shares on
          such an exchange or system on the last business day prior to the date
          of exercise of this Warrant or if no such sale is made on such day,
          the average of the closing bid prices for the Common Shares for such
          day on such exchange or such system shall be used; or

               (2) If the Common Shares are not so listed on such exchange or
          system or admitted to unlisted trading privileges, the current value
          shall be the average of the last reported bid prices reported by the
          National Quotation Bureau, Inc. on the last business day prior to the
          date of the exercise of this Warrant; or

                  (3) If the Common Shares are not so listed or admitted to
         unlisted trading privileges and if bid and asked prices are not so
         reported, the current value shall be an amount, not less than book
         value, determined in such reasonable manner as may be prescribed by the
         board of directors of the Company.

     (D) EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company or at


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the office of its stock transfer agent, if any, for other Warrants of different
denominations entitling the Holder thereof to purchase (under the same terms and
conditions as provided by this Warrant) in the aggregate the same number of
Common Shares purchasable hereunder. Any such transfer or assignment shall be
made by surrender of this Warrant to the Company or at the office of its stock
transfer agent, if any, with the Assignment Form annexed hereto duly executed
and with funds sufficient to pay any transfer tax; whereupon the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. The term "Warrant" as used herein
includes any warrants issued in substitution for or replacement of this Warrant,
or into which this Warrant may be divided or exchanged. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Subject to such right of indemnification, any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not this Warrant so lost,
stolen, destroyed, or mutilated shall be at any time enforceable by anyone.

     (E) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in the Warrant and
are not enforceable against the Company except to the extent set forth herein.

     (F) ADJUSTMENT PROVISIONS.

         (1) ADJUSTMENTS OF THE EXERCISE PRICE.

               (A) If the Company subdivides its outstanding Common Shares into
          a greater number of Common Shares, the Exercise Price in effect
          immediately prior to such subdivision shall be proportionately
          reduced. Conversely, if the Company combines its outstanding Common
          Shares into a lesser number of Common Shares, the Exercise Price in
          effect immediately prior to such combination shall be proportionally
          increased. In case of a subdivision or combination, the adjustment of
          the Exercise Price shall be made as of the effective date of the
          applicable event. A distribution on Common Shares, including a
          distribution of Convertible Securities, to shareholders of the Company
          on a pro rata basis shall be considered a subdivision of Common Shares
          for the purposes of this subsection (1)(A), except that the adjustment
          will be made as of the record date for such distribution and any such
          distribution of Convertible Securities shall be deemed to be a
          distribution of the Common Shares underlying such Convertible
          Securities.


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               (B) If the Company shall at any time distribute or cause to be
          distributed to its shareholders, on a pro rata basis, cash, assets, or
          securities of any entity other than the Company, then the Exercise
          Price in effect immediately prior to such distribution shall
          automatically be reduced by an amount determined by dividing (x) the
          amount (if cash) or the value (if assets or securities) of the
          holders' of Warrants (as such term is defined in the first paragraph
          hereof) pro rata share of such distribution determined assuming that
          all holders of Warrants had exercised their Warrants on the day prior
          to such distribution, by (y) the number of Common Shares issuable upon
          the exercise of this Warrant by the Holder on the day prior to such
          distribution.

          (2) ADJUSTMENTS OF EXERCISE PRICE - ON ISSUE AT LESS THAN EXERCISE
          PRICE.

               Excepted from the adjustment for anti-dilution provisions of this
          Section (2) and Section 3 are the Company's issuance of "Excluded
          Common Shares" as defined below, and also all Common Shares or
          Convertible Securities in the form of stock options to the Company's
          employees or non-executive directors, or Common Shares issued to
          acquire a subsidiary or its assets, provided such Common Shares or
          Convertible Securities are issued at prices or with exercise terms
          equal to the Company's then current market price on the date of such
          issuance. Whenever reference is made in this Section (2) or Section
          (3) to the distribution of Convertible Securities, the term
          "Convertible Securities" shall mean options or warrants or rights for
          the purchase of Common Shares of the Company or for the purchase of
          any stock or other securities convertible into or exchangeable for
          Common Shares of the Company.

               If the Company should at any time or from time to time hereafter
          issue or sell any of its Common Shares (other than Common Shares
          issued upon the exercise of Convertible Securities outstanding on
          October 18, 2001, which Common Shares shall be referred to herein as
          the "Excluded Common Shares") without consideration or for a
          consideration per share less than the Exercise Price in effect
          immediately prior to the time of such issue or sale, then forthwith
          upon such issue or sale, the Exercise Price shall be automatically
          adjusted to a price (computed to the nearest cent) determined by
          dividing (i) the sum of (x) the number of Common Shares outstanding
          immediately prior to such issue or sale multiplied by the Exercise
          Price in effect immediately prior to such issue or sale, by (y) the
          consideration, if any, received by the Company upon such issue or
          sale, by (ii) the total number of Common Shares outstanding
          immediately after such issue or sale. For purposes of this Section (2)
          and (3), the following provisions (i) and (ii) shall also be
          applicable:

                    (i) RIGHTS, OPTIONS OR WARRANTS. In case at any time
               hereafter the Company shall in any manner grant any right to
               subscribe for or to purchase, or any option or warrant for the
               purchase of Common Shares or for the purchase of any stock or
               securities convertible or exchangeable for Common Shares (such
               convertible or exchangeable stock or securities being hereinafter
               referred to as the


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               "Underlying Convertible Securities") and if the minimum price per
               share for which Common Shares are issuable, pursuant to such
               rights, options, warrants or upon conversion or exchange of such
               Underlying Convertible Securities (determined by dividing (i) the
               total amount, if any, received or receivable by the Company as
               consideration for the granting of such rights, options, or
               warrants plus the minimum aggregate amount of additional
               consideration payable to the Company upon the exercise of such
               rights, options, or warrants under the terms of such rights,
               options, or warrants at the time of making such computation,
               plus, in the case of such Underlying Convertible Securities, the
               minimum aggregate amount of additional consideration, if any,
               payable upon the conversion or exchange thereof under the terms
               of such Underlying Convertible Securities at the time of making
               such computation, by (ii) the total maximum number of Common
               Shares issuable pursuant to such rights, options, or warrants or
               upon the conversion or exchange of the total maximum amount of
               such Underlying Convertible Securities issuable upon the exercise
               of such rights, options, or warrants or Underlying Convertible
               Securities at the time of making such computation) shall be less
               than the Exercise Price in effect immediately prior to the time
               of the granting of such rights or options, then the total maximum
               number of Common Shares issuable pursuant to such rights,
               options, warrants or upon conversion or exchange of the total
               maximum amount of such Underlying Convertible Securities issuable
               upon the exercise of such rights, options, or warrants under the
               terms of such rights, options, warrants or Underlying Convertible
               Securities at the time of making such computation shall (as of
               the date of granting of such rights, options, or warrants) be
               deemed to be outstanding and to have been issued for said price
               per share as so determined; provided, that no further adjustment
               of the Exercise Price shall be made upon the actual issue of
               Common Shares so deemed to have been issued unless the price per
               share received by the Company upon the actual issuance of Common
               Shares so deemed to be issued differs from the price per share
               which was last used to adjust the Exercise Price or unless by the
               terms of such rights, options, or warrants or Underlying
               Convertible Securities the price per share which the Company will
               receive upon any such issuance of Common Shares differs from the
               price per share which was last used to adjust the Exercise Price,
               in either of which events the Exercise Price shall be adjusted
               upon the occurrence of either such event to reflect the new price
               per share of Common Stock; and further provided, that, upon the
               expiration of such rights (including rights to convert or
               exchange), options or warrants (a) the number of shares of Common
               Stock deemed to have been issued and outstanding by reason of the
               fact that they were issuable pursuant to such rights, options, or
               warrants (including rights to convert or exchange) that were not
               exercised, shall no longer be deemed to be issued and
               outstanding, and (b) the Exercise Price shall forthwith be
               adjusted to the price which would have prevailed had all
               adjustments been made on the basis of the issue only of the
               Common Shares actually issued upon the exercise of such rights,
               options, or warrants or upon conversion or exchange of such


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               Underlying Convertible Securities. Such adjustments upon
               expiration shall have no effect on Warrants exercised prior to
               such expirations.

                    (ii) CONVERTIBLE SECURITIES. If the Company shall in any
               manner issue or sell any Convertible Securities other than the
               rights, options, or warrants described in Section (2) or (3)
               hereof and if the minimum price per share for which Common Shares
               are issuable upon conversion or exchange of such Convertible
               Securities (determined by dividing (i) the total amount received
               or receivable by the Company as consideration for the issue or
               sale of such Convertible Securities, plus the minimum aggregate
               amount of additional consideration, if any, payable to the
               Company upon the conversion or exchange thereof under the terms
               of such Convertible Securities at the time of making such
               computation, by (ii) the total maximum number of Common Shares
               issuable upon the conversion or exchange of all such Convertible
               Securities under the terms of such Convertible Securities at the
               time of making such computation) shall be less than the Exercise
               Price in effect immediately prior to the time of such issue or
               sale, then the total maximum number of Common Shares issuable
               upon conversion or exchange of all such Convertible Securities at
               the time of making such computation shall (as of the date of the
               issue or sale of such Convertible Securities) be deemed to be
               outstanding and to have been issued for said price per share as
               so determined; provided, that no further adjustment of the
               Exercise Price shall be made upon the actual issue of Common
               Shares so deemed to have been issued unless the price per share
               received by the Company upon the actual issuance of Common Shares
               so deemed to be issued differs from the price per share which was
               last used to adjust the Exercise Price or unless by the terms of
               such Convertible Securities the price per share which the Company
               will receive upon any such issuance of Common Shares differs from
               the price per share which was last used to adjust the Exercise
               Price, in either of which events the Exercise Price shall be
               adjusted upon the occurrence of either such event to reflect the
               new price per share of Common Shares; and, further provided that
               if any such issue or sale of such Convertible Securities is made
               upon exercise of any right to subscribe for or to purchase or any
               option to purchase any such Convertible Securities for which an
               adjustment of the Exercise Price has been or is to be made
               pursuant to the provisions of Section (2) or (3), then no further
               adjustment of the Exercise Price shall be made by reason of such
               issue or sale unless the price per share received by the Company
               upon the conversion or exchange of such Convertible Securities
               when actually issued differs form the price per share which was
               last used to adjust the Exercise Price or unless by the terms of
               such Convertible Securities the price per share which the Company
               will receive upon any such issuance of Common Shares upon
               conversion or exchange of such Convertible Securities differs
               from the price per share which was last used to adjust the
               Exercise Price, in either of which events the Exercise Price
               shall be adjusted upon the occurrence of either of such events to
               reflect the new price per share of Common Shares; and, further
               provided,


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               that, upon the termination of the right to convert or to exchange
               of any such Convertible Securities, which were not so converted
               or exchange, shall no longer be deemed to be issued and
               outstanding, and the Exercise Price shall forthwith be adjusted
               to the price which would have prevailed had all adjustments been
               made on the basis of the issue only of the number of Common
               Shares actually issued upon conversion or exchange of such
               Convertible Securities. Such adjustments upon expiration shall
               have no effect on Warrants exercised prior to such expiration.

               (3) DETERMINATION OF ISSUE PRICE. In case any Common Shares or
          Convertible Securities which shall be issued for cash, the
          consideration received therefor, which shall be the gross sales price
          for such security without deducting therefrom any commission or other
          expenses paid or incurred by the Company for any underwriting of, or
          otherwise in connection with, the issuance thereof, shall be deemed to
          be the amount received by the Company therefor. In case any Common
          Shares or Convertible Securities shall be issued for a consideration
          part or all of which shall be other than cash, then the Board of
          Directors of the Company shall determine the fair value of such
          consideration, irrespective of accounting treatment, and such Common
          Shares or Convertible Securities shall be deemed to have been issued
          for an amount of cash equal to the value so determined by the Board of
          Directors. The reclassification of securities other than Common Shares
          into securities including Common Shares shall be deemed to involve the
          issuance for a consideration other than cash of such Common Shares
          immediately prior to the close of business on the date fixed for the
          determination of security holders entitled to receive such Common
          Shares. In case any Common Shares or Convertible Securities shall be
          issued together with other stock or securities or other assets of the
          Company for consideration, the Board of Directors of the Company shall
          determine what part of the consideration so received is to be deemed
          to be consideration for the issue of such Common Shares or Convertible
          Securities.

               (4) DETERMINATION OF DATE OF ISSUE. In case the Company shall
          take a record of the holders of Common Shares for the purpose of
          entitling them (i) to receive a dividend or other distribution payable
          in Common Shares or in Convertible Securities or (ii) to subscribe for
          or purchase Common Shares or Convertible Securities, then such record
          date shall be deemed to be the date of the issue or sale of the Common
          Shares deemed to have been issued or sold upon the declaration of such
          dividend or the making of such other distribution or the date of the
          granting of such right of subscription or purchase, as the case may
          be.

               (5) TREASURY SHARES. For the purpose of this Section (f), Common
          Shares at any relevant time owned or held by, or for the account of,
          the Company shall not be deemed outstanding.

     (G) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted as
required above, the Company shall forthwith file in the custody of its Secretary
or an Assistant Secretary at its principal office, and with its stock transfer
and warrant agent, if any, an officer's certificate


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showing the adjusted Exercise Price determined as herein provided and setting
forth in reasonable detail the facts requiring such adjustment. Each such
officer's certificate shall be made available at all reasonable times for
inspection by the Holder and the Company shall, forthwith after each such
adjustment, deliver a copy of such certificate to the Holder.

     (H) NO ADJUSTMENT FOR SMALL AMOUNTS. Anything in Sections (2) or (3) to the
contrary notwithstanding, the Company shall not be required to give effect to
any adjustment in the Exercise Price unless and until the net effect of one or
more adjustments, determined as above provided, shall have required a change of
the Exercise Price by at least one cent, but when the cumulative net effect of
more than one adjustment so determined shall be to change the actual Exercise
Price by at least one cent, such change in the Exercise Price shall thereupon be
given effect.

     (I) NUMBER OF SHARES ADJUSTED. Upon any adjustment of the Exercise Price,
the Holder of this Warrant shall thereafter (until another such adjustment) be
entitled to purchase, at the new Exercise Price, the number of Common Shares,
calculated to the nearest full share, obtained by multiplying the number of
Common Shares initially issuable upon exercise of this Warrant by the Exercise,
Price specified in the first paragraph hereof and dividing the product so
obtained by the new Exercise Price.

     (J) NOTICES TO HOLDERS. So long as this Warrant shall be outstanding and
unexercised (i) if the Company shall pay any dividend or make/any distribution
upon the Common Shares or (ii) if the Company shall offer to the holders of
Common Shares for subscription or purchase by them any shares of stock of any
class or any other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then, in any such case, the Company shall
cause to be delivered to the Holder, at least 10 days prior to the date
specified in (x) or (y) below, as the case may be, a notice containing a brief
description of the proposed action and stating the date on which (x) a record is
to be taken for the purpose of such dividend, distribution or rights, or (y)
such reclassification, reorganization, consolidation, merger, conveyance, lease,
dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Shares of record shall be
entitled to exchange their Common Shares for securities or other property
deliverable upon such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up.

     (K) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding Common
Shares of the Company (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of an issuance of
Common Shares by way of dividend or other distribution or of a subdivision or
combination), or in case of any consolidation or merger of the Company with or
into another corporation (other than a merger with a subsidiary in which merger
the Company is the continuing


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corporation and which does not result in any reclassification, capital
reorganization or other change of outstanding Common Shares of the class
issuable upon exercise of this Warrant) or in case of any sale or conveyance to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company shall cause effective provision to be
made so that the Holder shall have the right thereafter, by exercising this
Warrant, to purchase the kind and amount of shares of stock and other securities
and property which the Holder would have received upon such reclassification,
capital reorganization or other change, consolidation, merger, sale or
conveyance had this Warrant been exercised prior to the consummation of such
transaction. Any such provision shall include provision for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Warrant. The foregoing provisions of this Section (i) shall
similarly apply to successive reclassifications, capital reorganizations and
changes of Common Shares and to successive consolidations, mergers, sales or
conveyances. In the event the Company spins off a subsidiary by distributing to
the shareholders of the Company as a dividend or otherwise the stock of the
subsidiary, the Company shall reserve for the life of this Warrant, shares of
the subsidiary to be delivered to the Holders of the Warrants upon exercise to
the same extent as if they were owners of record of the Warrant Shares on the
record date for payment of the shares of the subsidiary.

     (L) REGISTRATION UNDER THE SECURITIES ACT OF 1933.

          (1) We agree with each Holder of this Warrant that as soon as
     practicable in 2001 after our financial statements for the fiscal year
     ended May 31, 2001 have been audited by our independent audit firm, we will
     prepare at our sole expense and file with the Securities and Exchange
     Commission (and use our best efforts to have the agency declare effective)
     a registration statement on Form S-3 under the Securities Act of 1933 to
     cover the issuance of restricted Common Shares upon exercise of any of
     these Warrants, and resale of such Common Shares by the Holder, and to
     qualify such issuance and resale thereof under the laws of such states
     specified in writing to us by the Holder. The Holder shall be solely
     responsible for payment of any commissions on sale of the Common Shares. We
     will keep the registration statement effective by additional filings with
     the Securities and Exchange Commission for so long as this Warrant is
     exercisable.

          (2) Each Holder shall supply such information as the Company may
     reasonably require from such Holders, or any underwriter for any of them,
     for inclusion in such registration statement or posteffective amendment.

          (3) The Company's agreements with respect to the Warrants and Warrant
     Shares in this Section will continue in effect regardless of the exercise
     or surrender of this Warrant.

          (4) Any notices or certificates by the Company to the Holder and by
     the Holder to the Company shall be deemed delivered if in writing and
     delivered. personally or sent by certified mail, return receipt requested,
     to the Holder, addressed to him at his address as set


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     forth on the Warrant or stockholder register of the Company, or, if the
     Holder has designated, by notice in writing to the Company, any other
     address, to such other address, and, if to the Company, addressed to it at
     877 North 8th West, Riverton, Wyoming 82501. The Company may change its
     address by written notice to Holders.

     (M) TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933. The Company may
cause the following legend, or one similar thereto, to be set forth on the
Warrants and on each certificate representing Warrant Shares or any other
security issued or issuable upon exercise of this Warrant not theretofore
distributed to the public or sold to underwriters for distribution to the
public, unless legal counsel for the Company is of the opinion as to any such
certificate that such legend, or one similar thereto, is unnecessary:

     "The securities represented by this certificate may not be offered for
     sale, sold or otherwise transferred except pursuant to an effective
     registration statement made under the Securities Act of 1933 (the "Act")
     and under any applicable state securities law, or pursuant to an exemption
     from registration under the Act and under any applicable state securities
     law, the availability of which is to be established to the satisfaction of
     the Company."

     (N) APPLICABLE LAW. This Warrant shall be governed by, and construed in
accordance with, the laws of the state of Wyoming.

Dated: October 18, 2001.

                                  U.S. ENERGY CORP.


                                  By:
                                       -----------------------------------------
                                        Keith G. Larsen, President



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                                  PURCHASE FORM

                                                      Dated:
                                                             -------------------

     The undersigned hereby irrevocably elects to exercise the Warrant to the
extent of purchasing shares of Common Stock and hereby makes payment of $ in
payment of the actual exercise price thereof.

                     INSTRUCTIONS FOR REGISTRATION OF STOCK
                     --------------------------------------

Name:
     ---------------------------------------------------------------------------
                  (Please typewrite or print in block letters)

Address:
         -----------------------------------------------------------------------

Signature:
           ---------------------------------------------------------------------

                                 ASSIGNMENT FORM

                                                      Dated:
                                                            --------------------

         FOR VALUE RECEIVED,
                             ---------------------------------------------------

hereby sells, assigns and transfers unto
                                         ---------------------------------------

--------------------------------------------------------------------------------
               (Name: Please typewrite or print in block letters)

Address:
          ----------------------------------------------------------------------

the right to purchase Common Stock represented by this Warrant to the extent of


----------------------------------- shares as to which such right is exercisable

and does hereby irrevocably constitute and appoint -----------------------------

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

attorney, to transfer the same on the books of the Company with full power of

substitution in the premises.

                           Signature:
                                       -----------------------------------------



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<PAGE>


                   HOLDERS OF WARRANTS DATED OCTOBER 18, 2001


                                                      Number of Shares
              Name                                    Exercisable
              ----                                    ----------------


              Robert H. Taggart Jr.                       8,981
              James J. Cahill                            10,500
              A. Clinton Allen, A.C. Allen & Co.          7,985
              Troy G. Taggart                             4,000
              Craig H. Von Peters                         3,000
              SJS Holdings  (Susan Schoch)                2,500
              Lance M. Hering                             1,500
              Donna Schulze                                 500



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