U.S. ENERGY CORP. ENTERSAGREEMENT TO SELL SIGNIFICANT INTEREST INSUTTER GOLD MINING INC. TO RMB RESOURCESLTD.

RIVERTON, Wyoming – June 13, 2008 -U.S. Energy Corp. (NASDAQ Capital Market: “USEG”) (“USE” or the “Company”), a natural resources exploration and development company with interests in molybdenum, uranium, oil and gas, gold, and real estate, announced today that it has entered into a private agreement to sell an aggregate of 39,062,072 common shares (the “Purchased Shares”) of Sutter Gold Mining Inc. (TSX-V:  SGM) (“SGMI”) to RMB Resources Ltd. (“RMB”), as trustee for the Telluride Investment Trust, for an aggregate purchase price of approximately Cdn. $5.4 million, in accordance with the terms of a share purchase agreement (the “Purchase Agreement”) and subject to closing conditions set out therein (the “Acquisition”).  The purchased shares will represent approximately 49.9% of the outstanding common shares of SGMI.  U.S. Energy Corp. currently owns 42,613,081 common shares of SGMI representing approximately 54.4% of the outstanding common shares of SGMI.  The Acquisition is expected to close at the end of July 2008.

Concurrently with the execution of the Purchase Agreement, U.S. Energy Corp. delivered to RMB a power of attorney pursuant to which RMB was granted the right to vote the common shares of SGMI currently owned by U.S. Energy Corp.

RMB is pursuing the Acquisition for investment purposes.  In addition to the Acquisition, the Purchase Agreement contemplates that RMB will subscribe for its proportionate ownership interest in SGMI in a financing transaction designed to provide SGMI with necessary working capital, subject to the receipt of necessary regulatory approval.  RMB reserves the right, depending on the circumstances including market conditions, to make further purchases, or disposals, of common shares of SGMI in the future.

Mark J. Larsen, President of U.S. Energy Corp., stated, “The sale of a majority of our position in Sutter Gold has been a corporate objective that will allow us to monetize our position in an asset where our liquidity has been in suspension for an extended period of time.  We believe that RMB will provide the catalyst to move this project forward in a meaningful way for the benefit of both U.S. Energy Corp. and Sutter Gold shareholders.  Upon closing the transaction, we plan to deploy the proceeds from this sale into cash flow generating operations such as oil and gas exploration and other projects that we continue to evaluate for investments in the near term.  We will also retain an equity position in Sutter along with a previously retained Net Profits Royalty on the project.”  “We expect the Net Profits Royalty will provide future revenues to the company as the Sutter project proceeds,” he added.

 

 

RMB is a wholly owned unit of the Rand Merchant Bank division of FirstRand Bank.  The registered office of RMB is Level 13, 60 Castlereagh Street, Sydney, NSW, Australia.

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U.S. Energy Corp. is a diversified natural resource company with interests in molybdenum, oil and gas, gold, and real estate.  The Company is headquartered in Riverton, Wyoming, and its common stock is listed on The NASDAQ Capital Market under the symbol “USEG”.