- Establishes $25 Million Line of Credit From Petrobridge

RIVERTON, Wyo., Feb. 2 /PRNewswire-FirstCall/ -- U.S. Energy Corp.
(Nasdaq: USEG) and Crested Corp. (OTC Bulletin Board: CBAG), d/b/a USECC
announced today that on January 30, 2004, their subsidiary, Rocky Mountain
Gas, Inc. (RMG), closed on the previously announced purchase and sale
agreement to acquire Wyoming coalbed methane (CBM) properties from a
non-disclosed party. The effective date of the acquisition is November 1,
2003.
The purchase price of $6.8 million was paid with $5.0 million of cash,
$500,000 in a 30 day secured note, $600,000 in restricted USEG stock (RMG's
parent company) and $700,000 in restricted RMG stock. RMG financed $3.7
million of the cash component from a recently established $25 million credit
facility arranged by Petrobridge Investment Management, LLC (Petrobridge), a
mezzanine lender headquartered in Houston, TX.
The properties acquired include 247 completed wells of which 138 wells are
currently producing approximately 6.0 million cubic feet of gas per day
(mmcfd) (approximately 3.2 mmcfd net to RMG) and 40,120 undeveloped fee acres.
RMG will operate 89% of the wells and owns an average 58% working interest in
the producing wells and a 100% working interest in all of the undeveloped
acreage. With the acquisition, RMG's gross and net acreage holdings increase
to approximately 365,000 and 130,000, respectively.
RMG plans to immediately drill 5 proven undeveloped locations and to begin
a remedial workover program on a number of existing wells and on the gas
gathering and pipeline facilities included in this purchase. This program is
estimated to cost approximately $640,000 and is also being funded from the
Petrobridge credit facility. The program is designed to quickly enhance
production from current levels. Subject to adequate financing, RMG will then
proceed to initiate exploration activities on other prospective coals.
As provided for under a previous agreement, Pinnacle Gas Resources, Inc.
(a CBM company in which RMG owns a 22% equity interest) has opted not to
exercise its option to acquire the undeveloped acreage portion of this
acquisition.
Mark J. Larsen, president of RMG commented, "We are pleased to close on
this acquisition of producing CBM properties and we look forward to fueling
RMG's growth by acquiring additional proven reserves in the future through our
association with Petrobridge. This acquisition, coupled with the arrangement
of the Petrobridge credit facility, is a significant step toward our goals to
further grow RMG's portfolio of CBM properties and to once again become a
producer of natural gas. Since the acquisition is effective as of November 1,
2003, we have the additional benefit of realizing natural gas revenues from
the effective date," he concluded.
RMG also announced today that Hobart A. (Hobie) Smith will join the
company's board of directors on February 1, 2004. Mr. Smith is a customer
relations and industry affairs consultant to Smith International, an
international products and services provider to the oil and gas and
petrochemicals industries.
Mr. Larsen further stated, "We are very pleased to have an experienced
industry veteran like Hobie join our company. His experience and expertise
will play a valuable role as we continue to build RMG into an industry
recognized leader in developing the Rocky Mountain Regions coalbed methane
resources."

ABOUT U.S. ENERGY CORP. AND CRESTED CORP.

U.S. Energy Corp. and its majority owned subsidiary, Crested Corp., are
engaged in joint business operations as USECC. Through their subsidiary Rocky
Mountain Gas, Inc., they own interests in over 365,000 gross acres prospective
for coalbed methane (CBM) in the Powder River Basin of Wyoming and Montana and
acreage adjacent to the Greater Green River Basin in southwest Wyoming.
Certain properties are subject to a definitive agreement with CCBM, Inc., a
division of Carrizo Oil & Gas, Inc. of Houston, TX to develop and expand RMG's
CBM properties dated July 10, 2001. U.S. Energy's and Crested's subsidiary,
Rocky Mountain Gas, Inc. owns a minority equity interest in Pinnacle Gas
Resources, Inc. USECC owns control of Sutter Gold Mining Company, which owns
properties in California prospective for gold. USECC also owns various
interests in uranium properties in Wyoming and Utah.

This press release includes statements, which may constitute
"forward-looking" statements, usually containing the words "believe,"
"estimate," "project," "expect," or similar expressions. These statements are
made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements inherently involve
risks and uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or contribute
to such differences include, but are not limited to, future trends in natural
gas and mineral prices, the availability of capital for development of natural
gas and other mineral projects, competitive factors, and other risks detailed
in the Companies' periodic report filings with the Securities and Exchange
Commission. By making these forward-looking statements, the Companies
undertake no obligation to update these statements for revision or changes
after the date of this release.

SOURCE U.S. Energy Corp.
-0- 02/02/2004
/CONTACT: Keith G. Larsen, President of U.S. Energy Corp.,
+1-307-856-9271; or Investor Relations, Neal Feagans of Riches In Resources,
Inc., +1-303-449-1184/
(USEG CBAG)

CO: U.S. Energy Corp.; Crested Corp.; Rocky Mountain Gas, Inc.
ST: Wyoming
IN: OIL OTC
SU: TNM PER