Rocky Mountain Gas Acquires Stake in Wyoming CBM Development

U.S. Energy Corp.'s subsidiary Rocky Mountain Gas and Crested Corp. have entered into an Exploration and Participation Agreement covering 38,184 gross and net mineral acres prospective for coalbed methane development. The properties are located in RMG's Oyster Ridge Project in the Ham's Fork coal field adjacent to the Green River Basin in southwestern Wyoming.

Mark J. Larsen, President of RMG commented, "Previous drilling and testing at RMG's Oyster Ridge Property has identified two significant coal seams with good permeability. We are pleased to have secured additional acreage at this property prior to commencing a more extensive exploration program in the near future. With 49,457 gross acres currently held and/or under option with Anadarko Petroleum, Inc., RMG has increased its gross interest in this property by 77% to approximately 87,641 gross acres. RMG plans to drill and test 14 exploratory wells on these properties during the summer/fall of 2004, subject to financing and permitting."