U.S. Energy Reports Initial Production from Bakken Well

U.S. Energy Corp. has announced the initial production rate from its Lee 16-21 #1H Bakken well and provided an operations update regarding its Williston Basin drilling program.

Williston Basin -- Bakken Drilling Program

The Lee 16-21 #1H well, which is operated by Brigham Exploration Company, flowed at an initial 24-hour production test rate of approximately 1,341 barrels of oil and 1.22 MMCF of natural gas per day or 1,544 BOE/D. The well was completed with swell packers and 28 fracture stimulation stages. USE's initial working interest in this well is approximately 60% (~47% net revenue interest), and oil sales from this well are expected to commence immediately. As with the previously completed BCD Farms 16-21 #1H well, gas sales will commence upon connection to a gathering system, which is estimated to take about 90-120 days.

The Strand 16-9 #1H well has been drilled to total measured depth of approximately 20,000 feet. Upon completion of the drilling, a sleeve was run into the hole with 26 swell packers and completion initiatives will commence this week. USE's initial working interest in this well is approximately 40%.

Two additional wells (wells #5 and #6 of the previously announced Drilling Participation Agreement with Brigham) are currently drilling to depth. The two wells are the Williston 25-36 #1H (~65% initial working interest) and the State 36-1 #1H (~28% initial working interest). As with USEG's other Brigham program wells, both the Williston and State wells are targeting the middle Bakken formation, and are planned to be drilled to a total measured depth of approximately 20,000 feet (~10,000 ft vertical; ~10,000 horizontal). To date, the drilling of both the Williston and the State wells have progressed into the horizontal portion of the well bore and are advancing toward target depth.

"With the successful completion of the Lee well, we have reached an average initial production rate of 1,810 BOE/D on our first three wells in the Williston Basin," stated Keith Larsen, CEO of U.S. Energy Corp. "We continue to make rapid progress with Brigham in the Rough Rider project area and fully expect that an additional three wells will be completed by year end," he added.