US Energy Corp – ‘S-3/A’ on 4/2/03

On:  Wednesday, 4/2/03, at 4:12pm ET   ·   Accession #:  1028269-3-37   ·   File #:  333-103692

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Pre-Effective Amendment to Registration Statement for Securities Offered Pursuant to a Transaction   —   Form S-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-3/A       Form S-3 Amnd 1 - Several Transactions                43    222K 

Document Table of Contents

S-3/A
1st Page of 43
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
 As filed with the Securities and Exchange Commission on April 2, 2003

 Registration No. 333-103692

Securities and Exchange Commission
Washington, D.C. 20549
 ---------------
FORM S-3

 PRE-EFFECTIVE AMENDMENT NO. 1

Registration Statement
Under the Securities Act of 1933

U.S. ENERGY CORP. 
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

 Wyoming
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)

83-0205516
--------------------------------------------------------------------------------
(I.R.S. Employer Identification No.)

877 North 8th West, Riverton, Wyoming 82501; Tel. 307.856.9271
--------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of issuer's principal executive offices)

Daniel P. Svilar, 877 North 8th West
 Riverton, WY 82501; Tel. 307.856.9271
--------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number of agent for service)

Copies to: Stephen E. Rounds, Esq.  
                     The Law Office of Stephen E. Rounds
                       4635 East 18th Ave., Denver, CO 80220
                       Tel:  303.377.6997; Fax: 303.377.0231
 ---------------
Approximate date of commencement and end of proposed sale to the public: From   
time to time after the registration statement becomes effective.                

If the only securities being registered on this Form are being offered pursuant 
to dividend or interest reinvestment plans, please check the following box. [ ] 

If any of the securities being registered on this Form are to be offered on a   
delayed or continuous basis pursuant to Rule 415 under the Securities Act of    
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X ]                               

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective       
registration statement for the same offering:[ ] ________                       

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under  
the Securities Act, check the following box and list the Securities Act         
registration statement number of the earlier effective registration statement   
for the same offering. [ ] ________                                             

If delivery of the prospectus is expected to be made pursuant to Rule 434,      
please check the following box. [ ]                                             

S-3/A
2nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 2nd
CALCULATION OF REGISTRATION FEE                                                 

                                                                [Download Table]

                                                       Proposed              
                                        Proposed        Maximum              
                          Amount of      Maximum       Aggregate             
Title of Each Class      Securities     Offering     Dollar Price     Amount 
of Securities         to be Registered  Price Per  of Securities to     of   
to be Registered       in the Offering  Security     be Registered     Fee   
----------------       ---------------  --------     -------------   --------

                                                                             
Common Stock                28,192        $4.00     $   112,768.00   $  10.38
                         Shares(1)                                           

Common Stock               333,333        $3.00     $   999,999.00   $  92.00
                         Shares(2)                                           

Common Stock               150,000        $3.00     $   450,000.00   $  41.40
                         Shares(3)                                           

Common Stock                 3,000        $3.75     $    11,250.00   $   1.04
                        Shares (4)                                           

Common Stock                74,564        $3.64     $   271,412.96   $  24.97
                        Shares (5)                                           

Common Stock               166,666        $3.00     $   499,998.00   $  46.00
                        Shares (6)                                           

Common Stock                75,000        $3.00     $   225,000.00   $  20.70
                        Shares (7)                                           

Common  Stock               33,705        $3.11     $   104,822.55   $   9.64
                        Shares (8)                                           

Common Stock                18,000        $3.00     $    54,000.00   $   4.97
                        Shares (9)                                           

Total No. Securities                                                         
to be Registered           882,460                  $ 2,729,250.51   $ 251.10
                            Shares                                           

(1)  These shares being registered for resale under this registration statement 
     are issuable on exercise of outstanding warrants, at $4.00 per share, which
  warrants are held by 36 persons who own equity interests in VentureRound
     Group LLC ("VRG"), exercisable at $4.00 per share. These warrants expire on
March 25, 2004.                                                       

(2)  These shares being registered for resale under this registration statement 
 are issuable upon conversion of debt to shares at a rate of 1 share for
     $3.00 of principal payable on a convertible secured promissory note held by
Caydal, LLC.                                                          

(3)  These shares being registered for resale under this registration statement 
     are issuable on exercise of outstanding warrants, at $3.00 per share, which
     warrants are held by Caydal, LLC and 31 persons who own equity interests in
    VRG, exercisable at $3.00 per share. These options expire on May 30, 2005.

 1

S-3/A
3rd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 3rd
(4)  These shares being registered for resale under this registration statement 
     are issuable on exercise of outstanding warrants, at $3.75 per share, which
warrants are held by one person who owns an equity interest in VRG,   
    exercisable at $3.75 per share. These warrants expire on October 18, 2006.

(5)  These shares being registered for resale under this registration statement 
     are issuable on exercise of outstanding warrants, at $3.64 per share, which
warrants are held by 23 persons. These warrants expire July 19, 2003. 

(6)  These shares being registered for resale under this registration statement 
 are issuable upon conversion of debt to shares at a rate of 1 share for
     $3.00 of principal payable on a convertible secured promissory note held by
Tsunami Partners, L.P.                                                

(7)  These shares being registered for resale under this registration statement 
     are issuable on exercise of outstanding warrants, at $3.00 per share, which
   warrants are held by Tsunami Partners, L.P. and 34 persons who own equity
   interests in VRG, exercisable at $3.00 per share. These options expire on
November 19, 2005.                                                    

(8)  These shares being registered for resale under this registration statement 
 include 20,000 shares held by two trusts, which shares were issued in a
    Sutter Gold Mining Company litigation settlement, and 13,705 shares issued
as partial payment of legal services.                                 

(9)  These shares being registered for resale under this registration statement 
    are issuable on exercise of outstanding options, at $3.00 per share, which
  options were issued as partial payment for legal services. These options
expire February 2, 2004.                                              

Pursuant to rule 457(c), registration fee calculations for shares     
outstanding are estimated based on the $3.11 market value of the registrant's   
common stock (Nasdaq National Market System price on March 6, 2003), which is   
within 5 business days prior to the initial filing of this statement.           

    Pursuant to Rule 457(h)(1), the maximum proposed offering price for shares
underlying warrants currently outstanding is based on the exercise price of the 
warrants.                                                                       

     The registration fee has been calculated pursuant to Rule 457(h) of the Act
by multiplying the proposed aggregate offering price times the fee rate of      
$0.000092.                                                                      

DELAYING AMENDMENT UNDER RULE 473(A): The registrant hereby amends this         
registration statement on such date or dates as may be necessary to delay its   
effective date until the registrant shall file a further amendment which        
specifically states that this registration statement shall become effective in  
accordance with section 8(a) of the Securities Act of 1933 or until the         
registration statement shall become effective on such date as the Commission    
acting pursuant to section 8(a), may determine.                                 

The information in this prospectus is subject to completion or amendment. The   
securities covered by this prospectus cannot be sold until the registration     
statement filed with the Securities and Exchange Commission becomes effective.  
This prospectus shall not constitute an offer to sell or the solicitation of an 
offer to buy nor shall there be any sale of these securities in any state in    
which an offer, solicitation or sale would be unlawful prior to registration or 
qualification under the securities laws of that state.                          

 2

S-3/A
4th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 4th
 U.S. ENERGY CORP.
882,460 SHARES OF COMMON STOCK

    This prospectus covers the offer and sale of up to 33,705 shares of common
stock ($0.01 par value) by shareholders; and up to 848,755 shares of common     
stock by holders of warrants and options on exercise of the warrants and        
options, and shares which may be issued if principal on two secured convertible 
notes is converted to common shares. The shares are offered for sale by the     
selling shareholders; all but one of the selling shareholders will become such  
on exercise of their warrants, or if the principal on the secured convertible   
notes is converted to common shares, and those persons decide to sell the       
shares.                                                                         

 3

S-3/A
5th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 5th
 4

S-3/A
6th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 6th
    In this prospectus, "selling shareholder" or "selling shareholders" refers
to Caydal, LLC, 36 persons who own equity interests in VRG, 22 persons who had  
been associated (licensed) with a broker- dealer which raised funds for YSFC,   
Tsunami Partners, L.P, two trusts involved in the SGMC litigation settlement,   
and the two persons who performed legal services for the company. In this       
prospectus, and the information incorporated by reference, "we," "company," and 
"USE" refer to U.S. Energy Corp. (and its subsidiaries unless otherwise         
specifically stated).                                                           

 For information on the transactions in which these persons and entities
acquired the various shares, warrants, options, and convertible notes, see      
"Selling Shareholders."                                                         

The selling shareholders may sell the shares from time to time in     
negotiated transactions, brokers' transactions or a combination of such methods 
of sale at market prices prevailing at the time of sale or at negotiated prices.
Although we will receive proceeds if and to the extent the options and warrants 
are exercised, we will not receive any proceeds from sale of any of the shares  
offered by the selling shareholders. None of the options or warrants have been  
exercised at prospectus date.                                                   

     USE is traded ("USEG") on the Nasdaq National Market System ($3.60 on March
28, 2003).                                                                      

   AN INVESTMENT IN THE SHARES OFFERED BY THIS PROSPECTUS IS SPECULATIVE AND
SUBJECT TO RISK OF LOSS. SEE "RISK FACTORS" BEGINNING ON PAGE 11 AND THE TABLE  
OF CONTENTS ON PAGE 6.                                                          

 NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OR DETERMINED IF THIS  
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A     
CRIMINAL OFFENSE.                                                               

 THE DATE OF THIS PROSPECTUS IS _________________, 2003.

 5

S-3/A
7th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 7th
 TABLE OF CONTENTS
                                                                        PAGE NO.

Summary Information............................................................8

     The Company...............................................................8

     The Offering..............................................................9

Risk Factors .................................................................11

     Risk Factors Involving the Company.......................................11

Lack of coalbed methane production                            
and established reserves for most of the                    
coalbed methane properties may slow down                      
         future exploration of these properties...............................11

Continued low gas prices for Powder River                     
         Basin production may hurt our business...............................12

We may have to begin to curtail                               
operations if we don't raise                                  
         more capital by July 2003............................................12

We are subject to certain kinds of risks                      
         which are unique to the minerals business............................13

Delays in obtaining permits for methane                       
         wells could impair our business......................................13

The company's poison pill could discourage                    
         some advantageous transactions.......................................13

Compliance with environmental                                 
         regulations may be costly............................................13

Commodity price fluctuations may be                           
         difficult to manage and could cause losses...........................14

Future equity transactions, including exercise of             
         options or warrants, could result in dilution........................14

Terms of  subsequent financings may                           
         adversely impact your investment.....................................14

There may be risks related to our prior use of                
Arthur Andersen LLP as our independent                        
         certified public accountant..........................................15

     Risk Factor Involving This Offering......................................15

 6

S-3/A
8th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 8th
Representations About This Offering...........................................16

Forward Looking Statements....................................................16

Description of Securities.....................................................16

Use of Proceeds...............................................................20

Selling Shareholders..........................................................20

Plan of Distribution..........................................................29

Disclosure of Commission Position on Indemnification..........................30

Where to Find More Information About Us.......................................31

Incorporation of Certain Information by Reference.............................31

Legal Matters.................................................................32

Experts.......................................................................32

 7

S-3/A
9th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 9th
 SUMMARY INFORMATION

   The following summarizes all material information found elsewhere in this
prospectus and the information incorporated into it by reference. This summary  
is qualified by the more detailed information in this prospectus and the        
information incorporated by reference.                                          

THE COMPANY                                                                     

     U.S. Energy Corp. is a Wyoming corporation, formed in 1966, in the business
of acquiring, exploring, developing and/or selling or leasing mineral           
properties, and the mining and marketing of minerals. We now are engaged in the 
exploration of coalbed methane gas properties, which is our primary business    
focus. The only activities of a significant and recurring nature are in coalbed 
methane.                                                                        

We also hold mining properties, but these properties (uranium and a   
property in Sutter Creek, California we bought for gold exploration) are shut   
down. The most significant uranium properties are located on Sheep Mountain in  
Wyoming, and in southeast Utah. We also hold a royalty interest in claims on    
Green Mountain, Wyoming, now held by Kennecott Uranium Company (see below).     
Interests are held in other mineral properties (principally molybdenum), but are
either non-operating interests or undeveloped claims. We know of no plans for   
the molybdenum property to be put into production (this property is owned by    
Phelps Dodge). Small oil and gas operations in Montana and Wyoming are conducted
as well. We also hold commercial properties, most of which are located in Utah  
and leased to third parties. Our fiscal year ended May 31, but on December 16,  
2002, our Board of Directors adopted a resolution changing the fiscal year end  
of USE and its affiliates to December 31, effective December 31, 2002.          

  The exploration of coalbed methane properties is conducted through Rocky
Mountain Gas, Inc. RMG, a Wyoming corporation is owned 51.1% by USE and 40.4% by
Crested Corp. Crested is a 70.5% majority-owned subsidiary of the company (see  
below). Properties of RMG are held in southeastern Montana and northeastern and 
southwestern Wyoming. In April 2002, a lawsuit was filed challenging the        
validity of Bureau of Land Management leases in Montana. Approximately 32%      
(88,411 acres) of RMG's total acreage is leased from the BLM in Montana. See    
Item 3 (Legal Proceedings) in the Form 10-K/A for fiscal 2002. The status of    
this litigation will be updated in subsequent SEC filings.                      

     Except for the Bobcat Field (for which we have established gas reserves) we
don't know if anything of value will result from our activities in the coalbed  
methane area: Only a limited number of exploratory wells have been drilled, and 
there is not yet enough information from these wells to determine if they       
contain proved reserves; gas prices are low in the Powder River Basin (our area 
of activity); permitting issues may delay further work, and more funding may be 
needed but not available.                                                       

USE and Crested originally were independent companies, with two common
affiliates (John L. Larsen and Max T. Evans, Mr. Evans is now deceased). In     
1980, USE and Crested formed a joint venture, referred to as the USECC Joint    
Venture, to do business together (unless one or the other elected not to pursue 
an individual project). As a result of USE funding certain of Crested's         
obligations from time to time (due to Crested's lack of cash on hand), and later
payment of debts by Crested issuing common stock to USE, Crested became a       
majority-owned subsidiary of USE in fiscal 1993. In fiscal 2001, Crested issued 
another 6,666,666 shares of common stock to reduce Crested's debt owed to USE by
$3.0 million, which increased USE's ownership of Crested to 70.5%.              

   All of USE's and Crested's operations are in the United States. Principal
executive offices for USE and Crested are located in the Glen L. Larsen building
at 877 North 8th Street West, Riverton, Wyoming 82501, telephone 307.856.9271;  
fax 307.857.3050.                                                               

 8

S-3/A
10th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 10th
Most of the company's (USE's) operations are conducted through        
subsidiaries, the USECC joint venture with Crested, and various jointly-owned   
subsidiaries of USE and Crested.                                                

Until September 11, 2000, USE, Crested and Kennecott Uranium Company  
("Kennecott"), owned the Green Mountain Mining Venture ("GMMV"), which held a   
large uranium deposit and uranium mill in Wyoming. On September 11, 2000, USE   
and Crested settled litigation with Kennecott involving the GMMV by selling     
their interest in the GMMV and its properties back to Kennecott for $3.25       
million and receiving a royalty interest in the uranium properties. Kennecott   
also assumed all reclamation obligations on the GMMV properties. Other principal
uranium properties and an uranium mill in southeast Utah are held by Plateau    
Resources Ltd., a wholly-owned subsidiary of USE. The Utah uranium properties   
are shut down.                                                                  

    The property held by Sutter Gold Mining Company ("SGMC"), a majority-owned
subsidiary of USE, is shut down so far as a prospective mining operation is     
concerned, because the current price of gold is too low to raise the capital    
necessary to put the properties into production. There are no current plans to  
start mining activities at Sutter.                                              

THE OFFERING                                                                    

Securities Outstanding             12,189,776 shares of common stock, $0.01 par 
value.    

Securities To Be Outstanding       13,038,531 shares of common stock, $0.01 par 
                                 value, assuming the options and warrants on
                        348,756 shares held by the selling
                                   shareholders were exercised as of the date of
                                 this prospectus, and the principal payments
                             of the two secured convertible notes is
                                  converted to 499,999 common shares as of the
              date of this prospectus.

Securities Offered                 882,460 shares of common stock owned or to be
                        owned by the selling shareholders.

Use of Proceeds                    We will not receive any proceeds from sale of
                                shares by the selling shareholders, but we
                               will receive up to $1,124,431 in proceeds
                                   from exercise of the warrants and options, if
                                   they are exercised, which will be used by the
                  company for working capital.

Plan of Distribution               The offering is made by the selling          
                                   shareholders named in this prospectus, to the
                                   extent they sell shares. Sales may be made in
                              the open market or in private negotiated
                                  transactions, at fixed or negotiated prices.
                 See "Plan of Distribution."

Risk Factors                       An investment is subject to risk. See "Risk  
Factors." 

 9

S-3/A
11th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 11th
GAS RESERVES FOR BOBCAT FIELD                                                   

 The following table sets forth estimated proved reserves of gas and the
present value (discounted 10%, referred to as the "PV10") of such reserves as of
December 31, 2002. These reserves are for the Bobcat Field (24 wells, all       
producing from the Cook coal, and wells to be drilled to the Cook coal, on      
acreage adjacent to the producing wells). The reserve data and the present value
as of that date were prepared by Ryder Scott Company, independent petroleum     
engineers. For further information, see Ryder Scott's reserve report included as
an exhibit to registration statement covering this prospectus.                  

Refer to these definitions when reading the reserve information:      

PROVED RESERVES: The estimated quantities of gas that geological and  
engineering data demonstrate with reasonable certainty to be recoverable in     
future years from known reservoirs under existing economic and operating        
conditions.                                                                     

PROVED DEVELOPED RESERVES: Proved reserves that can be expected to be 
recovered from existing wells with existing equipment and operating methods.    

PROVED UNDEVELOPED RESERVES: Proved reserves that are expected to be  
recovered from new wells on undrilled acreage.                                  

 PRESENT VALUE (also referred to below as the "PV10 VALUE"): The present
value of estimated future revenues to be generated from the production of proved
reserves, net of estimated production and future development costs, using prices
and costs as of the calculation date without future escalation, all without     
giving effect to non-property related expenses (such as general and             
administrative expenses, debt service, or future income tax expense), or to     
depreciation, depletion and amortization, and discounted using an annual        
discount rate of 10%.                                                           

     The PV10 value was prepared using constant prices ($3.00 per Mcf) as of the
calculation date, discounted at 10% per annum on a pre-income tax basis, and is 
not intended to represent the current market value of the estimated gas reserves
owned by the company. Note that the PV10 discount factor has been calculated net
of ad valorem and production taxes, but before income taxes. The PV10 discount  
factor is not the same as the standardized measure of present value calculations
which are determined on an after-income tax basis.                              

                 Proved Reserves     Proved Reserves
                                Developed          Undeveloped         Total
                                ---------          -----------         -----

Coalbed methane gas (Mmcf)            489.7               95.9             585.6
PV10 Value                        $ 793,482           $ 94,947         $ 888,429

     These estimates of proved reserves have been filed only with the Securities
and Exchange Commission, and have not been included in reports to other federal 
agencies.                                                                       

Note that there are numerous uncertainties inherent in estimating gas 
reserves and their estimated values, including many factors beyond the control  
of the company. Reservoir engineering is a subjective process of estimating     
underground accumulations of gas that cannot be measured exactly. Estimates of  
economically recoverable gas, and the future net cash flows which may be        
realized from the reserves, necessarily depend on a number of variable factors  
and assumptions, such as historical production from the area compared with      
production from other areas, the assumed effects of regulations by government   

10

S-3/A
12th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 12th
agencies, assumptions about future gas prices and operating costs, severance and
excise taxes, development costs, and workover and remedial costs. The outcomes  
in fact may vary considerable from the assumptions.                             

     Estimates of the economically recoverable quantities of gas attributable to
any particular property, the classification of reserves as to proved developed  
and proved undeveloped based on risk of recovery, and estimates of the future   
net cash flows expected from the properties, as prepared by different engineers 
or by the same engineers but at different times, may vary substantially, and the
estimates may be revised up or down as assumptions change.                      

    It is likely that actual production volumes, revenues from production, and
the amount of money spent on a property's reserves, will vary from the          
estimates. These variances could be material.                                   

The PV10 discount factor, which is required by Securities and Exchange
Commission for use in calculating discounted future net cash flows for reporting
purposes, is not necessarily the most appropriate discount factor, based on     
interest rates in effect in the financial markets, and risks associated with the
gas business.                                                                   

    Generally, the volume of gas production declines as reserves are depleted,
with the rate of decline depending on reservoir characteristics. Except to the  
extent we conduct successful exploration and development activities on our other
properties, or acquire properties with proved reserves, or both, our proved     
reserves will decline with production. Therefore, our future production depends 
on finding or acquiring more reserves.                                          

     The business of exploring for, developing, or acquiring reserves is capital
intensive. To the extent operating cash flow is reduced and external capital    
becomes unavailable or limited, our ability to make the necessary capital       
investment to maintain or expand our gas reserves asset base would be impaired. 
There is no assurance future exploration, development, and acquisition          
activities will result in additional proved reserves. Even if revenues increase 
because of higher gas prices, increased exploration and development costs could 
neutralize the increased revenues.                                              

RISK FACTORS

   An investment in our common stock is speculative in nature and involves a
high degree of risk. You should carefully consider the following risks and the  
other information in this prospectus (including the information incorporated by 
reference) before investing.                                                    

RISK FACTORS INVOLVING THE COMPANY                                              

     LACK OF COALBED METHANE PRODUCTION AND ESTABLISHED RESERVES FOR MOST OF THE
COALBED METHANE PROPERTIES MAY SLOW DOWN FURTHER EXPLORATION OF THESE           
PROPERTIES. Presently we have only one property in production for which reserves
have been established (see "Gas Reserves for bobcat Field" above). We have not  
drilled and tested enough wells on the other properties to determine if we have 
economic reserves of coalbed methane in place. For some properties, we will have
to establish at least some reserve parameters before gas transmission companies 
will build gas lines to our properties, and construction of lines will depend   
also on then-current and projected market prices for gas. If we have the        
necessary capital, we may elect to build our own lines over to existing         
transmission lines near two of our properties in the Powder River Basin in      
Wyoming. We can't sell production until the lines and associated gathering lines
and compression stations are constructed.                                       

11

S-3/A
13th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 13th
     Due to permitting delays in Montana, we may not realize production from the
Castle Rock and Kirby prospects until late 2003, or later. The Bobcat property  
in Wyoming is now in production, and other Wyoming properties could be in       
production in 2003, but production might be delayed due to low market prices for
gas. Low market prices could delay gas purchasers from building the necessary   
lines to move gas from our properties to the major gas transmission lines.      

   These factors may make it difficult to raise the amount of capital needed
to further explore the coalbed methane production potential in our properties in
a rapid manner. Therefore, we may have to seek to raise capital. In the         
meantime, we have only limited working capital. See below.                      

 CONTINUED LOW GAS PRICES FOR POWDER RIVER BASIN PRODUCTION MAY HURT OUR
BUSINESS. For September, 2002, RMG received an average price of $0.94 per       
Million BTU (MMBtu) of gas produced from the Bobcat field (its only producing   
field), with prices ranging from $0.46 to $1.22 per MMBtu. The energy content of
our CBM is close to one MMBtu per Mcf (from .96 to .98 MMBtu in 1.00 Mcf). The  
Bobcat field is not economic at these low prices. These prices approximate what 
other producers in the area were receiving in September 2002, and represent a   
negative price differential of approximately 73% compared to the average price  
of approximately $3.485 per MMBtu received by producers nationwide. This        
negative differential usually narrows to within 60% to 30% of a national average
during the winter months. RMG owns a 27.6% working interest (22% net revenue    
interest) in the Bobcat project.                                                

 There is no guarantee that increased pipeline capacity planned or under
construction will eliminate the negative price differential or even             
significantly reduce it.                                                        

Produced and sold gas (net of gas used as fuel for the compressors)   
averaged approximately 1,821 MMBtu per day in January 2003 (503 MMBtu net rate  
to our 27.6% working interest). All gas was sold at market prices (average price
$3.03 per MMBtu), which for January 2003 represented a negative differential of 
57% from national average gas prices in that month.                             

   During March 2003, RMG will receive a guaranteed price of $3.49 per MMBtu
for its share of the first 500 MMBtu of gas sold each day with the balance at   
market prices.                                                                  

  During February 2003, RMG received a guaranteed price of $3.07 per MMBtu
for its share of the first 1,000 MMBtu of gas sold each day, and an average     
price of $4.25 per MMBtu for the balance of gas produced. This guaranteed       
pricing arrangement may be available to RMG monthly, at prices negotiated with  
the gas buyer at the end of each preceding month, or, RMG may elect to sell on  
daily market prices.                                                            

     The guaranteed pricing mechanism may, or may not, prove advantageous to RMG
in those months it is utilized, depending on market price performance during    
those months, and in any event, would not insulate RMG from the negative price  
differential to the extent it is a significant influence on prices.             

  The return of sustained low gas prices would impair our ability to raise
capital for RMG and reduce revenues from production coming on line. See the     
discussion under the caption "Gathering and Transmission of CBM Gas" in the Form
10-K/A for fiscal 2002.                                                         

   WE MAY HAVE TO BEGIN TO CURTAIL OPERATIONS IF WE DON'T RAISE MORE CAPITAL
BY JULY 2003. At November 30, 2002, U.S. Energy Corp. had working capital of    
$2,166,600, and an accumulated deficit of $36,954,100. Our current level of     
operations, including general and administrative overhead, mineral operations   
(primarily holding costs for the uranium and gold properties), and costs to     
comply with other property lease and permitting obligations for the coalbed     
properties, are estimated to cost $2,900,000 for the six months ending June 30, 
2003. However, if we can't realize cash from liquidating assets, or other       

12

S-3/A
14th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 14th
sources, or if RMG spends more money on exploration than will be covered by     
current arrangements, then under these circumstances additional equity financing
may be necessary to sustain operations starting in July 2003. There are no      
current commitments for such future financing as may be necessary.              

Our strategy for RMG contemplates a total capital budget of up to     
$50,000,000 through calendar 2003 to continue exploring our coalbed methane     
properties; put them into production, and to acquire more properties. The cash  
requirements for our coalbed methane business are in addition to working capital
requirements. However, lack of production and established reserves may make it  
difficult to raise this amount of money in the near future. Therefore, we may   
have to seek to raise capital in smaller amounts over time, which efforts       
probably will extend well into calendar 2004. See the preceding risk factor.    

  WE ARE SUBJECT TO CERTAIN KINDS OF RISK WHICH ARE UNIQUE TO THE MINERALS
BUSINESS. The exploration for and production of minerals is highly speculative  
and involves risks different from and in some instances greater than risks      
encountered by companies in other industries. Many exploration programs do not  
result in the discovery of mineralization and any mineralization discovered may 
not be of sufficient quantity or quality. Also, the mere discovery of promising 
mineralization may not warrant production, because the minerals (including      
methane gas) may be difficult or impossible to extract (produce) on a profitable
basis.                                                                          

  Profitability of any mining and production we may conduct will involve a
number of factors, including, but not limited to: the ability to obtain all     
required permits; costs of bringing the property into production; the           
construction of adequate production facilities; the availability and costs of   
financing; keeping ongoing costs of production at economic levels, and market   
prices for the metals or hydrocarbons to be produced staying above production   
costs. Our properties, or properties we might acquire in the future, may not    
contain deposits of minerals or coalbed methane gas that will be profitable to  
produce.                                                                        

 In addition, all forms of mineral (and oil and gas and coalbed methane)
exploration and production require permits to have been issued by various       
federal and state agencies. See below.                                          

  DELAYS IN OBTAINING PERMITS FOR METHANE WELLS COULD IMPAIR OUR BUSINESS.
Drilling and producing coalbed methane wells requires obtaining permits from    
various governmental agencies. The ease of obtaining the necessary permits      
depends on the type of mineral ownership and the state in which the property is 
located. Intermittent delays in the permitting process can reasonably be        
expected throughout the development of any play. For example, there is currently
a temporary moratorium for drilling coalbed methane wells on fee and state lands
in Montana. We may shift our exploration and development strategy as needed to  
accommodate the permitting process. As with all governmental permit processes,  
permits may not be issued in a timely fashion or in a form consistent with our  
plan of operations.                                                             

    THE COMPANY'S POISON PILL COULD DISCOURAGE SOME ADVANTAGEOUS TRANSACTIONS.
We have adopted a shareholder rights plan, also known as a poison pill (see     
"Description of Securities"). The plan is designed to discourage a takeover of  
the company at an unfair low price. However, it is possible that the board of   
directors and the takeover acquiror would not agree on a higher price, in which 
case the takeover might be abandoned, even though the takeover price was at a   
significant premium to market prices. Therefore, as a result of the mere        
existence of the plan, shareholders would not receive the premium price.        

COMPLIANCE WITH ENVIRONMENTAL REGULATIONS MAY BE COSTLY. Our business 
(mostly coalbed methane) is intensely regulated by government agencies. Permits 
are required to drill and pump methane wells, explore for minerals, operate     
mines, build and operate processing plants, and handle and store                

13

S-3/A
15th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 15th
waste. The regulations under which permits are issued change from time to time  
to reflect changes in public policy or scientific understanding of issues. If   
the economics of a project would not justify the changes, we might have to      
abandon the project.                                                            

The company must comply with numerous environmental regulations on a  
continuous basis, to comply with the United States Clean Air Act, the Clean     
Water Act, the Resource Conservation and Recovery Act ("RCRA"), and the         
Comprehensive Environmental Response Compensation Liability Act ("CERCLA"). For 
example, water and dust discharged from mines and tailings from prior mining or 
milling operations must be monitored and contained and reports filed with       
federal, state and county regulatory authorities. Additional monitoring and     
reporting is required by the United States Nuclear Regulatory Commission for    
uranium mills even if not currently operating (like the company's uranium mill  
at Ticaboo, Utah). The Abandoned Mine Reclamation Act in Wyoming and similar    
laws in other states where we have properties impose reclamation obligations on 
abandoned mining properties, in addition to or in conjunction with federal      
statutes.                                                                       

    Failure to comply with these regulations could result in substantial fines
and environmental remediation orders. For information on the company's bonding  
requirements to date, see note K to the audited financial statements in the 2002
Form 10-K/A.                                                                    

 COMMODITY PRICE FLUCTUATIONS MAY BE DIFFICULT TO MANAGE AND COULD CAUSE
LOSSES. Gas, gold and uranium prices can be volatile. Sharp swings in market    
prices make budgeting and operations more difficult. Sustained lower prices can 
result in impairment of the financial value of the mineral property purchased as
well as the facilities built to process the material (such as mills or gas      
compression stations). Hedging activities, if available for the commodity, can  
protect against price swings but may result in locking a company into a lower   
than market price over time.                                                    

FUTURE EQUITY TRANSACTIONS, INCLUDING EXERCISE OF OPTIONS OR WARRANTS,
COULD RESULT IN DILUTION. From time to time the company sells restricted stock  
and warrants, and convertible debt, to investors in private placements conducted
by broker-dealers, or in negotiated transactions. Because the stock is          
restricted, the stock is sold at a greater discount to market prices compared to
a public stock offering, and the exercise price of the warrants sometimes is at 
or even lower than market prices. These transactions cause dilution to existing 
shareholders. Also, from time to time, options are issued to employees and third
parties, with exercise prices equal to market. Exercise of in-the-money options 
and warrants will result in dilution to existing shareholders; the amount of    
dilution will depend on the spread between market and exercise price, and the   
number of shares involved. The company will continue to grant options to        
employees with exercise prices equal to market price at grant date, and in the  
future may sell restricted stock and warrants, all of which may result in       
dilution to existing shareholders. See also "Registration for Resale of         
Additional Shares May Depress Market Prices."                                   

     TERMS OF SUBSEQUENT FINANCINGS MAY ADVERSELY IMPACT YOUR INVESTMENT. We may
have to raise equity, debt or preferred stock financing in the future. Your     
rights and the value of your investment in the common stock could be reduced.   
For example, if we have to issue secured debt securities, the holders of the    
debt would have a claim to our assets that would be prior to the rights of      
stockholders until the debt is paid. Interest on these debt securities would    
increase costs and negatively impact operating results. Preferred stock could be
issued in series from time to time with such designations, rights, preferences, 
and limitations as needed to raise capital. The terms of preferred stock could  
be more advantageous to those investors than to the holders of common stock. In 
addition, if we need to raise more equity capital from sale of common stock,    
institutional or other investors may negotiate terms at least and possibly more 
favorable than the terms of this offering. Shares of common stock which we sell 

14

S-3/A
16th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 16th
could be sold into the market, which could adversely affect market price. See   
"Risk Factor Involving This Offering" below.                                    

   THERE MAY BE RISKS RELATED TO OUR PRIOR USE OF ARTHUR ANDERSEN LLP AS OUR
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. The consolidated balance sheet of U.S. 
Energy Corp. for the year ended May 31, 2000 and the related consolidated       
statements of operations, shareholders equity and cash flows for each of the two
years in the period ended May 31, 2000 included in the Annual Report on Form    
10-K/A for the year ended May 31, 2002, as amended and incorporated by reference
into this prospectus, to the extent and for the periods indicated in their      
report, have been audited by Arthur Andersen LLP, independent certified public  
accountants.                                                                    

 The recent obstruction of justice conviction of Arthur Andersen LLP may
adversely affect Arthur Andersen LLP's ability to satisfy any claims arising    
from the provision of auditing services to us, including claims that may arise  
out of Arthur Andersen LLP's audit of our financial statements incorporated by  
reference in this prospectus for the years ended May 31, 2000. Arthur Andersen  
LLP has been convicted of federal obstruction of justice arising from the       
government's investigation of Enron Corp. Should we seek to access the public   
capital markets to raise money for the Company before October 1, 2003, SEC rules
will require us to include or incorporate by reference in any prospectus audited
financial statements for the fiscal year ended May 31, 2000, which has been     
audited by Arthur Andersen LLP. If the SEC ceases accepting financial statements
audited by Arthur Andersen LLP, we could be unable to access the public capital 
markets until after October 1, 2003, unless Grant Thornton LLP, our current     
independent accounting firm, or another independent accounting firm, is able to 
re-audit the financial statements originally audited by Arthur Andersen LLP. Any
delay or inability to access the public capital markets caused by these         
circumstances could have a material adverse effect on our business,             
profitability, and growth prospectus.                                           

   The SEC's rules would not require the use of the financial statements for
the fiscal year ended May 31, 2000, in any prospectus we file after October 1,  
2003.                                                                           

RISK FACTOR INVOLVING THIS OFFERING                                             

 REGISTRATION FOR RESALE OF ADDITIONAL SHARES MAY DEPRESS MARKET PRICES.
From time to time we have funded operations by selling restricted securities of 
subsidiary companies for their operations, then later reacquired those          
securities by exchange for shares and warrants of USE. For example, in January  
2002, we issued 1,423,460 restricted shares of common stock in exchange for     
restricted shares of Rocky Mountain Gas, Inc. and in conversion of preferred    
stock of USE, for which the exchanging shareholders, and the holder of the USE  
preferred stock, originally had invested $5,309,000. The shares of common stock 
of USE were issued based on the market price of $3.92 per share on December 5,  
2001, and the original investment amount for RMG and preferred stock, plus      
$270,959 of interest owed three of the investors.                               

In addition, in February and March 2002, we sold 281,926 shares of    
restricted stock, at $3.25 per share, and two year warrants to purchase 56,383  
shares of stock, with an exercise price of $4.00 per share, for $916,254 cash.  
We also issued 20,000 shares to Robert H. Taggart, Jr. in exchange for          
unexercised warrants and for services.                                          

    15,385 of the shares sold in February and March 2002 have been sold by two
of the original investors under rule 144. The remaining 266,541 shares sold by  
us in February and March 2003, the 1,423,460 shares issued in January 2002 in   
exchange for RMG stock and on conversion of USE preferred stock, plus the 20,000
shares issued to Mr. Taggart (for a total of                                    

15

S-3/A
17th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 17th
1,710,001 shares of USE common stock), and resale of the 56,383 shares on       
exercise of the warrants (at $4.00 per share), into the public market will be   
registered on two Form S-3 registration statements filed with the Securities and
Exchange Commission in March 2003.                                              

     Such resales could adversely affect market prices for the investors who buy
shares in this offering.                                                        

From time to time, we may sell restricted shares to raise capital.    
Registration for resale of such additional shares could adversely affect market 
prices for investors who buy shares in this offering.                           

 REPRESENTATIONS ABOUT THIS OFFERING

 We have not authorized anyone to provide you with information different
from that contained in this prospectus. This prospectus is not an offer to sell 
nor does it seek an offer to buy the shares in any jurisdiction where this offer
or sale is not permitted. The information contained in this prospectus is       
accurate only as of the date of this prospectus (or any supplement), regardless 
of when it is delivered or when any shares are sold.                            

FORWARD LOOKING STATEMENTS

   We make statements in this prospectus which are considered to be "forward
looking" statements. All statements (other than statements of historical fact)  
about financial and business strategy and the performance objectives of         
management are forward-looking statements. These forward-looking statements are 
based on the beliefs of management, as well as assumptions made by and          
information currently available to them. These statements involve risks that are
both known and unknown, including unexpected economic and market factors,       
failure to accurately forecast operating and capital expenditures and capital   
needs (due to rising costs and/or different drilling and production conditions  
in the field), changes in timing or conditions for getting regulatory approvals 
to drill coalbed methane wells where needed, and other business factors. The use
of the words "anticipate," "believe," "estimate," "expect," "may," "will,"      
"should," "continue," "intend" and similar words or phrases, are intended by us 
to identify forward-looking statements (also known as "cautionary statements"   
because you should be cautious in evaluating such statements in the context of  
all the information in this prospectus and the information incorporated by      
reference into this prospectus). These statements reflect our current views with
respect to future events. They are subject to the realization in fact of        
assumptions, but what we now think will happen may be turn out much different,  
and our assumptions may prove to have been inaccurate or incomplete.            

  The investment risks discussed under "Risk Factors" specifically address
all of the material risk factors that may influence future operating results and
financial performance. Those investment risks are not "boiler plate" but are    
intended to tell you about the uncertainties and risks inherent in our business 
at the present time which you need to evaluate before making your investment    
decision.                                                                       

 DESCRIPTION OF SECURITIES

   COMMON STOCK. We are authorized by our articles of incorporation to issue
an unlimited number of shares of common stock, $0.01 par value, and 100,000     
shares of preferred stock, $0.01 par value.                                     

 Shares of common stock may be issued for such consideration and on such
terms as determined by the board of directors, without shareholder approval.    
Holders are entitled to receive dividends when and as declared by the board of  
directors out of funds legally available therefor. There are no restrictions on 
payment of cash dividends. Cash dividends have not been declared on the common  
stock, although a 1 for 10 stock dividend was declared in November 1990. It is  
anticipated that future earnings would be                                       

16

S-3/A
18th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 18th
reinvested into operations and not declared as dividends on the common stock.   
All holders of shares of common stock have equal voting rights, and the shares  
of common stock sold in this offering will have the same rights. Holders of     
shares of common stock are entitled to one vote per share on all matters upon   
which such holders are entitled to vote, and further have the right to cumulate 
their votes in elections of directors. Cumulation means multiplying the number  
of shares held, by the number of nominees to the board of directors, then voting
the product among the nominees as desired. Directors are elected by a plurality 
of the votes cast.                                                              

Shares of common stock sold in this offering are fully-paid and       
nonassessable shares of U.S. Energy Corp.                                       

    Pursuant to our articles of incorporation and as permitted by Wyoming law,
shares of common stock held by our subsidiaries may be voted by such            
subsidiaries as determined by the board of directors of each, in elections of   
directors and other matters brought before shareholders.                        

   In September 2001, the company adopted a shareholder rights plan ("poison
pill") and filed the plan with the Securities and Exchange Commission as an     
exhibit to Form 8-A. The following three paragraphs briefly state principal     
features of the plan, which are qualified by reference to the complete plan,    
which is incorporated by reference into this prospectus.                        

   Under the plan, the holder of each share of common stock has the right to
purchase (when the rights become exercisable) from the company one-one          
thousandth (1/1,000th) of one (1) share of Series P preferred stock at a price  
of $200.00 for each one-one thousandth (1/1,000th) share of such preferred      
stock. The purpose of the plan is to deter an unfairly low priced hostile       
takeover of the company, by encouraging a hostile party to negotiate a fair     
offer with the board of directors and thus eliminate the poison pill.           

   The rights trade with the common stock and aren't separable therefrom; no
separate certificate for the rights is issued unless and until there is a       
hostile takeover attempted, after which time separate and tradable rights       
certificates would be issued.                                                   

    The rights are not exercisable and never can be unless and until a hostile
(not negotiated with the board) takeover of the company is initiated with the   
objective of acquiring 15% of the company's voting stock. If before the takeover
is launched the hostile party comes to agreement with the board of directors    
about price and terms and makes a "qualified offer" to buy the stock of the     
company, then the board of directors may redeem (buy back) the rights for $0.01 
each. But, if such a "qualified offer" isn't agreed upon, then the rights are   
exercisable for preferred stock, which in turn would enable the holder to       
convert the preferred stock into voting common stock of the company at a price  
equal to one-half the market price.                                             

  PREFERRED STOCK. Shares of preferred stock may be issued by the board of
directors with such dividend, liquidation, voting and conversion features as may
be determined by the board of directors without shareholder approval. In June   
2000, we established a Series A Convertible Preferred Stock, for which 1,000    
shares of preferred stock are reserved for sale at $10,000 per share; 200 shares
were issued and outstanding at November 30, 2001. In January 2002, we converted 
the 200 outstanding shares of Series A stock by issuing 513,140 shares of       
restricted common stock to the holder, based on $2,000,000 invested plus $11,507
of interest (annual rate of 7.5%) which accrued in December 2001 (previous      
interest had been paid in cash), divided by $3.92 (market price for USE stock on
December 5, 2001).                                                              

17

S-3/A
19th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 19th
WARRANTS. As of the date of this prospectus, warrants and options (to 
persons or entities other than employees, officers or directors of the company) 
are issued and outstanding to purchase a total of 743,870 shares of common      
stock:                                                                          

  o Options to purchase 18,000 shares at $3.00 held by Robert A. Nicholas,
issued February 3, 2003 and expiring February 2, 2004, issued as partial payment
for legal services. Resale of shares acquired on exercise of these options is   
covered by this resale prospectus.                                              

 o Warrants to purchase 60,000 shares at $3.00 held by Tsunami Partners,
L.P., issued on November 19, 2002 and expiring November 19, 2005, issued in     
connection with a $500,000 convertible loan to the company from Tsunami, L.P.   
Resale of shares acquired on exercise of these warrants is covered by this      
resale prospectus.                                                              

  o Warrants to purchase 15,000 shares at $3.00 held by 34 persons who own
equity interests in VentureRound Group ("VRG"), a licensed broker-dealer, which 
served as financial advisor in connection with the Tsunami loan transaction. The
warrants were issued as of November 19, 2002, expiring on November 19, 2005.    
Resale of shares acquired on exercise of these warrants is covered by this      
resale prospectus.                                                              

    o Warrants to purchase 120,000 shares at $3.00 held by Caydal, LLC, issued
on May 30, 2002 and expiring May 30, 2005, issued in connection with a          
convertible loan to the company from Caydal. Resale of shares acquired on       
exercise of these warrants is covered by this resale prospectus.                

  o Warrants to purchase 30,000 shares at $3.00 held by 31 persons who own
equity interests in VRG, which served as financial advisor in connection with   
the Caydal loan transaction. The warrants were issued as of May 30, 2002,       
expiring on March 30, 2005. Resale of shares acquired on exercise of these      
warrants is covered by this resale prospectus.                                  

   o Warrants to purchase 3,000 shares at $3.75 per share held by one person
who owns an equity interest in VRG, which served as the financial advisor to the
company in connection with the private transactions from June to October 2001   
(see above). These warrants were issued as partial compensation for services    
provided to the company by the individual, who owns an equity interest in and   
who is associated (licensed) with VRG. These warrants were issued as of October 
18, 2001 and expire October 18, 2006. Resale of shares acquired on exercise of  
these warrants is covered by this resale prospectus.                            

  o Warrants to purchase 28,192 shares at $4.00 held by 36 persons who own
equity interests in VRG, issued as of March 25, 2002, expiring on March 25,     
2004. VRG served as the financial advisor to the company in connection with the 
private transactions in February and March 2002. Resale of shares acquired on   
exercise of these warrants is covered by this resale prospectus.                

    o Options to purchase 20,000 shares at $3.90 held by James E. Seale issued
as of January 10, 2002, expiring on January 9, 2005 for consulting services.    
Resale of shares acquired on exercise of these options is not yet covered by a  
resale prospectus.                                                              

     o Warrants to purchase 10,000 shares at $3.75 held by Kevin P. Daly, issued
as of October 18, 2001 and expiring October 18, 2003. Resale of shares acquired 
on exercise of these warrants is covered by a prospectus filed pursuant to Rule 
424(b)(2).                                                                      

   o Warrants to purchase 50,000 shares at $3.00 held by Caydal, LLC, issued
on October 24, 2001 and expiring October 24, 2003. Resale of shares acquired on 
exercise of these warrants is covered by a prospectus filed pursuant to Rule    
424(b)(2).                                                                      

18

S-3/A
20th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 20th
o Warrants to purchase 67,936 shares at $3.75 held by 18 investors who
purchased shares and warrants in private transactions with the company from June
29, 2001 to October 18, 2001. These warrants were issued as of October 18, 2001 
and expire October 18, 2006. Resale of shares acquired on exercise of these     
warrants is covered by a prospectus filed pursuant to Rule 424(b)(2).           

o Warrants to purchase 34,761 shares at $3.75 held by persons who own 
equity interests in VRG, which served as the financial advisor to the company in
connection with the private transactions from June to October 2001 (see above). 
These warrants were issued as partial compensation for services provided to the 
company by persons who own equity interests in VRG, which services were provided
by licensed brokers . These warrants were issued as of October 18, 2001 and     
expire October 18, 2006. Resale of shares acquired on exercise of these warrants
is covered by a prospectus filed pursuant to Rule 424(b)(2).                    

o Warrants to purchase 11,034 shares at $3.75 held by persons who own 
equity interests in VRG. These warrants were issued for financial consulting    
services provided by persons who own equity interests in VRG. The services were 
provided by licensed brokers. These warrants were issued as of November 2, 2001 
and expire November 2, 2006. Resale of shares acquired on exercise of these     
warrants is covered by a prospectus filed pursuant to Rule 424(b)(2).           

o Warrants to purchase 74,564 shares at $3.64, issued in exchange for 
Yellowstone Fuels Corporation (a subsidiary of USE) warrants under a share and  
warrant exchange agreement between YSFC and USE. The warrants expire July 19,   
2003, and were issued to 23 persons who had been associated (licensed) with a   
broker-dealer (American Fronteer, f/k/a RAF Financial) which raised funds for   
YSFC in 1997. Resale of shares acquired on exercise of these warrants is covered
by this resale prospectus.                                                      

  o Options issued February 8, 1999 to purchase 75,000 shares at $2.25 per
share (expiring February 8, 2004), to consultant Michael Baybak. Resale of the  
shares acquired on exercise of these options is not covered by a resale         
prospectus.                                                                     

  o Options issued February 8, 1999 to purchase 20,000 shares at $2.62 per
share (expiring March 15, 2003), to (former) consultant R. J. Falkner. Resale of
the shares acquired on exercise of these options is covered by a prospectus     
filed pursuant to Rule 424(b)(2).                                               

     o Warrants issued May 14, 2001 to purchase 10,000 shares at $4.70 per share
(expiring May 14, 2003), to consultant Riches in Resources, Inc. The warrants   
are not exercisable unless the company's stock price closes at or above $6.50   
per share for 90 consecutive days before expiration of the options. Resale of   
the shares acquired on exercise of these options is covered by a prospectus     
filed pursuant to Rule 424(b)(2).                                               

     o Warrants issued May 14, 2001 to purchase 20,000 shares at $4.70 per share
(expiring May 14, 2003), to consultant Riches in Resources, Inc. The warrants   
are not exercisable until the company's stock price closes at or above $10.00   
per share for 90 consecutive days. Resale of the shares acquired on exercise of 
these options is covered by a prospectus filed pursuant to Rule 424(b)(2).      

o Options issued April 11, 2001 to purchase 20,000 shares at $3.98 per
share, expiring April 10, 2006, to (former) consultant R. J. Falkner and        
Company. Resale of the shares acquired on exercise of these options is covered  
by a prospectus filed pursuant to Rule 424(b)(2).                               

o Warrants to purchase 56,383 shares at $4.00 per share, held by 16   
investors who purchased shares and warrants in private transactions with the    
company in February and March, 2002. These warrants were issued in February and 
April 2002, and will expire two years after issuance. Resale of the shares      
acquired on exercise of these options is not yet covered by a resale prospectus.

19

S-3/A
21st Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 21st
  OPTIONS. USE has granted options to employees, officers and directors to
purchase shares at exercise prices from $2.00 to $3.90 per share. At March 6,   
2003, a total of 3,690,945 shares may be issued upon exercise of these options. 
These options expire at various times from 2008 to 2012.                        

 USE OF PROCEEDS

    We will not receive any of the proceeds from the sale of the shares by the
selling shareholders pursuant to this prospectus, but we will receive up to     
$1,124,431 in proceeds from the exercise of the options and warrants, if they   
exercise all the options and warrants, (pursuant to which the shares underlying 
such options and warrants will be sold pursuant to this prospectus), which will 
be used by the company for working capital.                                     

SELLING SHAREHOLDERS

     This prospectus covers the offer and sale by the selling shareholders of up
to 882,460 shares of common stock ($0.01 par value) owned or to be owned on     
exercise of options and warrants by the selling shareholders, and conversion of 
debt. The footnotes to the table below give information about shares issuable on
exercise of the options and warrants by the selling shareholders. All shares    
issued (and all shares issuable on exercise of options and warrants, and        
conversion of debt) are (and will be) restricted securities as that term is     
defined in rule 144 of the Securities and Exchange Commission under the         
Securities Act of 1933, and will remain restricted unless and until such shares 
are sold pursuant to this prospectus, or otherwise are sold in compliance with  
rule 144 or the restriction removed in accordance with rule 144(k).             

None of the selling shareholders are affiliates of the company or any 
subsidiary of the company.                                                      

The shares covered by this prospectus include:                        

o    28,192 shares under warrants held by 36 persons who own equity   
interests in VRG, exercisable at $4.00 per share.           

o    333,333 shares which may be issued if $1,000,000 principal on a  
       secured convertible note held by Caydal, LLC is converted to common
shares at a rate of 1 share for $3.00 of principal.         

  o    120,000 shares under warrants held by Caydal, LLC, a private lender
         and shareholder of U.S. Energy Corp., exercisable at $3.00 per share.

o    30,000 shares under warrants held by 31 persons who own equity   
interests in VRG, exercisable at $3.00 per share.           

o    3,000 shares under warrants held by one person who owns an equity
interest in VRG, exercisable at $3.75 per share.            

    o    74,564 shares under warrants, exercisable at $3.64 held by 23 persons
        who had been associated (licensed) with a broker-dealer which raised
         funds for Yellowstone Fuels Corp., a subsidiary of the company, under
       a private placement of YSFC common stock in 1997. The YSFC warrants
    were exchanged for warrants of the company in 1999. The warrants
expire July 19, 2003.                                       

20

S-3/A
22nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 22nd
    o    166,666 shares which may be issued if $500,000 principal on a secured
          convertible note held by Tsunami Partners, L.P. is converted to common
shares at a rate of 1 share for $3.00 of principal.         

o    60,000 shares under warrants held by Tsunami Partners, L.P.,     
      exercisable at $3.00 per share. These warrants expire November 19,
2005.                                                       

o    15,000 shares under warrants held by 34 persons who own equity   
    interests in VRG, exercisable at $3.00 per share. These warrants
expire November 19, 2005.                                   

 o    20,000 shares held by two trusts issued to them in settlement of a
          lawsuit involving the company's subsidiary Sutter Gold Mining Company.

 o    18,000 shares under options held by one person, which options were
          issued as partial payment for legal services, exercisable at $3.00 per
share. These options expire February 2, 2004.               

     o    13,705 shares held by two persons, which shares were issued as partial
payment for legal services.                                 

 The transactions in which the selling shareholders acquired the various
shares, warrants, options, and convertible notes, are summarized below:         

    On May 30, 2002, we borrowed $1,000,000 from Caydal, LLC, a private lender
and shareholder of U.S. Energy Corp. The two year secured loan is convertible   
into restricted shares of U.S. Energy Corp. common stock at the rate of 1 share 
for $3.00 of principal (a maximum of 333,333 shares), or into restricted shares 
of common stock of our subsidiary Rocky Mountain Gas, Inc. at the rate of 1     
share for $1.50 of principal. In addition, USE issued to the lender a warrant to
purchase until May 30, 2005, 120,000 shares of USE restricted common stock, at  
$3.00 per share, and RMG issued to the lender a warrant to purchase until May   
30, 2005, 120,000 shares of RMG restricted common stock, at $1.50 per share.    
VentureRound Group ("VRG"), a licensed broker-dealer, acted as the lender's     
agent in the transaction, for which services USE paid VRG $25,000 cash and      
issued (to 31 persons who own equity interests in VRG) warrants to purchase     
until May 30, 2005, 30,000 restricted shares of common stock of U.S. Energy     
Corp., at $3.00 per share. Resale of the shares of U.S. Energy Corp. common     
stock issuable to the lender on conversion of the note, and the shares issuable 
on exercise of the warrants to purchase shares of common stock of U.S. Energy   
Corp. issued to the lender, and to the 31 persons who own equity interests in   
VRG, are covered by this resale prospectus.                                     

  VRG also served as financial advisor to the company in connection with a
private financing by the company in February and March 2002. In connection with 
that transaction, warrants to purchase 28,192 shares at $4.00 are held by 36    
persons who own equity interests in VRG, issued as of March 25, 2002, expiring  
on March 25, 2004. In connection with an earlier financing by the company, the  
company issued warrants to purchase 3,000 shares at $3.75 to one person who owns
an equity interest in and is associated (licensed) with VRG; these warrants were
issued as of October 18, 2001 and expire on October 18, 2006. Resale of shares  
acquired on exercise of all these warrants is covered by this resale prospectus.

   On November 19, 2002, we borrowed $500,000 from Tsunami Partners, L.P., a
private lender. The two year secured loan is convertible into restricted shares 
of U.S. Energy Corp. common stock at the rate of 1 share for $3.00 of principal,
or into restricted shares of common stock of our subsidiary Rocky Mountain Gas, 
Inc. at the rate of 1 share for $2.00 of principal. In addition, U.S. Energy    
Corp. issued to the lender a warrant to purchase until November 19, 2005, 60,000
shares of U.S. Energy Corp. restricted                                          

21

S-3/A
23rd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 23rd
common stock, at $3.00 per share (a maximum of 166,166 shares), and RMG issued  
to the lender a warrant to purchase until November 19, 2005, 60,000 shares of   
RMG restricted common stock, at $2.00 per share. VRG acted as the agent in the  
transaction, for which services USE paid VRG $20,000 cash and issued a warrant  
to purchase until November 19, 2005, 15,000 restricted shares of common stock of
U.S. Energy Corp., at $3.00 per share. These warrants were issued to the equity 
owners of VRG (see below), including Robert H. Taggart, a licensed broker who   
provided securities-transaction services. Resale of the shares of U.S. Energy   
Corp. common stock issuable to the lender on conversion of the note, and the    
shares issuable on exercise of the warrants to purchase shares of common stock  
of U.S. Energy Corp. issued to the lender, and to the equity owners of VRG, are 
covered by this resale prospectus.                                              

In each of the financing or advisory transactions in which VRG was    
involved, the services provided by VRG were provided by persons associated with 
(licensed with) a broker-dealer registered with the Securities and Exchange     
Commission. The warrants to purchase stock in USE were issued in partial        
consideration for these services provided by licensed persons, but distributed  
to the owners of VRG, including the persons licensed as brokers (who also own   
equity interests in VRG). Those persons who received warrants as owners of VRG, 
but who are not licensed as brokers, did not provide securities- transaction    
services and did not otherwise pay for the warrants.                            

   Effective September 19, 2002, we entered into amendments to warrants that
were to expire on that date. The original warrants were issued for the exercise 
of up to 67,025 shares of the company's common stock to persons who had been    
associated (licensed) with a broker-dealer which raised funds in 1997 for       
Yellowstone Fuels Corp., a subsidiary of the company. As consideration for an   
extension of time for exercising the warrants, the holders agreed to waive      
certain rights relating to anti-dilutive and cashless exercise provisions of the
original warrants. The warrants, which cover now 74,564 shares, are exercisable 
at $3.64 per share, and now expire on July 19, 2003. Resale of these 74,564     
shares is covered by this prospectus.                                           

On December 2, 2002, the company and its subsidiary Sutter Gold Mining
Company entered into a settlement agreement relating to certain litigation      
involving SGMC. As a result of the settlement the company issued 20,000 shares  
of U.S. Energy Corp. common stock to trusts. Resale of these 20,000 shares is   
covered by this prospectus.                                                     

  On February 3, 2003, the company issued 8,231 shares and 5,474 shares of
common stock, respectively, to two persons, and options to purchase 18,000      
shares of common stock to one of them as partial payment for legal services.    
Resale of these 13,705 shares is covered by this prospectus.                    

  The selling shareholders may offer their shares for sale on a continuous
basis pursuant to rule 415 under the 1933 Act.                                  

The following information has been provided to us by the selling      
shareholders. All numbers of shares, and percentage ownership, are stated on a  
pro forma basis as of prospectus date assuming issuance of 348,756 shares upon  
exercise of all options and warrants listed above, and issuance of the 499,999  
shares upon conversion of the principal payments of the two secured convertible 
notes. There are 12,189,776 shares issued and outstanding on the initial date of
this prospectus; on a pro forma basis, 13,038,531 shares are outstanding, which 
number assumes exercise only of the options and warrants (and conversion of     
debt) held by the selling shareholders which are covered by this prospectus.    
Additional shares issuable on possible exercise of additional options and       
warrants presently outstanding, are not included in the pro forma calculation   
above.                                                                          

22

S-3/A
24th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 24th
                                                        [Enlarge/Download Table]


                                               Number of           Number of Shares                                
                                               Shares of            of Common Stock            Percent Owned       
Name and Address                             Common Stock             Registered           Prior to        After   
of Beneficial Owner                            Owned(1)                For Sale            Offering     Offering(2)
-------------------------------------------------------------------------------------------------------------------

                                                                                                                   
A. Clinton Allen                            18,909 (4)(5)(6)          10,924 (5)(6)            *             *     
1280 Massachusetts Ave. #200                                                                                       
Cambridge, MA 02138                                                                                                

Andy Galy                                   1,100 (7)                 1,100 (7)                *             *     
342 30th Street                                                                                                    
New Orleans, LA 80203                                                                                              

Ardell J. Schelich                          42,026 (4)(5)(6)          682 (5)(6)               *             *     
347 Lake View Dr.                                                                                                  
Washington, MO 93090                                                                                               

Bathgate McColley & Associates LLC          538 (4)                   538 (4)                  *             *     
5350 S. Roslyn Street, Suite 308                                                                                   
Greenwood Village, CO 80111                                                                                        

Belmont Navy, LLC                           1,167 (4)(5)(6)           682 (5)(6)               *             *     
111 Sixth Street                                                                                                   
Cambridge, MA 02141                                                                                                

Ben Bourgeois                               192 (7)                   192 (7)                  *             *     
3504 Lake Arrowhead                                                                                                
Harvey, LA 70058                                                                                                   

Bourne Capital LLC                          1,595 (5)(6)              1,595 (5)(6)             *             *     
410 Marion Street                                                                                                  
Denver, CO 80218                                                                                                   

Caydal, LLC                                 673,333 (3)(6)            453,333 (3)(6)          5.1%        1.6%     
410 Marion Street                                                                                                  
Denver, Colorado 80218                                                                                             

Chris Donofrio                              275 (7)                   275 (7)                  *             *     
First Funding                                                                                                      
848 W. Eastman, Suite 204                                                                                          
Chicago, IL 60622                                                                                                  

Curragh Capital Partners, LLC               1,500 (6)                 1,500 (6)                *             *     
609 5th Avenue, 2nd Floor                                                                                          
New York, NY 10017                                                                                                 

David Berkowitz                             412 (7)                   412 (7)                  *             *     
2013 Ottawa Drive                                                                                                  
Las Vegas, NV 89109                                                                                                

David Berlin                                1,167 (4)(5)(6)           682 (5)(6)               *             *     
Birchwood Resources                                                                                                
1675 Broadway #1020                                                                                                
Denver, CO 80202                                                                                                   

23

S-3/A
25th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 25th
                                                        [Enlarge/Download Table]


                                               Number of           Number of Shares                                
                                               Shares of            of Common Stock            Percent Owned       
Name and Address                             Common Stock             Registered           Prior to        After   
of Beneficial Owner                            Owned(1)                For Sale            Offering     Offering(2)
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   
David Gertz                                 1,167 (4)(5)(6)           682 (5)(6)               *             *     
7120 E. Orchard Rd. #300                                                                                           
Greenwood Village, CO 80111                                                                                        

Donna Schulze                               3,208 (4)(6)(7)           2,708 (6)(7)             *             *     
877 E. Dry Creek Rd.                                                                                               
Englewood, CO 80112                                                                                                

Edward J. Godin                             1,000 (6)                 1,000 (6)                *             *     
7424 S. Chapparal Circle East                                                                                      
Aurora, CO 800016                                                                                                  

Edward Swift and                            10,000                    10,000                   *             *     
Margaret Swift Revocable Trust                                                                                     
50 Church Street, P. O. Box 128                                                                                    
Sutter Creek, CA 95685                                                                                             

Eric Stroud                                 1,100 (7)                 1,100 (7)                *             *     
7715 Dairy Lane                                                                                                    
Village of Lakewood, IL 60014                                                                                      

George D. Thompson                          285 (4)(5)(6)             170 (5)(6)               *             *     
11710 W. 102 Place                                                                                                 
Overland Park, KS 66214                                                                                            

Greg Powers                                 165 (7)                   165 (7)                  *             *     
709 7th Lane                                                                                                       
Palm Beach Gardens, FL 33418                                                                                       

Gulf Projects Investment Company            4,670 (4)(5)(6)           2,720 (5)(6)             *             *     
Kuwait Stock Exchange Building                                                                                     
Safat 13066, Kuwait                                                                                                

James A. McCaughey                          83,268 (4)(5)(6)          1,699 (5)(6)             *             *     
3 Cueta Drive                                                                                                      
Rancho Mirage, CA 92270                                                                                            

James E. Hosch                              1,231 (5)                 1,231 (5)                *             *     
7038 Willa Lane                                                                                                    
Evergreen, CO 80439                                                                                                

James J. Cahill                             26,148 (4)(5)(6)          15,648 (5)(6)            *             *     
57 Lawrence Hill Rd.                                                                                               
Huntington, NY 11743                                                                                               

James V. Rauh                               19,036 (4)(5)(6)          339 (5)(6)               *             *     
7234 South Uravan Ct.                                                                                              
Aurora, CO 60016                                                                                                   

24

S-3/A
26th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 26th
                                                        [Enlarge/Download Table]


                                               Number of           Number of Shares                                
                                               Shares of            of Common Stock            Percent Owned       
Name and Address                             Common Stock             Registered           Prior to        After   
of Beneficial Owner                            Owned(1)                For Sale            Offering     Offering(2)
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   

Jeffrey J. Schmitz                          4,266 (4)(5)(6)           339 (5)(6)               *             *     
10356 E. Weaer Circle                                                                                              
Englewood, CO 80111                                                                                                

John J. Lais, III                           30,574 (4)(5)(6)          339 (5)(6)               *             *     
2602 Woodland Ct.                                                                                                  
McKinney, TX 75070                                                                                                 

John P. Kanouff                             31,335 (7)                31,335 (7)               *             *     
2525 E. Cedar Avenue                                                                                               
Denver, CO 80209                                                                                                   

John Shuster                                5,288 (7)                 1,788 (7)                *             *     
21379 York Ct.                                                                                                     
Kildeer, IL 60047                                                                                                  

Kurt Novey                                  1,450 (7)                 550 (7)                  *             *     
4224 Nasyth Drive                                                                                                  
Plano, TX 75093                                                                                                    

Lance Hering                                2,175 (4)(5)              675 (5)                  *             *     
5301 S. Yosemite St., Apt. 26206                                                                                   
Greenwood Village, CO 80111                                                                                        

Larry A. Bach & Susan A. Bach               285 (4)(5)(6)             170 (5)(6)               *             *     
501 W. Fairbanks Avenue                                                                                            
Winter Park, FL 32789                                                                                              

Leonard Alsfeld                             550 (7)                   550 (7)                  *             *     
4705 Rebecca Blvd.                                                                                                 
Metarie, LA 70003                                                                                                  

Mark A. Loewenstein &                       40,636 (4) (6)            135 (6)                  *             *     
Kangping K. Loewenstein                                                                                            
12512 White Drive                                                                                                  
Silver Spring, MD 20904                                                                                            

Mark Reinstein                              1,760 (7)                 1,760 (7)                *             *     
180 E. Meadows Ct.                                                                                                 
Alpharetta, GA 30006                                                                                               

Marshall G. Folkes, III                     24,749 (4)(5)(6)          339 (5)(6)               *             *     
3841 Houndstooth Court                                                                                             
Richmond, VA 23233                                                                                                 

25

S-3/A
27th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 27th
                                                        [Enlarge/Download Table]


                                               Number of           Number of Shares                                
                                               Shares of            of Common Stock            Percent Owned       
Name and Address                             Common Stock             Registered           Prior to        After   
of Beneficial Owner                            Owned(1)                For Sale            Offering     Offering(2)
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   

Martin G. Williams &                        574 (4)(5)(6)             339 (5)(6)               *             *     
Margaret M. Williams                                                                                               
13333 Long Leaf Dr.                                                                                                
Clarksville, MD 21029                                                                                              

Maury Rogow                                 925 (4)(5)(6)             540 (5)(6)               *             *     
1050 Taylor Street N #709                                                                                          
Arlington, VA 22201                                                                                                

Michael Bagnulo                             412 (7)                   412 (7)                  *             *     
1020 Martins Lake                                                                                                  
Roswell, GA 30076                                                                                                  

Mike Nixon                                  704 (7)                   704 (7)                  *             *     
43557 Window Ct.                                                                                                   
Ashburn, VA 20147                                                                                                  

Mildred Swift McBride                       10,000                    10,000                   *             *     
Testamentary Trust                                                                                                 
50 Church Street, P. O. Box 128                                                                                    
Sutter Creek, CA 95685                                                                                             

Mohamed Ali Ahmed                           574 (4)(5)(6)             339 (5)(6)               *             *     
5052 Grimm Dr. #512                                                                                                
Alexandria, VA 23233                                                                                               

Morgan Stanley Dean Witter                  574 (4)(5)(6)             339 (5)(6)               *             *     
FBO Thomas Garrity                                                                                                 
1857 Wainwright Dr.                                                                                                
Reston, VA 20190                                                                                                   

Peyton N. Jackson &                         12,190 (4)(5)(6)          845 (5)(6)               *             *     
Linda M. Jackson                                                                                                   
8704 Standish Rd.                                                                                                  
Alexandria, VA 22308                                                                                               

Philip A. Nicholas                          8,231                     8,231                    *             *     
170 North 5th Street                                                                                               
P. O. Box 928 Laramie, WY 82703                                                                                    

R. A. Fitzner, Jr.                          3,574 (4)(5)(6)           3,339 (4)(5)(6)          *             *     
P. O. Box 8000-260                                                                                                 
Mesquite, NV 89024                                                                                                 

Fiserv Securities Inc.  C/FBO               1,731 (5)                 193 (5)                  *             *     
Richard Huebner                                                                                                    
16318 E. Berry Avenue                                                                                              
Centennial, CO 80115                                                                                               

26

S-3/A
28th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 28th
                                                        [Enlarge/Download Table]


                                               Number of           Number of Shares                                
                                               Shares of            of Common Stock            Percent Owned       
Name and Address                             Common Stock             Registered           Prior to        After   
of Beneficial Owner                            Owned(1)                For Sale            Offering     Offering(2)
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   

Robert A. Nicholas                          26,639 (8)                23,474 (8)               *             *     
107 South Broadway, Suite 213                                                                                      
Riverton, WY 82501                                                                                                 

Robert H. Taggart, Jr.                      45,148 (4)(5)(6)          14,648 (5)(6)            *             *     
4163 S. Chapparrel Circle East                                                                                     
Aurora, CO 80116                                                                                                   

Robert Long                                 31,335 (7)                31,335 (7)               *             *     
3125 Riverside Dr.                                                                                                 
Riverton, WY 82501                                                                                                 

Roger Conan                                 574 (4)(5)(6)             339 (5)(6)               *             *     
14 Oakley Road                                                                                                     
Dublin 6, Ireland                                                                                                  

Roy Van Buskirk & Rachel Deutsch            872 (4)(5)(6)             512 (5)(6)               *             *     
1616 Buchanan St.                                                                                                  
Arlington, VA 22207                                                                                                

Sterne Agee & Leach, Inc.                   19,036 (4)(5)(6)          339 (5)(6)               *             *     
C/F Michael M. Vuocolo IRA                                                                                         
407 Arrowhead BL 123                                                                                               
Jonesboro, GA 30236                                                                                                

Steve Smitten                               137 (7)                   137 (7)                  *             *     
5520 Reflections Blvd.                                                                                             
Lutz, FL 33588                                                                                                     

Fiserv Securities Inc.  C/FBO               1,835 (5)                 296 (5)                  *             *     
Steven Bathgate                                                                                                    
6376 E. Tufts Avenue                                                                                               
Englewood, CO 80112                                                                                                

SJS Holdings                                5,909 (4)(5)(6)           3,409 (5)(6)             *             *     
c/o Susan Schoch                                                                                                   
350 East 84th Street                                                                                               
New York, NY 10028                                                                                                 

Tom Bazely                                  137 (7)                   137 (7)                  *             *     
5021 Seminary Rd. #327                                                                                             
Alexandria, VA 22311                                                                                               

Troy G. Taggart                             9,444 (4)(5)(6)(7)        5,444 (5)(6)(7)          *             *     
21220 Craborchard Ct.                                                                                              
Ashburn, VA 20147                                                                                                  

Tsunami Partners, L.P.                      226,666 (3)(5)            226,666 (3)(5)        1.8%             *     
2011 Cedar Springs Rd., Apt. 506                                                                                   
Dallas, TX 75201                                                                                                   

27

S-3/A
29th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 29th
                                                        [Enlarge/Download Table]


                                               Number of           Number of Shares                                
                                               Shares of            of Common Stock            Percent Owned       
Name and Address                             Common Stock             Registered           Prior to        After   
of Beneficial Owner                            Owned(1)                For Sale            Offering     Offering(2)
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   

Vicki D.E. Barone                           51 (5)                    51 (5)                   *             *     
7854 S. Harrison Circle                                                                                            
Littleton, CO 80122                                                                                                

Vincent Schmitz                             22,629 (4)(5)(6)          682 (5)(6)               *             *     
4207 Montview Blvd.                                                                                                
Denver, CO 80207                                                                                                   

Wayne A. Moore                              1,167 (4)(5)(6)           682 (5)(6)               *             *     
P. O. Box 68                                                                                                       
Rock Falls, IL 61071                                                                                               

William Gamello                             550 (7)                   550 (7)                  *             *     
19 West Sky Lane                                                                                                   
Clifton Park, NY 12065                                                                                             

William Gavin Kessler                       275 (7)                   275 (7)                  *             *     
1921 Bissell - Unit C                                                                                              
Chicago, IL 60614                                                                                                  

William Potter                              159 (5)(6)                159 (5)(6)               *             *     
498 Ridgewood Avenue                                                                                               
Glen Ridge, NJ 07028                                                                                               

William Powers                              550 (7)                   550 (7)                  *             *     
19900 Earlwood Dr.                                                                                                 
Jupiter, FL 33458                                                                                                  

William Todd Mauney                         137 (7)                   137 (7)                  *             *     
600 Rainier Ct.                                                                                                    
Highland Village, TX 75077                                                                                         

*        Less than 1%.                                                          

(1)  Includes shares underlying warrants which may not have yet been exercised  
and are not covered by this resale prospectus.                        

(2)  Assumes all shares registered for resale under this prospectus are sold by 
the selling shareholder.                                              

(3)  Includes shares issuable upon conversion of principal payments to shares at
   a rate of 1 share for $3.00 of principal payable on a convertible secured
promissory note.                                                      

(4)  Includes shares issuable on exercise of warrants at $3.75 per share, and   
assumes exercise of such warrants by the selling shareholder.         

(5)  Includes shares issuable on exercise of warrants at $4.00 per share, and   
assumes exercise of such warrants by the selling shareholder.         

28

S-3/A
30th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 30th
(6)  Includes shares issuable on exercise of warrants at $3.00 per share, and   
assumes exercise of such warrants by the selling shareholder.         

(7)  Includes shares issuable on exercise of warrants at $3.64 per share, and   
assumes exercise of such warrants by the selling shareholder.         

(8)  Includes shares issuable on exercise of warrants at $3.00 per share, and   
assumes exercise of such warrants by the selling shareholder.         

    The shares owned or to be owned by the selling shareholders are registered
under rule 415 of the general rules and regulations of the Securities and       
Exchange Commission, concerning delayed and continuous offers and sales of      
securities. In regard to the offer and sale of such shares, we have made certain
undertakings in Part II of the registration statement of which this prospectus  
is part, by which, in general, we have committed to keep this prospectus current
during any period in which the selling shareholders make offers to sell the     
covered securities pursuant to rule 415.                                        

PLAN OF DISTRIBUTION

   The selling shareholders and any of their pledgees, donees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares  
of common stock on any stock exchange, market or trading facility on which the  
shares are traded. These sales may be at fixed or negotiated prices. The selling
shareholders may use any one or more of the following methods when selling      
shares:                                                                         

O    ordinary brokerage transactions and transactions in which the    
broker-dealer solicits purchasers;                          

O    block trades in which the broker-dealer will attempt to sell the 
         shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;                    

O    purchases by a broker-dealer as principal and resale by the      
broker-dealer for its account;                              

O    an exchange distribution in accordance with the rules of the     
applicable exchange;                                        

O    privately negotiated transactions;                               

     O    short sales (sales of shares not owned in hopes of a decline in market
         price so the seller can purchase in the market at a lower price to be
able to deliver the shares sold);                           

O    broker-dealers may agree with the selling shareholder to sell a  
    specified number of such shares at a stipulated price per share;

O    a combination of any such methods of sale; and                   

O    any other method permitted pursuant to applicable law.           

    The selling shareholders also may resell all or a portion of the shares in
open market transactions in reliance upon rule 144 under the 1933 Act, provided 
they meet the criteria and conform to the requirements of the rule.             

29

S-3/A
31st Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 31st
    The selling shareholders may also engage in short sales against the box (a
short sale where the seller borrows the stock from a third party, hoping the    
market price will decline), puts and calls and other transactions in securities 
of the company or derivatives of company securities and may sell or deliver     
shares in connection with these trades. The selling shareholders may pledge     
their shares to their brokers under the margin provisions of customer           
agreements. If a selling shareholder defaults on a margin loan, the broker may, 
from time to time, offer and sell the pledged shares. The selling shareholders  
have advised the company that they have not entered into any agreements,        
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their his shares other than ordinary course brokerage arrangements, 
nor is there an underwriter or coordinating broker acting in connection with the
proposed sale of shares by the selling shareholders.                            

  Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions 
or discounts from the selling shareholders (or, if any broker-dealer acts as    
agent for the purchaser of shares, from the purchaser) in amounts to be         
negotiated. The selling shareholders do not expect these commissions and        
discounts to exceed what is customary in the types of transactions involved.    

   We are required to pay all fees and expenses incident to the registration
of resale of the shares covered by this prospectus. However, all discounts,     
commissions or fees incurred in connection with the sale of the shares offered  
hereby will be paid by the selling shareholders. The company has agreed to      
indemnify the selling shareholders against certain losses, claims, damages and  
liabilities, including liabilities under the 1933 Act. We have been advised that
in the opinion of the Securities and Exchange Commission, indemnification for   
liabilities under the 1933 Act is against public policy, and therefore is       
unenforceable. See below.                                                       

In order to comply with the securities laws of certain states, if     
applicable, the shares will be sold in such jurisdictions, if required, only    
through registered or licensed brokers or dealers. In addition, in certain      
states the shares may not be sold unless the shares have been registered or     
qualified for sale in such state or an exemption from registration or           
qualification is available.                                                     

DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

  Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the    
liability of a director for breach of the director's duty or loyalty to the     
corporation or its stockholders, or for acts of omission not in good faith or   
which involve intentional misconduct or a knowing violation of law.             

Wyoming law permits a corporation, under specified circumstances, to  
indemnify its directors, officers, employees or agents against expenses         
(including attorney's fees), judgments, fines and amounts paid in settlements   
actually and reasonably incurred by them in connection with any action, suit or 
proceeding brought by third parties by reason of the fact that they were or are 
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they          
reasonably believed to be in or not opposed to the best interests of the        
corporation and, with respect to any criminal action or proceedings, had no     
reason to believe their conduct was unlawful. In a derivative action, i.e., one 
by or in the right of the corporation, indemnification may be made only for     
expenses actually and reasonably incurred by directors, officers, employees or  
agent in connection with the defense or settlement of an action or suit, and    
only with respect to a matter as to which they shall have acted in good faith   
and in a manner they reasonably believed to be in or not opposed to the best    
interests of the corporation, except that no indemnification shall be made if   
such person shall have been adjudged liable to the corporation, unless and only 
to the extent that the court in which the action or suit was brought shall      
determine upon application that the defendant directors, officers, employees or 
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.                                                 

30

S-3/A
32nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 32nd
     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the  
company pursuant to the foregoing provisions, or otherwise (for example, in     
connection with the sale of securities), we have been advised that in the       
opinion of the Commission such indemnification is against public policy as      
expressed in the 1933 Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by   
the company of expenses incurred or paid by a director, officer or controlling  
person in the successful defense of any action, suit or proceeding) is asserted 
by such director, officer or controlling person in connection with the          
securities being registered, the company will, unless in the opinion of its     
counsel the matter has been settled by controlling precedent, submit to a court 
of appropriate jurisdiction the question whether such indemnification by it is  
against public policy as expressed in the 1933 Securities Act, and will be      
governed by the final adjudication of such issue.                               

 WHERE TO FIND MORE INFORMATION ABOUT US

We have filed with the Securities and Exchange Commission (the        
"Commission") a registration statement on Form S-3 under the 1933 Act with      
respect to the shares offered by this prospectus. This prospectus, filed as a   
part of the registration statement, does not contain certain information        
contained in part II of the registration statement or filed as exhibits to the  
registration statement. We refer you to the registration statement and exhibits 
which may be inspected and copied at the Public Reference Section of the        
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates; the
telephone number for the Public Reference Section is 1.800.SEC.0330. The        
registration statement and exhibits also are available for viewing at and       
downloading from the EDGAR location within the Commission's internet website    
(http://www.sec.gov).                                                           

 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

   Our common stock is registered with the Commission under section 12(g) of
the Securities Exchange Act of 1934 (the "1934 Act"). Under the 1934 Act, we    
file with the Commission periodic reports on Forms 10-K, 10-Q and 8-K, and proxy
statements, and our officers and directors file reports of stock ownership on   
Forms 3, 4 and 5. These filings may be viewed and downloaded from the           
Commission's internet website (http://www.sec.gov) at the EDGAR location, and   
also may be inspected and copied at the Public Reference Section of the         
Commission, 450 5th Street, NW, Washington, D.C. 20549, at prescribed rates; the
telephone number for the Public Reference Section is 1.800.SEC.0330. Information
on the operation of the Public Reference Room can be obtained by calling the    
Commission at 1.800.SEC.0330.                                                   

    All of the information contained in the following documents filed with the
Commission is incorporated by reference into this prospectus: Amended Annual    
Report on Form 10-K/A for fiscal year ended May 31, 2002 filed March 3, 2003;   
Quarterly Report on Form 10-Q for the three months ended August 31, 2002;       
Quarterly Report on Form 10-Q for the three and six months ended November 30,   
2002; Proxy Statement for Annual Meeting of Shareholders in December 2002;      
Report on Form 8-K on September 20, 2001, reporting adoption in calendar 2001 of
a "shareholder rights plan" also commonly known as a "poison pill"; and Report  
on Form 8-K on December 20, 2001 regarding status of coalbed methane operations;
Report on Form 8-K on April 23, 2002, reporting that Suncor did not exercise an 
option to acquire interest in coalbed methane properties and reporting a        
contract to purchase the Bobcat coalbed methane property in Wyoming; Form 8-K on
June 6, 2002, reporting closing of the contract to purchase the Bobcat property;
Form 8-K on June 10, 2002, providing further information on the closing of the  
contract to purchase the Bobcat property, and borrowing $1,000,000 in a secured 
convertible loan transaction; Form 8-K on July 23, 2002, reporting the Phelps   
Dodge legal proceedings; Report on Form 8-K on August 20, 2002, reporting the   
entry of an order by the Special Master (appointed by the Court in the Nukem    
litigation) to provide monthly reports on uranium transactions; Form 8-K on     
September 5, 2002 concerning a research report; Form 8-K/A on September 24, 2002
amending the Form 8-K on the research report; Form 8-K on December 9, 2002      
reporting an extension of time granted the Special Master                       

31

S-3/A
33rd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 33rd
in the Nukem litigation to file his final accounting report and borrowing       
$500,000 in a secured convertible debt transaction; Form 8-K on December 18,    
2002 reporting results of the company's annual meeting of shareholders and      
change in fiscal year end; Form 8-K on January 8, 2003 reporting RMG option to  
purchase coalbed methane properties; Form 8-K on February 7, 2003 reporting an  
Option Agreement to acquire additional coalbed methane properties, exploration  
results on Montana properties now held, and improved gas prices for Bobcat      
production; Form 8-K on March 3, 2003 reporting an additional extension of time 
granted the Special Master in the Nukem litigation to file his final accounting 
report; and Form 8-A, on September 20, 2001, registering the preferred stock    
purchase rights (in connection with the shareholder rights plan). The SEC file  
number for all of these filings is 000-06814.                                   

     All of the information which will be contained in our future Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Proxy Statements, and Reports on  
Form 8-K, and any other filings we make pursuant to sections 13(a), 13(c), 14 or
15(d) of the 1934 Act, all after the date of this prospectus, also are          
incorporated by reference into this prospectus as of the dates when such        
documents are filed with the Commission.                                        

 We will provide to you copies of any or all of the information in these
documents, and any exhibits to them, without charge, upon request addressed to  
U.S. Energy Corp., 877 North 8th West, Riverton, Wyoming 82501, attention Daniel
P. Svilar, Secretary. You also may request these documents by telephone:        
1.307.856.9271. Our internet address is www.useg.com. Our 1934 Act filings are  
not directly available through our internet address (website), but you can      
access those filings through the link to Nasdaq at our internet address         
(website).                                                                      

 LEGAL MATTERS

    The validity of the issuance of the shares offered has been passed upon by
The Law Office of Stephen E. Rounds, Denver, Colorado.                          

 EXPERTS

    Our consolidated balance sheet as of May 31, 2002 and 2001 and the related
consolidated statements of operations, shareholders' equity and cash flows for  
the year ended May 31, 2002 and 2001, have been audited by Grant Thornton LLP,  
and are included, with the audit report from Grant Thornton LLP, in the Annual  
Report on Form 10-K/a for the fiscal year ended May 31, 2002 in reliance upon   
the authority of such firm as experts in accounting and auditing. Our           
consolidated balance sheet as of May 31, 2000 and the related consolidated      
statements of operations, shareholders' equity and cash flows for each of the   
two years ended May 31, 2000, have been audited by Arthur Andersen LLP, and are 
included along with the audit report of Arthur Andersen LLP, in the Annual      
Report on Form 10-K/A for the fiscal year ended May 31, 2002, as amended, in    
reliance upon the authority of such firm as experts in giving said report.      
Arthur Andersen LLP has not consented to the incorporation by reference of their
report in this prospectus, and we have dispensed with the requirement to file   
their consent in reliance upon rule 437a of the Securities Act of 1933. Because 
Arthur Andersen LLP has not consented to the incorporation by reference of their
report in this prospectus, you will not be able to recover against Arthur       
Andersen LLP under Section 11 of the Securities Act of 1933 for any untrue      
statements of a material fact contained in the financial statements audited by  
Arthur Andersen LLP or any omissions to state a material fact required to be    
stated therein.                                                                 

The letter report of Ryder Scott Company, which contains certain      
information with respect to the company's gas reserves, has been filed as an    
exhibit to the registration statement of which this prospectus forms a part. The
information contained in the Ryder Scott Company report is included in this     
prospectus in reliance on such firm as experts in such matters.                 

32

S-3/A
34th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 34th
 882,460 SHARES COMMON STOCK

 U.S. ENERGY CORP.

 -------------------
PROSPECTUS
--------------------

 ___________________, 2003

   No dealer, salesman or other person is authorized to give any information
or make any information or make any representations not contained in the        
prospectus with respect to the offering made hereby. This prospectus does not   
constitute an offer to sell any of the securities offered hereby in any         
jurisdiction where, or to any person to whom it is unlawful to make such an     
offer. Neither the delivery of this prospectus nor any sale made hereunder      
shall, under any circumstances, create an implication that there has been no    
change in the information set forth herein or in the business of our company    
since the date hereof.                                                          

33

S-3/A
35th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 35th
 PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION                            

    Estimated expenses in connection with the issuance and distribution of the
securities being registered:                                                    

Securities and Exchange Commission registration fee...................$   251.10
National Association of Securities Dealers, Inc. examination fee......       n/a
Accounting ...........................................................  2,000.00
Legal fees and expenses...............................................  2,000.00
Printing .............................................................       n/a
Blue Sky fees and expenses (excluding legal fees).....................    250.00
Transfer agent .......................................................       n/a
Escrow agent..........................................................       n/a
Miscellaneous.........................................................       n/a

Total.................................................................$ 4,501.10

The Registrant will pay all of these expenses.                                  

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS                              

  Our articles of incorporation and bylaws provide that we shall indemnify
directors provided that the indemnification shall not eliminate or limit the    
liability of a director for breach of the director's duty or loyalty to the     
corporation or its stockholders, or for acts of omission not in good faith or   
which involve intentional misconduct or a knowing violation of law.             

Wyoming law permits a corporation, under specified circumstances, to  
indemnify its directors, officers, employees or agents against expenses         
(including attorney's fees), judgments, fines and amounts paid in settlements   
actually and reasonably incurred by them in connection with any action, suit or 
proceeding brought by third parties by reason of the fact that they were or are 
directors, officers, employees or agents of the corporation, if these directors,
officers, employees or agents acted in good faith and in a manner they          
reasonably believed to be in or not opposed to the best interests of the        
corporation and, with respect to any criminal action or proceedings, had no     
reason to believe their conduct was unlawful. In a derivative action, i.e., one 
by or in the right of the corporation, indemnification may be made only for     
expenses actually and reasonably incurred by directors, officers, employees or  
agent in connection with the defense or settlement of an action or suit, and    
only with respect to a matter as to which they shall have acted in good faith   
and in a manner they reasonably believed to be in or not opposed to the best    
interests of the corporation, except that no indemnification shall be made if   
such person shall have been adjudged liable to the corporation, unless and only 
to the extent that the court in which the action or suit was brought shall      
determine upon application that the defendant directors, officers, employees or 
agents are fairly and reasonably entitled to indemnify for such expenses despite
such adjudication of liability.                                                 

34

S-3/A
36th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 36th
ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULE.                            

                                                                      SEQUENTIAL
EXHIBIT NO.   TITLE OF EXHIBIT                                         PAGE NO. 
-----------   ----------------                                        ----------

3.1           USE Restated Articles of Incorporation.........................[2]

3.1(a)        USE Articles of Amendment to                                      
              Restated Articles of Incorporation.............................[4]

3.1(b)        USE Articles of Amendment (Second) to                             
Restated Articles of Incorporation                  
              (Establishing Series A Convertible Preferred Stock.............[9]

3.1(c)        Articles of Amendment (Third) to                                  
Restated Articles of Incorporation                  
              (Increasing number of authorized shares)......................[14]

3.2           USE Bylaws, as amended through April 22, 1992..................[4]

4.1           Amendment to USE 1998 Incentive Stock                             
Option Plan (To include Family                      
              Transferability of Options Under SEC Rule 16b)................[11]

4.2           USE 1998 Incentive Stock Option Plan                              
              and Form of Stock Option Agreement 1/99........................[8]

4.3           USE Restricted Stock Bonus Plan,                                  
              as amended through 2/94........................................[5]

4.4           Form of Stock Option Agreement, and Schedule                      
              Options Granted January 1, 1996................................[6]

4.5           Form of Stock Option Agreement and Schedule,                      
              Options Granted January 10, 2001..............................[11]

4.6           Form of Investors' Warrant issued in                              
February and March 2002, and                        
              List of Holders...............................................[21]

4.7           USE 1996 Officers' Stock Award Program (Plan)..................[7]

4.8           USE Restated 1996 Officers' Stock Award Plan and                  
              Amendment to USE 1990 Restricted Stock Bonus Plan..............[7]

4.9           Warrant held by Caydal LLC....................................[13]

4.10          Warrant held by Kevin P.  Daly................................[13]

35

S-3/A
37th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 37th
4.11          Rights Agreement, dated as of September 19,  2001                 
between U.S. Energy Corp. and Computershare         
 Trust Company, Inc. as Rights Agent.  The Articles of
Amendment to Articles of Incorporation creating the 
Series P Preferred Stock is included herewith as an 
exhibit to the Rights Agreement.                    
Form of Right Certificate (as an exhibit to the     
Rights Agreement).                                  

   Summary of Rights, which will be sent to all holders of
   record of the outstanding shares of Common Stock of the
registrant, also included as an exhibit to the      
              Rights Agreement..............................................[12]

4.12          Form of Advisor Warrant dated October 18, 2001                    
              and List of Holders ..........................................[14]

4.13          Form of Advisor Warrant dated November 2, 2001                    
              and List of Holders...........................................[14]

4.14          Form of Investor Warrant dated October 18, 2001                   
              and List of Holders...........................................[14]

4.15          Stock Option held by R. Jerry Falkner                             
              dated April 11, 2001..........................................[14]

4.16          Warrant held by Riches In Resources                               
              dated May 14, 2001............................................[14]

4.17          Stock Option held by R. Jerry Falkner dated                       
              October 11, 1999 and Amendment thereto........................[15]

4.18          Amendment dated April 25, 2002 to                                 
October 11, 1999 Stock Option                       
              Agreement held by R.  Jerry Falkner...........................[16]

4.19          USE 2001 Incentive Stock Option Plan                              
              with Form of Option Agreement.................................[18]

4.20          USE Schedule of Options                                           
              Issued - 12/7/01 and 5/20/01..................................[18]

4.21          USE 2001 Officers' Stock Compensation Plan....................[18]

4.22          Warrant held by Tsunami Partners, L.P............................*

4.23          Amendment dated December 10, 2002 to                              
October 11, 1999 Stock Option                       
              Agreement held by R. Jerry Falkner............................[20]

36                

S-3/A
38th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 38th
4.24          Stock Option held by Robert Nicholas.............................*

4.25          Form of Warrant, Amendment                                        
thereto and List of Holders                         

              (Yellowstone Fuels Corp./USE Exchange)...........................*

5.1           Opinion re legality and consent of counsel.......................*

10.1          USECC Joint Venture Agreement - Amended as of 1/20/89..........[1]

10.2          Management Agreement with USECC................................[3]

10.3          Contract - R. J. Falkner & Company                                
              dated April 11, 2001..........................................[11]

10.4          Consulting Agreement - Riches In Resources                        
              dated May 14, 2001............................................[11]

10.5          Agreement for Strategic Services                                  
              VentureRound Group LLC........................................[14]

10.6-10.60    [intentionally left blank]                                        

10.61         Closing Agreement - Addendum to Agreement                         
              for Purchase and Sale of Assets (see Exhibit 10.62)...........[11]

10.62         Agreement for Purchase and Sale of Assets                         
              (Rocky Mountain Gas, Inc. and Quantum Energy LLC)..............[9]

10.63         Purchase and Sale Agreement                                       
CCBM, Inc. (subsidiary of Carrizo Oil & Gas, Inc.)  
              and Rocky Mountain Gas, Inc...................................[16]

10.64         Purchase and Sale Agreement                                       
              Bobcat Property...............................................[16]

10.65         Convertible Promissory Note and                                   
              Security Agreement dated May 30, 2002.........................[17]

10.66         Convertible Promissory Note and                                   
              Security Agreement dated November 19, 2002....................[19]

16.           Concurrence Letter from Arthur Andersen LLP                       
              on Change of Accounting Firms.................................[10]

21.1          Subsidiaries of Registrant....................................[11]

23.1          Included in Exhibit 5.1                                           

23.2          Consent of Independent Auditors (Grant Thornton LLP).............*

37                

S-3/A
39th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 39th
99.1          Summary of reserve report of Ryder Scott Company,                 
              as of December 31, 2002, with consent............................*

*  Previously filed.                                                            

_____________                                                                   

Unless otherwise indicated, the SEC File Number for each of the following       
documents incorporated by reference is 000-6814.                                

[1]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
1989, filed August 29, 1989.                                  

[2]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
1990, filed September 14, 1990.                               

[3]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
1991, filed September 13, 1991.                               

[4]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
1992, filed September 14, 1991.                               

[5]      Incorporated by reference from the like-numbered exhibit to the        
        Registrant's Form S-1 registration statement, initial filing (SEC File
No. 333-1689) filed June 18, 1996).                           

[6]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
1996, filed September 13, 1996.                               

[7]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
1997, filed September 15, 1997.                               

[8]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
1998, filed September 14, 1998.                               

[9]      Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
2000, filed September 13, 2000.                               

[10]     Incorporated by reference from the like-numbered exhibit to the        
Registrant's Form 8-K, filed February 5, 2001.                

[11]     Incorporated by reference from the like-numbered exhibit to the        
       Registrant's Annual Report on Form 10-K for the year ended on May 31,
         2001, filed August 29, 2001, and amended on June 18, 2002 and September
25, 2002.                                                     

[12]     Incorporated by reference to exhibit number 4.1 to the Registrant's    
Form 8-A12G filed, September 20, 2001.                        

[13]     Incorporated by reference from the like-numbered exhibit to the        
        Registrant's Form S-3 registration statement (SEC File No. 333-73546),
filed November 16, 2001.                                      

38

S-3/A
40th Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 40th
[14]     Incorporated by reference from the like-numbered exhibit to the        
        Registrant's Form S-3 registration statement (SEC File No. 333-75864),
filed December 21, 2001.                                      

[15]     Incorporated by reference from the like-numbered exhibit to the        
        Registrant's Form S-3 registration statement (SEC File No. 333-83040),
filed February 19, 2002.                                      

[16]     Incorporated by reference from the like-numbered exhibit to the        
         Registrant's Form S-3 registration statement, amendment no. 1 (SEC File
No. 333-83040), filed May 17, 2002.                           

[17]     Incorporated by reference from the like-numbered exhibit to the        
Registrant's Form 8-K, filed June 6, 2002.                    

[18]     Incorporated by reference from the like-numbered exhibit to the        
    Registrant's Annual Report on Form 10-K for the year ended May 31,
2002, filed September 13, 2002.                               

[19]     Incorporated by reference from the like-numbered exhibit to the        
Registrant's Form 8-K, filed December 9, 2002.                

[20]     Incorporated by reference from the like-numbered exhibit to the        
         Registrant's Form S-3 registration statement, amendment no. 4 (SEC File
No. 333-83040), filed March 3, 2003.                          

[21]     Incorporated by reference from the like-numbered exhibit to the        
         Registrant's Form S-3 registration statement, amendment no. 1 (SEC File
No. 333-88584), filed March 10, 2003.                         

39

S-3/A
41st Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 41st
ITEM 17.  UNDERTAKINGS.                                                         

(a) RULE 415 OFFERING.                                                

The undersigned registrant hereby undertakes:                         

   (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:                        

   (i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;                                                                 

         (ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or in the most recent             
post-effective amendment thereof) which, individually or in the aggregate,      
represent a fundamental change in the information set forth in the registration 
statement. Notwithstanding the foregoing, any increase or decrease in volume of 
securities offered (if the total dollar value of securities offered would not   
exceed that which was registered) and any deviation from the low or high end of 
the estimated maximum offering range may be reflected in the form of prospectus 
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the     
changes in volume and price represent no more than 20% change in the maximum    
aggregate offering price set forth in the "Calculation of Registration Fee"     
table in the effective registration statement; and                              

       (iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any      
material change to such information in the registration statement.              

    Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply to this
registration statement if the information required to be included in a          
post-effective amendment by those paragraphs is contained in periodic reports   
filed with or furnished to the Commission by the registrant pursuant to Section 
13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by     
reference in this registration statement.                                       

    (2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities 
at that time shall be deemed to be the initial bona fide offering thereof.      

    (3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.                                                                       

  (b) FILING INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.

The undersigned registrant hereby undertakes that for purposes of     
determining any liability under the Securities Act , each filing of the         
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities 
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit 
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be  
deemed to be a new registration statement relating to the securities offered    
therein, and the offering of such securities at that time shall be deemed to be 
the initial bona fide offering thereof.                                         

40

S-3/A
42nd Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 42nd
(h) RELATIVE TO REQUEST FOR ACCELERATION OF EFFECTIVE DATE.           

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers, and controlling   
persons of the registrant pursuant to the foregoing provisions, or otherwise,   
the registrant has been advised that in the opinion of the Securities and       
Exchange Commission such indemnification is against public policy as expressed  
in the Securities Act and is therefore unenforceable. In the event that a claim 
for indemnification against such liabilities (other than the payment by the     
registrant of expenses incurred or paid by a director, officer, or controlling  
person of the registrant in the successful defense of any action, suit, or      
proceeding) is asserted by such director, officer, or controlling person in     
connection with the securities being registered, the registrant will, unless in 
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such         
indemnification by it is against public policy as expressed in the Securities   
Act of 1933, as amended, and will be governed by the final adjudication of such 
issue.                                                                          

41

S-3/A
Last Page of 43
TOC
1st
Previous
Next
↓Bottom
Just 43rd
SIGNATURES

    Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the    
requirements for filing on Form S-3 and has duly caused this registration       
statement amendment no. 1 to be signed on its behalf by the undersigned,        
thereunto duly authorized in the city of Riverton, state of Wyoming on April 2, 
2003.                                                                           

                                   U.S. ENERGY CORP.
(Registrant)                                                                    

Date: April 2, 2003                         By:    /s/  John L. Larsen          
                                                 -------------------------------
                                 John L. Larsen,
                                         Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this registration statement on Form S-3 has been signed below by the following  
persons on behalf of the Registrant and in the capacities and on the dates      
indicated.                                                                      

Date: April 2, 2003                         By:    /s/  John L. Larsen          
                                                 -------------------------------
                                          John L. Larsen, Director

Date: April 2, 2003                         By:    /s/  Keith G. Larsen         
                                                 -------------------------------
                                           Keith G. Larsen, Director

Date: April 2, 2003                         By:    /s/  Harold F. Herron        
                                                 -------------------------------
                                            Harold F. Herron, Director

Date: April 2, 2003                         By:    /s/  Don C. Anderson         
                                                 -------------------------------
                                           Don C. Anderson, Director

Date: April 2, 2003                         By:    /s/  Nick Bebout             
                                                 -------------------------------
                                       Nick Bebout, Director

Date: April 2, 2003                         By:    /s/  H. Russell Fraser       
                                                 -------------------------------
                                             H. Russell Fraser, Director

Date: April 2, 2003                         By:    /s/  Robert Scott Lorimer    
                                                 -------------------------------
                                       Robert Scott Lorimer,
                                              Principal Financial Officer/
                                          Chief Accounting Officer

42

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘S-3/A’ Filing		Date		First		Last			Other Filings
		11/2/06		20					8-K,  RW
		10/18/06		3		22
		4/10/06		20					10-K,  4
		11/19/05		3		23
		5/30/05		2		22
		3/30/05		19
		1/9/05		19
		3/25/04		2		22
		2/8/04		20
		2/2/04		3		22
		10/24/03		19
		10/18/03		19
		10/1/03		16
		7/19/03		3		23
		6/30/03		13					10-Q,  NT 10-Q
		5/14/03		20
Filed on:		4/2/03		1		43			S-3/A
		3/28/03		6
		3/15/03		20
		3/10/03		40					S-3,  S-3/A
		3/6/03		3		21
		3/3/03		32		40			10-K/A,  8-K,  S-3/A
		2/7/03		33					8-K
		2/3/03		19		23
		1/8/03		33					8-K
		12/31/02		9		39			10-K,  4,  NT 10-K
		12/18/02		33					4,  8-K
		12/16/02		9					8-K,  DEF 14A
		12/10/02		37
		12/9/02		32		40			8-K
		12/2/02		23
		11/30/02		13		32			10-Q
		11/19/02		19		38			8-K
		9/25/02		39					10-K/A,  S-3/A
		9/24/02		32					8-K/A
		9/19/02		23
		9/13/02		40					10-K
		9/5/02		32					8-K
		8/31/02		32					10-Q,  4
		8/20/02		32					8-K
		7/23/02		32					8-K
		6/18/02		39					10-K/A
		6/10/02		32					8-K
		6/6/02		32		40			8-K
		5/31/02		16		40			10-K,  10-K/A,  5,  NT 10-K
		5/30/02		19		38			8-K
		5/17/02		40					S-3,  S-3/A
		4/25/02		37
		4/23/02		32					8-K
		3/25/02		19		22
		2/19/02		40					S-3
		1/10/02		19					424B2
		12/21/01		40					S-3
		12/20/01		32					8-K
		12/5/01		16		18
		11/30/01		18					10-Q
		11/16/01		39					S-3
		11/2/01		20		37
		10/24/01		19
		10/18/01		19		37
		9/20/01		32		39			8-A12G,  PRE 14A
		9/19/01		37
		8/29/01		39					10-K
		6/29/01		20
		5/31/01		33		39			10-K,  10-K/A,  4,  5,  DEF 14A,  PRE 14A
		5/14/01		20		38
		4/11/01		20		38
		2/5/01		39					8-K
		1/10/01		36
		9/13/00		39					10-K,  8-K
		9/11/00		10
		5/31/00		16		39			10-K,  5,  DEF 14A,  NT 10-K
		10/11/99		37
		2/8/99		20
		9/14/98		39					10-K
		5/31/98		39					10-K,  DEF 14A,  NT 10-K
		9/15/97		39					10-K
		5/31/97		39					10-K,  10-K/A,  DEF 14A,  NT 10-K
		9/13/96		39					10-K,  10-K/A
		6/18/96		39					S-1
		5/31/96		39					10-K,  10-K/A,  DEF 14A,  NT 10-K
		1/1/96		36
		5/31/92		39
		4/22/92		36
									List all Filings