U.S. Energy (USEG) Updates on Wang 10-3, Crescent Farms 7-6 Production

U.S. Energy Corp. (Nasdaq: USEG), reported the initial production rate on the Wang 10-3 #1H well and the Crescent Farms 7-6 #1H well under its drilling program with Zavanna, LLC.

Williston Basin, North Dakota - Yellowstone Program:

• The Wang 10-3 #1H well was fracture stimulated with 35 stages and had an early 24-hour flow back rate of 2,208 BOE/D on a 36/64" restricted choke during drillout of the plugs. The initial production rate consisted of approximately 1,942 barrels of oil and 1.6 MMCF of natural gas. The Company has an approximate 18% WI and 14% NRI in this well. The Wang well began production on March 15, 2012.
  
  
• The Crescent Farms 7-6 #1H has also been fracture stimulated with 35 stages and had an early 24-hour flow back rate of 2,437 BOE/D on a 36/64" restricted choke during drillout of the plugs. The initial production rate consisted of approximately 2,178 barrels of oil and 1.5 MMCF of natural gas. The Company has an approximate 27% WI and 21% NRI in this well. The Crescent Farms well began production on March 22, 2012 and represents the highest reported IP rate for a Zavanna drilling program well to date.

The next two wells which have drilled to depth in this program and are scheduled to be fracture stimulated in April 2012 are:

• The Skorpil 11-2 #1H well, in which the Company has an approximate 23% WI and 18% NRI.
  
  
• The CDK 15-22 #1H well, in which the Company has an approximate 32% WI and 25% NRI.

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