U.S. Energy/Crested Shareholders Hear Upbeat Uranium Report UPC Participation, Drilling, Mill Reactivation on Track RIVERTON, Wyo., July 27 /PRNewswire-FirstCall/ -- High uranium prices, increased financial participation by Uranium Power Corp., exploration drilling in Wyoming to establish verifiable resources and progress on the reopening and upgrading of the Shootaring Canyon mill highlighted an upbeat uranium report to the shareholders and directors of U.S. Energy Corp. and Crested Corp. July 22. U.S. Energy Corp. (NASDAQ:USEG) and Crested Corp. (OTC:CBAG) (BULLETIN BOARD: CBAG) held their annual shareholders and directors meetings at the companies' Riverton, Wyoming headquarters. The two companies often combine their resources, d/b/a USECC, in natural resource ventures. Uranium prices are at levels not seen in decades -- in excess of $30 per pound long-term and nearly that high on the spot market -- in recent weeks. World-wide demand for uranium currently outstrips production by approximately 40%, and the deficit is expected to grow as developing nations, particularly China, increasingly turn to nuclear-powered electric generation over the next two decades. "USECC has conserved its uranium assets over the past 20 years because we firmly believed that this day would come," U.S. Energy president Keith Larsen told the directors. "Solid, verifiable assets and experience in the industry are traits that distinguish USECC," Larsen said. "We are positioned for growth, and we are determined to make the most of this opportunity." Larsen described several major uranium initiatives to the shareholders and directors: 1. USECC has entered into a three-part financial agreement with Uranium Power Corp. (TSX-V: UPC) to develop uranium prospects: a.) UPC has optioned half of USECC's Sheep Mountain property for $4,050,000 and four million shares of UPC stock. To date USECC has received $850,000 in cash, and the first installment of one million shares of UPC stock has been transferred to USECC. The next payment of $800,000 in cash and 750,000 shares of UPC stock is scheduled for June 29, 2006. b.) UPC has an option to participate in up to 20 uranium ventures at up to $500,000 per venture with USECC, up to a total of $10 million. To date, UPC has provided $500,000 for exploratory drilling at Sheep Mountain. c.) Long-term uranium prices have remained above $30 per pound for a minimum of 30 days, triggering additional purchase payments to USECC of $3 million by UPC in two installments of $1.5 million each on April 29, 2006 and October 29, 2009. 2. USECC has committed to exploratory drilling to delineate the extent and grade of its uranium resources at Sheep Mountain in Wyoming and on several thousand acres of claims in Utah. Drilling at Sheep Mountain will commence this month. Drilling in Utah is scheduled for this fall. USECC has staked over 12,000 acres of uranium lode mining claims in Utah. 3. Shootaring Canyon, the company's uranium processing mill in southeastern Utah, has been mothballed since the 1980s, when it was the last uranium processing mill built in the United States. USECC is now exploring various means to raise $25 million dollars to refurbish and upgrade the mill over the next two years. The company is readying permit applications to the state of Utah for work on the mill and for upgrading the existing tailings cells to current environmental standards. At full capacity the mill is expected produce up to 1.5 million pounds of uranium annually. 4. Burgeoning demand for vanadium had pushed prices for to $26 per pound by early June, and prices are expected to remain strong. Anticipated uranium ore feeds for the Shootaring mill are rich in vanadium content, so a vanadium processing circuit will be added to the existing uranium facility. The mill is expected to produce up to 4.2 million pounds of vanadium per year. U.S. Energy Corp. has roots in the uranium mining industry dating back over four decades. USECC also holds assets in gold through Sutter Gold Mining Inc. (TSX: SGM) and a position in oil and gas through its equity ownership in Enterra Energy Trust (Nasdaq: EENC; TSX: ENT.UN) and Pinnacle Gas Resources. The company also anticipates receiving a world-class molybdenum deposit at Mt. Emmons, Colorado in 2005. The shareholders of U.S. Energy Corp. re-elected incumbents Don C. Anderson, Michael J. Feinstein and H. Russell Fraser to the Board of Directors. The shareholders of Crested Corp. re-elected incumbent Daniel P. Svilar to the Board of Directors. The shareholders of both companies voted to ratify the directors' appointment of the accounting firm of Epstein, Weber & Conover, PLC as auditors for both companies. ABOUT U.S. ENERGY CORP. AND CRESTED CORP. U.S. Energy Corp. and its majority owned subsidiary, Crested Corp., are engaged in a joint venture to conduct various business operations as USECC. Through their subsidiaries, Sutter Gold Mining Inc., Plateau Resources Limited, U.S. Moly Corp and USECC, they own interests or properties prospective for gold, uranium, vanadium and molybdenum. This news release includes statements which may constitute "forward- looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, future trends in mineral prices, the availability of capital, competitive factors, and other risks. The profitable mining and processing of uranium and vanadium will depend on many factors: Obtaining properties in proximity to the Shootaring mill to keep transportation costs economic; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for uranium oxide and vanadium; obtaining the capital required to upgrade the Shootaring mill and add a vanadium circuit; and obtaining and continued compliance with operating permits. The profitable mining and processing of gold will depend on many factors, including receipt of final permits and keeping in compliance with permit conditions; delineation through extensive drilling and sampling of sufficient volumes of mineralized material, with sufficient grades, to make mining and processing economic over time; continued sustained high prices for gold; and obtaining the capital required to initiate and sustain mining operations and build and operate a gold processing mill. We have not yet obtained feasibility studies on any of our mineral properties. These studies would establish the economic viability, or not, of the different properties based on extensive drilling and sampling, the design and costs to build and operate gold and uranium/vanadium mills, the cost of capital, and other factors. Feasibility studies can take many months to complete. We have not established any reserves (economic deposits of mineralized materials) on any of our uranium/vanadium or gold properties, and future studies may indicate that some or all of the properties will not be economic to put into production. The molybdenum property has had extensive work conducted by prior owners, but this data will have to be updated to determine the viability of starting mining operations. Obtaining mining and other permits to begin mining the molybdenum property may be very difficult, and, like any mining operation, capital requirements for a molybdenum mining operation will be substantial. By making these forward-looking statements, the Companies undertake no obligation to update these statements for revision or changes after the date of this release. DATASOURCE: U.S. Energy Corp. CONTACT: Keith G. Larsen, President, or Don Warfield, Director of Corporate Relations, +1-307-856-9271, , both of U.S. Energy Corp.

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