Stock Preacher

U.S. Energy Corp. (NASDAQ: USEG)

U.S. Energy Corp. (USEG) acquires and develops energy-related and other mineral properties. The Company is primarily involved in the acquisition of mineral properties, the exploration and development of those properties, and from time to time the sale and lease of mineral-bearing properties and production and/or marketing of minerals. During 2008, the Company completed its multifamily apartment project serving the residential market in Gillette, Wyoming. The Company is focused on developing the Mount Emmons molybdenum project (Mount Emmons) into a major operating mine with Thompson Creek Metals Co. (USA).

U.S. Energy Corp. was founded in 1966 and is based in Riverton, Wyoming.

Share Statistics (11-Dec-09)			FY 2007	FY 2008	% Chg	Q3 2008	Q3 2009	% Chg
Symbol	USEG	Revenue, $Mn	1.2M	2.3M	21.7%	0.57M	1.28M	124.6%
Current price	$5.16	Gross marg.	-25.3%	-82.6%	226.5%	-166.6%	n/a	n/a
52wk Range:	$1.45-7.30	Oper. margin	-1237%	-416.3%	66.4%	-464.9%	n/a	n/a
Avg Vol (3m):	82,450,000	Net margin	4700%	-60.9%	101.3%	666.7%	n/a	n/a
Market Cap.	110.2M
Dil. Shares Outst.	21.3M	EPS, $	2.54	-0.27	107.1%	-0.06	-0.09	50.0%

Source: Reuters.com, SEC Filings.

Financial Summary

Selected Highlights for the Second Quarter of 2009 and Period Subsequent to June 30, 2009

• Entered into three oil and gas participation agreements with Houston Energy L.P.

• Drilled three wells with Houston Energy L.P., two wells deemed commercially viable, one well        deemed non-productive.

• Production from successful wells expected to come on line 3rd and 4th quarters 2009.

• Initiated geothermal temperature gradient drilling program with Standard Steam Trust, LLC.

• Acquired 22,033 acres of additional geothermal leases with Standard Steam Trust, LLC.

• Revenues for the six months and quarter ended June 30, 2009 increased by $2,329,000 $1,065,000,    respectively over the same periods of 2008.

Financial Strength (11-Nov-2009)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	32.86	2.92	1.03	0.90
Current Ratio (MRQ)	32.86	3.77	1.65	1.07
Long-Term Debt to Equity (MRQ)	0.75	31.98	24.70	124.83
Total Debt to Equity (MRQ)	0.94	63.02	39.00	191.51

Source: Reuters.com, SEC Filings.

Analyst Consensus

No chart available.

Source: www.ft.com

No consensus analysis data available.

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=USEG.W

Investment Highlights

USEG earlier this month announced the initial production rate from its Strand 16-9 #1H Bakken well and provided an operations update regarding its Williston Basin drilling program. The Strand 16-9 #1H well, which is operated by Brigham Exploration Co. (”Brigham” or “BEXP”), flowed at an initial 24-hour production test rate of approximately 1,947 barrels of oil and 1.9 MMCF of natural gas per day or 2,264 BOE/D. The well was completed with swell packers and 26 fracture stimulation stages and represents the highest reported 24-hour flow back rate of U.S. Energy’s four long lateral multistage fracture stimulation completions in the Williston Basin. USEG’s initial working interest in this well is approximately 40% (~31% net revenue interest), and oil sales from this well have commenced. Natural gas sales will commence upon connection to a gathering system, which is estimated to take about 90-120 days. The Williston 25-36 #1H (~65% initial working interest) and the State 36-1 #1H (~28% initial working interest), the fifth and sixth wells to be drilled under the previously announced Drilling Participation Agreement with Brigham, have now reached total measured depth of approximately 20,000 feet (~10,000 ft vertical; ~10,000 horizontal). Completion initiatives for both wells are expected to begin in mid-December. The Williston 25-36 #1H well is expected to be completed with 32 fracture stimulation stages, and the State 36-1 #1H well is expected to be completed with 30 fracture stimulation stages.

USEG in early December announced that it has commenced an underwritten public offering of 5,000,000 shares of common stock. The Company will also grant the underwriters a 30-day option to purchase up to 750,000 additional shares of common stock to cover over-allotments, if any. The Company intends to use the proceeds from the offering (net of underwriting discounts and expenses) to fund its capital expenditure program through 2010, with specific emphasis on the expansion of its Williston Basin drilling program with Brigham Exploration Co. and further drilling participation with PetroQuest Energy and Yuma Exploration. In connection with the offering, SMH Capital Inc. is acting as sole book-running and lead manager and C.K. Cooper and Co. is acting as co-manager for the offering. An investor may obtain a free copy of the prospectus as supplemented by visiting EDGAR on the SEC Website at www.sec.gov.

Source: http://www.usnrg.com/home

Technical Analysis

Source: http://stockcharts.com

USEG is trading below its lower Bollinger Band. Relative to recent price action, the stock is currently overextended to the downside and due for either a pause or retracement.

The MACD for USEG currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Nov-11-2009	symbol	Share, $	$ Mn	2009	2010	2009	2010
Denison Mines Corp.	DNN	1.33	451.83M	n/a	n/a	5.32	n/a
General Moly Inc.	GMO	2.14	156.46M	n/a	n/a	n/a	n/a
US Gold Corp.	UXG	2.63	313.36M	n/a	n/a	n/a	n/a
Metal Mining Median			307.2M	n/a	n/a	n/a	n/a
US energy Corp.	USEG	5.16	110.2M	n/a	n/a	22.35	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	n/a	0
Sales	n/a	0
Net Shares Purchased (Sold)	n/a	0
Total Insider Shares Held	2.13M	n/a
% Net Shares Purchased (Sold)	0.0%	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	(2,605,960)
% Change in Institutional Shares Held	(110.0%)

Source: Yahoo Finance

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