U.S. ENERGY CORP. AND CRESTED CORP.'S ROCKY MOUNTAIN GAS, INC. SUBSIDIARY SIGNS OPTION TO LEASE 40,000 ACRES OF COALBED METHANE PROPERTIES IN THE POWDER RIVER BASIN
EXPLORATION ACTIVITIES IN MONTANA SHOW PROMISING RESULTS
NATURAL GAS PRICES HIT $4.50/MMBtu IN WYOMING
RIVERTON, Wyoming (February 7, 2003) – U.S. Energy Corp. (NASDAQ/NMS: "USEG") and Crested Corp. (OTC Bulletin Board: "CBAG"), d/b/a USECC, today announced that their Rocky Mountain Gas, Inc. ("RMG") subsidiary has signed an Option Agreement to acquire about 40,000 net acres of undeveloped coalbed methane (CBM) properties in the Powder River Basin of northeastern Wyoming.
Under the terms of the agreement, RMG has until May 1, 2003 to complete its due diligence, raise sufficient capital to exercise the option and enter into a definitive agreement for purchase and sale of the subject properties. The optioned properties include 10 completed wells defining the targeted coals. A portion of the property offsets production from adjoining properties belonging to other parties. Pipelines traverse portions of the properties and all but 600 acres of the properties are held in fee (privately owned). RMG is contracting an independent geologic consultant to provide volumetric reserve analyses.
Additionally, RMG is conducting exploration activities on the Company's properties in the Montana portion of the Powder River Basin. A 4 well exploration program is underway with 2 wells having been drilled and completed. Management is encouraged by initial gas shows and an individual coal thickness of over 50 feet. Complete results from the exploration program will dictate the extent of follow-up pilot programs tentatively scheduled for later this year. Two additional wells that were previously completed have undergone further testing as required by the U.S. Bureau of Land Management. Water analysis and production testing of these two wells have yielded positive preliminary results.
"We're gearing up to expand the pace and scope of our exploration and development programs this year," stated Peter G. Schoonmaker, President of Rocky Mountain Gas,Inc. "Our production volumes are increasing at our Bobcat, Wyoming project and as of yesterday, we're selling a portion of our gas for over $4.00 per Million BTU (MMBtu) ($4.50 on February 6,2003). With more normal winter weather finally reaching the Rockies, we're encouraged for the possibility of more of the same going forward," concluded Schoonmaker.
ABOUT U.S. ENERGY CORP. AND CRESTED CORP.
U.S. Energy and Crested Corp. are engaged in joint business operations as USECC, and through their subsidiary Rocky Mountain Gas, Inc., own working interests in over 280,000 gross acres prospective for coalbed methane in the Powder River Basin of Wyoming and Montana and acreage adjacent to the Greater Green River Basin in southwest Wyoming. All properties are subject to a definitive agreement with a division of Carrizo Oil & Gas,Inc.(Nasdaq:CRZO)of Houston TX to develop and expand RMG's CBM properties dated July 10, 2001. USECC owns control of Sutter Gold Mining Company, which owns gold properties in California. USECC also owns various interests in uranium properties in Wyoming and Utah.
This press 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 natural gas and mineral prices, the availability of capital for development of mineral projects and other projects, acceptance of the Companies' products and services in the marketplace, competitive factors, dependence upon third-party vendors, and other risks detailed in the Companies' periodic report filings with the "Securities and Exchange Commission". 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.
*** For Further information, please contact: Keith G. Larsen, President U.S. Energy Corp. at (307) 856-9271 Rob Kindle, Corporate Communications at (307) 856-9271
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