SecProbe.io

July 1, 2010

Keith G. Larsen Chief Executive Officer U.S. Energy Corp 877 North 8
th West
Riverton, Wyoming 82501
Re: U.S. Energy Corp.
Form 10-K for the Fiscal Year Ended December 31, 2009 Filed March 12, 2010
  Definitive Proxy Statement on Schedule 14A
Filed April 29, 2010 Form 10-Q for the Quarterly Period Ended March 31, 2010 Filed May 10, 2010 File No. 0-06814
 Dear Mr. Larsen:

We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.

General

1. In light of recent events in the Gulf of Me xico, please review your disclosure to ensure
that you have disclosed all material informa tion regarding your poten tial liability in the
event that your employees or your working partners are involved in an  event that leads to
property damage, personal injury, death or th e discharge of hazardous materials into the
environment.  For example, and without  limitation, please ad dress the following:

• Disclose your insurance coverage with resp ect to any liability related to any such
event.  Such disclosure should address the types of claims covered, and the applicable
policy limits and deductibles.  For example,  and without limitation, such disclosure

Keith G. Larsen
U.S. Energy Corp.
July 1, 2010 Page 2
should address your insurance coverage with respect to any liabili ty related to any
resulting negative environmental effects.
• Disclose your related indemnification oblig ations and those of your customers, if
applicable.

Such disclosure should be set forth in the “Business” section of your annual report and in the “Risk Factors” and MD&A s ections of your periodic repo rts, as applicable.  Please
provide a sample of your proposed disclosure  for our review.  In responding to this
comment, please consider all your current and planned operations, not just those involved
in offshore operations.
 Form 10-K for the Fiscal year Ended December 31, 2009

 Properties

Oil and Natural Gas, page 27
 2. We note that you have made material additions  to your reserve estima tes.  Please provide
a discussion of the technologies you used to establish the appropriate  level of certainty
for reserves estimates from material propertie s included in the total reserves disclosed,
pursuant to Item 1202(a)(6) of Regulation S-K.
 Exhibit 99.1, Report of Ryder Scott Company, L.P.

 3. The closing paragraph states in part that the report “was prepared for the exclusive use and sole benefit of U.S. Energy Corp., and ma y not be put to other use without our prior
written consent for such use.”  As Item 1202(a)(8) of Regulation S- K requires the report,
please obtain and file a revised version wh ich retains no language that could suggest
either a limited audience or a lim it on potential investor reliance.
4. We refer you to Items 1202(a)(8)(iv); 1202(a)(8)(vi); and 1202(a)(8)(v iii) of Regulation
S-K.  Please obtain and file a revised re port from Ryder Scott which includes the
following:
• a statement that the consultant has used all methods and procedures as it considered
necessary under the circumstan ces to prepare the report;

• a discussion of the possible effects of regula tion on the ability of the registrant to
recover the estimated reserves; and

• a statement that the assumptions, data, met hods, and procedures used in the report are
appropriate for the purpose served by the report.

Keith G. Larsen
U.S. Energy Corp.
July 1, 2010 Page 3  5. In the revised report you obtain, ensure that ther e is appropriate disclo sure of the relevant
benchmark prices and weighted  average prices from the tota l company reserve report.
See Item 1202(a)(8)(v) of Regul ation S-K.  Such weighted  average prices should be
provided by the geographic area required to be provided in the reserves table, pursuant to
Item 1202(a)(2) of Regulation S-K.
 Exhibit 99.2, Report of Cawley, Gillespie & Associates, Inc.

 6. Disclose the qualifications of  the technical person primarily responsible for overseeing
the preparation of the reserves estimates.  Refer to Item 1202(a)(7) of Regulation S-K.
 7. The report states that the methods employed in  estimating reserves are described in page
4 of the Appendix.  The Appendix describes f our methods generally but does not indicate
which methods were actually used to estimat e your reserves.  Please obtain a revised
report that specifically identifies the me thods used to prepare your reserves.

8. We note the statements in the report on page 2 that state “Possible environmental liability
related to the properties has not been investigated nor c onsidered,” and “The possible
effects of changes in legislation or other Fe deral or State restrictive actions which could
affect the reserves and economics have not b een considered.”  Pl ease obtain a revised
report that provides a discussion of the possibl e effects of regulation on the ability of the
registrant to recover the estimated rese rves, pursuant to Item 1202(a)(8)(vi).
 Definitive Proxy Statement on Schedule 14A filed April 29, 2010

 Business Experience and Other Directorship s of Directors and Officers, page 15

9. Revise the biographical sketch for Mr. Conrad  to identify the three oil and gas drilling
funds with which he has served as co-Gener al Partner for the past five years.
 Compensation Discussion and Analysis, page 18

10. We note that “the Compensation Committee has determined that the compensation
package generally is consistent with comp ensation arrangements at similarly-sized
corporations in the oil and ga s and minerals business.”  Plea se explain the criteria you use
to identify “similarly-sized corporations” and name the companies that the Committee
examined to make its determination.
11. Discuss in further detail the personal goals of  each executive that comprise the Personal
Goals portion of the Perfor mance Compensation Plan.

Keith G. Larsen
U.S. Energy Corp. July 1, 2010 Page 4  Form 10-Q for the Quarterly Period Ended March 31, 2010

 General

12. In light of the recent events in the Gulf of Mexico, be sure to include appropriate risk
factor disclosure to address any material di fficulty you may encounter in that area related
to these events, including the possible e ffects of government action or pending and
proposed regulation, or explai n why you have not yet includ ed such a risk factor.
 Closing Comments

              We urge all persons who are res ponsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.                In responding to our comments, please provide a written statement from the company
acknowledging that:
• the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;

• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
 • the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.

You may contact Craig Arakaw a at (202) 551-3650 or Kimber ly Calder, Assistant Chief
Accountant, at (202) 551-3701 if you have que stions regarding comments on the financial
statements and related matters.  Please cont act Parker Morri ll at (202) 551-3696 or, in his
absence, Timothy Levenberg, Special Counsel, at  (202) 551-3707 with any other questions.

Sincerely,

H. Roger Schwall Assistant Director