SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                    PURSUANT TO SECTION 13 AND 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934


DATE  OF  REPORT (DATE OF EARLIEST EVENT REPORTED):  DECEMBER 23, 2003 (DECEMBER
18,  2003)


                                U.S. ENERGY CORP.
                                -----------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           WYOMING                    0-6814               83-205516
----------------------------       --------------      --------------------
(STATE OR OTHER JURISDICTION       (COMMISSION          (I.R.S.  EMPLOYER
     OF INCORPORATION)               FILE NO.)          IDENTIFICATION NO.)


GLEN  L.  LARSEN  BUILDING
877  NORTH  8TH  WEST
RIVERTON,  WY                                                82501
----------------------------------------                    -----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                    (ZIP  CODE)


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (307) 856-9271


                                 NOT APPLICABLE
                                 --------------
              (FORMER NAME, FORMER ADDRESS OR FORMER FISCAL YEAR,
                          IF CHANGED FROM LAST REPORT)





ITEM  5:  OTHER  EVENTS  AND  REGULATION  FD  DISCLOSURE.

     U.S.  Energy Corp. (USE) reports that on December 18, 2003, its subsidiary,
Rocky  Mountain Gas, Inc. (RMG), signed a Purchase and Sale Agreement to acquire
coalbed  methane (CBM) properties from a non-disclosed party in the Powder River
Basin  of  Wyoming  for  a  combination  of  cash and equity. The transaction is
contingent  upon  receipt of financing from outside sources. RMG is conducting a
due  diligence  review  of  title,  various permits, and production records. The
Agreement  is  subject to the approval of the Boards of USE and Crested Corp. (a
USE  subsidiary),  and  is  scheduled  to  close  on or before January 30, 2004.

     The property subject to the Agreement includes 247 completed wells of which
237  are  completed  in  the  Wyodak  formation on the North and South producing
properties.  Of  these  237 wells, 144 are producing gas, while the remaining 93
wells are pumping water only to enhance production from the gas producing wells.
Combined  production  from  the  North  and  South  producing  properties  is
approximately  8.1  million cubic feet of gas per day (MMCFD) gross. The portion
of  the  production  that is subject to the sale is about 4.2 MMCFD net from the
two  properties located near Gillette, Wyoming. The producing properties include
12,602  gross  acres,  which  includes  a gathering and transmission line to the
Thunder  Creek  Pipeline  on  one  of the properties. The purchase also includes
approximately  40,000  net  acres  of  undeveloped properties, which consists of
about  28,000  net  acres  that  are  located  in the Powder River Basin and are
prospective  for  CBM  development. All of the acreage being acquired is in fee,
which  typically  are  the  least  restrictive  lands  to  develop. Pinnacle Gas
Resources,  Inc.  (Pinnacle), a CBM company that RMG currently owns a 22% equity
interest  in,  has  a  first right of refusal to acquire the undeveloped acreage
portion of the acquisition. PGR has not yet indicated that it will exercise such
right.

ITEM  7.     FINANCIAL  STATEMENTS  AND  EXHIBITS.

     (a)     Financial  statements  of  business  acquired.  Not  applicable.

     (b)     Pro  forma  financial  information.  Not  applicable.

     (c)     Exhibits.  Not  applicable

                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
Registrant  has  duly  caused  this  Report  to  be  signed on its behalf by the
undersigned  hereunto  duly  authorized.


                                             U.S.  ENERGY  CORP.



Dated:  December  24,  2003           By:      /s/  Daniel  P.  Svilar
                                             ------------------------
                                             Secretary