U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 8-K/A

                                 CURRENT REPORT

                    Pursuant to Section 13 and 15(d) of the
                        Securities Exchange Act of 1934


Date  of  Report (date of earliest event reported):  April 15, 2004 (January 30,
2004)


                                U.S. ENERGY CORP.
                              -------------------
             (Exact Name of Registrant as Specified in its Charter)

          Wyoming                   000-6814               83-205516
----------------------------   ------------------     -------------------
(State or othe  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)


                                        1



ITEM  2.  ACQUISITION  OR  DISPOSITION  OF  ASSETS.

     On  January  30,  2004, U.S. Energy Corp., ("USE" or "the Company") through
its  88.5%  owned  subsidiary  Rocky  Mountain  Gas,  Inc. ("RMG") closed on the
acquisition  of  the assets of Hi-Pro, Production LLC ("Hi-Pro") for $6,800,000.
The  purchase  included  an  average  working interest of 58% (average 46.4% net
revenue) in approximately 108 producing coalbed methane gas wells located in the
Powder  River  Basin  of  Wyoming and 40,120 undeveloped fee acres in the Powder
River  Basin  of  Wyoming  ("the  Properties").  The  purchase  also  included
miscellaneous  equipment,  inventory  and  office  facilities.

     The  transaction  was  structured as an asset purchase, with a wholly owned
subsidiary of RMG, RMG I, LLC ("RMG I") as the purchaser, in connection with the
establishment  of  a  mezzanine credit facility for up to $25,000,000 of secured
loans  to acquire and develop more proven coalbed methane reserves. RMG replaced
Hi-Pro  as  the  contract  operator  for  89%  of  the wells that were acquired.

     For  information  about  the terms of the transaction not summarized below,
see  the  Form  8-K/A  filed  on  March 5, 2004. This Form 8-K/A files financial
information  about the purchased assets and pro forma financial information. See
Item  7.

     RMG  negotiated  the  purchase  based  on  the  $7,113,000  present  value,
discounted  10%,  of  gas  reserves  recoverable  (and  the estimated future net
revenues  to  be  derived)  from  proved  reserves  in the Hi-Pro properties, as
estimated  as  of  November  1,  2003.

     The  $6,800,000  purchase  price  reflects  a  deduction, negotiated by the
parties  in  January  2004,  to  account for the decrease in gas production from
October  2003  due  to the impact on production from deferred maintenance on the
properties,  and  the  expected  cost  of  such  maintenance work after closing.

-     TERMS  OF  THE  PURCHASE.  The  purchase  price  of  $6,800,000  was paid:

  *   $  776,700 cash by RMG, $75,000 of which was non refundable as of December
      31,  2003.
  *   $  588,300 net  revenues from November 1, 2003 to December 31, 2003, which
      were  retained  by  Hi-Pro.(1)
  *   $  500,000 by  USE's 30 day promissory note (secured by 166,667 restricted
      shares  of USE  common  stock,  valued  at  $3.00  per  share).(2)
  *   $  600,000  by  200,000  restricted shares of USE common  stock (valued at
      $3.00 per  share).(3)
  *   $ 700,000  by  233,333  restricted  shares of RMG common stock  (valued at
      $3.00 per  share).(4)
  *   $3,635,000  cash,  loaned  to  RMG  I  under the credit facility agreement
      ----------
      $6,800,000

     (1)  RMG  I  paid all January operating costs at closing. Net revenues from
          the  purchased  properties  for  January 2003 were credited to RMG I's
          obligations  under  the  credit facility agreement. These net revenues
          were considered by the parties to be a reduction in the purchase price
          which RMG I otherwise would have paid at the January 30, 2004 closing.
     (2)  Pursuant  to  the  terms  of  the  promissory note, USE issued 166,667
          shares  as payment in full of this obligation during the first quarter
          of  2004.
     (3)  USE  agreed  to  file  a resale registration statement with the SEC to
          cover  public  resale  of  these  200,000  shares.


                                        2



     (4)  From  November  1,  2004  to November 1, 2006, the RMG shares shall be
          convertible at Hi-Pro's sole election into restricted shares of common
          stock  of  USE.  The number of USE shares to be issued to Hi-Pro shall
          equal  (A)  the  number  of  RMG shares to be converted, multiplied by
          $3.00  per share, divided by (B) the average closing sale price of the
          shares  of  USE for the 10 trading days prior to notice of conversion.
          The  conversion  right  is  exercisable  cumulatively,  as to at least
          16,666  RMG  shares  per  conversion.

     USE  issued  the  participating  lenders  three year warrants to purchase a
total  of  318,465  shares  of common stock of USE (subject to vesting) at $3.30
cash  per share. At closing of the Hi-Pro acquisition, warrants on 63,693 shares
vested. The remaining warrants will vest at the rate of the right to buy one USE
share  for each $157 which RMG I subsequently borrows under the credit facility.
Regardless  of  when  or  if  vested, all warrants will expire on the earlier of
January  30,  2007, or the 180th day after USE notifies the warrant holders that
USE's  stock  price  has achieved or exceeded $6.60 per share for 15 consecutive
business  days.  USE has agreed to file a registration statement with the SEC to
cover  public  resale  of  the  warrant  shares.

     RMG  assumed  a  liability  in  the  amount  of  $155,700 for royalty owner
payments  that were in suspense. The assumption of this liability resulted in an
increase  in  the  basis  of  proven  properties.

     RMG  also  signed  a  promissory  note  payable  to Hi-Pro in the amount of
$115,000  for  the  purchase of miscellaneous inventory and office equipment and
field  equipment. The purchase of these assets was in addition to the $6,800,000
purchase price of the Hi-Pro coalbed methane properties. The promissory note was
due  on  March  30, 2004 and bore no interest if it was timely paid. RMG retired
the  note  prior  to  its  maturity  date  in  March  2004.

     In  a  separate  transaction,  RMG  purchased 5 trucks from an affiliate of
Hi-Pro  for $120,000. This transaction was completed by the payment of $4,500 in
cash  and  a  promissory  note  to  a commercial bank in the amount of $115,700.

     As  disclosed  in  the  Company's Form 10-K for the year ended December 31,
2003,  in  June  2003,  the  Company  and  RMG  contributed  all their producing
properties  into  a  newly  formed  entity for an equity position in that entity
(Pinnacle  Gas Resources, Inc.). The Company and RMG therefore had no production
of  coal  bed  methane  gas  as  of December 31, 2003. The acquisition of Hi-Pro
therefore  became  100%  of  the coal bed methane production for the Company and
RMG.

ITEM  7.  FINANCIAL  STATEMENTS,  PRO  FORMA FINANCIAL INFORMATION AND EXHIBITS.

     (a)  FINANCIAL  STATEMENTS  OF BUSINESSES ACQUIRED. The following financial
statements  for  the Properties acquired in the Hi-Pro acquisition for the years
ended  December  31,  2003,  2002  and  2001  are  filed  herewith:

     INDEX     PAGE

Report  of  Independent  Certified  Public  Accountants                        5
Statements of Revenue  and Direct Operating  Expenses of Acquired Hi - Pro
      Properties                                                               6
Notes  to  Financial  Statements                                             7-9

     (b)  PRO  FORMA  FINANCIAL  INFORMATION.  The  unaudited pro forma combined
balance  sheet  as  of  December  31, 2003, and the unaudited pro forma combined
statement  of


                                        3



operations for the year ended December 31, 2003, which give effect
to  the  acquisition  of  the Hi-Pro Properties are filed herein on pages 10-16.


                                        4



Board  of  Directors
U.S.  Energy  Corp.

     We  have audited the accompanying Combined Statements of Revenue and Direct
Operating  Expenses of Certain Acquired Property Interests (combined statements)
for  the  years  ended December 31, 2003, 2002 and 2001. The combined statements
are the responsibility of the Acquired Properties management. Our responsibility
is  to  express  an  opinion  on  the  combined  statements based on our audits.

     We  conducted  our  audits  in accordance with auditing standards generally
accepted  in  the United States of America. Those standards require that we plan
and  perform the audit to obtain reasonable assurance about whether the combined
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the  amounts and disclosures in the combined
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
presentation  of  the  combined statements. We believe that our audits provide a
reasonable  basis  for  our  opinion.

     The  accompanying  combined  statements  were  prepared  for the purpose of
complying  with  the  rules  and  regulations  of  the  Securities  and Exchange
Commission  (for inclusion in the Form 8-K of U.S. Energy Corp.) as described in
Note  A  and  are  not  intended  to  be a complete presentation of the Acquired
Properties  revenue  and  expenses.

     In  our  opinion, the combined statements referred to above present fairly,
in all material respects, the revenue and direct operating expenses as described
in  Note  A  of the Acquired Property Interests for the years ended December 31,
2003, 2002 and 2001, in conformity with accounting principles generally accepted
in  the  United  States  of  America.


/s/  Grant  Thornton  LLP



Oklahoma  City,  Oklahoma
April  7,  2004


                                        5



                                U.S. ENERGY CORP.
              STATEMENTS OF REVENUE AND DIRECT OPERATING EXPENSES
                          OF ACQUIRED HI-PRO PROPERTIES






                                   Year  ended  December  31,


                                  2003         2002        2001
                               -----------  ----------  ----------
                                               
Revenue- gas sales             $ 4,381,100  $3,846,600  $6,922,500

Direct operating expenses
  Lease operations               1,091,700     956,100   1,181,700
  Production taxes                 521,800     495,800     849,800
                               -----------  ----------  ----------

                                 1,613,500   1,451,900   2,031,500
                               -----------  ----------  ----------

Excess of revenue over direct
  operating expenses           $ 2,767,600  $2,394,700  $4,891,000
                               ===========  ==========  ==========





        The accompanying notes are an integral part of these statements.


                                        6



                                U.S. ENERGY CORP.
                       NOTES TO STATEMENTS OF REVENUE AND
                          DIRECT OPERATING EXPENSES OF
                           ACQUIRED HI-PRO PROPERTIES

                        December 31, 2003, 2002 and 2001


NOTE  A  -  BASIS  OF  PRESENTATION  AND  GENERAL  INFORMATION

     The accompanying combined statements present the ownership interests of the
Company  in the revenue and direct operating expenses of certain coalbed methane
gas  properties  acquired in the acquisition of the Hi-Pro Properties on January
30,  2004.  The  combined  statements  include  the revenue and direct operating
expenses of the Properties for the years ended December 31, 2003, 2002 and 2001.

     The  accompanying  combined  statements  do  not  reflect  provisions  for
depletion,  depreciation, and amortization, if any, which may have been recorded
in  the  financial records of the previous owner. The combined statements do not
reflect  certain  additional  expenses that may have been incurred in connection
with  the  ownership  of  the  Properties  such  as interest on indebtedness and
general  and administrative expenses incurred individually by the prior interest
owners  as  such  costs  are  not comparable to those which will result from the
future  operation  of  the  Properties.

     Lease operations expense includes direct costs of operating the Properties.

     The  Properties are not taxpaying entities. Any taxable income arising from
the  operation  of  the  Properties  accrues  directly  to  the  interest owners
Accordingly,  no  provision  for  income  taxes  has  been  made in the combined
statements  of  revenue  and  direct  operating  expenses.

NOTE  B  -  GAS  RESERVE  DATA  (UNAUDITED)

     The  following estimates of proved developed and proved undeveloped reserve
quantities  and related standardized measure of discounted future net cash flows
are  estimates  only,  and  do  not purport to reflect realizable values or fair
market  values  of  the  Properties'  reserves.  It  is  emphasized that reserve
estimates  are  inherently  imprecise  and that estimates of new discoveries are
more  imprecise  than  those  of  producing oil and gas properties. Accordingly,
these  estimates are expected to change as future information becomes available.

     Proved  reserves  are  estimated  reserves  of  coalbed  methane  gas  that
geological  and  engineering  data  demonstrate  with reasonable certainty to be
recoverable  in  future  years from known reservoirs under existing economic and
operating  conditions.  Proved  developed  reserves  are  those  expected  to be
recovered  through  existing  wells,  equipment,  and  operating  methods.


                                        7



                                U.S. ENERGY CORP.
                       NOTES TO STATEMENTS OF REVENUE AND
                          DIRECT OPERATING EXPENSES OF
                           ACQUIRED HI-PRO PROPERTIES

                        December 31, 2003, 2002 and 2001

     The standardized measure of discounted future net cash flows is computed by
applying year-end prices of gas (with consideration of price changes only to the
extent  provided by contractual arrangements) to the estimated future production
of  proved  gas  reserves, less estimated future expenditures (based on year-end
costs)  to  be  incurred  in  developing  and producing the proved reserves, and
assuming  continuation of existing economic conditions. The estimated future net
cash  flows  are  then  discounted  using  a  rate  of 10% a year to reflect the
estimated timing of the future cash flows. The following summaries of changes in
reserves  and  standardized  measure  of  discounted  future net cash flows were
prepared from estimates of proved reserves developed by an independent petroleum
engineer  and  Company  personnel.  The  acquired  properties  have  no  proved
undeveloped  reserves.


                  CHANGE IN STANDARDIZED MEASURE OF QUANTITIES






                                          December 31,

                                   2003         2002         2001
                                                 
                                   MCF          MCF          MCF
                                ----------   ----------   ----------
Beginning of Year                5,409,210    7,349,918    8,997,579
Revision of previous estimates    (170,404)     628,246     (276,442)
Extensions & Discoveries                 -            -    2,088,700
Production                      (1,834,113)  (2,568,954)  (3,459,919)
                                ----------   ----------   -----------
End of Year                      3,404,693    5,409,210    7,349,918
                                ==========   ==========   ===========



                                        8



                                U.S. ENERGY CORP.
                       NOTES TO STATEMENTS OF REVENUE AND
                          DIRECT OPERATING EXPENSES OF
                           ACQUIRED HI-PRO PROPERTIES

                        December 31, 2003, 2002 and 2001


NOTE  B  -  OIL  AND  GAS  RESERVE  DATA  (UNAUDITED)  -  CONTINUED

       Changes in Standardized Measure of Discounted Future Net Cash Flows
                         Related to Proved Gas Reserves




                                                        December 31,

                                              2003          2002          2001
                                          ------------  ------------  -------------
                                                             
Standardized measure - beginning of year  $11,000,591   $ 4,727,437   $ 45,547,500

Sale & Transfer, net of production cost    (2,767,511)   (2,394,703)    (4,890,983)

Net  change in sales & transfer price,
net of production cost                        370,529     5,373,659    (30,173,881)

Extensions, discoveries and improved
recovery, net of future production and
development cost                                    -             -      1,343,452

Revision of Quantity Estimate                (353,171)    1,277,650       (177,806)

Accretion of Discount                       1,100,059       472,743      4,554,750

Change in Production Rate & Other          (2,294,097)    1,543,805    (11,475,595)
                                          -----------   -----------   ------------
Standardized measure - end of year        $ 7,056,400   $11,000,591   $  4,727,437
                                          ===========   ===========   ============



                                        9



                                U.S. ENERGY CORP.

         PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003
                                  (UNAUDITED)


     The unaudited pro forma combined condensed consolidated balance sheet as of
December  31,  2003  and the unaudited pro forma combined condensed consolidated
statement  of operations for the year ended December 31, 2003 give effect to the
acquisition  of  certain  property  interests acquired in the acquisition of the
Hi-Pro  Properties  by  U.S.  Energy  Corp.  ("USE"  or  "the Company"), and its
subsidiary  Rocky  Mountain  Gas, ("RMG") which has been accounted for using the
purchase  method  of accounting. The pro forma combined financial statements are
presented  for  illustrative purposes only and are not necessarily indicative of
the  operating  results  that  would have occurred if the transactions given pro
forma  effect  herein  had been consummated as of the time reflected herein, nor
are  they  necessarily  indicative  of the future operating results or financial
position  of  the  Company.  The  pro forma adjustments are based upon available
information  and  certain  assumptions that the Company believes are reasonable.
This  information  should  be  read in conjunction with the historical financial
statements  and  related  notes of the Company and the Statements of Revenue and
Direct  Operating  Expenses  of  Hi-Pro  Acquired  Properties.


                                       10



                       U.S. ENERGY CORP. AND SUBSIDIARIES
             PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
                                     ASSETS
                                DECEMBER 31, 2003
                                   (UNAUDITED)



                                                                ACQUISITION
                                                                ADJUSTMENTS
                                                 U.S. ENERGY    FOR HI-PRO
                                                  HISTORICAL    PROPERTIES         COMBINED
                                                 ------------  ------------       -----------
                                                                              
CURRENT ASSETS:
  Cash and cash equivalents                      $ 4,084,800   $  (706,200)  (1)  $ 3,378,600
  Accounts Receivable                                397,700       551,100   (1)      948,800
  Other Current Assets                               708,900        88,300   (1)      797,200
                                                 ------------  ------------       -----------
    Total current assets                           5,191,400       (66,800)         5,124,600

INVESTMENTS:                                       7,831,900                        7,831,900

PROPERTIES AND EQUIPMENT:
  Land, Buildings, Machinery and Oil Properties   12,884,100       146,700   (1)   13,030,800
  Proven coal bed methane properties                             3,285,300   (1)    3,285,300
  Unproved coal bed methane properties
    excluded from amortization                     1,204,400     3,213,000   (1)    4,417,400
                                                 ------------  ------------       -----------
    Total property and equipment                  14,088,500     6,645,000         20,733,500
  Less accumulated depreciation,
    depletion and amortization                    (6,901,400)                      (6,901,400)
                                                 ------------  -----------        -----------
    Net property and equipment                     7,187,100     6,645,000         13,832,100

OTHER ASSETS:                                      3,719,300       145,000   (1)    3,864,300
                                                 ------------  ------------       -----------
  Total assets                                   $23,929,700   $ 6,723,200         30,652,900
                                                 ============  ============       ===========



        The accompanying notes are an integral part of these statements.


                                       11



                       U.S. ENERGY CORP. AND SUBSIDIARIES
             PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET
                       LIABILITIES AND STOCKHOLDERS EQUITY
                                DECEMBER 31, 2003
                                   (UNAUDITED)



                                                               ACQUISITION
                                                               ADJUSTMENTS
                                                U.S. ENERGY    FOR HI-PRO
                                                HISTORICAL     PROPERTIES          COMBINED
                                               -------------  -------------       -----------
                                                                              
CURRENT LIABILITIES                            $  1,909,700   $  1,615,400   (1)  $ 3,525,100

LONG-TERM DEBT                                    1,317,600      3,242,200   (1)    4,559,800

ASSET RETIREMENT OBLIGATIONS                      7,264,700        372,100   (1)    7,636,800

OTHER ACCRUED LIABILITIES                         2,158,600                         2,158,600

DEFERRED GAIN ON SALE OF ASSET                    1,295,700                         1,295,700

MINORITY INTERESTS                                  496,000        700,000   (1)    1,196,000

COMMITMENTS AND CONTINGENCIES

FORFEITABLE COMMON STOCK,  $.01 par value
  465,880 and 500,788 shares issued,
  forfeitable until earned                        2,726,600                         2,726,600

SHAREHOLDERS' EQUITY
  Common Stock, $.01 par value;
    unlimited shares authorized; 12,824,698
    and 13,024,698 shares issued respectively    49,833,800        793,500   (1)   50,627,300
  Accumulated deficit                           (43,073,000)                      (43,073,000)
                                               -------------  ------------        -----------
    Total shareholders' equity                    6,760,800        793,500          7,554,300
                                               -------------  -------------       -----------
  Total liabilities and shareholders' equity   $ 23,929,700   $  6,723,200         30,652,900
                                               =============  =============       ===========



         The accompanying notes are an integral part of these statements


                                       12



                       U.S. ENERGY CORP. AND SUBSIDIARIES

                    PRO FORMA COMBINED CONDENSED CONSOLIDATED
                            STATEMENTS OF OPERATIONS
                          Year Ended December 31, 2003
                                   (Unaudited)



                                                HI - PRO

                                U.S. ENERGY    PROPERTIES    ADJUSTMENTS          COMBINED
                               -------------  ------------  -------------       ------------
                                                                          
OPERATING REVENUES:
  Gas sales                    $    287,400   $ 4,381,100   $          -        $  4,668,500
  Other                             549,900             -              -             549,900
                               -------------  ------------  -------------       ------------
                                    837,300     4,381,100              -           5,218,400

OPERATING COSTS AND EXPENSES:
  Gas operations                    313,100     1,613,600      1,601,600   (2)     3,528,300
  Mineral holding costs           1,461,700             -              -           1,461,700
  General and administrative      6,300,400             -        485,900   (3)     6,786,300
                               -------------  ------------  -------------       ------------
                                  8,075,200     1,613,600      2,087,500          11,776,300
                               -------------  ------------  -------------       ------------

OPERATING (LOSS) GAIN:           (7,237,900)    2,767,500     (2,087,500)         (6,557,900)

OTHER INCOME & EXPENSES:
  Other Income                      758,500             -              -             758,500
  Other Expenses                   (831,500)            -              -            (831,500)
                               -------------  ------------  -------------       ------------
                                    (73,000)           --             --             (73,000)

(LOSS) GAIN INCOME BEFORE
  MINORITY INTEREST,
  PROVISION FOR INCOME TAXES,
  DISCONTINUED OPERATIONS
  AND CUMULATIVE EFFECT        ------------   -----------   ------------        ------------

  OF ACCOUNTING CHANGE:        $ (7,310,900)  $ 2,767,500   $ (2,087,500)       $ (6,630,900)
                               ============   ===========   ============        ============

NET (LOSS) INCOME PER SHARE
  BASIC                        $      (0.65)                                    $      (0.58)

NET (LOSS) INCOME PER SHARE    $      (0.65)                                    $      (0.58)
  DILUTED

BASIC WEIGHTED AVERAGE
  SHARES OUTSTANDING             11,180,975                                       11,380,975
                               ============                                     ============

DILUTED WEIGHTED AVERAGE
  SHARES OUTSTANDING             11,180,975                                       11,380,975
                               ============                                     ============



        The accompanying notes are an integral part of these statements.


                                       13



                                U.S. ENERGY CORP.
                          NOTES TO UNAUDITED PRO FORMA
              COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


NOTE  A  -  BASIS  OF  PRESENTATION

     On  January  30,  2004,  the  Company  acquired  the Hi-Pro coalbed methane
Properties  for $6,800,000 and other equipment, inventory and vehicles were also
purchased  for  approximately  $235,000.  The  accompanying  pro  forma combined
condensed  consolidated  balance  sheet has been presented as if the acquisition
occurred  on December 31, 2003 and the accompanying pro forma combined condensed
consolidated  statement  of  operations for the year ended December 31, 2003 has
been  prepared  as  if  the  acquisition  was  consummated  on  January 1, 2003.

     Basic  earnings  per  share  are  based upon the weighted average number of
common  shares  outstanding.  Diluted earnings per common share are based on the
assumption  that  all  of  the  common  stock  options and purchase warrants are
converted  into  common  shares  using  the  treasury stock method. There are no
differences in net earnings for purposes of computing basic and diluted earnings
per  share as conversion of the common stock options and purchase warrants would
have  not  effect  on  net  earnings.

NOTE  B  -  PRO  FORMA  ADJUSTMENTS

     Pro  forma  adjustments  are necessary to reflect the assumed effect of the
acquisition  on  the  balance  sheet  as  of  December 31, 2003 and statement of
operations  assuming  the  acquisition  was  consummated on January 1, 2003. The
accompanying  pro  forma  balance  sheet and statement of operations reflect the
following  adjustments:

     (1)  To  record the acquisition of the Hi-Pro properties as of December 31,
          2003.  The  fair  value  of  stock  warrants  to acquire USE stock and
          overriding  royalty  interests  on acquired properties conveyed to the
          lender  are  reflected  as  discount  on  debt.

     (2)  To  record  pro  forma  overriding royalty to lender, depletion, fixed
          operating  expenses  and  asset  retirement  accretion  related to the
          Hi-Pro  properties  as though they had been purchased as of January 1,
          2003.

     (3)  To  record interest expense on the long term debt and the amortization
          of  warrants issued in relation to that debt and other debt issue cost
          as  though  the  Hi-Pro properties had been purchased as of January 1,
          2003.


                                       14



                                U.S. ENERGY CORP.
                          NOTES TO UNAUDITED PRO FORMA
              COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003


NOTE  C  -  GAS  RESERVE  DATA  (UNAUDITED)

     The  following  tables  contain  certain gas disclosures reflecting the pro
forma  combined  gas  activities as of and for the year ended December 31, 2003.

                      Summary of Changes in Proved Reserves




                                                              December 31,
                                                          
                                                                 2003
                                                                  MCF
                                                             -------------
Beginning of Year                                                5,994,813
Revision of previous estimates                                    (170,404)
Exchange of reserves in place (1)                                 (504,087)
Production                                                      (1,915,629)
                                                             -------------
End of Year                                                      3,404,693
                                                             =============

     (1)  During  June  2003,  RMG contributed proved and unproved properties in
          exchange  for  a  37.5%  interest  in  Pinnacle

            Standardized Measure of Discounted Future Net Cash Flows
                        Relating to Proved Gas Reserves

                                                              December 31,
                                                                 2003
                                                             -------------
Future Cash Inflows                                          $  14,217,600
Future Cost                                                  $  (5,613,700)
                                                             -------------
Future Net Cash Flows                                        $   8,603,900
10% Discount Factor                                          $  (1,547,500)
                                                             -------------
Standardized measure of discounted                           $   7,056,400
                                                             =============
future net cash flows



                                       15



                                U.S. ENERGY CORP.
                          NOTES TO UNAUDITED PRO FORMA
              COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2003

NOTE  C  -  OIL  AND  GAS  RESERVE  DATA  (UNAUDITED)  -  CONTINUED


      Changes in Standardized Measure of Discounted Future Net Cash Flows
                         Related to Proved Gas Reserves





                                                                                 December 31,
                                                                             
                                                                                     2003
                                                                                -------------
Standardized measure - beginning of year                                        $  11,889,019

Sale & Transfer, net of production cost                                            (2,830,711)

Net  change in sales & transfer price,
net of production cost                                                                370,529

Revision of Quantity Estimate                                                        (353,171)

Accretion of Discount                                                               1,188,902

Net Change in income tax (1)                                                                -

Exchange of reserves in place (2)                                                    (825,228)

Change in Production Rate & Other                                                  (2,382,940)
                                                                                -------------
Standardized measure - end of year                                              $   7,056,400
                                                                                =============


(1)  Due  to  significant net operating loss carryforwards no income tax expense
     is  recognized

(2)  During  June  2003,  RMG  contributed  proved  and  unproved  properties in
     exchange  for  a  37.5%  interest  in  Pinnacle



                                       16



                                   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:  April  15,  2004               By:     /s/  Robert  Scott  Lorimer
                                               ---------------------------
                                                Robert  Scott  Lorimer


                                       17