8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 25, 2024

U.S. ENERGY CORP.

(Exact name of registrant as specified in its charter)

Delaware	000-06814	83-0205516
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1616 S. Voss, Suite 725, Houston, Texas	77057
(Address of principal executive offices)	(Zip Code)

(303) 993-3200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☑	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $0.01 par value	USEG	NASDAQ Stock Market LLC (Nasdaq Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.01. Completion of Acquisition or Disposition of Assets.

On June 26, 2024, U.S. Energy Corp. (the “Company”, “we” and “us”), entered into a Purchase and Sale Agreement for Farmout Assignment (the “Purchase Agreement”) with Wavetech Helium, Inc. (“Wavetech”). Pursuant to the Purchase Agreement, effective June 1, 2024, we acquired rights to a farmout agreement (the “Farmout Agreement”) pursuant to which Wavetech had the rights to certain properties located across the Kevin Dome Structure in Toole County, Montana (the “Property”), which vest upon the drilling of two wells on the Property. Specifically, we acquired eighty-two and one-half percent (82.5%) of Wavetech’s rights under the Farmout Agreement (the “Assigned Rights”).

In consideration for the purchase of the Assigned Rights, we paid Wavetech $2.0 million in cash and issued Wavetech 2,600,000 shares of restricted common stock (the “Wavetech Shares”). Additionally, Wavetech agreed to be responsible for 100% of the costs and expenses associated with its 17.5% carried working interest in the Assigned Rights, with the exception of any monthly lease operating expenses, until such time as Wavetech has paid $20.0 million in such expenses.

The Purchase Agreement included customary representations and warranties consistent with a transaction of the size and type of the acquisition.

The foregoing summary description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit10.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 1.01.

Item 3.02 Unregistered Sales of Equity Securities.

The discussion of the Purchase Agreement and the Wavetech Shares in Item 1.01 above is incorporated by reference into this Item 3.02 in its entirety. The issuance of the Wavetech Shares was exempt from registration pursuant to Section 4(a)(2) and/or Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), since the foregoing issuance did not involve a public offering, the recipient was an “accredited investor”, and the recipient acquired the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by us or our representatives. The securities are subject to transfer restrictions, and the certificates or book-entry notations evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom.

Item 8.01. Other Events.

On June 25, 2024, the Company entered into a non-binding letter of intent (the “LOI”), with Synergy Offshore LLC (“Synergy”), relating to the proposed acquisition by the Company, from Synergy, of 24,000 net operated acres, located across the Kevin Dome Structure in Toole County, Montana, which are highly contiguous to the Wavetech Property (the “Synergy Asset”).

Under the terms of the non-binding LOI, Synergy will assign to the Company 87.5% of their working interests in the Synergy Asset for the following consideration:

● $2.0 million in cash;

● 4,845,900 shares of the Company’s restricted common stock;

● 6,250,000 warrants to purchase one share of the Company’s common stock, contingent on achieving certain milestones at an exercise price of $0.01 per share;

● a $12.5 million carried working interest for which the Company will commit to pay Synergy’s exploration, drilling, and completion costs attributable to Synergy’s 12.5% retained working interest;

● 18.0% of future amounts realized by the Company in connection with tax credits obtained for carbon sequestration; and

● an Area of Mutual Interest (the “Synergy AMI”) under which Synergy will have the right to participate for its proportionate interest of 12.5% in any new leases.

The definitive purchase agreement relating to the acquisition is expected to contain customary representations and warranties of the parties, and mutually acceptable terms for demand registration rights and piggyback registration rights.

Synergy is controlled by Mr. Duane H. King, a member of the Board of Directors of the Company, who serves as the Chief Executive Officer and Manager of Synergy, and John A. Weinzierl, the Company’s Chairman, is an approximate thirty percent beneficial owner of Synergy.

The Synergy acquisition is subject to among other things, the negotiation of definitive agreements, and the Company coming to agreement with Synergy on definitive agreements and terms, satisfactory due diligence, shareholder approval of the issuance of shares of common stock to Synergy in the transaction, and other customary conditions to closing, and we cannot estimate the expected closing date of such acquisition. The parties may not be able to come to terms on definitive acquisition agreements, and for that or other reasons, the acquisition of the Synergy Asset may not close on a timely basis, on the terms set forth in the LOI, or at all. The LOI currently includes an anticipated closing date of September 30, 2024, subject to the timing associated with a planned proxy statement to request stockholder approval for the issuance of shares of common stock as part of the acquisition.

The foregoing summary description of the LOI does not purport to be complete and is qualified in its entirety by reference to the full text of the LOI, which is filed as Exhibit99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.

On July 1, 2024, the Company filed a press release disclosing the consummation of the Purchase Agreement and the entry into the LOI, and certain other matters, a copy of which is attached hereto as Exhibit99.2, which is incorporated by reference into this Item 8.01 in its entirety.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
10.1*#	Purchase and Sale Agreement for Farmout Assignment, by and between U.S. Energy Corp., as buyer and Wavetech Helium, Inc., as seller, dated June 26, 2024 and effective June 1, 2024
99.1*	Letter of Intent dated June 25, 2024, between Synergy Offshore LLC and U.S. Energy Corp.
99.2*	Press Release dated July 1, 2024
104	Inline XBRL for the cover page of this Current Report on Form 8-K

* Filed herewith.

# Certain schedules and exhibits have been omitted pursuant to Item 601(b)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that U.S. Energy Corp. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this communication and in Exhibits 99.1 and 99.2 included herewith, which are not statements of historical fact constitute forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements.

Important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the negotiations and any subsequent definitive agreements with respect to the proposed Synergy acquisition, and the possibility that the terms and conditions set forth in any definitive agreements with respect to the proposed acquisition may differ materially from the terms and conditions set forth in the LOI; (2) the outcome of any legal proceedings that may be instituted against the parties following the announcement of the proposed Synergy acquisition and any definitive agreements with respect thereto; (3) the inability to complete the proposed acquisition, including due to failure to obtain approval of the stockholders of the Company; (4) the receipt of an unsolicited offer from another party for an alternative business transaction that could interfere with the proposed transaction; (5) the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the proposed transaction; (6) the ability to recognize the anticipated benefits of the proposed transaction, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably and retain its key employees; (7) costs related to the proposed transaction; (8) changes or other circumstances that could give rise to the right to Synergy or the Company (collectively, the “LOI Parties”) to terminate the LOI or assuming such definitive agreements are agreed to, the definitive agreements; (9) the effect of such termination, including fees potentially payable in connection therewith; (10) the ability to obtain approvals and meet other closing conditions to the acquisition on a timely basis or at all, including the risk that approvals required are not obtained on a timely basis or at all, or are obtained subject to conditions that are not anticipated or the expected benefits of the transaction; (11) risks associated with the integration of recently acquired assets; (12) the Company’s ability to comply with the terms of its senior credit facilities; (13) the ability of the Company to retain and hire key personnel; (14) the business, economic and political conditions in the markets in which the Company operates; (15) the volatility of oil and natural gas prices; (16) the Company’s success in discovering, estimating, developing and replacing oil and natural gas reserves; (17) risks of the Company’s operations not being profitable or generating sufficient cash flow to meet its obligations; (18) risks relating to the future price of oil, natural gas and NGLs; (19) risks related to the status and availability of oil and natural gas gathering, transportation, and storage facilities; (20) risks related to changes in the legal and regulatory environment governing the oil and gas industry, and new or amended environmental legislation and regulatory initiatives; (21) risks relating to crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; (22) technological advancements; (23) changing economic, regulatory and political environments in the markets in which the Company operates; (24) general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine and the global response to such conflict; (25) actions of competitors or regulators; (26) the potential disruption or interruption of the Company’s operations due to war, accidents, political events, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the Company’s control; (27) pandemics, governmental responses thereto, economic downturns and possible recessions caused thereby; (28) inflationary risks and recent changes in inflation and interest rates, and the risks of recessions and economic downturns caused thereby or by efforts to reduce inflation; (29) risks related to military conflicts in oil producing countries; (30) changes in economic conditions; limitations in the availability of, and costs of, supplies, materials, contractors and services that may delay the drilling or completion of wells or make such wells more expensive; (31) the amount and timing of future development costs; (32) the availability and demand for alternative energy sources; (33) regulatory changes, including those related to carbon dioxide and greenhouse gas emissions; (34) uncertainties inherent in estimating quantities of oil and natural gas reserves and projecting future rates of production and timing of development activities; (35) risks relating to the lack of capital available on acceptable terms to finance the Company’s continued growth; (36) the review and evaluation of potential strategic transactions and their impact on stockholder value and the process by which the Company engages in evaluation of strategic transactions; and (37) other risk factors included from time to time in documents U.S. Energy files with the Securities and Exchange Commission, including, but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly filed reports, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, and future annual reports and quarterly reports. These reports and filings are available at www.sec.gov. unknown or unpredictable factors also could have material adverse effects on the Company’s future results.

The Company cautions that the foregoing list of important factors is not complete, and does not undertake to update any forward-looking statements except as required by applicable law. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of any LOI Parties are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included in this communication and in Exhibits 99.1 and 99.2 are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that are not paid for by the Company. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Additional Information and Where to Find It

In connection with the proposed Synergy acquisition (the “Transaction”), and assuming the Company can come to definitive acquisition terms with Synergy regarding the Transaction, and such Transaction terms continue to include the issuance of a material amount of shares of common stock of the Company, the Company plans to file with the Securities and Exchange Commission (SEC) a proxy statement to seek shareholder approval for the Transaction, which, when finalized, will be sent to the shareholders of the Company seeking their approval of the respective transaction-related proposals. This communication is not a substitute for any proxy statement or other document the Company may file with the Securities and Exchange Commission (SEC) in connection with the proposed Transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE TRANSACTION.

Investors and security holders may obtain copies of these documents free of charge, when available, through the website maintained by the SEC at www.sec.gov or from the Company at its website, https://usnrg.com. Documents filed with the SEC by the Company will be available free of charge on the “Investors,” “SEC Filings” page of our website at https://usnrg.com or, alternatively, by directing a request by mail, email or telephone to U.S. Energy, Inc. at 1616 S. Voss, Suite 725, Houston, Texas 77057; IR@usnrg.com; or (303) 993-3200, respectively.

No Offer Or Solicitation

This communication is for informational purposes only and is not intended to and shall not constitute a proxy statement or the solicitation of a proxy, consent or authorization with respect to any securities or in respect of the Transaction and is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy or subscribe for any securities or a solicitation of any vote of approval, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. 

Participants in the Solicitation

The Company, Synergy and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the respective shareholders of the Company in respect of the proposed Transaction under the rules of the SEC. Information about the Company’s directors and executive officers and their ownership of the Company is available in the Company’s Definitive Proxy Statement on Schedule 14A, as filed with the Securities and Exchange Commission on April 17, 2024. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC regarding the Transaction when they become available. Investors should read the proxy statement carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from the Company using the sources indicated above.

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.
By:	/s/ Ryan Smith
	Ryan Smith
	Chief Executive Officer
Dated:	July 1, 2024

EX-10.1

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

For

FARMOUT ASSIGNMENT

This Purchase and Sale Agreement for Farmout Assignment (this “Agreement”) is entered into this 26th day of June, 2024, to be effective as of June 1, 2024, (the “Effective Date”) by and between U.S. Energy Corp, a Delaware corporation, whose address is 1616 S. Voss, Houston, Texas 77057 (“USEG” or “Buyer”) and Wavetech Helium, Inc., a Colorado corporation, whose address is 1801 Broadway, Suite 600, Denver, Colorado 80202 (“Wavetech” or “Seller”). USEG and Wavetech are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

WHEREAS, effective February 8, 2022, Wavetech entered into an agreement (the “Farmout Agreement”) with Falcon Energy Partners, LLC, Tom and Jo Swanson Trust, and Zana Resources, LLC (collectively “Farmors”) under which Wavetech has the exclusive right to earn all of Farmors’ right, title and interest in the following within the area depicted on Exhibit “A” attached hereto (the “Property”): (i) all oil, gas, minerals, leases, assignments, conveyances, partial assignments, or other interests of any nature or kind, specifically including helium, and (ii) all substances produced in association with all formations (insofar as (i) and (ii) cover formations below the top of the Potlach Anhydrite formation in Toole County, Montana (the “Covered Depths”)), (such rights as to (i) and (ii) as to the Covered Depths the “Earned Interests”);

WHEREAS, Wavetech’s right under the Farmout to an assignment from Farmors of the Earned Interests vests upon the drilling of two wells on the Property (“Earning Wells”) commenced on or before July 1, 2024 (the “Commencement Deadline”) to the top of the Precambrian formation (the “Earning Conditions”); and

WHEREAS, USEG desires to purchase and receive from Wavetech an assignment of eighty-two and one-half percent (82.5%) of Wavetech’s rights and obligations under the Farmout Agreement (the “Assigned Rights”), and Wavetech desires to sell and deliver to USEG the Assigned Rights, subject to all rights of Farmors, with Seller excepting and reserving the remaining seventeen and one-half percent (17.5%) of Wavetech’s rights and obligations under the Farmout Agreement (the “Seller Reserved Interest”).

NOW THEREFORE, for the mutual benefits and covenants contained herein, and for other good and valuable consideration, the Parties agree to the following terms and conditions:

1. Purchase and Sale. Subject to the terms herein, Buyer agrees to purchase and receive the Assigned Rights from Seller, and Seller agrees to sell and deliver the Assigned Rights to Buyer.

2. Purchase Price. On the date of Closing, Buyer will pay or deliver to Seller the following (the “Purchase Price”):

a. Cash.  Two million dollars ($2,000,000.00) (the “Cash”), plus

b. Shares.  Two million six hundred thousand (2,600,000) shares of U.S. Energy restricted common stock (the “Shares”), and

1

c. The Carried Working Interest. The “Carried Working Interest” means Buyer’s commitment to cover, pay for and be liable for one hundred percent (100%) of all Seller Costs attributable to the Seller Reserved Interest during the Carry Period. The “Carry Period” is the Effective Date of this Agreement through the date that the Seller Costs attributable to the Seller Reserved Interest total twenty-million dollars ($20,000,000.00) (the “Carry Amount”). “Seller Costs” are all capital costs, including costs relating to project exploration, appraisal, development, of drilling, completing, and equipping any and all wells to the extent that such costs are chargeable to or payable by Seller under the Joint Operating Agreement attached hereto as Exhibit “B,” naming Buyer as the Operator (the “JOA”). Monthly lease operating expenses (including without limitation rental payments, lease maintenance payments and title curative expenses and payments) (“LOE”) shall not be considered Seller Costs and shall be accounted as per Exhibit “C” attached to the JOA. During the Carry Period, LOE shall be netted against revenue. In the event that there is not sufficient revenue to cover LOE during a particular month, then during the Carry Period, any negative LOE will be carried forward to the next operating month and offset against future net revenue until the cumulative negative LOE is fully offset. Buyer has the option to apply a portion or all of the negative LOE to the outstanding Carry Amount. Following expiration of the Carry Period, Seller shall be liable for all costs and expenses under the JOA attributable to its working interests.

3. Closing. Upon execution of this Agreement (“Closing”), Seller shall deliver to Farmors by notice mutually acceptable to Seller and Buyer that effective upon execution of this Agreement:

a. The Parties have entered into this Agreement.

b. Buyer or its designee will be the operator of any Earning Wells under the rights granted in Section 1.3 of the Farmout Agreement.

c. Upon satisfaction of the Earning Conditions and receiving an assignment under Section 1.2 of the Farmout Agreement, Seller will assign to Buyer an undivided eighty-two and one-half percent (82.5%) of the Earned Interests.

d. Buyer has assumed all rights of Seller under Section 1.4 of the Farmout Agreement to receive assistance from Farmors in clarifying title and preparing, executing, filing and/or recording instruments to perfect title to the Assigned Interests as that term is defined in the Farmout Agreement.

e. Buyer is assuming the position of Seller under Section 1.5 of the Farmout regarding coordination of operations with Farmors.

f. Buyer is assuming Seller’s rights to receive Property Documents under Section 1.7 of the Farmout Agreement.

g. Buyer is assuming Seller’s obligation under Section 1.9.1 of the Farmout Agreement to offer unsuccessful wells (among the initial two wells) to Farmors and to receive Farmors’ election thereunder. Any Farmout election shall cover both Buyer’s and Seller’s ownership interest in the well, plus a leasehold interest in the well only insofar as the leasehold interest covers the wellbore.

h. Buyer is assuming the obligation to provide drilling reports and data to Farmors under Section 2.2.

4. Seller Representations and Warranties. Seller represents and warrants that as of Closing:

a. Seller’s Representations and Warranties in Farmout Agreement. All of Seller’s representations and warranties under Section 3.2 of the Farmout agreement are true in all material respects.

b. Farmors’ Representations and Warranties in Farmout Agreement. To the best of Seller’s knowledge, Farmors’ representations and warranties under Section 3.1 of the Farmout Agreement are true in all material respects.

2

c. Authority of Seller. Seller has all requisite power and authority to carry on its business as presently conducted and to execute and deliver this Agreement and perform it obligations under this Agreement. The execution and delivery of this Agreement and consummation of the transactions contemplated hereby and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be in conflict with, any material provision of Seller’s governing documents or any material provision of any agreement or instrument to which it is a party or by which it is bound, or, to its knowledge, any judgement, decree, order, statute, rule or regulation applicable to it.

d. Enforceability. The execution, delivery and performance of this Agreement and the transactions contemplated herein have been duly and validly authorized by all requisite corporate action on behalf of Seller. This Agreement constitutes Seller’s legal, valid, and binding obligation, enforceable in accordance with its terms and conditions subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws for the protection of creditors, as well as to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law. Assuming the due authorization, execution, and delivery of this Agreement by Buyer, this Agreement is legal, valid and binding with respect to Seller and is enforceable in accordance with its terms.

e. No Conflicts. The execution, delivery, performance and consummation of this Agreement and the transactions contemplated hereunder does not and will not: (a) violate, conflict with or constitute a default or an event that, with notice or lapse of time or both, would be a default, breach or violation under any term or provision of the governing documents of Seller; (b) result in a material default or an event that, with notice or lapse of time or both, would be a material default, breach or violation under any material term or provision of any agreement, contract, promissory note, indenture, mortgage, deed, deed of trust or lease to which Seller is a party or by which Seller or its interest in the Farmout Agreement is bound; or (c) violate, conflict with or constitute a breach of in any material respect any law applicable to Seller or by which Seller or its interest in the Farmout Agreement is bound.

f. Brokers’ Fees. Seller has not incurred and will not incur any liability, contingent or otherwise, for brokers’ or finders’ fees resulting from the Farmout Agreement, this Agreement or the transactions contemplated hereunder for which Buyer will have any responsibility whatsoever.

g. Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by or, to Seller’s knowledge, threatened against Seller.

h. Material Contracts. There are no contracts or agreements of Seller and to Seller’s knowledge, Farmors, that would have a materially adverse impact on Buyer’s ability to conduct operations under the Farmout Agreement or the JOA.

i. Preferential Rights and Consents. There are no preferential purchase rights or consent to transfer requirements affecting Seller’s interest under the Farmout Agreement, in the Assigned Rights or in the Earned Interests, or which may be applicable to the transactions contemplated herein.

j. Marketing and Transportation Agreements.    No portion of the Assigned Rights or Earned Interests is subject to or dedicated to any production sales, marketing, gathering, transportation, processing, or similar agreements which will not be released prior to the consummation of the transactions contemplated herein.

3

k. Knowledge and Experience. Seller is sophisticated in the evaluation, purchase, ownership and operation of entities like Buyer who own and operate oil, gas and helium exploration and production properties, pipelines, wells and related facilities. In making its decision to enter into this Agreement and to consummate the transactions contemplated hereunder, Seller has solely relied on (i) the representations and warranties of Buyer set forth in Section 5, (ii) its own independent investigation and evaluation of Buyer, (iii) public information regarding the Shares and (iv) the advice of its own legal, financial, tax, economic, environmental, engineering, geological and geophysical advisors and not on any comments, statements, projections of other material made or given by any representative, consultant or advisor of Buyer. Seller hereby acknowledges that, other than the representations and warranties made by Buyer in Section 5, neither Buyer nor any representatives, consultants, or advisors of Buyer or its affiliates will make or have made any representation or warranty, express or implied, at law of in equity, with respect to the Shares.

l. Well Commencement Deadline. The Commencement Deadline has been extended to September 1, 2024.

m. Rentals. All rentals and other lease maintenance payments due up to the date of Closing under the Leases to keep them in force and effect have been paid timely and accurately.

n. Swanson Interests. Seller acknowledges that a material inducement to Buyer’s entering into this Agreement is Seller’s entering into a binding commitment in writing (“Commitment”) with Tom Swanson and any other lessees under any oil and gas lease to which Tom Swanson is a lessee (“Swanson Parties”) covering the Property, or any option of any Swanson Party to acquire any oil and gas lease covering the Property (collectively, a “Swanson Interest”) to assign such interest to Buyer upon satisfaction of the Earning Conditions.  

o. Capital Raise. Seller acknowledges that notwithstanding anything to the contrary in this Agreement, Buyer is not responsible for any obligation or payment under the terms or any interpretation of the Section 1.11 (Capital Raise) of the Farmout Agreement. Seller indemnifies Buyer as to the conditions or obligations of the Section 1.11 of the Farmout Agreement.  

p. Securities Law Compliance.

(i)    Seller is an accredited investor as defined in Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). Seller (A) is acquiring the Shares for its own account and not with a view to distribution, as that term is used in Section 2(11) of the Securities Act, (B) has sufficient knowledge and experience in financial and business matters so as to be able to evaluate the merits and risk of an investment in the Shares and is able financially to bear the risks thereof, and (C) understands that the Shares will, upon issuance, be characterized as “restricted securities” under state and federal securities laws and that under such laws and applicable regulations cannot be resold unless the resale of the Shares is registered under the Securities Act or unless an exemption from registration is available.

4

(ii)    Seller has experience in analyzing and investing in companies similar to Buyer and is capable of evaluating the merits and risks of its decisions with respect to such matters and has the capacity to protect its own interests.

(iii)    Seller has not been offered the Shares by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to Seller’s knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising.

(iv)    To the extent necessary, Seller has retained and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of the Shares.

(v)    Seller has had an opportunity to discuss Buyer’s business, management and financial affairs with the members of Buyer’s management and has had an opportunity to ask questions of the officers and other representatives of Buyer, which questions, if any, were answered to its satisfaction.

(vi)    Seller (A) is aware of, has received and had an opportunity to review (i) the Buyer’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (SEC) on March 26, 2024; (ii) the Buyer’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 17, 2024, and (iii) the Buyer’s Quarterly Reports on Form 10-Q and current reports on Form 8-K from January 1, 2024, to the date of such Seller’s entry into this Agreement (which filings can be accessed by going to https://www.sec.gov/edgar/searchedgar/companysearch.html, typing “US Energy Corp” in the “Name, ticker symbol, or CIK” field, and clicking the “Search” button), in each case (i) through (iii), including, but not limited to, the audited and unaudited financial statements, description of business, risk factors, results of operations, certain transactions and related business disclosures described therein and an independent investigation made by it of the Buyer; and (B) is not relying on any oral representation of the Buyer or any other person, nor any written representation or assurance from the Buyer; in connection with Seller’s acceptance of the Shares and investment decision in connection therewith.

(vii)    Neither the Buyer, nor any other party, has supplied Seller any information regarding the Shares or an investment in the Shares other than as contained in this Agreement, and Seller is relying on its own investigation and evaluation of the Buyer and the Shares and not on any other information.

(viii)    Seller acknowledges that it is a sophisticated investor capable of assessing and assuming investment risks with respect to securities, including the Shares, and further acknowledges that the Buyer is entering into this Agreement with the Seller, in reliance on this acknowledgment and with Seller’s understanding, acknowledgment and agreement that the Buyer is privy to material non-public information regarding the Buyer (collectively, the “Non-Public Information”), which Non-Public Information may be material to a reasonable investor, such as Seller, when making investment disposition decisions, including the decision to enter into this Agreement, and Seller’s decision to enter into the Agreement is being made with full recognition and acknowledgment that the Buyer is privy to the Non-Public Information, irrespective of whether such Non-Public Information has been provided to Seller. Seller hereby waives any claim, or potential claim, it has or may have against the Buyer relating to the Buyer’s possession of Non-Public Information. Seller has specifically requested that the Buyer not provide it with any Non-Public Information. Seller understands and acknowledges that the Buyer would not enter into this Agreement in the absence of the representations and warranties set forth in this paragraph, and that these representations and warranties are a fundamental inducement to the Buyer in entering into this Agreement.

5

(ix)    Seller represents, warrants, and agrees that the Buyer is under no obligation to register or qualify the Shares under the Securities Act or under any state securities law, or to assist such Seller in complying with any exemption from registration and qualification.

(x)    Seller confirms and acknowledges that it is familiar with the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, but not limited to Rule 13d-1 thereof, and Schedules 13D and 13G, thereunder, including, but not limited to Seller’s potential obligation to timely file a Schedule 13D or Schedule 13G (as applicable, the “Schedule”) with the Securities and Exchange Commission in connection with its acquisition of the Shares. Seller further confirms and acknowledges that it is solely Seller’s obligation to determine whether a Schedule is due and to file the Schedule, and the Company is under no obligation to assist Seller with such filing or provide any advice to Seller in connection therewith whatsoever.

(xi)    Seller understands and agrees that a legend has been or will be placed on any certificate(s) or other document(s) evidencing the Shares in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) THEY SHALL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE STATE SECURITIES ACT, OR (II) THE CORPORATION SHALL HAVE BEEN FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE CORPORATION.”

In the event that Seller has breached any representation, warranty or covenant contained in this Agreement, Seller shall indemnify, defend, hold harmless and release Buyer, its affiliates, and its and their officers, directors, managers, representatives and employees (“Buyer Indemnified Parties”) from and against any and all claims, demands, losses, damages, suits, liabilities, judgments, causes of action, fines, penalties, interest and expenses (including reasonable attorneys’ fees) brought upon or suffered by any Buyer Indemnified Party relating to such breach. THE DEFENSE, INDEMNIFICATION, HOLD HARMLESS AND RELEASE PROVIDED FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE OR RESULTED SOLELY OR IN PART FROM THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OR VIOLATION OF LAW OF OR BY ANY BUYER INDEMNIFIED PARTY.

6

5. Buyer Representations and Warranties. Buyer represents and warrants that:

a. Authority of Buyer. Buyer has all requisite power and authority to carry on its business as presently conducted and to execute and deliver this Agreement and perform it obligations under this Agreement. The execution and delivery of this Agreement and consummation of the transactions contemplated hereby and the fulfillment of and compliance with the terms and conditions hereof will not violate, or be in conflict with, any material provision of Buyer’s governing documents or any material provision of any agreement or instrument to which it is a party or by which it is bound, or, to its knowledge, any judgement, decree, order, statute, rule or regulation applicable to it.

b. Enforceability. The execution, delivery and performance of this Agreement and the transactions contemplated hereunder have been duly and validly authorized by all requisite corporate action on behalf of Buyer. This Agreement constitutes Buyer’s legal, valid, and binding obligation, enforceable in accordance with its terms and conditions, subject, however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws for the protection of creditors, as well as to general principles of equity, regardless of whether such enforceability is considering in a proceeding in equity or at law. Assuming the due authorization, execution, and delivery of this Agreement by Seller, this Agreement is legal, valid and binding with respect to Buyer and is enforceable in accordance with its terms.

c. No Conflicts. The execution, delivery, performance and consummation of this Agreement and the transactions contemplated hereunder does not and will not: (i) violate, conflict with or constitute a default or an event that, with notice or lapse of time or both, would be a default, breach or violation under any term or provision of the governing documents of Buyer; (ii) result in a material default or an event that, with notice or lapse of time or both, would be a material default, breach or violation under any material term or provision of any agreement, contract, promissory note, indenture, mortgage, deed, deed of trust or lease to which Buyer is a party or by which Buyer is bound; or (iii) violate, conflict with or constitute a breach of in any material respect any law applicable to Buyer or by which Buyer is bound.

d. Brokers’ Fees. Seller has not incurred and will not incur any liability, contingent or otherwise, for brokers’ or finders’ fees resulting from the Farmout Agreement, this Agreement or the transactions contemplated hereunder for which Buyer will have any responsibility whatsoever.

e. Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending, being contemplated by or, to Seller’s knowledge, threatened against Seller.

f. No Distribution. Buyer is purchasing the Assigned Rights for its own account and not with the intent to make a distribution in violation of the Securities Act of 1933, as amended (and the rules and regulations pertaining thereto), or in violation of any other applicable securities laws.

7

g. Knowledge and Experience. Buyer is sophisticated in the evaluation, purchase, ownership and operation of oil and gas exploration and production properties. In making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer has solely relied on (i) the representations and warranties of Seller set forth in Section 4, (ii) its own independent investigation and evaluation of the Farmout Agreement, and the Assigned Rights (iii) on public information regarding the Farmout Agreement and the Assigned Rights and (iv) on the advice of its own legal, financial, tax, economic, environmental, engineering, geological and geophysical advisors and not on any comments, statements, projections or other material made or given by any representative, consultant or advisor of Seller. Buyer hereby acknowledges that, other than the representations and warranties made by Seller in Section 5, neither Seller nor any representatives, consultants, or advisors of Seller of its affiliates will make or have made any representation or warranty, express or implied, at law of in equity, with respect to the Assigned Rights. Buyer is able to bear the risks of the acquisition of the Assigned Rights, in accordance with and as set forth in this Agreement, and understands the risks of, and other considerations related to an assignment of the Assigned Rights to Buyer and the ownership and operation of the Earned Interests.

h. NASDAQ Notice. Prior to the issuance of the Shares, Buyer has provided to NASDAQ (i) minutes signed by Buyer’s Board of Directors approving the issuance of the Shares and execution of this Agreement, and (ii) a copy of the PSA in materially final form. Immediately following Closing, Buyer will provide to Nasdaq a copy of the fully executed PSA.

In the event that Buyer has breached any representation, warranty or covenant contained in this Agreement, Buyer shall indemnify, defend, hold harmless and release Seller, its affiliates, and its and their officers, directors, managers, representatives and employees (“Seller Indemnified Parties”) from and against any and all claims, demands, losses, damages, suits, liabilities, judgments, causes of action, fines, penalties, interest and expenses (including reasonable attorneys’ fees) brought upon or suffered by any Seller Indemnified Party relating to such breach. THE DEFENSE, INDEMNIFICATION, HOLD HARMLESS AND RELEASE PROVIDED FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE OR RESULTED SOLELY OR IN PART FROM THE SOLE, ACTIVE, PASSIVE, CONCURRENT OR COMPARATIVE NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OR VIOLATION OF LAW OF OR BY ANY SELLER INDEMNIFIED PARTY.

6. Survival of Representations, Warranties and Covenants.  The representations, warranties and covenants of Buyer and Seller hereunder shall survive indefinitely.

7. Joint Operating Agreement. The Parties’ rights and obligations regarding operation under the Farmout Agreement, the drilling, completion and equipping of any future wells, the production therefrom, the sale of production from the wells, and the treatment, handling, gathering or transportation of such production prior to the point of first sale to an affiliated or non-affiliated entity of Buyer shall conducted under and in accordance with the JOA.

8. Assignment of Oil and Gas Leases. Any Earned Interests under the Farmout Agreement shall be assigned under a Partial Assignment of Oil and Gas Leases substantially in the form of Exhibit “C” (the “Assignment”) along with all required state and/or federal assignments and transfers. In the event either Party fails to execute and deliver to the other the Assignment or comply with any other material term of this Agreement, remedies at law may be inadequate, and the non-breaching Party may, without limiting any other remedy available at law or in equity, enforce an injunction, restraining order, specific performance, and other forms of equitable relief or money damages or any combination thereof.

8

9. Miscellaneous.

a. Incorporated by Reference. All of the Exhibits and Schedules (if any) referenced in this Agreement are attached hereto and incorporated herein by reference.

b. Further Assurances. After the Closing, Seller shall execute and deliver, and shall otherwise cause to be executed and delivered, from time to time, such further instruments, notices, division orders, transfer orders, and other documents, and do such other and future acts and things as may be reasonably necessary to more fully and effectively grant, convey, and assign the Assigned Rights to Buyer.

c. Unlisted Seller Leases. In the event that on or after delivery of the Assignment it is determined that Seller owned or was credited with at the Effective Date any right, title and interests in any leases, mineral interests and associated property in the Property that were not included in Exhibit “A” of the Assignment, Seller shall, effective as of the later of the date of acquisition of such property by Seller or the effective date of the Assignment, upon request of Buyer, convey to Buyer in the same form as the Assignment, an undivided eighty-two and one-half percent (82.5%) interest in all of Seller’s right, title and interests in such leases, mineral interests and associated property whereupon such property and the Seller Reserved Interest therein shall become subject to this Agreement (without a purchase price adjustment) and the JOA, where applicable.

d. Post-Closing Seller Acquired Interests. In the event that after Closing Seller or any affiliate of Seller acquires any right, title or interest in any oil and gas leases, mineral interests and associated property in the Property, whether by lease, deed or assignment (a “New Interest”) Seller shall notify Buyer and upon request of Buyer, Seller shall assign to Buyer in the same form as the Assignment, eighty-two and one-half percent (82.5%) of all of Seller’s right, title and interest in such entire New Interest to the extent that it lies within the Property and any contiguous portion thereof outside of the Property, effective as of the effective date of Seller’s acquisition thereof whereupon such New Interest shall become subject to this Agreement and the JOA, where applicable. Upon receipt of such assignment, Buyer shall reimburse Seller for eighty-two and one-half percent (82.5%) of any bonus or other consideration paid by Seller for such New Interest.

e. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, notwithstanding any conflict of laws provisions that would require the application of the law of another jurisdiction, provided, however that with regard to the construction and enforcement of the Assignment and any title to the Leases, Minerals, Contracts, Easements and Wells, the laws of the State of Montana shall apply.

f. Jurisdiction and Venue. Any claims, disputes or suits under this Agreement, the Assignment or the JOA (“Disputes”) shall be brought in and litigated exclusively in state or federal courts residing in Harris County, Texas. The Parties consent to the exclusive jurisdiction and venue in such courts for such purposes.

g. WAIVER OF RIGHTS TO JURY TRIAL. In any Disputes the Parties agree that they hereby waive all rights to trial by jury.

9

h. Notices. All notices that are required or authorized to be given to any Party hereto as a result of this Agreement, shall be given in writing and delivered by personal messenger, or by registered mail, overnight mail or by electronic mail or fax, addressed to the Party to which such notice is given as set forth below. All notices shall be deemed properly delivered on the date confirmation of delivery of the same is received or on the date of any Party’s refusal to accept delivery of the same.

Buyer Contact Information

U.S. Energy Corp.

Attn: Ryan Smith

1616 S. Voss

Houston, Texas 77057

Email: Ryan@usnrg.com

Phone: 303-993-3200

Seller Contact Information:

Wavetech Helium, Inc.

Attn: Edward Gendelman

1801 Broadway, Suite 600

Denver, Colorado 80202

Email: egendelman@wavetechenergy.com

Phone: 303-534-3383

i. Amendments. This Agreement may not be amended except by an instrument expressly modifying this Agreement signed by both Parties. Except for waivers specifically provided for in this Agreement, no waiver by either Party of any breach of any provision of this Agreement shall be binding unless made expressly in writing. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless expressly so provided. Delay in the exercise, or non-exercise, of any such right is not a waiver of that right.

j. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the Parties, and their respective successors and assigns. Notwithstanding anything to the contrary herein, this Agreement is not a binding agreement between the Parties unless and until this Agreement is duly executed in writing by representatives of the Parties and delivered by the Parties. Capitalized terms not defined herein shall be given their definition under the Farmout Agreement.

k. Other Agreements. This Agreement is the exclusive Agreement among the Parties regarding the subject matter hereof and the transactions provided for under this Agreement.

10

l. Confidentiality and Press Releases. The Parties agree that the terms and conditions of this Agreement, including its existence, shall be treated as confidential. No Party shall issue any press release, make a public filing or otherwise make any disclosure with respect to this Agreement unless done so in compliance with Section 4 of the Farmout Agreement and then only with the prior written consent of the other Party; provided that if there are any legally mandated disclosures of this Agreement (including under the rules of any stock exchange), the Party required to make such disclosures shall (i) immediately notify the other Party of the existence, terms and circumstances surrounding such legal requirement, (ii) consult with the other Party on the advisability of taking legal available steps to resist or narrow such required disclosure, (iii) assist the Party required to make the disclosure in seeking a protective order or other appropriate remedy, and (iv) in all events disclose only that information which it is advised by counsel that it is legally required to disclose.

m. Counterpart Execution. This Agreement may be executed in multiple counterparts (including by facsimile or .pdf signature), each of which shall be considered an original once Buyer and Seller have executed and delivered a counterpart of this Agreement, and all of which taken together shall constitute one and the same agreement.

[Signatures on following page.]

11

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

U.S. ENERGY CORP.
By:	/s/ Ryan Smith
Name:	Ryan Smith
Title:	President and Chief Executive Officer
WAVETECH HELIUM, INC.
By:	/s/ Edward Gendelman
Name:	Edward Gendelman
Title:	Chief Executive Officer

12

EXHIBIT A

(Property Map)

Attached to and made a part of that Purchase and Sale Agreement for Farmout Assignment dated June [___], 2024 by and between U.S. Energy Corp. and Wavetech Helium, Inc. [To clarify, this will be the map used in Farmout Agreement.]

13

EXHIBIT B

(Joint Operating Agreement)

Attached to and made a part of that Purchase and Sale Agreement for Farmout Assignment dated June [___], 2024 by and between U.S. Energy Corp. and Wavetech Helium, Inc.

14

Exhibit C

(Partial Assignment)

Attached to and made a part of that Purchase and Sale Agreement for Farmout Assignment dated June [___], 2024 by and between U.S. Energy Corp. and Wavetech Helium, Inc.

PARTIAL ASSIGNMENT OF OIL AND GAS LEASES

This Partial Assignment of Oil and Gas Leases (the “Assignment”) dated effective as of _________ (the “Effective Date”), is by and between Wavetech Helium, Inc., a Colorado corporation, whose address is 1801 Broadway, Suite 600, Denver Colorado 80202 (“Assignor”) and U.S. Energy Corp., a Delaware corporation, whose address is 1616 S. Voss, Houston, Texas 77057 (“Assignee”).

WHEREAS, Assignor currently owns interests in those certain oil and gas leases and other property rights and interests listed on Exhibit “A” (the “Leases”); and

NOW THEREFORE, for Ten Dollars and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), Assignor does hereby grant, bargain, sell, convey, assign, transfer, set over and deliver to Assignee an undivided eighty-two and one-half (82.5%) percent of all of Assignor’s right, title and interest in and to: (i) the Leases, (ii) all right of ways and easements insofar as they are used or useful in exercising rights under the Leases or on lands pooled therewith (the “Easements”), and (iii) the Farmout Agreement (the Leases, Easements and Farmout Agreement are herein referred to collectively as the “Assets”).

TO HAVE AND TO HOLD the Assets unto Assignee, its successors and assigns, forever, subject to the following terms and conditions:

1. SPECIAL WARRANTY. ASSIGNOR AGREES TO WARRANT AND FOREVER DEFEND DEFENSIBLE TITLE TO THE ASSETS UNTO ASSIGNEE AGAINST THE CLAIMS AND DEMANDS OF ALL PERSONS CLAIMING, OR TO CLAIM THE SAME, OR ANY PART THEREOF, BY, THROUGH OR UNDER ASSIGNOR, BUT NOT OTHERWISE. ASSIGNOR ASSIGNS ALL RIGHTS UNDER WARRANTIES AND REPRESENTATIONS OF ITS PREDECESSORS IN TITLE INSOFAR AS THEY COVER THE ASSETS.

2. Subject to PSA. This Assignment is made subject to that certain Purchase and Sale Agreement for Farmout Assignment effective as of June 1, 2024, by and between Assignor and Assignee (the “Agreement”). The Agreement contains certain representations, warranties, covenants and agreements between Assignor and Assignee, some of which survive the delivery of this Assignment, as provided for therein and shall not be merged into this Assignment or be otherwise negated by the execution or delivery of this Assignment. This Assignment shall not be construed to amend the Agreement or vary the rights or obligations of either Assignor or Assignee from those set forth in the Agreement. In the event of any conflict between this Assignment and the Agreement, the terms of the Agreement shall control. Any defined term used herein but not otherwise defined shall have the meaning ascribed to such term in the Agreement.

3. Further Assurances. From and after the date hereof, Assignor shall execute and deliver, and shall otherwise cause to be executed and delivered, from time to time, such further instruments, notices, division orders, transfer orders, and other documents, and do such other and future acts and things as may be reasonably necessary to more fully and effectively grant, convey, and assign the Assets to Assignee and complete the transactions provided for under the Agreement and this Assignment.

15

4. Recording. Assignee shall record an executed copy of this Assignment in the relevant county deed records. In lieu of recording this Assignment in its entirety, Assignee may record a memorandum of this Assignment in a form mutually acceptable to Assignor and Assignee.

5. Choice of Law, Jurisdiction. Insofar as permitted by otherwise applicable law, this Assignment and all matters related thereto shall be governed by and construed under the laws of the State of Texas (without regard to conflict of law provisions thereof that would apply the provisions of the laws of another jurisdiction, provided, however that with regard to the construction and enforcement of this Assignment and any title to the Leases and Easements, the laws of the State of Montana shall apply. Any claims, disputes or suits (“Disputes”) under this Assignment or the JOA shall be brought in and litigated exclusively in state or federal courts residing in Harris County, Texas. The Parties consent to the exclusive jurisdiction and venue in such courts for such purposes.

6. WAIVER OF RIGHTS TO JURY TRIAL. In any dispute arising out of this Agreement, the JOA or the Assignment, the Parties agree that they hereby waive all rights to trial by jury.

7. Successors and Assigns. This Assignment binds and inures to the benefit each of Assignor and Assignee and their successors and assigns.

8. Counterpart Execution. This Assignment may be executed in several counterparts and all of such counterparts together shall constitute one and the same instrument.

IN WITNESS WHEREOF, this Assignment has been executed by the parties hereto effective as of the Effective Date.

ASSIGNOR:
Wavetech Helium, Inc.
By:
Name:	Edward Gendelman
Title:	CEO
ASSIGNEE:
U.S. Energy Corp.
By:
Name:	Ryan Smith
Title:	President and Chief Executive Officer

16

STATE OF COLORADO	)
	)	ss:
COUNTY OF DENVER	)

The foregoing instrument was acknowledged before me on this ______ day of _______, 2024, by __________, as ___________ for Wavetech Helium, Inc., a Colorado corporation, on behalf of such corporation.

(SEAL)

Notary Public in and for the State of Texas

My Commission Expires:

STATE OF TEXAS	)
	)	ss:
COUNTY OF HARRIS_	)

The foregoing instrument was acknowledged before me on this ______ day of _______, 2024, by __________, as ___________ for U.S. Energy Corp., a Delaware corporation, on behalf of such corporation

(SEAL)

Notary Public in and for the State of Texas

My Commission Expires:

17

EXHIBIT A TO ASSIGNMENT

Attached to and made a part of that Assignment dated __, 2024 by and between Wavetech Helium, Inc, and U.S. Energy Corp.

INCLUDE ALL ASSETS DESCRIBED IN THE ASSIGNMENT FROM FARMORS TO ASSIGNOR UNDER THE FARMOUT AGREEMENT.

TO BE COMPLETED PRIOR TO EXECUTION OF THE ASSIGNMENT.

18

EX-99.1

Exhibit 99.1

1616 Voss, Suite 725

Houston, TX 77057

Phone: 303-993-3200

www.usnrg.com

STRICTLY CONFIDENTIAL

June 24, 2024

Synergy Offshore LLC

Attn: Duane King, CEO

Dear Mr. King,

U.S. Energy Corp. (“U.S. Energy” or “USEG”) is pleased to offer to you this Letter of Intent (“Letter of Intent”) to acquire all of Synergy Offshore LLC’s (“SOG”) right, title, and interest in and to all of the leases and wells currently controlled by SOG located in Montana and Wyoming (subject to the exclusions described below, the “Assets”), pursuant to a definitive purchase and sale agreement and other applicable documents (“PSA”) to be negotiated between U.S. Energy and SOG. U.S. Energy and SOG are collectively called the “Parties” and individually a “Party.”

1.    Assets. The Assets shall include SOG’s rights, title and interests to SOG leases and wells in Montana and Wyoming, excluding the following, without limitation:

● The twelve- and one-half percent (12.5%) working interest in the Assets (owned by SOG or affiliates of SOG) reserved from the transaction and subject to the Carried Working Interest as described below (“Retained Working Interest”).

● SOG’s existing right, title, and interest in and to certain leases and rights located in the West Poison Spider field in Wyoming.

2.    PSA. Upon SOG’s acceptance of this Letter of Intent, U.S. Energy and SOG will negotiate in good faith to execute a PSA covering the sale of the Assets from SOG to U.S. Energy. Among other standard terms and conditions for a transaction of this type described in this Letter of Intent, the PSA will contain the following terms and conditions:

(a) Effective Date. The PSA will have an effective date of June 1, 2024 (the “Effective Date”).

(b) Purchase Price. The total purchase price for the Assets shall consist of the following:

■ Cash. Two million dollars ($2,000,000) of cash at closing (the “Cash”), reduced as necessary by the provisions of Section 3.f, plus

■ Shares. Four million, eight hundred forty-five thousand, nine hundred (4,845,900) shares of U.S. Energy common stock (the “Shares”). This amount represents five million dollars ($5,000,000) in value converted to shares at the 15-day Volume Weighted Average Price (“VWAP”) of U.S. Energy common stock for the period prior to execution of this Letter of Intent, and

■ Warrants. Six million, two hundred fifty thousand (6,250,000) warrants to acquire USEG common stock that vest upon the first sale of helium from the Initial Processing Plant (as defined below, the “Initial Plant”) processing helium from a predominantly CO2-based or nitrogen-based gas stream sourced from wells located on the Synergy acreage or covered under the AMI. For clarity, such warrants will expire if not exercised within sixty (60) months from the date of Closing of the PSA and will be issued as “penny warrants” (the “Warrants”), and

■ Carried Working Interest. The “Carried Working Interest” means USEG’s commitment to cover, pay for and be liable for one hundred percent (100%) of all SOG Costs attributable to the Retained Working Interest during the Carry Period. The “Carry Period” is the Effective Date of this Agreement through the date that the SOG Costs attributable to the Retained Working Interest total twelve-million five hundred thousand dollars ($12,500,000.00) (the “Carry Amount”). “SOG Costs” are the costs relating to drilling, completing, and equipping any and all wells to the extent that such costs are chargeable to or payable by SOG to be further described under the Joint Operating Agreement naming USEG as the Operator (the “JOA”). For the avoidance of doubt, SOG Costs shall not include the costs of any processing plants, facilities or pipelines. Monthly lease and well operating expenses (including without limitation lease rental payments, lease maintenance payments and title curative expenses and payments) (“LOE”) shall not be considered SOG Costs. During the Carry Period, LOE shall be netted against revenue. In the event there is insufficient revenue to cover LOE during a particular month, then during the Carry Period, any negative LOE will be carried forward to the next operating month and offset against future net revenue until the cumulative negative LOE is fully offset. Prior to the receipt of first revenues, USEG and SOG shall have the option to apply all or any portion of the negative LOE to the outstanding Carry Amount. Following the expiration of the Carry Period, SOG shall be liable for all costs and expenses under the JOA attributable to its working interests, and

1

■ Tax Credit Payments. USEG shall deliver payments equal to 18.00% of the cash amounts actually realized and received by USEG under Section 45(Q) (the “Tax Credit Payments”).

(c) Additional Terms and Provisions.

■ Drilling Commitment. USEG commits to drill and test at least two wells to at least the depth necessary to test all prospective helium zones on the SOG acreage within eighteen (18) months of the Closing. USEG shall have sole authority to determine the location of these wells and the manner of drilling and testing such wells. It is contemplated, though not required, that these wells, together with the existing Kiefer Farms #1, will constitute the primary gas stream supply for the Initial CO2 Plant. See Further AMI Participation, below for additional provisions on this matter. In the event USEG does not meet this obligation, SOG’s sole remedy shall be the right to terminate the project contemplated by the applicable definitive agreements. In such event, USEG shall earn and keep the wellbores and acreage associated with any wells it has drilled and any related infrastructure. USEG shall return the remaining acreage and have no further obligations to SOG under the applicable definitive agreements, except for any provisions that may be binding at such termination. This right to terminate will take the form of a one-time option, exercisable for 45 days, after which USEG will continue to own its interests in the Assets.

■ AMI. The PSA or associated documents will incorporate an Area of Mutual Interest covering all of Township and Range 35N-1W, 35N‐2W, 34N-1W, 34N-2W, 33N-1W and 33N-2W and the Cut Bank producing interval, under which SOG will have the right to participate for its proportionate interest of twelve and one half percent (12.5%) in any new leases, assignments or letter agreements obtained by USEG, but excluding any such leases or rights currently held or contractually bound by Wavetech Helium, Inc. or its affiliates. The cost of acquiring such leases or rights and the costs of drilling any wells that include such additional leases or rights shall be included in the SOG Costs as defined in the Carried Working Interest above. USEG will use commercially reasonable efforts to maintain the existing leases and agreements owned by SOG in the AMI.

■ Further AMI Participation in Initial CO2 Plant. It is the expectation of both parties that one or more gas processing plants to process helium from a predominantly CO2 stream utilizing some type of cryogenic processing technology (the “Processing Plants”) will be constructed by or for the benefit of USEG or its affiliates. For purposes of the net revenue interest from the Carried Working Interest in the Initial CO2 processing plant, SOG or its affiliates shall be paid its proportionate share of twelve- and one-half percent (12.5%) of the helium revenues attributable to the working interest owners on 100% of the gas processed through the plant, as if 100% of such gas came from the SOG acreage or AMI acreage discussed above. Nothing in this paragraph or elsewhere will create a binding obligation on USEG to construct such plant. This provision shall apply only to the first such CO2 Gas Plant that may be constructed by USEG.

2

■ Gas Plant Terms. Processing of gas produced from the Retained Working Interest by the Processing Plants shall be governed by commercially reasonable terms and shall reflect market rates considering all facts and circumstances, including but not limited to, location, time to construct and operating and capital cost to provide the necessary facilities.

■ Cut Bank Reserve Report and Development Plan. USEG agrees to undertake and complete a reserve report on a Cut Bank tertiary flood program by a mutually agreeable third-party reserve engineering firm. Additionally, USEG will develop a full cycle development program for a Cut Bank tertiary flood. The program will be reviewed annually by the full USEG Board of Directors, including the two existing SOG principals (John Weinzierl and Duane King).

■ Provision of CO2. USEG will offer to provide CO2 to the Cut Bank field upon request at a commercial market rate. The commercial market rate will be determined by a mutually agreeable 3^rd party in a scenario where USEG and SOG cannot agree on a commercial market rate amount. Any such CO2 will be delivered to SOG at the outlet of the Processing Plants, so long as it does not impact the Section 45(Q) tax credit treatment of sequestered CO2 from the Processing Plants. USEG will have no obligation to transport such gas.

■ Cut Bank Farmout. SOG agrees not to exercise the right to farm into the Cut Bank Field per the terms of the Farm-Out agreement between USEG and SOG dated January 5, 2022, for a period of 3 years from the date of Closing of the PSA. If, at the end of such period, SOG decides to exercise the Farm-Out Agreement, SOG may, at its sole cost, drill and complete such CO2 supply wells on the SOG acreage as may be necessary to supply CO2 to the Cut Bank field, but only so long as such wells do not adversely affect the supply of inlet gas to the Processing Plants, including any sanctioned expansion to such plants.

■ Reversion of Project. If USEG has not signed a binding contract for the construction of the CO2 Gas Plant within thirty-six (36) months from Closing, SOG or its successors in interest shall have the right to terminate the project contemplated by this agreement. In such event, USEG shall earn and keep the wellbores and acreage associated with any wells it has drilled, including the Kiefer Farms #1, and any related infrastructure. USEG shall return the remaining acreage and have no further obligations to SOG under this agreement, except for any provisions that may be binding at such termination. This right to terminate will take the form of a one-time option, exercisable for 45 days, after which USEG will continue to own its interests in the Assets.

3

(d) Nominating and Voting Agreement. The Nominating and Voting agreement dated January 5, 2022, shall remain in effect with Duane King and John Weinzierl continuing to serve on the USEG Board of Directors, with John Weinzierl continuing to serve as Chairman.

(e) Release. Effective with the execution of this LOI, SOG releases any and all claims that it or its affiliates may have with respect to any potential claims by SOG against USEG up to the date of this LOI and including any and all actions taken by the Board of Directors of USEG on such date, and USEG releases any and all claims that it or its affiliates may have with respect to potential claims by USEG against SOG or its affiliates up to the date of this LOI. This release shall be a binding agreement that survives the term of this LOI.

(f) Diligence; Access to Information. U.S. Energy shall have the opportunity under both the Letter of Intent and the PSA to conduct a confirmatory due diligence review and to receive timely access to information in SOG’s control including leases, title files, environmental, contracts, rights-of-way, easements, third party reports and any operational diligence, with respect to the Assets that is usual and customary for a transaction of the type contemplated in this Letter of Intent. Similarly, SOG shall have the reciprocal opportunity under both this Letter of Intent and the PSA to conduct confirmatory due diligence.

(g) Representations. The PSA shall include typical representations and warranties for a transaction of the type described in this Letter of Intent, as well as typical limitations on liability of SOG for breaches of such representations and warranties. The ABOS shall contain a special warranty of title and an assumption by USEG of all liabilities and obligations associated with the transferred assets, whether arising prior to or after the effective date.

(h) Registration Rights. The PSA will contain mutually acceptable terms for registration rights, demand rights and piggyback rights with regard to the offering of the USEG stock issued in this transaction.

(i) Closing. It is anticipated that the “Closing” of the PSA will occur on or before September 30, 2024, subject to timing uncertainties surrounding the approval of the definitive proxy statement by the Securities and Exchange Commission and scheduling of the vote of the USEG common shareholders.

(j) Consideration. At Closing, U.S. Energy will deliver the Purchase Price, including any adjustments made under the terms of the PSA, in cash and USEG common stock, together with agreements governing the Warrants, the Carried Working Interest and the Tax Credit Payments.

4

3.    Contingencies. This Letter of Intent and the execution of and Closing of the PSA are subject to certain conditions, including but not limited to the following:

a. Approvals. Prior to the execution and delivery of the PSA, the USEG and SOG shall have obtained all necessary Board and other required approvals for the proposed acquisition and shall have authorized the execution and delivery of the PSA.

b. Due Diligence. The due diligence conducted by each party and its legal counsel in connection with the proposed acquisition shall not have caused such party or its legal counsel to become aware of any facts relating to the business, assets, properties, liabilities, financial condition, results of operations or affairs of the other party or its subsidiaries which, in the judgment of such party or its legal counsel, make it inadvisable for such party to proceed with the proposed acquisition. No material adverse change in the business, operations or financial condition of either party or its subsidiaries shall have occurred after the date hereof.

c. Financing. There are no financing contingencies.

d. Shareholder Vote. The transaction, including the issuance of the shares of USEG common stock in the transaction, will be conditioned upon approval by holders of a majority of the outstanding shares of USEG common stock owned by stockholders unaffiliated with SOG and its affiliates, in addition to any other requisite stockholder approvals under applicable law or stock exchange rules.

e. JOA. A mutually acceptable JOA will be negotiated and attached to the PSA to be executed at the Closing of the PSA.

f. Lease Extensions. SOG will cooperate with USEG in permitting USEG to obtain mutually acceptable extensions and necessary amendments for helium development to all fee leases and partial term assignments prior to Closing at a total cost not to exceed four hundred thousand dollars ($400,000.00). To the extent the costs exceed such amount, if SOG elects to proceed with Closing, the excess shall be deducted from the cash payable at Closing.

5

4.    Confidentiality Agreement. This Letter of Intent is confidential information between U.S. Energy and SOG. Furthermore, the Parties agree that the terms and conditions of this Letter of Intent, including its existence, shall be treated as confidential. Except as may be required by law or the rules of an applicable stock exchange, no Party shall issue any press release, make a public filing or otherwise make any public disclosure with respect to this Letter of Intent without the prior written consent of the other Parties; provided that if there are any legally mandated disclosures of this Letter of Intent, the Party required to make such disclosures shall (a) immediately notify the other Parties of the existence, terms and circumstances surrounding such legal requirement, (b) consult with the other Parties on the advisability of taking legally available steps to resist or narrow such required disclosure, (c) assist the Party required to make the disclosure in seeking a protective order or other appropriate remedy, and (d) in all events disclose only that information which it is advised by counsel it is legally required to disclose. Upon written acceptance of the terms of this Letter of Intent, SOG shall not offer the Assets or any portion thereof or enter into any transaction with any third party prior to August 15, 2024.

5.    PSA Signing. U.S. Energy is prepared to commit the necessary time and resources to execute the PSA on or before August 15, 2024.

6.    U.S. Energy Authority. The following individual(s) have the decision-making authority regarding the contents of this Letter of Intent, and you may discuss this Letter of Intent with them directly utilizing the contact information as set forth below:

Randall D. Keys

Chair of Special Committee

Phone: (281) 620-4468

E-mail: randy@rdkinterests.com

7.    Non-Binding Letter of Intent. The Parties intend that this Letter of Intent serve as a broad outline of a proposed agreement to be further negotiated between the Parties. This Letter of Intent constitutes a statement of that intent, not an agreement, except with respect to obligations set forth in Paragraphs 2(d), 2(e) and Paragraph 4 of this Letter of Intent, which shall be binding agreements between the parties and shall survive the termination of this LOI. This Letter of Intent is not intended to impose any legally binding obligations upon the Parties, except as otherwise noted in the immediately preceding sentence. Neither U.S. Energy nor SOG shall be obligated to negotiate or consummate the transaction contemplated in this Letter of Intent or enter into any agreement proposed in this Letter of Intent unless and until the PSA is properly executed and delivered by the Parties. If this Letter of Intent is accepted by SOG but the PSA has not been executed and delivered by the Parties on or before August 15, 2024, neither Party will have any further obligations under this Letter of Intent, except with respect to Paragraphs 2(d), 2(e) and 4 of this Letter of Intent, which shall survive such termination.

8.    Time is of the essence.

If the terms and conditions of this Letter of Intent are acceptable to SOG, please contact the undersigned in writing at the above-stated address. This offer will expire if not executed on or before June 24, 2024.

6

Sincerely,
U.S. ENERGY CORP.
By:	/s/ Randall D. Keys
Randall D. Keys
Chair of Special Committee

ACCEPTED AND AGREED TO
this 25         day of June 2024.
SYNERGY OFFSHORE LLC
By:	/s/ Duane King
Name:	Duane King
Title:	Chief Executive Officer

7

EX-99.2

Exhibit 99.2

U.S. Energy Corp. Announces Transformative Acquisition

Targeting Helium Production

HOUSTON, Texas, July 1, 2024 — U.S. Energy Corporation (NASDAQ: USEG, “U.S. Energy” or the “Company”) today announced that the Company has closed a transaction (the “Agreement”) with Wavetech Helium Inc (“Wavetech” or “WT”) for the acquisition of operated acreage targeting helium production across the Kevin Dome structure in Toole County, Montana (the “WT Asset”). Additionally, the Company has executed a non-binding letter of intent (the “LOI”) with Synergy Offshore, LLC (“Synergy” or “SOG”) to acquire offsetting operated acreage (the “SOG Asset”), forming a largely contiguous acreage position across the Kevin Dome of approximately 164,000 net acres, as discussed in greater detail below (collectively the “Assets”).

HIGHLIGHTS

■ Closed Wavetech Agreement on June 26, 2024. The WT Asset includes:

- Approximately 140,000 net acres.

- Multiple prospective helium pay zones consisting primarily of inert nitrogen and carbon dioxide heavy zones.

■ Executed Synergy LOI on June 25, 2024. The SOG Asset includes:

- Approximately 24,000 net acres, highly contiguous to Wavetech acreage.

- Multiple prospective helium pay zones, initially targeting carbon dioxide heavy zones.

■ Planned and permitted two upcoming drilling locations on WT Asset.

- Wells expected to be spud in late July and early August 2024.

■ Industry leading low environmental footprint through the production of non-hydrocarbon helium.

- Initiation of carbon sequestration business significantly expands opportunity.

- Company development plans are highly aligned with local, state, and federal legislation.

■ Transactions are structured to minimize existing dilution while maintaining current attractive leverage profile.

- The Company does not anticipate raising outside capital to execute on this asset move, with cash on hand, cash flow, and anticipated proceeds from non-core asset sales expected to fund considerations and near-term development.

■ Upcoming investor call to further discuss the transactions is scheduled for Wednesday, July 10, 2024 at 10:00 a.m. ET/9:00 a.m. CT, details below.

MANAGEMENT COMMENTARY

“With U.S. Energy’s acquisition of the Wavetech assets covering a vast resource position across Montana’s Kevin Dome structure, the Company believes that it has positioned itself to exploit what we anticipate will be a transformational resource and economic opportunity in an area with which we have a longstanding community footprint,” said Ryan Smith, U.S. Energy’s Chief Executive Officer, who continued, “Simply put, we believe the Kevin Dome structure holds tremendous overall resource potential and full-cycle helium economics competitive with any location in North America. We also believe in future acquisition opportunities across the structure that highly complement this acquisition, as evidenced by U.S. Energy’s letter of intent to acquire an additional position which is highly contiguous to the acquired assets. Together, as U.S. Energy begins development, these positions are expected to drive valuable cost synergies, flexible planning capabilities, and continued balance sheet strength.”

Mr. Smith continued, “While the most recent global helium shortage has eased in recent months, the world continues to struggle with supporting the growing helium needs of the aerospace, semi-conductor, and medical industries as well as the major risks to other global sources of helium. Issues ranging from global shipping disruptions to trade restrictions that impact foreign supply highlight the importance of reliable, clean helium that is domestically sourced. We expect to begin operations in the near term, with U.S. Energy currently scheduled to begin drilling two wells on the acquired acreage, with expected start dates in late July and early August 2024. Throughout this process, our geoscience and reservoir engineering has been focused on development optimization and resource management and we expect that this initial drilling will result in significant proved resource conversion with highly compelling economics.

“Across the vast asset base that U.S. Energy now controls, we expect to produce helium from multiple underground zones consisting primarily of both inert nitrogen and carbon dioxide. To that end, U.S. Energy is pleased to have initiated our new carbon sequestration business and have begun the planning and permitting phase where we intend to utilize U.S. Energy-owned infrastructure to sequester carbon. Greening the global helium production process while supporting recent state and federal legislation to do so is a win for all stakeholders, and we plan to pursue that strategy.”

“In closing, we are delighted to work with our new partners moving forward, the state of Montana, and all of U.S. Energy’s stakeholders, to work to effectuate this transformational transaction which we believe creates a unique and powerful platform that will drive value creation. We look forward to further updating the market in the coming weeks on our scheduled investor call,” said Mr. Smith.

OVERVIEW OF ASSETS

The collective Assets comprise control of approximately 164,000 net acres across the Kevin Dome, a significant geological structure which has historically been a robust area for resource extraction. The Assets are highly contiguous and complimentary, and the area has seen recent successes with wells drilled for helium in multiple formations primarily consisting of inert nitrogen and carbon dioxide. The vast majority of the Assets are located on fee acreage, with a non-material amount on federal lands. We expect to go into further geologic and technical detail on our upcoming investor call.

Wavetech Asset:

The WT Asset covers 140,000 net acres spanning the majority of the economically targeted positions across the Kevin Dome. While the initial primary targeted helium pay zone beneath the acreage will be the Flathead Sandstone, which we believe contains nitrogen dominated gas systems with recent data points of highly economic helium concentrations, we are optimistic about the testing of further helium pay zones across the Asset. Results from the two wells being drilled in late July and early August 2024 by U.S. Energy are expected to provide insight into the helium concentrations of other pay zones across the Asset.

Synergy Asset:

The SOG Asset, covering 24,000 net acres, is positioned atop the center of the Kevin Dome structure. The initially targeted helium pay zone beneath the acreage is the Duperow, which contains carbon dioxide dominated gas systems with recent data points of highly economic helium concentrations. Additionally, U.S. Energy would be acquiring an active well within the SOG Asset with recent gas analysis showing highly economic helium concentrations being produced from the Duperow zone. Additionally, U.S. Energy expects its carbon sequestration focus to initially focus on the SOG Asset. The company anticipates initiating activity in 2024 with the drilling of additional evaluation wells.

Synergy is controlled by Mr. Duane H. King, a member of the Board of Directors of U.S. Energy, who serves as the Chief Executive Officer and Manager of Synergy, and John A. Weinzierl, U.S. Energy’s Chairman, is an approximate thirty percent beneficial owner of Synergy. The Synergy acquisition is subject to U.S. Energy coming to agreement with Synergy on definitive agreements and terms, shareholder approval of the issuance of shares of common stock to Synergy in the transaction, and other customary conditions to closing, and we cannot estimate the expected closing date of such acquisition. The acquisition of the SOG Asset may not close on a timely basis, on the terms set forth below, or at all.

TRANSACTION CONSIDERATION DETAILS

Wavetech Consideration:

Under the terms of the Agreement, Wavetech will assign to U.S. Energy 82.5% of their interests in the WT Asset for the following consideration:

■ $2.0mm in cash.

■ 2,600,000 shares of U.S. Energy restricted common stock.

■ $20.0mm carried working interest for which U.S. Energy commits to pay Wavetech’s exploration, drilling, and completion costs attributable to Wavetech’s 17.5% retained working interest.

Synergy Consideration:

Under the terms of the LOI, SOG will assign to U.S. Energy 87.5% of their interests in the SOG Asset for the following consideration:

■ $2.0mm in cash.

■ 4,845,900 shares of U.S. Energy restricted common stock.

■ Warrants to purchase 6,250,000 shares of USEG common stock (at $0.01 per share), contingent on achieving future helium sales.

■ $12.5mm carried working interest for which U.S. Energy commits to pay Synergy’s exploration, drilling, and completion costs attributable to Synergy’s 12.5% retained working interest.

■ 18.0% of future amounts realized by U.S. Energy in connection with tax credits obtained for carbon sequestration.

■ An Area of Mutual Interest (the “SOG AMI”) under which Synergy will have the right to participate for its proportionate interest of 12.5% in any new leases.

UPCOMING DRILLING AND DEVELOPMENT CATALYSTS

U.S. Energy plans to drill and complete two wells beginning in late July on the Wavetech Asset. The locations are permitted and prepared, and the Company expects to encounter and test multiple pay zones across the Duperow, Souris River and Flathead Sands formations. These multi-zone tests will further delineate our internal reserve evaluation and allow for near term 3^rd party reserve bookings. The two wells are expected to cost $1.4mm each.

ADVISORS

Roth Capital Partners and Johnson Rice & Company LLC are acting as advisors to U.S. Energy.

UPCOMING INVESTOR CALL

A conference call will be held Wednesday, July 10, 2024, at 10:00 a.m. ET/9:00 a.m. CT to discuss the recent acquisition and letter of intent and conduct a question-and-answer session.

A webcast of the conference call will be available in the Investor Relations section of the Company’s website at www.usnrg.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register, download, and install any necessary audio software.

To participate in the live teleconference:

Domestic Live:	877-407-3982
International Live:	201-493-6780
Call me link:	Call me active link.
Webcast Participant Link:	Webcast active link.

To listen to a replay of the teleconference, which subsequently will be available through July 24, 2024:

Domestic Replay:	844-512-2921
International Replay:	412-317-6671
Conference ID:	13747559

ABOUT U.S. ENERGY CORP.

We are a growth company focused on consolidating high-quality assets in the United States with the potential to optimize production and generate free cash flow through low-risk development while maintaining an attractive shareholder returns program. We are committed to being a leader in reducing our carbon footprint in the areas in which we operate. More information about U.S. Energy Corp. can be found at www.usnrg.com.

INVESTOR RELATIONS CONTACT

Mason McGuire

IR@usnrg.com

(303) 993-3200

www.usnrg.com

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements.

Important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, risks associated with the integration of the recently acquired assets; the Company’s ability to recognize the expected benefits of the acquisitions and the risk that the expected benefits and synergies of the acquisition may not be fully achieved in a timely manner, or at all; the amount of the costs, fees, expenses and charges related to the acquisitions; the Company’s ability to comply with the terms of its senior credit facilities; the ability of the Company to retain and hire key personnel; the business, economic and political conditions in the markets in which the Company operates; fluctuations in oil and natural gas prices, uncertainties inherent in estimating quantities of oil and natural gas reserves and projecting future rates of production and timing of development activities; competition; operating risks; acquisition risks; liquidity and capital requirements; the effects of governmental regulation; adverse changes in the market for the Company’s oil and natural gas production; dependence upon third-party vendors; risks associated with COVID-19, the global efforts to stop the spread of COVID-19, potential downturns in the U.S. and global economies due to COVID-19 and the efforts to stop the spread of the virus, and COVID-19 in general; economic uncertainty relating to increased inflation and global conflicts; the lack of capital available on acceptable terms to finance the Company’s continued growth; the review and evaluation of potential strategic transactions and their impact on stockholder value; the process by which the Company engages in evaluation of strategic transactions; the outcome of potential future strategic transactions and the terms thereof; and other risk factors included from time to time in documents U.S. Energy files with the Securities and Exchange Commission, including, but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly filed reports, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. These reports and filings are available at www.sec.gov.

The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of any Sale Agreement Parties are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on U.S. Energy’s future results. The forward-looking statements included in this press release are made only as of the date hereof. U.S. Energy cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, U.S. Energy undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that are not paid for by U.S. Energy. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

XML

Document And Entity Information	Jun. 25, 2024
Document Information [Line Items]
Entity, Registrant Name	US ENERGY CORP
Document, Type	8-K
Document, Period End Date	Jun. 25, 2024
Entity, Incorporation, State or Country Code	DE
Entity, File Number	000-06814
Entity, Tax Identification Number	83-0205516
Entity, Address, Address Line One	1616 S. Voss, Suite 725
Entity, Address, City or Town	Houston
Entity, Address, State or Province	TX
Entity, Address, Postal Zip Code	77057
City Area Code	303
Local Phone Number	993-3200
Written Communications	false
Soliciting Material	true
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	USEG
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000101594