SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 2*)

U.S. Energy Corporation

(Name of Issuer)

COMMON STOCK, $0.01 PAR VALUE

(Title of Class of Securities)

911805307

(CUSIP Number)

Duane H. King

9811 Katy Freeway, Suite 805

Houston, Texas 77024

(713) 827-9988

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

September 16, 2022

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 911805307

1	Name of Reporting Persons Duane H. King
2	Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
3	SEC Use Only
4	Source of Funds OO
5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Item 2(d) or 2(e) ☐
6	Citizenship or Place of Organization United States of America

Number of Shares Beneficially Owned by Each Reporting Person With	7	Sole Voting Power 2,027,399 shares*
	8	Shared Voting Power 0*
	9	Sole Dispositive Power 2,027,399 shares
	10	Shared Dispositive Power 0 shares

11	Aggregate Amount Beneficially Owned by Each Reporting Person 2,027,399 shares*
12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ☐
13	Percent of Class Represented by Amount in Row (11) 8.13%**
14	Type of Reporting Person IN

*These shares of Common Stock are owned directly by King Oil and Gas, Inc. Duane H. King is the sole shareholder, director and officer of King Oil and Gas, Inc. These shares also expressly exclude shares of Common Stock that are owned and controlled by Katla Energy Holdings, LLC in its capacity as a former member of Synergy Offshore, LLC.

** Does not include shares of Common Stock held by the Separately Filing Group Members (as defined in the Original Schedule 13D, Item 2), except for shares of Common Stock attributable to the distribution from Synergy. The Reporting Persons (as defined in Item 2) believe that they and the Separately Filing Group together as a “group” may be deemed to collectively beneficially own in the aggregate 15,386,752 shares of the Issuer’s Common Stock, or 61.74% of the Common Stock, as of the date of this Schedule 13D. The percentage is based on information provided by the Issuer on or about August 11, 2022, reflecting 24,923,812 shares of Common Stock of the Issuer outstanding as of such date.

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CUSIP No. 911805307

1	Name of Reporting Persons King Oil and Gas, Inc. 76-0348827
2	Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
3	SEC Use Only
4	Source of Funds OO
5	Check Box if Disclosure of Legal Proceedings Is Required Pursuant to Item 2(d) or 2(e) ☐
6	Citizenship or Place of Organization Texas

Number of Shares Beneficially Owned by Each Reporting Person With	7	Sole Voting Power 2,027,399* shares
	8	Shared Voting Power 0
	9	Sole Dispositive Power 2,027,399* shares
	10	Shared Dispositive Power 0 shares

11	Aggregate Amount Beneficially Owned by Each Reporting Person 2,027,399 shares*
12	Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) ☐
13	Percent of Class Represented by Amount in Row (11) 8.13%**
14	Type of Reporting Person CO

*These shares of Common Stock are owned directly by King Oil and Gas, Inc. Duane H. King is the sole shareholder, director and officer of King Oil and Gas, Inc. These shares also expressly exclude shares of Common Stock that are owned and controlled by Katla Energy Holdings, LLC in its capacity as a former member of Synergy Offshore, LLC.

** Does not include shares of Common Stock held by the Separately Filing Group Members (as defined in Item 2 of the Original Schedule 13D), except for shares of Common Stock attributable to the distribution from Synergy. The Reporting Persons (as defined in Item 2) believe that they and the Separately Filing Group together as a “group” may be deemed to collectively beneficially own in the aggregate 15,386,752 shares of the Issuer’s Common Stock, or 61.74% of the Common Stock, as of the date of this Schedule 13D. The percentage is based on information provided by the Issuer on or about August 11, 2022, reflecting 24,923,812 shares of Common Stock of the Issuer outstanding as of such date.

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This Amendment No. 2 amends those Items set forth below with respect to the Schedule 13D filed on July 22, 2022 by the Reporting Persons, which in turn, amended the original Schedule 13D filed on January 11, 2022 (the “Original Schedule 13D”) (Amendment No. 2, Amendment No. 1 and the Original 13D are hereinafter referred to as the “Schedule 13D). Except as expressly amended hereby, all information in Amendment No. 1 and the Original Schedule 13 D is incorporated by reference. All capitalized terms used herein and not otherwise defined shall have the same meaning as in the Original Schedule 13D.

Item 2. Identity and Background

(a) This Schedule 13D is being filed by Duane H. King and his wholly owned corporation, King Oil and Gas, Inc. after the termination of an Amended Joint Filing Agreement, among Duane H. King, King Oil and Gas, Inc., Lee Hightower, Trustee of the Hightower 2021 Descendants’ Trust and Melanie Hightower, Trustee of the Melanie Hightower 2021 Family Trust As a result, the Reporting Persons for the purposes of this Second Amendment to the Schedule 13D originally filed on January 11, 2022 are as follows:

(1)	Duane H. King (“King”) is the Chief Executive Officer and one of two managers of Synergy
(2)	King Oil and Gas, Inc. (“KOG”), a Texas corporation

Item 5. Interest in Securities of the Issuer.

The information provided in Items 2 and 4 of this Schedule 13D is incorporated by reference herein.

Synergy Offshore, LLC (“Synergy”) was originally the holder of record of 6,546,384 shares of the Issuer’s outstanding Common Stock, as a result of transactions described in the Original Schedule 13D. As of July 22, 2022, Synergy distributed all of the shares of Common Stock (the “Distribution”) that it held to the members of the limited liability company that owned 100% of the membership interest of Synergy.

Pursuant to the Nominating and Voting Agreement dated January 5, 2022, if Synergy made a distribution to its members, for so long as the shares of Common Stock are held by those members, the Nominating and Voting Agreement requires those members to vote their shares in accordance with the terms and conditions of the Nominating and Voting Agreement. This Nominating and Voting Agreement was amended as of September 16, 2022, in which the former members of Synergy, except for King Oil and Gas, Inc. and Katla Energy Holdings, LLC, are no longer required to vote the Issuer’s shares in accordance with the Amended and Restated Nominating and Voting Agreement. As a result, this amendment reduces the number of share with a “Shared Vote,” to reflect that King Oil and Gas, Inc. is bound by the voting provisions of the Amended and Restated Nominating and Voting Agreement. Katla Energy Holdings, LLC shares derived from Synergy are not reported herein either. The Reporting Persons continue to exclude all shares held by the Separately Filing Persons in connection with the numbers of shares reported herein, and the Katla Energy Holdings, LLC shares of Common Stock derived from Synergy are not reported herein.

The percentages of beneficial ownership disclosed in this Schedule 13D are based on an aggregate of 24,923,812 shares of Common Stock outstanding as of August 11, 2022, based on information furnished by the Issuer.

Item 7. Material to Be Filed as Exhibits

Exhibit No.	Description
1	Amended and Restated Nominating and Voting Agreement dated September 22, 2022.

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SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: November 4, 2022

King Oil & Gas, Inc.
By:	/s/ Duane H. King
Name:	Duane H. King
Title:	President
	Duane H. King
X:	/s/ Duane H. King

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EX-1

Exhibit

AMENDED AND RESTATED

NOMINATING AND VOTING AGREEMENT

This Amended and Restated Nominating and Voting Agreement (this “Agreement”), dated September 16, 2022, by and among U.S. Energy Corp., a Delaware corporation (formerly a Wyoming corporation) (the “Company”); Lubbock Energy Partners LLC, a Texas limited liability company (“Lubbock”); Synergy Offshore LLC, a Texas limited liability company (“Synergy”); and Banner Oil & Gas, LLC, a Delaware limited liability company (“Banner”), Woodford Petroleum, LLC, a Delaware limited liability company (“Woodford”), Llano Energy LLC, a Delaware limited liability company (“Llano”, and together with Banner and Woodford, collectively, the “Sage Road Entities”), King Oil & Gas Company, Inc., a Texas corporation (“King Oil”), WDM Family Partnership, LP, a Texas limited partnership (“WDM”), and Katla Energy Holdings LLC, a Texas limited liability company (“Katla Energy”), each a “Party” and collectively, the “Parties”. Lubbock, Synergy and the Sage Road Entities are each referred to as a “Seller Party” and collectively referred to as the “Seller Parties”. King Oil, WDM and Katla Energy are each referred hereto herein as an “Affiliated Voting Party” and are collectively referred to herein as the “Affiliated Voting Parties”. This Agreement amends and restates that prior Nominating and Voting Agreement entered into between the Seller Parties and the Company on January 4, 2022 (the “Original Agreement”).

A. Each of Lubbock, Synergy and the Sage Road Entities has entered into and completed the transactions contemplated by a separate Purchase and Sale Agreement with the Company (as amended from time to time, collectively the “Purchase and Sale Agreements”), each dated as of October 2, 2021, pursuant to which each Seller Party sold certain of its assets in exchange for shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) and cash.

B. As a condition to the consummation of the transactions contemplated by the Purchase and Sale Agreements and the issuance of such shares of Common Stock to the Seller Parties, the Parties were required to enter into the Original Agreement.

C. Upon the consummation of the transactions contemplated by the Purchase and Sale Agreements, Lubbock was issued 6,568,828 shares of Common Stock, representing 26.7% of the then voting shares of the Company, Synergy was issued 6,546,384 shares of Common Stock, representing 26.6% of the then voting shares of the Company, and the Sage Road Entities were issued 6,790,524 shares of Common Stock, representing 27.6% of the then voting shares of the Company.

D. Subsequent to the closing of the transactions contemplated by the Purchase and Sale Agreements, (a) on July 20, 2022, Synergy transferred all of its 6,546,384 shares of common stock of the Company which it held to: King Oil (2,027,399 shares); Katla Energy (1,781,651 shares) and certain other parties; and (b) on July 19, 2022, Lubbock transferred an aggregate of 6,568,828 shares of common stock of the Company which it then held to: Katla Energy (3,071,914 shares); WDM (3,071,914 shares) and certain other parties (the “Transfers”).

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Nominating and Voting Agreement

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E. It was the original intent of the parties to the Original Agreement that the voting obligations of the Seller Parties as set forth therein would also become obligations of any Affiliates of the Seller Parties that received shares of Common Stock in any distribution of shares by any Seller Parties and that shares of Common Stock of the Seller Parties which were subsequently distributed to the Affiliates of the Seller Parties would be included in the calculation of the ownership of the Seller Parties for purposes of the Nominating Rights set forth herein (as defined below), in proportion to such distributed shares.

F. The Parties desire to enter into this Agreement to amend and restate the Original Agreement, to add the Affiliated Voting Parties, each of which is an Affiliate of the original Seller Parties and each of which received shares of Common Stock in connection with the Transfers, as voting parties under this Agreement, and to provide for certain nomination and voting rights as set forth herein, each on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

1. Definitions. The defined terms in the introductory paragraphs, the defined terms set forth below, and the defined terms in the remainder of this Agreement each has the meaning so given to it whenever used throughout this Agreement; provided, however, that each capitalized term used herein but not defined herein has the meaning given to it in the Purchase and Sale Agreements.

1.1. “Affiliate” of a specified Person means any other Person that (at the time when the determination is made) directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person. As used in the foregoing sentence, the term “control” (including, with correlative meaning, the terms “controlling,” “controlled by” and “under common control with”) means, with respect to a specified Person, the power to direct the management and/or the policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

1.2. “Board” means the Board of Directors of the Company.

1.3. “Board Appointee” means, as applicable, (a) a person designed for nomination to the Board by a Nominating Seller Party pursuant to its Board Appointment Right or (b) a person designed for nomination to the Board by the Non-Seller Appointed Directors.

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Nominating and Voting Agreement

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1.4. “Board Appointment Notice” means notice of a proposed Election Meeting or Consent to appoint members of the Board.

1.5. “Board Appointment Right” means the right of a Nominating Seller Party to designate a nominee for election or appointment to the Board as set forth in this Agreement.

1.6. “Company Nominated Person” means a person designed by the Non-Seller Appointed Directors for nomination to the Board.

1.7. “Effective Date” shall mean the latest date that (a) this Agreement has been countersigned and dated by each of the Parties hereto; and (b) signed and dated copies of such Agreement have been delivered to the Company, provided that the Effective Date must occur prior to September 16, 2022, or else this Agreement shall not become effective.

1.8. “Nominating Rights” means the rights and obligations set forth in Section 3.

1.9. “Nominating Seller Party” means a Seller Party that, together with its Affiliates, beneficially owns at least five percent (5%) of the Company’s outstanding Common Stock at the time when the determination is made (subject in all cases to Section 3.1(C) and (D) hereof).

1.10. “Non-Nominating Seller Party” means a Seller Party which, together with its Affiliates, fails to beneficially own at least five percent (5%) of the Company’s outstanding Common Stock as of any date following the Effective Date (subject in all cases to Section 3.1(C) and (D) hereof).

1.11. “Non-Seller Appointed Directors” means the members of the Board who were not nominated by the Sellers as set forth herein.

1.12. “Organizational Documents” means Company’s certificate of incorporation and bylaws as then in effect.

1.13. “Person” means any natural person, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, proprietorship, business or statutory trust, trust, union, association, instrumentality, governmental authority or other entity, enterprise, authority, unincorporated organization or business organization.

2. Effective Date.

2.1. This Agreement shall become effective on the Effective Date.

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Nominating and Voting Agreement

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3. Nominating Provisions.

3.1. Nominating Rights.

(A) With respect to any general meeting of the shareholders of the Company (the “Shareholders”) or pursuant to any consent to action without meeting of the Shareholders, in each case at which the election of directors is to be voted on (each, an “Election Meeting or Consent”) (a) each Nominating Seller Party shall have the right to designate for nomination to the Board one or two Board Appointees in accordance with Section 3.1(B) below (each such designated person, a “Seller Nominated Person”) and (b) the Company shall take any and all actions necessary (to the extent such actions are permitted by Law) to cause the Board to include each Seller Nominated Person, including the following: (i) with respect to each applicable Election Meeting or Consent, include for election to the Board the Seller Nominated Persons as part of the Company’s slate of nominees for election as directors, (ii) to solicit proxies in order to obtain shareholder approval of the election of the Seller Nominated Persons, including causing officers of the Company who hold proxies (unless otherwise directed by the Company shareholder submitting such proxy) to vote such proxies in favor of the election of such Seller Nominated Persons, (iii) to cause the Seller Nominated Persons to be elected to the Board, including recommending that the Company’s shareholders vote in favor of the Seller Nominated Persons in any proxy statement used by the Company to solicit the vote of its shareholders in connection with each Election Meeting or Consent and (iv) to use or provide the same level of effort and same level of support as is used or provided for the other director nominees of the Company in connection with each Election Meeting or Consent; provided, however, that to exercise its Board Appointment Right with respect to any particular Election Meeting or Consent, a Nominating Seller Party must notify the Chairman of the Board (or if there is not a Chairman of the Board, the Board) in writing of each Seller Nominated Person designated by such Nominating Seller Party no later than twenty (20) days after receiving the Board Appointment Notice with respect to such Election Meeting or Consent.

(B) A Nominating Seller Party who beneficially owns at least five percent (5%) but less than fifteen percent (15%) of the Company’s outstanding Common Stock at the time when the determination is made (subject in all cases to Section 3.1(C) and (D) hereof) is entitled to designate for nomination to the Board one (1) Board Appointee. A Nominating Seller Party who beneficially owns fifteen percent (15%) or more of the Company’s outstanding Common Stock at the time when the determination is made (subject in all cases to Section 3.1(C) and (D) hereof) is entitled to designate for nomination to the Board a total of two (2) Board Appointees.

(C) For the purposes of calculating the percentage ownership of Common Stock beneficially held by each Nominating Seller Party, shares of Common Stock may only be counted once, and may only be deemed beneficially owned by at a maximum, by one Nominating Seller Party (regardless of the guidance set forth in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (“Rule 13d-3”)). In the event any shares of Common Stock are beneficially owned (as determined in accordance with Rule 13d-3) by more than one Nominating Seller Party, such affected Nominating Seller Parties shall apportion beneficial ownership for the purposes of the calculations set forth in this Section 3, the determination of Nominating Seller Party status (which may be different than as set forth in Rule 13d-3), and the calculations set forth in (B) above, equitably, in good faith, and promptly advise the Company and the other Seller Parties of such agreed allocations.

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Nominating and Voting Agreement

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(D) For purposes of the Transfers, the Parties hereto agree that the 4,853,565 shares of Common Stock distributed by Synergy and Lubbock to Katla Energy (collectively, the “Katla Energy Shares”) shall be allocated (a) 36.7% to Synergy; and (b) 63.3% to Lubbock (the “Agreed Allocations”)¹, solely for the purposes of the calculations relating to the Nominating Rights and the determination of Nominating Seller Party status (including pursuant to (B) above) and that in the event that Katla Energy shall hereafter distribute, sell, or transfer, any of the Katla Energy Shares, such remaining shares of Common Stock held by Katla Energy shall continue to be allocated, for the purposes of the Nominating Rights and the determination of Nominating Seller Party status (including pursuant to (B) above), pursuant to the Agreed Allocations. Any additional shares of Common Stock acquired by Katla Energy after the date hereof shall be apportioned at the time of acquisition equitably by the control persons of Katla Energy to the appropriate Nominating Seller Party for the purposes of the calculations relating to the Nominating Rights. Nothing in this Section 3.1(D) shall deem Synergy (or Synergy’s Affiliates) as the beneficial owner (as described in Rule 13d-3) of any of the Katla Energy Shares, except in connection with the nominating and voting rights set forth in this Agreement, as is applicable to all Seller Parties, and such Katla Energy Shares, shall consistent with the requirements of Rule 13d-3, be deemed beneficially owned by John A. Weinzierl, its Chief Executive Officer, who has voting and dispositive control over such shares, for the purposes of Rule 13d-3.

3.2. If at any time there are less than that the number of Board Appointees to which a Nominating Seller Party is entitled to designate for nomination pursuant to Sections 3.1(B) then serving on the Board, then upon the receipt of written notice from such Nominating Seller Party to the Chairman of the Board (or if there is not a Chairman of the Board, the Board) (a “Seller Appointment Notice”) designating a Board Appointee to fill any such position, the Company shall take any and all necessary action to (a) increase the number of directors on the Board as may be required for the appointment of such Board Appointee(s) and (b) cause the appointment of such Board Appointee(s) to the Board.

3.3. Each Seller Nominated Person shall be selected by the affirmative vote of each Nominating Seller Party, as applicable, and each Company Nominated Person shall be selected by the affirmative vote of the Non-Seller Appointed Directors set forth in writing (which may be via email).

3.4. Each Nominating Seller Party shall have the exclusive right to designate a nominee to the Board to fill any vacancy created by reason of death, disqualification, removal or resignation of any director who was a Seller Nominated Person designated by such Nominating Seller Party, and upon the receipt of a Seller Appointment Notice with respect to any such designation, the Company shall take any and all necessary action to cause such vacancy to be filled by the Seller Nominated Person set forth in such Seller Appointment Notice as promptly as reasonably practicable. In the absence of a designation from the applicable Nominating Seller Party as specified above, such Board seat shall remain vacant until otherwise filled as provided above.

¹ Representing the proportions in which such shares of Common Stock were originally held by Synergy (1,781,651 / 4,853,565 = 36.7%) and Lubbock (3,071,914 / 4,853,565 = 63.3%).

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Nominating and Voting Agreement

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3.5. Any vacancy on the Board arising from the death, disqualification, removal or resignation of a Company Nominated Person shall be filled by an individual nominated by the Non-Seller Appointed Directors.

3.6. Following provision of any notice from a Nominating Seller Party regarding the designation of a Board Appointee, such Nominating Seller Party shall use its commercially reasonable efforts to provide, or cause such individual(s) to provide, to the Company such information about such individuals at such times as the Company may reasonably request in order to ensure compliance with Section 3.6, the listing rules of NASDAQ and the rules and regulations of the SEC to the same extent as requested from the other director nominees of the Company in connection with their appointment or election.

3.7. Notwithstanding anything to the contrary herein, no Board Appointee shall be included as a nominee for election or appointment to the Board in the event such person is a Disqualified Person. For the purposes hereof, a “Disqualified Person” is a person for whom the Board reasonably determines (which determination shall set forth in writing the grounds for such reasonable determination) that the nomination, election or appointment of such person to the Board or retention of such person on the Board, as applicable, would (a) violate the listing rules of NASDAQ or the rules and regulations of the SEC, (b) due to such person’s past, affiliations or otherwise, negatively affect the reputation of the Company, negatively affect the Company’s ability to complete future transactions, or disqualify the Company from undertaking any offering under applicable securities laws, or (c) violate the fiduciary duties that the Board owes to the Company or its shareholders; provided, however, that if the Board reasonably determines that any Board Appointee is unfit for service on the Board for the reasons set forth above, then the Company shall promptly notify the applicable Nominating Seller Party and such Nominating Seller Party shall then be entitled to designate an alternative or replacement person as a nominee to the Board. Other than pursuant to the foregoing sentence, neither the Company nor any other Party shall have the right to object to any nominee selected pursuant to this Section 1.

3.8. Notwithstanding the above, the Non-Seller Appointed Directors and Seller Nominated Persons shall be apportioned between ‘independent’ and non-’independent’ directors as required by the rules of NASDAQ such that the Company continues in compliance with applicable NASDAQ rules.

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3.9. During the Term, each Seller Party shall promptly notify the Company upon becoming a Non-Nominating Seller Party. The Company shall not be required to provide Board Appointment Notice to any Non-Nominating Seller Parties and Non-Nominating Seller Parties shall have no rights to nominate any Person to the Board pursuant to the terms hereof. Upon any Nominating Seller Party becoming a Non-Nominating Seller Party, such Seller Party shall take any and all necessary action to cause such Seller Party’s Seller Nominated Persons to tender their resignation from the Board and, upon delivery of such resignations, the Company and Seller Parties shall take any and all necessary action to cause the authorized size of the Board to be reduced accordingly.

3.10. Any nomination procedures set forth in the Company’s Organizational Documents which conflict with the terms hereof shall be amended as required to comply with the terms hereof.

3.11. Each Seller Nominated Person shall be entitled to the same expense reimbursement and advancement, exculpation, indemnification and insurance in connection with his or her role as a director as the other members of the Board (which shall be primary over any other indemnification or insurance available to such Seller Nominated Person), as well as reimbursement for documented, reasonable out-of-pocket expenses incurred in attending meetings of the Board or any committee of the Board of which such Seller Nominated Person is a member, if any, in each case to the same extent as the other members of the Board. Each Seller Nominated Person shall be also entitled to any retainer, equity compensation or other fees or compensation paid to the non-employee directors of the Company for their services as a director, including any service on any committee of the Board. During the term hereof and for a period of at least six (6) years after each such Seller Nominated Person’s service on the Board has concluded, the Company shall not amend, alter, repeal or waive (a) any right to indemnification or exculpation covering or benefiting any Seller Nominated Person nominated pursuant to this Agreement (whether such right is contained in the Company Organizational Documents or another document) or (b) any provision of the Company Organizational Documents, if such amendment, alteration, repeal or waiver adversely affects the rights or obligations of the Seller Parties or the Seller Nominated Persons pursuant to this Agreement. The Company shall maintain directors’ and officers’ liability insurance covering each Seller Nominated Person to the maximum extent of the coverage available to the most favorably insured of the other directors serving on the Board, and the Company shall continue to maintain such directors’ and officers’ liability insurance coverage with respect to each Seller Nominated Person’s service on the Board for a period of at least six (6) years after each such Seller Nominated Person’s service on the Board has concluded. The obligations of the Company under this Section 3.11 shall survive the expiration of the Term.

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Nominating and Voting Agreement

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3.12. Each Seller Nominated Person may share any information received in his or her capacity as a Board member with the Nominating Seller Party which designated them for election or appointment to the Board. Each Nominating Seller Party severally agrees that it will, and will cause its Affiliates to, keep confidential and not disclose, divulge or use for any purpose, other than to monitor and make voting and investment decisions with respect to its investment in the Company and its subsidiaries, any confidential information obtained from the Company, unless such confidential information is known or becomes known to the public in general (other than as a result of a breach of this Section 3.12 by such Nominating Seller Party or its Affiliates), is or has been independently developed or conceived by such Nominating Seller Party or its Affiliates without use of the Company’s confidential information or is or has been made known or disclosed to such Nominating Seller Party or its Affiliates by a third party without a breach of any obligation of confidentiality such third party may have to the Company that is known to such Nominating Seller Party or its Affiliates; provided, however, that such Nominating Seller Party and its Affiliates may disclose confidential information (a) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring and making voting and investment decisions with respect to its investment in the Company, (b) to any Affiliate, partner, member or related investment fund of such Nominating Seller Party or its Affiliates and their respective directors, employees and consultants, in each case in the ordinary course of business, or (c) as may otherwise be required by Law. Each Party hereto acknowledges that the Sage Road Entities or any of their Affiliates and related investment funds may review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company and its subsidiaries, and may trade in the securities of such enterprises. Nothing in this Section 3.12 will preclude or in any way restrict the Sage Road Entities or any of their Affiliates or related investment funds from investing or participating in any particular enterprise, or trading in the securities thereof, whether or not such enterprise has products or services that compete with those of the Company and its subsidiaries. For the sake of clarity, nothing in this Section 3.12 prohibits any Party from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation, which shall not require the prior approval of, or notification to, the Company.

3.13. Any Seller Party may elect upon written notice to the Company to irrevocably terminate any or all of their rights under this Section 3 at any time.

3.14. At all times when Lubbock is a Nominating Seller Party and its Board Appointee is John A. Weinzierl (“Weinzierl”), each Nominating Seller Party shall instruct its Board Appointee to vote in favor of appointing Weinzierl as Chairman of the Board.

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Nominating and Voting Agreement

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4. Voting Requirements; Notice Requirements.

4.1. During the Term, each Seller Party and each Affiliated Voting Party agrees to vote all Common Stock held by such Party (whether at a meeting of the shareholders of the Company or via any written consent to action without meeting of the shareholders of the Company), in such manner as may be necessary to nominate and elect (and, if applicable, maintain in office) as a member of the Company’s Board, each of the Seller Nominated Persons.

4.2. Each Seller Party and each Affiliated Voting Party agrees to not vote any Common Stock for the removal of any Seller Nominated Persons, unless such person is a Disqualified Person.

4.3. Each Seller Party and each Affiliated Voting Party shall provide prompt written notice to the other Seller Parties and/or other Affiliated Voting Parties and the Company, of the transfer, distribution, sale and/or divestiture of any Common Stock held by such applicable Party so such each other Seller Party and Affiliated Voting Party and the Company, can make required filings with the Securities and Exchange Commission.

5. Term. This Agreement shall continue in effect from the Effective Date until the earlier of (a) the date mutually agreed by all the Seller Parties and (b) the date that no Seller Party owns at least 5% of the outstanding shares of Common Stock (such period, the “Term”); provided that any rights or obligations which by their express terms survive beyond the expiration of the Term shall survive in accordance with their terms. Once a Seller Party becomes a Non-Nominating Seller Party it shall no longer have any right to nominate any Person hereunder, even if such Seller Party shall thereafter increase its ownership of Common Stock above 5% of the Company’s outstanding Common Stock. Each Seller Party and each Affiliated Voting Party shall continue to be bound by the voting requirements set forth in Section 4 hereof, so long as each such Party beneficially owns any shares of Common Stock; provided that if such applicable Party should ever cease to own any shares of Common Stock, such applicable Seller Party or Affiliated Voting Party shall no longer have any obligations under Section 4 hereof (a “Voting Right Termination”). In the event a Voting Right Termination applies to an Affiliated Voting Party, such applicable Affiliated Voting Party shall no longer have any obligations hereunder, or be bound by any of the terms of this Agreement.

6. Miscellaneous.

6.1. Representations. Each Party hereby represents and warrants to each other Party that as of the Effective Date: (a) it is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization; (b) this Agreement has been duly and validly executed and delivered by such party and this Agreement constitutes a legal and binding obligation of such party, enforceable against the such party in accordance with its terms; (c) the execution, delivery and performance by such party of this Agreement and the consummation by such party of the transactions contemplated hereby will not, with or without the giving of notice or lapse of time, or both (i) violate any Law applicable to it, or (ii) conflict with, or result in a breach or default under, any term or condition of any material agreement or other instrument to which such party is a party or by which such party is bound, except for such violations, conflicts, breaches or defaults that would not, in the aggregate, materially affect such party’s ability to perform its obligations hereunder.

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6.2. Binding Effect; Successors and Assigns. This Agreement shall not be binding on any Party until the Effective Date, and shall not be binding on any Party unless and until it is executed by all Parties. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors, heirs and permitted assigns of the Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement.

6.3. Enforceability. This Agreement may only be enforced by the Parties hereto, and nothing set forth in this Agreement shall be construed to confer upon or give to any other person, other than the Parties hereto and their respective successors, heirs and permitted assigns, any rights to enforce the undertakings set forth herein.

6.4. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

(a) This Agreement, and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relating to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) shall be governed by and construed in accordance with the internal Laws of the State of Texas, without regard to any choice-of-law or conflicts of law provision or rule (whether of the State of Texas or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Texas.

(b) Each of the Parties hereby irrevocably and unconditionally (i) submits, for itself and its property, to the exclusive jurisdiction and venue of any federal court or state court sitting in Houston, Texas) (“Texas Courts”), and any appellate court from any decision thereof, in any action arising out of or relating to this Agreement, including the negotiation, execution or performance of this Agreement and agrees that all claims in respect of any such action shall be heard and determined in the Texas Courts, (ii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any action arising out of or relating to this Agreement or the negotiation, execution or performance of this Agreement in the Texas Courts, including any objection based on its place of incorporation or domicile, (iii) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action in any such court and (iv) agrees that a final judgment in any such action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

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(c) EACH OF THE PARTIES ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY BE BASED UPON, ARISE OUT OF OR RELATED TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY FOR ANY DISPUTE BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, TERMINATION OR VALIDITY HEREOF OR ANY TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES CERTIFIES AND ACKNOWLEDGES THAT (I) NEITHER THE OTHER PARTIES NOR THEIR RESPECTIVE REPRESENTATIVES, AGENTS OR ATTORNEYS HAVE REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH OF THE PARTIES UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH OF THE PARTIES MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH OF THE PARTIES HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS OF THIS SECTION 4.3(c). ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

6.5. Counterparts. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .jpeg or similar attachment to electronic mail (any such delivery, an “Electronic Delivery”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

6.6. Headings. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

6.7. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (a) personal delivery to the Party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective Parties at their address as set forth on the signature pages hereto, or to such email address, facsimile number or address as subsequently modified by written notice given in accordance with this Section 6.7.

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6.8. Consent Required to Amend, Terminate or Waive. This Agreement may be amended or terminated and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by each of the Parties hereto.

6.9. Specific Performance. The Parties agree that irreparable damage would occur if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any federal or state court located in Texas, this being in addition to any other remedy at law or in equity, and the Parties to this Agreement hereby waive any requirement for the posting of any bond or similar collateral in connection therewith. The Parties agree that they shall not object to the granting of injunctive or other equitable relief on the basis that there exists an adequate remedy at law.

6.10. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Party under this Agreement, upon any breach or default of any other Party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting Party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any Party, shall be cumulative and not alternative.

6.11. Severability. If any provision of this or the application of any such provision to any Party or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof or the application of such provision to any other Parties or circumstances.

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6.12. Further Assurances. At any time or from time to time after the date hereof, the Parties agree to cooperate with each other, and at the request of any other Party, to execute and deliver any further instruments or documents and to take all such further action as the other Party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the Parties hereunder.

6.13. Entire Agreement. This Agreement, the Purchase and Sale Agreements, the Confidentiality Agreement, and (when executed) the other Transaction Documents contain the entire agreement and understanding between the Parties with respect to the subject matter hereof and thereof, and all prior and contemporaneous negotiations, understandings, and agreements between the Parties on the matters contained herein and therein are expressly merged into and superseded by this Agreement (including the Original Agreement, which is replaced and superseded by this Agreement), the Purchase and Sale Agreements, the Confidentiality Agreement, and (when executed) the other Transaction Documents. The provisions of this Agreement, the Purchase and Sale Agreements, the Confidentiality Agreement, and (when executed) the other Transaction Documents may not be explained, supplemented, or qualified through evidence of trade usage or a prior course of dealings. No Party shall be liable or bound to any other Party in any manner by any representations, warranties, covenants, or agreements relating to such subject matter except as specifically set forth in this Agreement, the Purchase and Sale Agreements, the Confidentiality Agreement, and (when executed) the other Transaction Documents.

[Remainder of page left intentionally blank. Signature pages follow.]

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IN WITNESS WHEREOF, the Parties have executed this Amended and Restated Nominating and Voting Agreement as of the date first written above.

“COMPANY”
U.S. Energy Corp.
By:	/s/ Ryan Smith
Name:	Ryan Smith
Title:	CEO

Address for Notice:

U.S. Energy Corp.

Attn: Ryan Smith

1616 S. Voss, Suite 725

Houston, Texas 77057

Email: Ryan@usnrg.com

With a copy, which shall not constitute notice to:

The Loev Law Firm, PC

Attn: David M. Loev and John S. Gillies

6300 West Loop South, Suite 280

Bellaire, Texas 77401

Email: dloev@loevlaw.com and john@loevlaw.com

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“Lubbock”
Lubbock Energy Partners LLC
By:	/s/ John A. Weinzierl
Name:	John A. Weinzierl
Title:	CEO

Address for Notice:

Lubbock Energy Partners LLC

Attn: John Weinzierl

1616 S. Voss Rd. #530

Houston, Texas 77057

Email: johnw@katlacapital.com

With a copy, which shall not constitute notice to:

Nance & Simpson, LLP

Attn: Glynn Nance

2603 Augusta, Suite 1000

Houston, Texas 77057

Email: gnance@nancesimpson.com

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“Synergy”
Synergy Offshore LLC
By:	/s/ Duane H. King
Name:	Duane H. King
Title:	Chief Executive Officer

Address for Notice:

Synergy Offshore LLC

Attn: Duane H. King

9821 Katy Fwy, Suite 805

Houston, Texas 77024

Fax: 713-827-9989

Email: dking@synergyog.com

With a copy, which shall not constitute notice to:

Crain, Caton and James

Attn: Adrienne Randle Bond

Five Houston Center

1401 McKinney St., Suite 1700

Houston, Texas 77010

Email: abond@craincaton.com

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“Sage Road Entities”
Banner Oil & Gas, LLC
By:	/s/ Joshua L. Batchelor
Name:	Joshua L. Batchelor
Title:	Manager

Woodford Petroleum, LLC
By:	/s/ Joshua L. Batchelor
Name:	Joshua L. Batchelor
Title:	Manager
Llano Energy LLC
By:	/s/ Joshua L. Batchelor
Name:	Joshua L. Batchelor
Title:	Manager

Address for Notice:

c/o Sage Road Capital, LLC

2121 Sage Road, Suite 325

Houston, TX 77056

Attention: Benjamin A. Stamets

Email: ben@sagerc.com

With a copy, which shall not constitute notice to:

Porter Hedges LLP

1000 Main Street, 36th Floor

Houston, Texas 77002

Attn: Jeremy Mouton

Email: jmouton@porterhedges.com

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“King Oil”
King Oil & Gas Company, Inc.
By:	/s/ Duane H. King
Name:	Duane H. King
Title:	CEO

Address for Notice:

Katla Energy Holdings LLC

Attn: ________________________

________________________

________________________

Email: ________________________

With a copy, which shall not constitute notice to:

__________________________

Attn: ________________________

________________________

________________________

Email: ________________________

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“WDM”
WDW Family Partnership, LP
By:	/s/ Wallis Marsh
Name:	Wallis Marsh
Title:	President

Address for Notice:

WDW Family Partnership, LP

Attn: ________________________

________________________

________________________

Email: ________________________

With a copy, which shall not constitute notice to:

With a copy, which shall not constitute notice to:

__________________________

Attn: ________________________

________________________

________________________

Email: ________________________

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“Katla Energy”
Katla Energy Holdings LLC
By:	/s/ John A. Weinzierl
Name:	John A. Weinzierl
Title:	CEO

Address for Notice:

Katla Energy Holdings LLC

Attn: ________________________

________________________

________________________

Email: ________________________

With a copy, which shall not constitute notice to:

Nance & Simpson, LLP

Attn: Glynn Nance

2603 Augusta, Suite 1000

Houston, Texas 77057

Email: gnance@nancesimpson.com

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