Initial Production Rate of Approximately 2,717 BOE/D From the Brad Olson 9-16 #2H Well
Company Announces Leasing Activity in Northeastern Montana
RIVERTON, Wyo., Nov. 3, 2010 (GLOBE NEWSWIRE) -- U.S. Energy Corp. (Nasdaq:USEG) ("USE" or the "Company"), a natural resources exploration and development company with interests in oil and gas, molybdenum, geothermal, and real estate assets, today announced the initial production rate from its Brad Olson 9-16 #2H well which was recently completed with Brigham Exploration Company (Nasdaq:BEXP) ("Brigham" or "BEXP") in the Williston Basin of North Dakota, and provided an update on its oil and gas drilling initiatives and leasing program in the Williston Basin.Williston Basin – Bakken Shale / Three Forks Formation The Brad Olson 9-16 #2H, the first Bakken infill well completed under the Drilling Participation Agreement ("DPA") with Brigham, produced approximately 2,472 barrels of oil and 1.47 MMCF of natural gas per day or 2,717 BOE/D during an early 24-hour initial flow back period. The well was completed with swell packers and 32 fracture stimulation stages. U.S. Energy's initial working interest in this well is approximately 31% (~25% net revenue interest). Oil and gas sales from this well have commenced. The second infill well in the Brad Olson 9-16 unit, the Brad Olson 9-16 #3H well, was also drilled late this summer in the same 1,280 acre spacing unit. U.S. Energy's initial working interest in this well is approximately 31% (~25% net revenue interest). It is expected that this well will be completed in November of 2010. During the completion of the Brad Olson 9-16 #2H well, the unit was monitored with a micro-seismic array to evaluate the frac wing performance of the first infill well in the unit. The resulting information will be used to determine optimal spacing for the remaining well or wells in the unit, and could delineate the potential to drill additional infill wells beyond the currently envisioned three wells per formation, per spacing unit. If results indicate that four to six wells may be required to effectively drain the spacing units, which is yet to be determined, USE's drilling inventory could increase to 120 to 180 total gross wells.