U.S. Energy Corporation announced that the Company has closed a transaction 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). 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. Company expect to go into further geologic and technical detail on 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 believe contains nitrogen dominated gas systems with recent data points of highly economic helium concentrations, are optimistic about the testing of further helium pay zones across the Asset. Results rom 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. 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: 2.0 million in cash.

2,600,000 shares of U.S. Energy restricted common stock. 20.0 million 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: 2.0 million 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. 12.5 million 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.