EXHIBIT 99.1

                    U.S. ENERGY CORP. AUDIT COMMITTEE CHARTER

                              Adopted May 30, 2000


     The  charter and powers of the Audit Committee of the Board of Directors
          (the "Audit Committee") shall be:

     o   Overseeing that management has maintained the reliability and integrity
     of the accounting policies and financial reporting and disclosure practices
     of the Company;

     o   Overseeing that management has established and maintained processes to
     assure that an adequate system of internal control is functioning within
     the Company;

     o   Overseeing that management has established and maintained processes to
     assure compliance by the Company with all applicable laws, regulations and
     Company policy;

     The Audit Committee shall have the following specific powers and duties:

     1.   Holding such regular meetings as may be necessary and such special
     meetings as may be called by the Chairman of the Audit Committee or at the
     request of the independent accountants;

     2.   Creating an agenda for the ensuing year;

     3.   Reviewing the performance of the independent accountants and making
     recommendations to the Board of Directors regarding the appointment or
     termination of the independent accountants;

     4.   Conferring with the independent accountants concerning the scope of
     their examinations of the books and records of the Company and its
     subsidiaries; reviewing and approving the independent accountants' annual
     engagement letter; annual audit plans and budgets; directing the special
     attention of the auditors to specific matters or areas deemed by the
     Committee or the auditors to be of special significance; and authorizing
     the auditors to perform such supplemental reviews or audits as the
     Committee may deem desirable;

     5.   Reviewing the management and the independent accountants significant
     risks and exposures, audit activities and significant audit findings;

     6.   Reviewing the range and cost of audit and non-audit services performed
     by the independent accountants;

     7.   Reviewing the Company's audited annual financial statements and the
     independent accountants' opinion rendered with respect to such financial
     statements, including reviewing the nature and extent of any significant
     changes in accounting principles or the application therein;

     8.   Reviewing the adequacy of the Company's systems of internal control;






     9.   Obtaining from the independent accountants their recommendations
     regarding internal controls and other matters relating to the accounting
     procedures and the books and records of the Company and its subsidiaries
     and reviewing the correction of controls deemed to be deficient;

     10.  Providing an independent, direct communication between the Board of
     Directors and independent accountants;

     11.  Reviewing the adequacy of internal controls and procedures related to
     executive travel and entertainment, including use of Company-owned
     aircraft;

     12.  Reviewing with appropriate Company personnel the actions taken to
     ensure compliance with the Company's Code of Conduct and the results of
     confirmations and violations of such Code;

     13.  Reviewing the programs and policies of the Company designed to ensure
     compliance with applicable laws and regulations and monitoring the results
     of these compliance efforts;

     14.  Reviewing the procedures established by the Company that monitor the
     compliance by the Company with its loan and indenture covenants and
     restrictions;

     15.  Reporting through its Chairman to the Board of Directors following
     the meetings of the Audit Committee;

     16.  Maintaining minutes or other records of meetings and activities of
     the Audit Committee;

     17.  Reviewing the powers of the Committee annually and reporting and
     making recommendations to the Board of Directors on these responsibilities;

     18.  Conducting or authorizing investigations into any matters within the
     Audit Committee's scope of responsibilities. The Audit Committee shall be
     empowered to retain independent counsel, accountants, or others to assist
     it in the conduct of any investigation;

     19.  Considering such other matters in relation to the financial affairs of
     the Company and its accounts, and in relation to external audit of the
     Company as the Audit Committee may, in its discretion, determine to be
     advisable.


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