<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>ex99-1_pre14a2001.txt
<DESCRIPTION>AUDIT CHARTER
<TEXT>
                                                                    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:

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

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

         * 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;


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<PAGE>



         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;


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<PAGE>


         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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<PAGE>



</TEXT>
</DOCUMENT>
