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Shareholders' Equity
 3 Months Ended
Mar. 31, 2012
Shareholders' Equity [Abstract]  
Shareholders' Equity
9)       Shareholders' Equity
 
Common Stock

During the three months ended March 31, 2012, the Company issued 36,070 shares of common stock.  These shares consist of (a) 15,000 shares issued to officers of the Company pursuant to the 2001 Stock Compensation Plan, (b) 20,000 shares issued as a result of options being exercised by a former director of the Company and (c) a net of 1,070 shares issued as a result of the exercise of options by employees of the Company.
 
The following table details the changes in common stock during the three months ended March 31, 2012:
 
(Amounts in thousands, except for share amounts)
 
         
Additional
 
   
Common Stock
  
Paid-In
 
   
Shares
  
Amount
  
Capital
 
           
 Balance January 1, 2012
  27,409,908  $274  $122,523 
 2001 stock compensation plan
  15,000   --   48 
 Exercise of employee stock options
  1,070   --   -- 
 Exercise of outside director options
  20,000   --   50 
 Expense of employee options vesting
  --   --   2 
 Expense of outside director warrants vesting
  --   --   22 
 Balance March 31, 2012
  27,445,978  $274  $122,645 
              
Employee Stock Option Plans

All options outstanding at March 31, 2012 were granted pursuant to the U.S. Energy Corp. 2001 Incentive Stock Option Plan (the "2001 ISOP").  The 2001 ISOP had a term of 10 years, and expired on December 6, 2011.  Options issued prior to that date will survive to their expiration date which does not exceed a ten year period from date of grant and are subject to vesting and forfeiture provisions.

The Company recorded $2,000 and $251,000 of related compensation expense for the three months ended March 31, 2012 and 2011, respectively.  As of March 31, 2012, there was no unrecognized compensation expense related to stock option awards.  As a result of the exercise of 4,167 options held by a former employee, 1,070 shares of common stock were issued during the three months ended March 31, 2012.

Director Option Plans

From time to time we issue stock options to non-employee directors for services.  During the three months ended March 31, 2012, we issued 70,000 options to non-employee directors.  The options were issued at the closing price of $2.85 on the date of grant, 60,000 options vest over a three year period and expire ten years from the date of grant or one year after the Board member no longer serves on the Board and 10,000 options vested immediately and expire ten years from the date of grant or one year after the Board member no longer serves on the Board.  The options were valued under Black-Scholes using a risk free interest rate of 1.13% to 1.41%, expected life of 5 to 6 years and expected volatility of 62.75% to 63.59%.

During the three months ended March 31, 2012, we recorded $23,000 in expense for options issued to non-employee directors.  We will recognize an additional $145,000 in expense over the vesting period of the outstanding options.  During the three months ended March 31, 2012, we issued 20,000 shares of common stock to directors of the Company as the result of the exercise of 20,000 outstanding options.
 
The following table represents the activity in employee stock options and non-employee director stock options for the three months ended March 31, 2012:

   
March 31, 2012
 
   
Employee Stock Options
  
Director Stock Options
 
      
Weighted
     
Weighted
 
      
Average
     
Average
 
      
Exercise
     
Exercise
 
   
Options
  
Price
  
Options
  
Price
 
              
Outstanding balance at December 31, 2011
  2,318,399  $3.94   210,000  $3.10 
Granted
  --  $--   70,000  $2.85 
Forfeited
  --  $--   --  $-- 
Expired
  (50,000)  $4.97   --  $-- 
Exercised
  (4,167) $2.52   (20,000) $2.52 
Outstanding at March 31, 2012
  2,264,232  $3.92   260,000  $3.08 
Exercisable at March 31, 2012
  2,264,232  $3.92   173,334  $2.96 
                  
Weighted Average Remaining Contractual Life - Years
   4.67       4.82 
                  
Aggregate intrinsic value of options outstanding
     $558,000      $95,000