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New York, NY, May 22, 2006. U.S. Energy Systems, Inc. (Nasdaq:USEY), announced that is has consolidated its position in its UK transaction. Through its wholly owned subsidiary, US Energy Overseas, it has agreed to acquire VTEX Energy, Inc's. (OTC: VXEN) 25% ownership in the project, bringing USEY's effective ownership to 75% of the UK transaction. Under the terms of the agreement, at closing of the UK transaction, US Energy Overseas will issue to VXEN a non voting and non dividend paying Participating Convertible Preferred ("PCP") which is convertible into 1,900,000 USEY common shares at the earlier of when the underling common stock of USEY reaches $11.00 a share or three years. As additional consideration USEY will issue to VXEN a total of 500,000, non tradable, common stock purchase warrants to purchase USEY common shares at strike price ranging from $8 to $10 a share.
In addition to this agreement and its consolidation of ownership, USEY also outlined the management of its operating company, UK Energy Systems.
Grant Emms - CEO
UK Energy Systems will be headed by Grant Emms, an oil and gas executive with over 30-year experience in oil & gas and industry. Mr. Emms is a geoscientist who has held management positions at Amoco and Nexen.
Gary Neus - CFO
Gary Neus was formerly the Assistant Treasurer for project structural and acquisition finance at Unocal as well as the former Vice President of Commercial Development at Amoco in their power resources division. Previous to that he was a SVP Project Finance at Nat West. Mr. Neus also has over 30 years of experience in the energy industry.
Tony Lobban - COO
Tony Lobban, a Petroleum Engineer, has over 30 years of experience in the oil & gas industry and has worked for numerous companies including Amoco and PwC.
Asher Fogel, USEY's chief executive officer stated, "We are excited to be in the end stages of this acquisition and look forward to the completion of our previously announced financing shortly. We are also pleased to have brought on board such a strong management team which will enable us to execute on our strategy of developing USEY into a significant energy company".
About U.S. Energy Systems, Inc.
U.S. Energy Systems, Inc is an owner of generating facilities and a provider of energy outsourcing services for large retail customers, including industrial, commercial and institutional end users. USEY owns and operates energy projects in the United States that generate electricity and thermal energy and use renewable fuels.
For further information contact:
Investor Relations Department
U.S. Energy Systems, Inc.
750 Lexington Avenue
15th Floor
New York, NY 10022
212-588-8901
info@useyinc.com
Certain matters discussed in this press release are forward-looking statements, and certain important factors may affect the Company's actual results and could cause actual results to differ materially from any forward-looking statements made in this release, or which are otherwise made by or on behalf of the Company. Such factors include, but are not limited to, changes in market conditions, the inability to commence planned projects in a timely manner, the impact of competition, the ability to complete acquisitions, risks associated with acquisitions, as well as other risks detailed from time to time in US Energy's Securities and Exchange Commission filings, including its Annual Report on Form 10-K for the year ended December 31, 2004, as amended. We do not undertake to update any of the information set forth in this press release.
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