American Oil & Gas Inc. is an independent oil and natural gas company headquartered in Denver, Colorado. Commencing operations in January of 2003, the company lists on the American Stock Exchange. They engage in the exploration, development, and production of hydrocarbon reserves, mainly in the Rocky Mountain region.
American currently owns interests in three core project areas: Douglas-Fetter, Goliath, and Krejci. Drilling is underway in all three of these areas, which represent company-acquired interests in more than 500,000 gross acres. These three projects are in areas where there is historical evidence of the existence of hydrocarbons.
The company’s Douglas acreage Fetter Prospect is in the Powder River Basin in Wyoming. The company is currently focusing on drilling three to eight additional wells in this area before 2008 ends. These wells will be within six miles of a natural gas processing plant, which means they will be wells that generate revenues quickly.
American may add additional drilling rigs to speed up development of the Fetter area if they have success and increase their drilling efficiencies in the area. The Douglas acreage, including Fetter, offers the company the opportunity to establish natural gas production from deeper over-pressured formations, and from shallower oil-bearing formations.
Their Krejci project is roughly 131,000 gross acres on the southeastern edge of the Powder River Basin. American owns an average 45-percent working interest in approximately 109,000 lease net acres. They have participated in the drilling and completion of four wells in this project. American currently has production from two of the four wells, although not commercially viable as yet. They have also participated in the drilling of a fifth well, the Krejci Family Trust 32-1H well, and are in the process of completion and testing.
The company’s Goliath project is mainly in Williams and Dunn Counties, North Dakota. The Goliath project area is approximately 88,000 gross acres. American owns a 50-percent working interest in approximately 67,000 lease net acres.
In late August, American Oil & Gas announced they made a deal to sell approximately half of their Douglas Project area for $27 million to a major independent natural gas producer. American plans to use proceeds from this sale for programs at their Fetter Field and Krejci Project area in Wyoming, and their Goliath Bakken project in North Dakota. They also plan to use the proceeds to buy land in new regions that have significant potential. The sale involves 36,000 net acres of a total 70,000 net acres.
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