DENVER, Aug. 17 /PRNewswire-FirstCall/ -- American Oil and Gas, Inc.
(Amex: AEZ) today announced oil and gas revenues of $1,239,042 and net income
of $159,412, or less than one cent per share basic and diluted, for the
quarter ended June 30, 2005, as compared to oil and gas revenues of $79,763
and a net loss of $188,705, or one cent per share, for the quarter ended June
30, 2004. For the six months ended June 30, 2005, the Company had oil and gas
revenues of $1,925,769 and net income of $221,074, or one cent per share basic
and diluted, as compared to oil and gas revenues of $147,677 and a net loss of
$350,704, or two cents per share, for the six months ended June 30, 2004.
During the quarter ended June 30, 2005, the Company sold 22,233 barrels of
oil at an average price of $50.97, resulting in oil revenues of $1,133,297,
and sold 16,094 Mcf of natural gas at an average price of $6.57 per Mcf,
resulting in gas revenues of $105,745. During the corresponding quarter of
the prior year, the Company sold 815 barrels of oil at an average price of
$37.47, resulting in oil revenues of $30,527, and sold 11,228 Mcf of natural
gas at an average price of $4.39 per Mcf, resulting in gas revenues of
$49,236.
During the six month period ended June 30, 2005, the Company sold 35,958
barrels of oil at an average price of $48.92, resulting in oil revenues of
$1,759,034, and sold 26,163 Mcf of natural gas at an average price of $6.37
per Mcf, resulting in gas revenues of $166,735. During the corresponding six
month period of the prior year, the Company sold 1,587 barrels of oil at an
average price of $34.37, resulting in oil revenues of $54,548, and sold 23,361
Mcf of natural gas at an average price of $3.99 per Mcf, resulting in gas
revenues of $93,129.
The Company incurred increases in general and administrative expenses for
both the quarter and six months ended June 30, 2005 as compared to the prior
year periods. The increase in the quarterly period is primarily from an
increase in salaries of $251,000, primarily from the acquisition of Tower
Colombia Corporation. In addition, the Company paid a $75,000 listing fee to
the American Stock Exchange, paid a management fee of $15,000, and recorded an
increase in directors' expense of $48,000, which was associated with the value
of common stock paid to an independent director. The increase in the six
month period is primarily from an increase in salaries of $279,000, primarily
from the acquisition of Tower Colombia Corporation, together with the $75,000
listing fee paid to the American Stock Exchange, a management fee of $90,000,
and an increase in directors' expense of $79,000. The remaining increases in
both the quarterly and six month periods result from costs associated with
expanding operations.
At June 30, 2005, the Company had working capital of $2,987,778, of which
$2,799,273 was in cash and cash equivalents, $11,224,699 in total assets, a
long term asset retirement obligation of $44,425, and $10,220,104 in
stockholders' equity. There are currently 35,788,702 common shares
outstanding.
Operationally, at the Company's Fetter project, the sidetracked wellbore
on the Sims 16-26 well has been drilled into the Niobrara formation,
approximately 260 vertical feet above the Frontier formation, where the well
has encountered significant pressures and intermittent natural gas flows.
Current operations include stabilizing the well in preparation to continue to
drill toward the Frontier formation, which is the primary objective of this
well. After drilling the remaining 260 feet, the wellbore will be conditioned
in preparation for running and cementing 5 1/2 inch casing. Once casing has
been set, the conventional drilling rig will be removed and a snubbing unit
will be rigged up to drill the high angle, under-balanced drilling portion of
the well into the Frontier. The conventional drilling rig will be mobilized
to the Hageman 16-34 well location, the second of the planned initial two well
program at Fetter.
The snubbing unit that will be used to drill the under-balanced portion of
the Sims well is designed to operate under the types of surface pressures and
flow rates encountered on the well's first penetration into the Frontier
formation last month. Reservoir information and operational experience
obtained from the initial effort indicate that utilizing a snubbing unit may
facilitate achieving the lateral penetration objectives on this well and help
overcome some of the mechanical challenges encountered from drilling the
Frontier formation with the conventional drilling rig.
The Fetter project area consists of approximately 51,000 gross acres
within American's 103,000 gross acre Douglas project. Subject to the terms of
existing agreements with partners, American is paying 15% of the costs on the
Sims 16-26 well and owns a 26.25% interest. On the Hageman 16-34 well,
American will pay 37.5% of the costs and will own a 45% interest. On all
remaining wells, with the exception of three locations, American owns and will
pay the associated costs of its 56.25% interest.
At the Big Sky Project, American currently owns working interests
aggregating .86 net well in a total of 16 gross producing wells. The
Company's share of production from this project is now approximately 250
barrels of oil per day. The Company is on schedule to participate in the
drilling of up to nine additional wells during the remainder of 2005.
At the Krejci oil project, targeting the Mowry shale, American has
permitted several new drill sites and is in the process of securing a drilling
rig with the goal of commencing a multi-well horizontal drilling program later
this year. Discussions are ongoing with several potential industry partners.
At the West Rozel heavy oil project in Utah and the Bear Creek Coalbed
methane project in Montana, the Company is in advanced stage discussions with
potential industry partners with the goal of entering into some form of
participation agreement, farm out or sale of the properties.
Selected Financial and
Operating Data Three Months Ended Six Months Ended
6/30/05 6/30/04 6/30/05 6/30/04
FINANCIAL RECAP:
Revenues $1,239,042 $79,763 $1,925,769 $147,677
Net income (loss) $159,412 $(188,705) $221,074 $(350,704)
Net income (loss)
per common share- basic $-- $(0.01) $0.01 $(0.02)
Net income (loss)
per common share-diluted $-- $(0.01) $0.01 $(0.02)
OPERATING DATA:
Net oil production (Bbl) 22,233 815 35,958 1,587
Oil revenues $1,133,297 $30,527 $1,759,034 $54,548
Average oil price per Bbl $50.97 $37.47 $48.92 $34.37
Net gas production (Mcf) 16,094 11,228 26,163 23,361
Natural gas revenues $105,745 $49,236 $166,735 $93,129
Average gas price
per Mcf $6.57 $4.39 $6.37 $3.99
Barrels of oil equivalent
produced ("BOE") 24,915 2,686 40,319 5,480
Lease operating and
production taxes $57,400 $14,710 $94,503 $34,922
LOE and production
taxes per BOE $2.26 $ 5.48 $2.34 $6.37
Depreciation, depletion
and amortization-
oil and gas properties $373,874 $19,305 $517,695 $38,597
DD&A per BOE $15.01 $7.18 $12.84 $7.04
General and
administrative expenses $665,303 $233,625 $1,132,010 $422,813
American Oil and Gas, Inc. is an independent oil and natural gas company
engaged in exploration, development and production of hydrocarbon reserves
primarily in the Rocky Mountain region. Additional information about American
Oil and Gas, Inc. can be found at the Company's website:
http://www.americanoilandgasinc.com.
This release and the Company's website referenced in this release contain
forward-looking statements regarding American Oil and Gas, Inc.'s future plans
and expected performance that are based on assumptions the Company believes
to be reasonable. A number of risks and uncertainties could cause actual
results to differ materially from these statements, including, without
limitation, the success rate of drilling efforts and the timeliness of
development activities, fluctuations in oil and gas prices, and other risk
factors described from time to time in the Company's reports filed with the
SEC. In addition, the Company operates in an industry sector where securities
values are highly volatile and may be influenced by economic and other factors
beyond the Company's control. This press release may include the opinions of
American Oil and Gas, Inc. and does not necessarily include the views of any
other person or entity.
Contact:
Andrew Calerich, President
303.991.0173 Fax: 303.595.0709
1050 17th Street, Suite 1850 - Denver, CO 80265
Neal Feagans, Investor Relations
Feagans Consulting, Inc
303.449.1184
SOURCE American Oil and Gas, Inc.
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Related links:
http://www.americanoilandgasinc.com
CONTACT:
Andrew Calerich, President of American Oil
and Gas, Inc., +1-303-991-0173, or fax, +1-303-595-0709; or Neal
Feagans, Investor Relations of Feagans Consulting, Inc,
+1-303-449-1184, for American Oil and Gas, Inc.
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