AENP.OB

[greeneyedhawk]

AMEP DD #4 ...for New Eyes:(#4 of 5)
DD re EST AMEP REVENUES based on WELL SPACING, and also est revenues when all the leases are developed by Wholly owned Bend Arch, OAG, and PRI.

I talked to the CEO recently about the spacing on the horizontals, which typically produce about three or four times the amount of a vertical in the Barnett Shale. He said it would not be 40, more likely 80 or 160. I am figuring on the conservative figure of 160, which will make this stock valued in dollars, not pennies, after the 7,000 is covered with horizontals at 160 acre well spacing. I am also figuring 2 wells(5%) down at all times for servicing, and re-fracing to return the production back to near the original volume, per numerous DD sources.

A spacing of 160 acres, yields 43 wells less 2 wells for servicing for a total of 41 full time producers. I am figuring $2M gross per well at a VERY CONSERVATIVE $9 for NG ($14 now), $55 oil ($66 now). That gives a figure of $82M annual gross revenues from the Bend Arch leases alone when developed (on the conservative figure).
-----------------------
That does not count gross revenues from the 193 PRI existing well project, which will be substantial when the project is completed, and that should not take all that long now that the technique has been established, because drilling is not involved. I am estimating that 154 of the 193 wells will be producers, as one in five wells will be used to enter the HOA-800 treatment into the formation. I am figuring 7 wells (+5%) will be down at a time for servicing, leaving an average of 147 wells producing at any time.
The recent announcement, is that the HOA-800 treatment has been achieving as much as a 500% increase in the oil production from the 12 well test as of August.
It looks like CB will achieve his quest to bring AMEP to profitability with the help of PRI now that the program is finally going to be expanded to the existing 193 wells and working pumps program ...and fast, as no drilling is required.
This announcement finally gives us data to make some meaningful projections. Figures based on current well production spread over 12 wells gives sufficient average data for making estimated projections based on 12 well producing 987 barrels in 31 days. The average is 2.65 barrels per day, per well.
Now the program will expand to another 25 wells in the next 45 days. That will be a little better than a +200% increase in PRI wells in production in just 45 days. In 45 days the total HOA-800 treated wells will be 37. That gives 37 wells X 2.65 barrels X 30 days X $60 per barrel(what PRI got on last load) = 2,941 bbl X $60 = $176,460 per month from RPI only. That would be $529,380 gross revenues per next Quarter from wholly owned PRI ONLY, for 37 of the 193 well program. Note; one in 5 wells are used to inject the HOA-800 treatment. Figure a max of 154 producers.
Est Gross Revenues from PRI when field is completely treated:

Like I calculated, PRI has a net of approximately 154 producing wells of the 193 total, when the entire field has been treated. As one in five is used to inject the treatment.

154 wells X 2.65 barrels per day = 408 barrels per day PRI
408 barrels per day X 30 days = 12,240 bbl per Month.
12,240 X $55 (conservative) = $673,200 per month PRI
$673,200 X 3 Months = $2,019,600 per Quarter PRI (ONLY!)
$2,019,600 X 4 Quarters = $8,078,400 Annual gross Rev

That is over $8,000,000 from PRI only.
This MC and SP is so undervalued, the hard figures say so.
Profitability for AMEP is approaching fast.


Wholly owned Bend Arch will do even better, ...the NASH 1-c was not in the last Q.

AMEP longs, IMO the dynamics have really changed at AMEP with the big Ideco Rig acquisition, .....and now the 193 existing well PRI program will spread until the entire field has been treated. That is big news for Q increases in sales of Oil and NG.
-------------snip------yesterday's good news------
Production Resources, Inc. posted significant oil production increases after several months of testing various procedures utilizing AMEP HOA 800. PRI discovered a method of well treatment that combines the utilization of heat along with AMEP HOA-800 in a chemical process that has returned positive results. PRI has increased oil production from the Olmos formation on the 12 test wells by as much as 500% for the month of August. Plans are being implemented to expand the testing area to an additional 25 oil wells in the next 45 days. In august PRI produced 987 barrels of oil at gross sales of approximately $55,000.00
Charles Bitters, President of American Energy Production, Inc. stated, "This is the best month for oil production and revenues that PRI has done since AMEP bought the Company. PRI has been working extremely hard on achieving the desired results with AMEP HOA-800 and now believe its time to start expanding this treatment program. There is still room for improvement, but I believe PRI can now benefit because of current record high oil prices and increased production rates from the Olmos heavy oil sand field. This oil field is very difficult to produce because of the tight sand and the compaction of the heavy oil in the sand; still these are very exciting results."

Management cannot discuss the details and/or formulations being used with AMEP HOA- 800, but PRI believes the heat treatment once perfected can possibly be sold to other oil operators. The Company will keep investors informed of the expanded test results.
------------------------------- snip---

THEREFORE in conclusion on TOTAL est O&NG gross revenues:

My estimated total gross revenues for the 7,000 acres + 193 PRI well project, totals $82,000,000 + $8,078,400 = $90,078,400 gross revenues annually for AMEP.
------------------------------
That said I really believe energy prices will continue to rise over the next several years, with HUBBERT's PEAK production world wide at hand; and China, India, and South East Asia gobbling up energy in order to fuel their growing economies. If that happens the above estimated figures are calculated too low.

You must also consider that CB/CEO will be adding Barnett acreage as the company becomes profitable, ...as CB will grow this company.

All the above IMVHO, and are my VERY CONSERVATIVE estimated figures on $9 NG and $55 Oil, you may want to adjust upward to reflect todays prices, and projections for this winter.
GLTY all AMEP longs.

... %^ greeneyedhawk "GOT GAS?" Get AMEP for relief ;^)

[nextmove]

American Energy Production Inc. Announces 20% Increase in 3rd Quarter Production Revenues for Two Investees
10/27/2005 07:00
American Energy Production Inc. (OTCBB: AMEP) announced today 3rd quarter production revenues for it's two wholly owned investees, Production Resources Inc. and Bend Arch Petroleum Inc.

American Energy Production Inc. investee, Production Resources Inc., sold approximately 2761 barrels of oil in the third quarter for total net oil revenue of $97,617.00.

Bend Arch Petroleum Inc. sold 2782 barrels of oil and 26,431 MCF of natural gas for approximate total gross revenue of $436,281. Total approximate gross revenues for Bend Arch Petroleum Inc. and Production Resources Inc. totaled $533,898.

Charles Bitters, President of American Energy Production Inc. stated, "Oil and Gas revenues in the 3rd quarter increased approximately 20% from the 2nd quarter even though Bend Arch Petroleum Inc has not been able to fracture stimulate several oil and gas wells due to a lack of water caused by the severe drought in the north Texas area. In fracture stimulating a well the amount of slick water required is over 5,000 barrels per well."

Mr. Bitters also stated, "After a few delays with mechanics and part order delays, we are pleased to announce that all drilling rig and mud pump engines started and ran without any major problems or repairs. The derrick should be raised in the next few days and then the drilling rig will be moved to a location on a Bend Arch Petroleum lease to drill a 3100 foot natural gas well and test out the rig."

Statements contained in this release, which are not historical facts, may be considered "forward-looking statements" and are based on current expectations and the current economic environment. We caution the reader that such forward-looking statements are not guarantees of future performance. Unknown risk, uncertainties, as well as other uncontrollable or unknown factors could cause actual results to materially differ from the result, performance, or expectations expressed or implied by such forward-looking statements.

[greeneyedhawk]

That announcement should read 30% increase instead of 20%, if you check the math.  I am expecting a corrective announcement, possibly Fri morning, or Mon at the latest.
BTW, I am travling to Mineral Wells Texas to watch the newly acquired Ideco drilling rig make it's first spud for AMEP. I will be there for a week for observation and detailed DD purposes starting next Tuesday.
Note that AMEP only lost $207K last Q, See Aug 31st News "AMEP Financials." The independent Barnett Shale DD, and historical well records of other companies in the Barnett, indicates that each new high production horizontal well should produce at least $2M per year, ..... per well. AMEP has 7,000 acres with 100% blanket coverage of the Barnett Shale  formation below. AMEP will drill 20 wells per year with the new Ideco drilling rig, starting next week. AMEP looks to be profitable in short order.
GL all longs.
...   %^  greeneyedhawk

[twodachsie]

Hi, Hawk. Any update on AMEP based on your trip? Are you still comfortable with the progress?

[greeneyedhawk]

AMEP UPDATE: re-posted for my fellow AMEP longs, just wanted to let you know the bashers on the AMEP RB board that say that I am selling are lying, see for yourself the 16 Nov 'Scottrade' buys at the bottom of this post, where I copied my 654,249 shares of AMEP buys/add for today. I would think these buys 'speaks volumes' about how I feel about AMEP prospects, I'm putting my hard earned money on the line based on non-material information of what I saw and heard. The bashers that say I'm dumping apparently cannot read. Anyone is welcome to spend their dime, as I did, and go see the entire operations, ...anyone. Although I do not have to, I am sharing my DD here with many friends and a few relatives; and if anyone does not care to believe, they are welcomed to skip my posts. Once again I say to everyone who reads this post, do your own DD; do not solely rely on what a long, short, pumper, basher, fundamentalist, chart technician, or I may post, ...it's your money, make it your own DD.
Like everyone else, I am waiting on 'AMEP NEWS' of the start of the drilling program, or web site photos of the rig with it's derrick raised and ready to drill (see referenced drillin4oil RB post #48940).

---------re-post from earlier ----------
I told Charles Bitter's that I would wait until he post pictures on the newly acquired Ideco H-40 rotary drilling rig, before I posted my pictures and the corresponding notes. However I feel this one post would be OK, just to let everyone know that all I saw, and heard, was highly positive, and that I was still accumulating AMEP shares. This will be my only post, until the rig pictures are made available on the AMEP web site.

BTW, I am not involved with any of the limited partnerships, as that is a tax break for individual earning profits directly from Oil and NG sales. I feel the stock will return more bang for the buck, to the average investor like myself. I 'may' however reconsider in the future, since I am over-weighted in the stock; and would like the cash flow, while keeping the stock shares. Regardless, I will not be selling a share this year, and I still have every share of AMEP that I have ever bought. I do not plan on selling any shares until AMEP is trading in the dollars range, which I expect next year, based on ramping revenues from the drilling program, and AMEP turning a nice profit.

The rig is ready to go except for a torque converter that required re-building. I helped Mr. Bitters deliver that torque converter to a shop in Ft.Worth last Thursday afternoon while eleven experienced AMEP rig hands were busy with other minor tasks at hand, and I expect to hear it has been returned and installed at any time. Once that is done, the derrick will be raised and the rig will be photographed, and then will ready for drilling. All the engines and the turn table "runs like new", and that was how the experienced rig hands described it, "runs as smooth as a sewing machine" as another one said to me.
I am currently working with 'Rocky' on about 20 pictures and comments that will be posted on his fine "Unofficial AMEP Web Site". He will release those pictures right after AMEP releases theirs.

Based on the size and condition of the rig, plus seeing some of the wells that are currently producing, and seeing how knowledgeable and hard working the management and rig hands are, prompted me to continue to add to my position. Seeing the 3-D acquisition in the field was highly encouraging too, and will highly increase AMEP chances for drilling high producing horizontals in the Barnett formation, without hitting a fault/fracture that may run into Ellenberger formation below the Barnett, and bringing in water.

I thought it would only be fair to let my fellow longs know that I am still buying based on the above. I bought 1,405,000 shares this Monday, and a smaller, but additional amounts throughout the week. I plan on buying a few more too, to try and round out the position before the drilling program starts.

FWIW, I have also advised my family and close friends to buy now too, ... and they have.
GL all.
... %^ greeneyedhawk
(Note date below is  settlement date, not trade date.)

Up Date Buy/add on Nov 16th for 654,249 shares:
Current Open Orders & Real-Time Executions
Today's Real-Time Executions
Action Quantity Name Symbol Price Total Order Account type Time executed Settlement Date

BOUGHT 50000 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 2218.00 XWA609320051116 11:32:15 AM 11/21/05
BOUGHT 5000 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 221.10 XWA609320051116 11:32:43 AM 11/21/05
BOUGHT 50000 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 2211.00 XWA609320051116 11:33:13 AM 11/21/05
BOUGHT 8500 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 375.87 XWA609320051116 11:35:02 AM 11/21/05
BOUGHT 15500 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 754.72 XAA522620051116 12:46:38 PM 11/21/05
BOUGHT 10000 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 482.40 XAA522620051116 12:47:03 PM 11/21/05
BOUGHT 5000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 255.74 XTB800520051116 01:14:25 PM 11/21/05
BOUGHT 100000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 4974.75 XTB800520051116 01:14:27 PM 11/21/05
BOUGHT 161666 AMERICAN ENERGY PRODUCTION INC AMEP 0.05 8123.71 XTB800520051116 01:14:45 PM 11/21/05
BOUGHT 50000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 2494.38 XGA700920051116 01:17:29 PM 11/21/05
BOUGHT 333 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 16.56
XGA700920051116 01:17:33 PM 11/21/05
BOUGHT 5000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 255.74 XMA000120051116 01:22:34 PM 11/21/05
BOUGHT 13550 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 674.08 XMA000120051116 01:22:41 PM 11/21/05
BOUGHT 11250 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 549.70 XLB935720051116 01:32:27 PM 11/21/05
BOUGHT 10000 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 489.40 XPB321520051116 01:38:26 PM 11/21/05
BOUGHT 1200 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 57.89
XPB321520051116 01:39:44 PM 11/21/05
BOUGHT 23950 AMERICAN ENERGY PRODUCTION INC AMEP 0.049 1186.42 XRA945220051116 02:09:23 PM 11/21/05
BOUGHT 90000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 4484.28 XHA029720051116 02:51:59 PM 11/21/05
BOUGHT 10000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 497.47 XHA029720051116 02:55:59 PM 11/21/05
BOUGHT 33300 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 1656.59 XHA029720051116 03:01:12 PM 11/21/05

FYI & FWIW.
... %^ greeneyedhawk

[greeneyedhawk]

AMEP UPDATE: re-posted for my fellow AMEP longs, just wanted to let you know the bashers on the AMEP RB board that say that I am selling are lying, see for yourself the 16 Nov 'Scottrade' buys at the bottom of this post, where I copied my 654,249 shares of AMEP buys/add for today. I would think these buys 'speaks volumes' about how I feel about AMEP prospects, I'm putting my hard earned money on the line based on non-material information of what I saw and heard. The bashers that say I'm dumping apparently cannot read. Anyone is welcome to spend their dime, as I did, and go see the entire operations, ...anyone. Although I do not have to, I am sharing my DD here with many friends and a few relatives; and if anyone does not care to believe, they are welcomed to skip my posts. Once again I say to everyone who reads this post, do your own DD; do not solely rely on what a long, short, pumper, basher, fundamentalist, chart technician, or I may post, ...it's your money, make it your own DD.
Like everyone else, I am waiting on 'AMEP NEWS' of the start of the drilling program, or web site photos of the rig with it's derrick raised and ready to drill (see referenced drillin4oil RB post #48940).

---------re-post from earlier ----------
I told Charles Bitter's that I would wait until he post pictures on the newly acquired Ideco H-40 rotary drilling rig, before I posted my pictures and the corresponding notes. However I feel this one post would be OK, just to let everyone know that all I saw, and heard, was highly positive, and that I was still accumulating AMEP shares. This will be my only post, until the rig pictures are made available on the AMEP web site.

BTW, I am not involved with any of the limited partnerships, as that is a tax break for individual earning profits directly from Oil and NG sales. I feel the stock will return more bang for the buck, to the average investor like myself. I 'may' however reconsider in the future, since I am over-weighted in the stock; and would like the cash flow, while keeping the stock shares. Regardless, I will not be selling a share this year, and I still have every share of AMEP that I have ever bought. I do not plan on selling any shares until AMEP is trading in the dollars range, which I expect next year, based on ramping revenues from the drilling program, and AMEP turning a nice profit.

The rig is ready to go except for a torque converter that required re-building. I helped Mr. Bitters deliver that torque converter to a shop in Ft.Worth last Thursday afternoon while eleven experienced AMEP rig hands were busy with other minor tasks at hand, and I expect to hear it has been returned and installed at any time. Once that is done, the derrick will be raised and the rig will be photographed, and then will ready for drilling. All the engines and the turn table "runs like new", and that was how the experienced rig hands described it, "runs as smooth as a sewing machine" as another one said to me.
I am currently working with 'Rocky' on about 20 pictures and comments that will be posted on his fine "Unofficial AMEP Web Site". He will release those pictures right after AMEP releases theirs.

Based on the size and condition of the rig, plus seeing some of the wells that are currently producing, and seeing how knowledgeable and hard working the management and rig hands are, prompted me to continue to add to my position. Seeing the 3-D acquisition in the field was highly encouraging too, and will highly increase AMEP chances for drilling high producing horizontals in the Barnett formation, without hitting a fault/fracture that may run into Ellenberger formation below the Barnett, and bringing in water.

I thought it would only be fair to let my fellow longs know that I am still buying based on the above. I bought 1,405,000 shares this Monday, and a smaller, but additional amounts throughout the week. I plan on buying a few more too, to try and round out the position before the drilling program starts.

FWIW, I have also advised my family and close friends to buy now too, ... and they have.
GL all.
... %^ greeneyedhawk
(Note date below is  settlement date, not trade date.)

Up Date Buy/add on Nov 16th for 654,249 shares:
Current Open Orders & Real-Time Executions
Today's Real-Time Executions
Action Quantity Name Symbol Price Total Order Account type Time executed Settlement Date

BOUGHT 50000 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 2218.00 XWA609320051116 11:32:15 AM 11/21/05
BOUGHT 5000 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 221.10 XWA609320051116 11:32:43 AM 11/21/05
BOUGHT 50000 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 2211.00 XWA609320051116 11:33:13 AM 11/21/05
BOUGHT 8500 AMERICAN ENERGY PRODUCTION INC AMEP 0.044 375.87 XWA609320051116 11:35:02 AM 11/21/05
BOUGHT 15500 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 754.72 XAA522620051116 12:46:38 PM 11/21/05
BOUGHT 10000 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 482.40 XAA522620051116 12:47:03 PM 11/21/05
BOUGHT 5000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 255.74 XTB800520051116 01:14:25 PM 11/21/05
BOUGHT 100000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 4974.75 XTB800520051116 01:14:27 PM 11/21/05
BOUGHT 161666 AMERICAN ENERGY PRODUCTION INC AMEP 0.05 8123.71 XTB800520051116 01:14:45 PM 11/21/05
BOUGHT 50000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 2494.38 XGA700920051116 01:17:29 PM 11/21/05
BOUGHT 333 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 16.56
XGA700920051116 01:17:33 PM 11/21/05
BOUGHT 5000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 255.74 XMA000120051116 01:22:34 PM 11/21/05
BOUGHT 13550 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 674.08 XMA000120051116 01:22:41 PM 11/21/05
BOUGHT 11250 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 549.70 XLB935720051116 01:32:27 PM 11/21/05
BOUGHT 10000 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 489.40 XPB321520051116 01:38:26 PM 11/21/05
BOUGHT 1200 AMERICAN ENERGY PRODUCTION INC AMEP 0.048 57.89
XPB321520051116 01:39:44 PM 11/21/05
BOUGHT 23950 AMERICAN ENERGY PRODUCTION INC AMEP 0.049 1186.42 XRA945220051116 02:09:23 PM 11/21/05
BOUGHT 90000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 4484.28 XHA029720051116 02:51:59 PM 11/21/05
BOUGHT 10000 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 497.47 XHA029720051116 02:55:59 PM 11/21/05
BOUGHT 33300 AMERICAN ENERGY PRODUCTION INC AMEP 0.0495 1656.59 XHA029720051116 03:01:12 PM 11/21/05

FYI & FWIW.
... %^ greeneyedhawk

[setravis]

Posted here......no need to do a re-write.

http://www.3stocksonfire.org/trading/index.php?topic=1272.90

[setravis]

Looking good..................

AMERICAN ENERGY PROD (OTC BB:AMEP.OB) Delayed quote data 

Last Trade: 0.063
Trade Time: 2:24PM ET
Change:  0.013 (26.00%)
Prev Close: 0.05
Open: 0.05
Bid: 0.06 x 5000
Ask: 0.063 x 5000
1y Target Est: N/A

  Day's Range: 0.049 - 0.064
52wk Range: 0.01 - 0.26
Volume: 12,648,944
Avg Vol (3m): 26,331,500
Market Cap: 19.03M
P/E (ttm): N/A
EPS (ttm): -0.006
Div & Yield: N/A (N/A)

[setravis]

Press Release Source: American Energy Production Inc.


American Energy Production Inc. Releases Update to Shareholders on the Progress of the Ideco Drilling Rig
Friday November 18, 8:00 am ET


MINERAL WELLS, Texas--(BUSINESS WIRE)--Nov. 18, 2005--American Energy Production Inc. (OTCBB:AMEP - News) announced an update to shareholders on the most recent progress of the Ideco drilling rig purchased by Investee AMEP Strategic Investments Inc. The refurbishing of the Ideco oil drilling rig is now complete. The mud pump engines and the draw works engines are running with no problems. The company is extremely happy with these results. Overhauling two torque converters on the draw works engines are completed and re-installed and ready to operate. Pressure washing and new paint on the rig is also complete. The derrick will be raised ASAP and pictures of the drilling rig will be posted on the websites of AMEP and Oil America Group.


Bend Arch Petroleum Inc. will move the drilling rig to Bend Arch Petroleum Inc., 12 well property, and drill a 3,100 foot developmental well. This well will have four to five potential natural gas formations that could produce 200,000 to 300,000 cubic feet of natural gas per day, however there are no guarantees the well will be commercial.

In a recent news announcement, the extensive 3-D seismic study on 2500+ acres, consisting of two tracts, in Central and North Central Palo Pinto County, Texas for Bend Arch Petroleum Inc. will be completed this weekend. The purpose of the seismic evaluation is to prepare the way for the re-entry and deepening of two existing wells by Bend Arch Petroleum Inc. into the Barnett Shale formation with horizontal lines and two proposed new joint venture horizontal Barnett Shale wells to be drilled by Oil America Group over the next few months. As stated previously this 3-D seismic shoot will take some of the guess work out of staking locations for the horizontal Barnett shale wells.

As previously announced AMEP has posted its best 3rd quarter ever. With the Ideco drilling rig becoming operational and our Production Resources Inc. oil properties having great success with AMEP HOA 800 our forward-looking guidance looks positive for a strong 4th quarter and 1st quarter of 2006.

Statements contained in this release, which are not historical facts, may be considered "forward-looking statements" and are based on current expectations and the current economic environment. We caution the reader that such forward-looking statements are not guarantees of future performance. Unknown risks, uncertainties, as well as other uncontrollable or unknown factors could cause actual results to materially differ from the result, performance, or expectations expressed or implied by such forward-looking statements.


Contact:
American Energy Production Inc.
Charles Bitters, 210-410-8158
www.americanenergyproduction.com
or
Oil America Group Inc.
Joe Christopher, 972-386-0601
[email protected]

--------------------------------------------------------------------------------
Source: American Energy Production Inc.

[greeneyedhawk]

AMEP DD #4 ...for New Eyes:(#4 of 5) ***Revised December 12, 2005.

This AMEP DD regarding ESTIMATED AMEP REVENUES is based on estimated well spacing, and estimated formation production of natural gas and oil, when all of the 7,000 acres of the Barnett Shale leases are developed by AMEP’s who lly owned BAP and OAG, with SI’s newly acquired Ideco H-40 drilling rig; and when wholly owned PRI completes it’s 193 heavy oil well program.

During my recent visit to AMEP in Mineral Wells Texas, I talked to the CEO Charles Bitters about the estimated spacing on the horizontal and vertical wells. A most important item that I was made aware of, is that the Texas Railroad Commission (TRRC) allows well spacing that can overlap if the wells are producing from completely different formations (horizons). So my previous DD #4 figures, for the amount of wells that can be drilled on Bend Arch’s 7,000 acres, based on a flat 160 acre well spacing for the horizontals, was grossly underesti mating the number of wells that will be drilled on these leases. For example, a vertical well into the Strawn Sands formation could be near another vertical well in the Bend Conglomerate formation, which could be near a horizontal well into the Barnett Shale formation, which could be near another horizontal well in the Marble Falls formation, etc. There are a total of 11 hydrocarbon pay zone formations on these leases.

The upper production formations, mostly sandstone and limestone, are reservoir rock horizons from hydrocarbons seeping from the Barnett shale source rock below, and are found throughout the Barnett leases. These leases are being held without expiration by the currently producing wells in these upper formations. No one upper formation covers the entire leases; some have the Strawn, and/or the Bend Conglomerate, and/or the Caddo, and/or Duffer, etc, most have several upper pay zones. For example, the lease in Comanche County, East of Gorman, has the Duffer as the upper pay zone (Google “Duffer limestone oil gas formation”) which is not present on the other leases. Mr. Bitters’ plan was to buy leases that were already producing in the upper zones to hold the leases, gain revenues cheaply, while planning the exploitation of the deeper and more prolific Marble Falls and Barnett Shale formations. Many geologist believe that these prolific upper pay zones, are a primary indicator of potentially high production from the source rock below, the Barnett Shale formation on AMEP’s leases.

Although the TRRC commonly a llows a 40 acre spacing on these upper formations, for this DD I am conservatively figuring a 60 acre spacing, a 50% cushion. That spacing calculates the number of potential verticals at 116 wells for the 7,000 acres(that includes the present producing wells). I am also estimating a very conservative 250,000 cubic feet of NG per day. Although some of these wells are gas only, and some are gas and oil; I am conservatively ‘not’ figuring any of the oil that some of these wells will produce. I am also very conservatively figuring natural gas at $9 per 1,000 cubic feet (million BTU). That calculates out to $2,250 per well per day, or $787,500 per year, per well, for only 350 days (15 days for servicing), or $91,350,000 per year when the entire upper zones only on the properties are drilled and developed. Keep in mind that these upper zones can overlap in well spacing, which these figures do not reflect, I do not have enough data at this point in time to figure the overlaps, actual results will yield that data later on in the drilling program. Therefore these figures could be very conservative in a considerable way.

On the other hand, the Barnett Shale and the Marble Falls Limestone are a 100% blanket coverage under the leases, which is bullish since these two formations are by far potentially the biggest producers of both NG and the light grade condensate oil coming out with the NG. Future high production horizontal wells are planned for these two formations. The Barnett Shale and the Marble Falls also have the lion’s share of the hydrocarbon reserves on AMEP’s leases. The independent US government agency USGS says:

“Fort Worth, Texas, is built on top the Barnett Shale natural gas field, a field so vast that the U.S. Geological Service estimates that the field contains some 26 trillion cubic feet of yet to be discovered natural gas. Estimates are that as much as 160 billion cubic feet of natural gas are in place per square mile in the Barnett Shale formation. "The Barnett Shale formation," has rightfully emerged as the largest natural gas field in Texas and one of the most important natural gas fields in the nation."

The newly acquired 3-D survey and analysis will shed additional light on the various production zones capabilities, and the extent of the in-ground reserves, as well as show faults and fractures that are to be avoided in most cases.

Horizontals with long laterals, typically produce about five or ten times the amount of a vertical in the Barnett Shale per various sources that I have talked to and read. The TRRC will likely allow at least a 160 acre spacing. Mr Bitters told me that some of the major producers in the Barnett are ‘experimenting’ with much closer spacing with the blessing of the TRRC, however he said that they were getting some so close that they were taking some of the pressure off their own neighboring wells. Mr. Bitters indicated he has no intention of pushing the production envelope or getting greedy, since there will be plenty of future AMEP wells at the 160 acre spacing that will produce for a long time, possibly 20 to 30 years, and some geologist and petroleum engineers say they will produce much longer than that. An important factor that is highly favorable for Barnett horizontal wells, is that they come back to near original production when re-fraced, that is a fact based on the current technology and actual experience from producers in the Barnett.

Special note concerning a future horizontal into the Marble Falls limestone formation; AMEP will be the first to drill a horizontal in this formation as far as Mr. Bitters knows. This will ‘not’ be done early on in the drilling schedule, as the horizon tal in the Marble Falls Limestone is somewhat experimental, and that can wait until higher cash flows are established from the Barnett wells scheduled first for horizontal entries. Currently one of AMEP’s best producers of NG and light condensate oil is a vertical into the Marble Falls. Mr. Bitters said there was a good chance that some of the Marble Falls horizontal wells could equal, or possibly out produce some of the Barnett Shale horizontals based on what they have coming out of the vertical Marble Falls well (which BTW needs to be re-fraced when rains fill the ponds, like so many other AMEP wells currently producing, to bring the production back up.) Mr. Bitters believes a good high-pressure frac will be the key to yielding high production NG and condensate oil from the Marble Falls (and the Barnett too).

Another interesting fact concerns the Ellenberger Dolomite formation (Google Ellenberger oil gas formation). Although in most cases the Ellenberger, which is right below the Barnett, is to be avoided because it is a water bearing formation. However under certain circumstances the Ellenberger formation can be a big oil and NG producer from ‘highs’ in the formation, ‘if’ your lease is lucky enough to have such highs. Since oil and gas floats on top of water, these highs, particularly if it is a rare and ancient reef as sometimes found, can be like hitting the jackpot in the patch. The drilling technique is to use 3-D data and simply drill a deep vertical into the highest point of the formation. The deep pressures from the weight of the earth above, plus the water below the oil and gas, pushes the oil and gas to the surface typically with a strong force. These can be very high production vertical wells, but require drilling deep. That said, I am not figuring in any Ellenberger wells, ‘if’ that happens, it will be a nice bonus.

I am figuring on the conservative spacing figure of 160 acres per Barnett horizontal, and also a 160 acre spacing for the Marble Falls. I am also figuring 2 wells(5%) in each formation will be down at all times for servicing, and re-fracing to return the production back to near the original volume, per numerous DD sources.

A spacing of 160 acres, yields 43 wells per Barnett formation, and another 43 wells per Marble Falls formation, less 4 wells for s ervicing, for a total of 41 wells in each formation, or 82 full time horizontal producers.

Based on the various historical data figures, including vertical wells already drilled into the Barnett and Marble Falls on AMEP leases, it is estimated that these wells will produce 2.5 million cubic feet of gas per day, and 500 barrels of light grade condensate oil per day; however I am taking the conservative figures of 1 million cubic feet of gas per day, and 300 barrels of oil per day.

I am figuring gross per well at a VE RY CONSERVATIVE $9 for NG , and $55 for oil. That yields $9,000 per day per well in natural gas, and $16,500 for the light grade condensate oil (which actually pays a premium, but being conservative I am staying with $55 oil). At 350 days, that calculates out to $3,150,000 for NG, and $5,775,000 for oil per horizontal well, or $8,925,000 per horizontal well for the NG and oil.

That calculates out to $365,925,000 per year for the Barnett alone, after all the wells are drilled and developed. Conservatively, I am cutting that figure in half for the Marble Falls, but will re-figure after a horizontal is drilled and developed in that formation. That conservatively yields $182,962,500 for the NG and oil in the Marble Falls per year, after all the wells are drilled and developed.

That does not count gross revenues from the 193 PRI existing well project, which will be substantial when the project is completed, and that should not take all that long now that the technique has been established, because drilling is not involved. I am estimating that 154 of the 193 wells will be producers, as one in five wells will be used to enter the HOA-800 treatment into the formation. I am figuring 7 wells (+5%) will be down at a time for servicing, leaving an average of 147 wells producing at any time.

The recent announcement, is that the HOA-800 treatment has been achieving as much as a 500% increase in the oil production from the 12 well test as of August. It looks like CB will achieve his quest to bring AMEP to profitability with the help of PRI now that the program is finally going to be expanded to the existing 193 wells and working pumps program ...and fast, as no drilling is required.

This announcement f inally gives us data to make some meaningful projections. Figures based on current well production spread over 12 wells gives sufficient average data for making estimated projections based on 12 well producing 987 barrels in 31 days. The average is 2.65 barrels per day, per well.

Now the program will expand to another 25 wells in the next 45 days. That will be a little better than a +200% increase in PRI wells in production in just 45 days. In 45 days the total HOA-800 treated wells will be 37. That gives 37 wells X 2.65 barrels X 30 days X $50 per barrel (reduced to $50 from $55 because it is heavy oil) = $147,075 per month from RPI only for the 37 wells. Note; one in 5 wells are used to inject the HOA-800 treatment. Figure a max of 154 producers. Est Gross Revenues from PRI when field is completely treated:

Like I calculated, PRI has a net of approximately 154 producing wells of the 193 total, when the entire field has been treated, as one in five is used to inject the treatment.

154 wells X 2.65 barrels per day = 408 barrels per day PRI
408 barrels per day X 30 days = 12,240 bbl per Month.
12,240 X $50 (conservative) = $612,000 per month PRI
$612,000 X 3 Months = $1,836,000 per Quarter PRI only.
$7,344,000 annually from PRI (which should be completed in a relatively short time since no drilling is required).

Grand Totals:
The total annual estimated revenues after AMEP has developed the entire leases it now holds is:
116 Verticals in the upper zones = $91,350,000
41 horizontal wells in the Barnett Shale = $365,925.000
41 horizontal wells in the Marble Falls = $182,962,500
PRI 154 producing heavy oil wells = $7,344,000
AMEP gross annual revenues after all the leases are drilled and developed = $647,581,500

AMEP longs, IMO the dynamics have really changed dramatically at AMEP with the Ideco H-40 drilling rig acquisition, considering the significant NG and oil reserves in the ground under AMEP leases.
I really believe energy prices will continue to rise over the next several years, with HUBBERT's PEAK production world wide at hand; and China, India, and South East Asia gobbling up energy in order to fuel their growing economies. If that happens the above conservative estimated figures are probably calculated too low.

You must also consider that CEO will be adding Barnett acreage as the company becomes profitable, ...as Mr Bitters will grow this company.

All the above IMVHO, and are my VERY CONSERVATIVE estimated figures on $9 NG and $55 Oil ($50 heavy oil for PRI) you may want to adjust upward to reflect today’s prices, and projections for this winter. GLTY all AMEP longs.

... %^ greeneyedhawk

[lalitha0]

Greeneyedhawk,
I appreicate the information. Please keep posting. I am holding long.
Thanks
Lalitha

[netman]

Amep up 18% near close some thing is cooking

I think PR is on the way probably tommorow

[greeneyedhawk]

AMEP Natural Gas & Oil closed up 18%. AMEP is starting to break out above the trend line. Also with the drilling permit now approved, I'm expecting 'NEWS' anyday now that the drilling program has officially started, with the first spud made by AMEP's own acquired drilling rig. The Ideco drilling rig is now being set up on the drilling site over the conductor hole, (the conductor hole already completed).
AMEP is a natural gas and oil company with it's own drilling rig, and 100 percent blanket coverage of 7,000 AMEP acres of prime Barnett Shale formation, the largest and most prolific Natural Gas in ground reserves in the US, on-shore.
GLTY.
...   %^  greeneyedhawk

BTW, can someone tell me how to post a chart on 3stocksonfire, (apparently not like iHub)TIA

[joozt]

under your textbox from your reply, you can click the 'additional options...' feature, then you can attach a file!
go ahead and try!

[netman]

any news ? but it is up 22%