DENVER, CO -- 11/09/09 --
American Oil & Gas, Inc. (NYSE Amex: AEZ)
reports a net loss to common stockholders of $3,400,573 (loss of seven
cents per share, basic and diluted) for the quarter ended September 30,
2009, as compared to net loss to common stockholders of $12,780,287 (loss
of 27 cents per share, basic and diluted) for the quarter ended September
30, 2008. For the nine-month periods ended September 30, 2009 and 2008,
American reports a net loss to common stockholders $8,892,054 (loss of 18
cents per share, basic and diluted) and a net loss to common stockholders
of $15,045,806 (loss of 32 cents per share, basic and diluted),
respectively. The loss in the prior three and nine-month periods ended
September 30, 2008 includes a non-cash impairment of oil and gas properties
of $18.8 million.
During the quarter ended September 30, 2009, American sold 4,877 barrels of
oil at $59.17 per barrel and 49,949 mcf of natural gas at $3.48 per mcf for
total revenues of $462,553. For the corresponding quarter ended September
30, 2008, American sold 5,609 barrels of oil at $108.83 per barrel and
53,783 mcf of natural gas at $10.21 per mcf for total oil and gas revenues
of $1,159,621. Lease operating expenses, including production taxes, for
the quarters ended September 30, 2009 and 2008 were $278,429 and $475,382,
respectively. Depreciation, depletion and amortization expense of oil and
gas properties was $212,000 for the current quarter and $337,000 for the
corresponding prior year quarter.
During the nine-month period ended September 30, 2009, American sold 14,056
barrels of oil at $46.87 per barrel and 183,386 mcf of natural gas at $3.42
per mcf for total oil and gas revenues of $1,285,705. For the
corresponding nine-month period ended September 30, 2008, American sold
13,503 barrels of oil at $104.97 per barrel and 117,711 mcf of natural gas
at $10.09 per mcf for total oil and gas revenues of $2,604,786. Lease
operating expenses, including production taxes, for the nine-month period
September 30, 2009 and 2008 were $848,354 and $1,025,987, respectively.
Depreciation, depletion and amortization expense of oil and gas properties
was $546,000 for the current nine-month period and $1,047,000 for the prior
year nine-month period.
For the quarters ended September 30, 2009 and 2008, American's general and
administrative expenses were $1,198,188 and $768,780, respectively. The
approximate $429,000 increase is largely attributable to $79,000 in
increased share-based compensation, $140,000 in increased other personnel
related costs, a reduction of $60,000 in capitalized land administration
costs, $48,000 in increased rent expense and a $69,000 allowance for bad
debts. For the nine-month period ended September 30, 2009 and 2008,
American's general and administrative expenses were $4,242,539 and
$3,260,093, respectively. The $982,000 increase is largely attributable to
approximately $500,000 paid for third-party financial advisory services,
$475,000 in additional staffing and general salary and bonus adjustments,
and an increase in share-based compensation of $160,000.
At September 30, 2009, American had $16.6 million in working capital which
includes $15.9 million in cash and short-term investments, total assets of
$56.2 million, a long term asset retirement obligation of $412,000, no long
term debt and stockholders' equity of $54.6 million. There are currently
48,307,399 common shares outstanding.
For the nine-month period ended September 30, 2009, American's cash used by
operating activities was $3.1 million and cash used for investing
activities was $7.2 million. Of the cash used in investing activities,
American generated $2.6 million from the redemption at par value of auction
rate securities and expended $9.7 million for drilling the Sims 7-25 well
at Fetter, leasing and preliminary field work at the Bigfoot project,
acquisition of additional working interests at the Goliath project, other
Fetter field activities and various land costs. American had no cash
provided by or used in financing activities.
Pat O'Brien, CEO of American, provided the following comments regarding
American's third quarter operations:
"During the third quarter, we finalized an agreement in our Fetter project
for an outside industry service provider to pay for 100% of the costs to
re-complete up to five existing wells into the Niobrara formation. The
first re-completion is underway with a fracture stimulation of the Hageman
11-22 well. We expect subsequent re-completions to occur periodically over
the next few months. Our goal of creating a commercially successful
developmental drilling program at Fetter remains in focus, and we remain
confident that by combining commingled production from the Frontier and
Niobrara formations with decreased drilling costs, we can establish
commercial production in our Fetter project, even at lower commodity
process.
"Within our Bakken and Three Forks focused Goliath area, we have increased
our position to approximately 70,000 net acres and expect to close shortly
on acquisitions of an additional 6,200 net acres. We have two drill sites
permitted and expect to begin drilling on one of those sites before
year-end. We plan to bring in an industry participant to pay for all or a
substantial portion of one or more wells in return for an ownership
interest at Goliath."
American Oil & 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 & Gas, Inc. can be found at the Company's website:
www.americanog.com.
This release and the Company's website referenced in this release contain
forward-looking statements regarding American Oil & 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. The Company
undertakes no obligation to publicly update these forward-looking
statements to reflect events or circumstances that occur after the issuance
of this press release or to reflect any change in the Company's
expectations with regard to these forward-looking statements or the
occurrence of any unanticipated events. This press release may include the
opinions of American Oil & Gas, Inc., and does not necessarily include the
views of any other person or entity.
Selected
Financial and
Operating Data Three Months Ended Nine Months Ended
---------------------------- ----------------------------
9/30/09 9/30/08 9/30/09 9/30/08
------------- ------------- ------------- -------------
CASH FLOW
RECAP:
Net cash (used)
by operating
activities $ (482,666) $ (175,221) $ (3,057,074) $ (1,118,277)
Net cash
(used)/provid-
ed for
investing
activities $ (285,934) $ (2,971,049) $ (7,214,875) $ 1,648,032
Net cash
provided by
financing
activities $ - $ 2,381,638 $ - $ 2,381,638
FINANCIAL
RECAP:
Revenues $ 462,553 $ 1,159,621 $ 1,285,705 $ 2,604,786
Net loss to
common
stockholders $ (3,400,573) $ (12,780,287) $ (8,892,054) $ (15,045,806)
Net loss per
common share-
basic and
diluted $ (0.07) $ (0.27) $ (0.18) $ (0.32)
OPERATING DATA:
Net oil
production
(Bbl) 4,877 5,609 14,056 13,503
Oil revenues $ 288,567 $ 610,437 $ 658,759 $ 1,417,403
Average oil
price per Bbl $ 59.17 $ 108.83 $ 46.87 $ 104.97
Net gas
production
(Mcf) 49,949 53,783 183,386 117,711
Natural gas
revenues $ 173,986 $ 549,184 $ 626,946 $ 1,187,383
Average gas
price per Mcf $ 3.48 $ 10.21 $ 3.42 $ 10.09
Barrels of oil
equivalent
sold ("BOE") 13,202 14,573 44,620 33,122
Lease operating
and production
taxes $ 278,429 $ 475,382 $ 848,354 $ 1,025,987
LOE and
production
taxes per BOE $ 21.09 $ 32.62 $ 19.01 $ 30.98
Depreciation,
depletion and
amortization-
oil and gas
properties $ 212,000 $ 337,000 $ 546,000 $ 1,047,000
DD&A per BOE $ 16.06 $ 23.13 $ 12.24 $ 31.61
Investment
income $ 9,632 $ 73,329 $ 47,949 $ 446,560
Impairment
expense - oil
and gas assets $ 1,850,000 $ 18,840,000 $ 3,950,000 $ 18,840,000
Loss on sale of
securities $ - $ - $ - $ 369,172
General and
administrative
expenses $ 1,198,188 $ 768,780 $ 4,242,539 $ 3,260,093
Contact:
Andrew Calerich
President
303.991.0173
Fax: 303.595.0709
1050 17th Street, Suite 2400 - Denver, CO 80265
Neal Feagans
Investor Relations
Feagans Consulting, Inc
303.449.1184
