HESS BAKKEN INVESTMENTS I (AEZ) 10-K/A 2008 FY Annual report (amended)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 2

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2008

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 001-31900

AMERICAN OIL & GAS, INC.

(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction of
incorporation or organization) 88-0451554
(I.R.S. Employer
Identification Number)

1050 17^th Street, Suite 2400 Denver, Colorado 80265
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (303) 991-0173
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Name of Each Exchange on Which Registered:
Common Stock, $.001 par value per share	NYSE Amex (formerly American Stock Exchange)

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yesþ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yesþ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.þ Yeso No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).o Yeso No Not required.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filero Accelerated filerþ Non-accelerated filero Smaller reporting companyo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).o Yesþ No

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant onJune 30, 2008was $147,860,526.

The number of shares of registrant’s common stock outstanding as ofSeptember 21, 2009was 48,307,399 shares.

DOCUMENTS INCORPORATED BY REFERENCE:

None.

EXPLANATORY NOTE

American Oil & Gas, Inc. (the “Company,” “we,” “us” or “our”) is filing this Amendment No. 2 on Form 10-K/A (this “Amendment”) to amend its Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2009 (the “Original 10-K”) as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on April 24, 2009 (“Amendment No. 1”). Amendment No. 1 replaced in Items 10, 11, 12, 13 and 14 Proxy Statement references with the relevant information expected to be provided in the definitive Proxy Statement for the Company’s 2009 Annual Meeting.

This Amendment No. 2, conforms Items 11, 12 and 13 to the related disclosures in the aforementioned definitive Proxy Statement and makes additional changes to Items 1, 1A, and 10 through 13 in response to comments made by the SEC Staff in connection with its review of the aforementioned Annual Report on Form 10-K and Amendment No. 1 thereto.

Item 1 and 1A are included in this Amendment No. 2 in their entirety, as required by SEC rules, but the only changes to those items are as follows:

• Item 1Businessis amended in the subsection “Customers” to disclose the percentage of oil and gas sales that each of the named customers accounted for.

• In the first paragraph of Item 1ARisk Factors, the phrase “and in documents we incorporate by reference” is deleted at the end of the second sentence, which now reads, “In evaluating our company, you should consider carefully, among other things, the factors and the specific risks set forth below.” Added to the first paragraph is the sentence, “Our business operations could be affected by additional factors that apply to all companies operating in the United States and globally, as well as other risks that are not precisely known to us or that we currently consider to be immaterial to our operations.”

The Company is also updating its list of exhibits in Item 15 of this report to include the certifications specified in Rule 13a-14(a) under the Securities Exchange Act of 1934 required to be filed with this Amendment. Except for the changes to Items 1, 1A, and 10 through 13, the updates to the cover page and the filing of related certifications, this Amendment No. 2 makes no other changes to the Original 10-K as amended by Amendment No. 1. This Amendment No. 2 does not reflect events occurring after the filing of the Original 10-K or modify or update those disclosures affected by subsequent events.

AMERICAN OIL & GAS, INC.
FORM 10-K/A
TABLE OF CONTENTS

	Page
PART I
Item 1: Business		2
Item 1A: Risk Factors		9
PART III
Item 10: Directors, Executive Officers and Corporate Governance		13
Item 11: Executive Compensation		16
Item 12: Securities Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		23
Item 13: Certain Relationships and Related Transactions, and Director Independence		25
PART IV
Item 15: Exhibits, Financial Statement Schedules		25
Exhibit 31.1
Exhibit 31.2

As used in this document, “American”, “Company”, “we”, “us” and “our” refer to American Oil & Gas, Inc. and its subsidiary.

1

Item 1: Business

We are an independent oil and gas exploration and production company, engaged in acquiring oil and gas mineral leases and the exploration and development of crude oil and natural gas reserves and production in the US Rocky Mountain region. At December 31, 2008, we controlled the following:

• Approximately 53,000 gross (34,000 net) acres in the Fetter Project area, located in the southern Powder River Basin, Wyoming,

• Approximately 128,000 gross (52,000 net) acres in the Krejci Project, located in Niobrara County, Wyoming,

• Approximately 87,000 gross (33,000 net) acres in the Goliath Project, located in the Williston Basin, North Dakota, and

• Approximately 175,000 gross (112,000 net) acres in the Bigfoot Project, located in the U.S. Rocky Mountain area.

We have a management team experienced in building large acreage positions in the Rocky Mountain region. In many instances, these areas have been overlooked by other companies and have resulted in the ability to acquire substantial project size at relatively low cost. In September and October 2008, we sold two non-core acreage positions for $31.7 million in cash, which exceeded by $23 million our direct costs for the properties sold. Recognized gain in 2008 was limited to $16.5 million under full cost accounting rules. We believe that our existing project portfolio provides us with the opportunity to rapidly grow reserves and cash flow if we are able to prove that our acreage positions can be developed in a commercial fashion.

Although commodity prices have significantly decreased in the prior months, we believe we can establish commercial production in our focus areas at current commodity price levels. We anticipate accomplishing this by significantly reducing the cost to drill and complete wells, controlling costs to operate producing wells and by enhancing production. We are already experiencing decreases in service costs, and we expect that service costs will continue to decrease for 2009.

We have been able to reduce or eliminate our financial exposure in the initial drilling in our projects by creating joint venture arrangements that provide for others to pay for all or a disproportionate share of the initial drilling costs. This has allowed us to move forward in drilling a greater number of wells than if we were to drill these wells on our own. We expect to continue to use industry relationships to partially or completely fund initial drilling.

We begin 2009 with:

• Over $25.6 million in working capital ($0.53/share), including $23.3 million in cash and $5.4 million in short term investments,

• No long term debt,

• Approximately 259,000 net undeveloped acres of oil and gas leases of which only approximately 8,000 acres would expire in 2009, even if we drill no wells in 2009,

• Improved opportunity for drilling commercially successful wells within the Fetter and Goliath projects, even at current commodity prices when taking into consideration current and expected further decreases in service costs, and

• Plans to drill several shallow gas wells at our new Bigfoot project that could be commercially successful under existing gas price conditions.

• Little employee turnover in 2008 and no turnover of officers or key managers,

2

In light of the low oil and gas prices currently and the uncertainties of price recovery and financial market recovery, we expect in 2009, to maintain a substantial portion of our cash in U.S. Treasuries and similar low risk, liquid investments, and we are planning to spend approximately $15 million in 2009 for base case capital projects and operating expenses.

For more information relating to our operational activities, please see “Item 2: Properties.”

We operate in one industry segment, which is the exploration, development and production of natural gas and crude oil, and all of our operations are conducted in the United States. Consequently, we currently report a single industry segment. See “Financial Statements” and “Notes to Consolidated Financial Statements” for financial information about this industry segment.

Competition

We operate in the highly competitive oil and gas areas of acquisition and exploration — areas in which other competing companies have substantially larger financial resources, operations, staffs and facilities. Such companies may be able to pay more for prospective oil and gas properties or prospects and to evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit.

Proved Reserves

Ryder Scott Company L.P. (“Ryder Scott”), an independent petroleum engineering firm, determined our estimated proved oil and gas reserves as of December 31, 2008, 2007, and 2006 and determined the projected future cash flows from those proved reserves and the present value, discounted at 10% per annum, of those future cash flows (“PV-10 Value”), as summarized in the following table. In estimating reserves, Ryder Scott used the SEC definition of proved reserves. Projected future cash flows are based on economic and operating conditions as of the applicable December 31^st date for 2008, 2007 and 2006. In particular, projected future cash flows reflect oil and gas prices on those December 31^st dates.

	At December 31,
	2008		2007		2006
Proved oil reserves (bbls)		75,610		96,399		91,850
Proved NGL reserves (bbls)		11,139		53,933		*
Proved natural gas reserves (mcf)		1,147,074		1,307,159		809,847
Future net cash flows (before income taxes)	$	4,675,700	$	13,727,358	$	6,428,667
PV-10 Value	$	2,950,787	$	8,362,799	$	4,692,808

* At December 31, 2006, NGL (i.e., natural gas liquids) estimated to be recovered from the produced natural gas were not significant and not separately estimated.

Volumes of reserves actually recovered and cash flows actually received from actual production may differ significantly from the proved reserve estimates and the related projected cash flows, respectively. Reserve engineering is a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact way. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment and the existence of development plans. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revision of such estimates. Accordingly, reserve estimates are often different from the quantities of oil and gas that are ultimately recovered.

3

Reconciliation of Standardized Measure to PV-10 Value

PV-10 Value is the estimated present value of the future net revenues from our proved oil and natural gas reserves before income taxes, discounted at 10% per annum. PV-10 Value is considered a non-GAAP financial measure under SEC regulations because it does not include the effects of future income taxes, as is required in computing the standardized measure of discounted future net cash flows. We believe that PV-10 Value is an important measure that can be used to evaluate the relative significance of our oil and natural gas properties and that PV-10 Value is widely used by security analysts and investors when evaluating oil and natural gas companies. Because many factors that are unique to each individual company impact the amount of future income taxes to be paid, the use of a pre-tax measure provides greater comparability of assets when evaluating companies. We believe that most other companies in the oil and natural gas industry calculate PV-10 Value on the same basis. PV-10 Value is computed on the same basis as the standardized measure of discounted future net cash flows but without deducting income taxes. The table below provides a reconciliation of our standardized measure of discounted future net cash flows to our PV-10 Value.

	At December 31,
	2008		2007		2006
Standardized measure of discounted future net cash flows	$	2,944,869	$	8,304,799	$	4,598,000
Add present value of future income tax discounted at 10%		5,918		58,000		94,808
PV-10 Value	$	2,950,787	$	8,362,799	$	4,692,808

Customers

During calendar year 2008, we had three major customers accounting for 63% of oil and gas sales that year: DCP Midstream LLC (31%), Shell Trading (US) Company (17%) and Wyoming Refining Company (15%). During 2007, we had four major customers accounting for 81% of our oil and gas sales that year: DCP Midstream LLC (36%), Wyoming Refining Company (19%), Shell Trading (US) Company (13%) and Nexen Marketing U.S.A., Inc. (13%). Because there are other purchasers that are capable of and willing to purchase our oil and gas and because we have the option to change purchasers on our properties if conditions so warrant, we believe that our oil and gas production can be sold in the market in the event that it is not sold to our existing customers, but in some circumstances a change in customers may entail significant transition costs and/or shutting in or curtailing production for weeks or even months during the transition to a new customer.

During 2006, we had one major customer: Eighty Eight Oil, LLC. Sales to this customer accounted for approximately 71% of oil and gas sales in 2006 and related to properties we sold in 2006.

Environmental Matters

Operations on properties in which we have an interest are subject to extensive federal, state and local environmental laws that regulate the discharge or disposal of materials or substances into the environment and otherwise are intended to protect the environment. Numerous governmental agencies issue rules and regulations to implement and enforce such laws, which are often difficult and costly to comply with and which carry substantial administrative, civil and criminal penalties and in some cases injunctive relief for failure to comply.

Some laws, rules and regulations relating to the protection of the environment may, in certain circumstances, impose “strict liability” for environmental contamination. These laws render a person or company liable for environmental and natural resource damages, cleanup costs and, in the case of oil spills in certain states, consequential damages without regard to negligence or fault. Other laws, rules and regulations may require the rate of oil and gas production to be below the economically optimal rate or may even prohibit exploration or production activities in environmentally sensitive areas. In addition, state laws often require some form of remedial action, such as closure of inactive pits and plugging of abandoned wells, to prevent pollution from former or suspended operations.

Legislation has been proposed in the past and continues to be evaluated in Congress from time to time that would reclassify certain oil and gas exploration and production wastes as “hazardous wastes.” This reclassification would make these wastes subject to much more stringent storage, treatment, disposal and clean-up requirements, which could have a significant adverse impact on operating costs. Initiatives to further regulate the disposal of oil and gas wastes are also proposed in certain states from time to time and may include initiatives at the county, municipal and local government levels. These various initiatives could have a similar adverse impact on operating costs.

4

The regulatory burden of environmental laws and regulations increases our cost and risk of doing business and consequently affects our profitability. The federal Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, also known as the “Superfund” law, imposes liability, without regard to fault, on certain classes of persons with respect to the release of a “hazardous substance” into the environment. These persons include the current or prior owner or operator of the disposal site or sites where the release occurred and companies that transported, disposed or arranged for the transport or disposal of the hazardous substances found at the site. Persons who are or were responsible for releases of hazardous substances under CERCLA may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment and for damages to natural resources, and it is not uncommon for the federal or state government to pursue such claims.

It is also not uncommon for neighboring landowners and other third parties to file claims for personal injury or property or natural resource damages allegedly caused by the hazardous substances released into the environment. Under CERCLA, certain oil and gas materials and products are, by definition, excluded from the term “hazardous substances.” At least two federal courts have held that certain wastes associated with the production of crude oil may be classified as hazardous substances under CERCLA. Similarly, under the federal Resource, Conservation and Recovery Act, or RCRA, which governs the generation, treatment, storage and disposal of “solid wastes” and “hazardous wastes,” certain oil and gas materials and wastes are exempt from the definition of “hazardous wastes.” This exemption continues to be subject to judicial interpretation and increasingly stringent state interpretation. During the normal course of operations on properties in which we have an interest, exempt and non-exempt wastes, including hazardous wastes, that are subject to RCRA and comparable state statutes and implementing regulations are generated or have been generated in the past. The federal Environmental Protection Agency and various state agencies continue to promulgate regulations that limit the disposal and permitting options for certain hazardous and non-hazardous wastes.

We believe that the operators of the properties in which we have an interest are in substantial compliance with applicable laws, rules and regulations relating to the control of air emissions at all facilities on those properties. Although we maintain insurance against some, but not all, of the risks described above, including insuring the costs of clean-up operations, public liability and physical damage, there is no assurance that our insurance will be adequate to cover all such costs, that the insurance will continue to be available in the future or that the insurance will be available at premium levels that justify our purchase. The occurrence of a significant event not fully insured or indemnified against could have a material adverse effect on our financial condition and operations. Compliance with environmental requirements, including financial assurance requirements and the costs associated with the cleanup of any spill, could have a material adverse effect on our capital expenditures, earnings or competitive position. We do believe, however, that our operators are in substantial compliance with current applicable environmental laws and regulations. Nevertheless, changes in environmental laws have the potential to adversely affect operations. At this time, we have no plans to make any material capital expenditures for environmental control facilities.

Employees

At December 31, 2008, we had seventeen full time employees. Our employees are not covered by a collective bargaining agreement. We consider our relationship with our employees to be good.

Website and Codes of Ethics

Our website address ishttp://www.americanog.com. We make available free of charge through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after electronically filed or furnished to the SEC. Additionally, posted on our website are our Code of Ethics (for senior financial management) and our Code of Business Conduct and Ethics (for all employees, officers and directors) and the Charters for our Audit Committee, our Compensation Committee and our Nominating and Corporate Governance Committee. The codes of ethics and the committee charters are available in print free of charge to any stockholder who requests them. Requests should be sent by mail to our corporate secretary at 1050 17 ^th Street, Suite 2400, Denver, Colorado 80265.

5

Glossary of Abbreviations and Terms

Unless otherwise indicated in this document, oil equivalents are determined using the ratio of six Mcf of natural gas to one barrel of crude oil, condensate or natural gas liquids so that six Mcf of natural gas are referred to as one barrel of oil equivalent.

AMI. Area of Mutual Interest.

Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to oil or other liquid hydrocarbons.

Bbl/d. One barrel per day.

Bc/d. Barrels of condensate daily.

Bcf. One billion cubic feet of natural gas at standard atmospheric conditions.

Bcfe. One billion cubic feet equivalent of natural gas, calculated by converting oil to equivalent Mcf at a ratio of six Mcf to one Bbl of oil.

Boe. Barrels of oil equivalent, with six thousand cubic feet of natural gas being equivalent to one barrel of oil.

Btu or British thermal unit. The quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit.

Capital Expenditures. Costs associated with exploratory and development drilling (including exploratory dry holes); leasehold acquisitions; seismic data acquisitions; geological, geophysical and land related overhead expenditures; delay rentals; producing property acquisitions; other miscellaneous capital expenditures; compression equipment and pipeline costs.

Carried Working Interest. The owner of this type of working interest in the drilling of a well incurs no liability for drilling costs associated with a well until the well is drilled.

Completion. The installation of permanent equipment for the production of oil or natural gas.

Condensate. Liquid hydrocarbons associated with the production of a primarily natural gas reserve.

Developed Acreage. The number of acres that are allocated or assignable to producing wells or wells capable of production.

Development Well. A well drilled within the proved area of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

Drill Spacing Unit. The gross minimum surface area for the drilling of one well, usually set or approved by local state law or a state agency. For example, the agency may initially require gas wells to be drilled on 640-acre spacing units. If the initial well’s production indicates that four wells are needed to access oil and gas reserves under the 640 acre spacing unit, then the agency may reduce the drill spacing unit to 160 acres to allow four wells per 640 acres.

Exploitation. The continuing development of a known producing formation in a previously discovered field. To make complete or maximize the ultimate recovery of oil or natural gas from the field by work including development wells, secondary recovery equipment or other suitable processes and technology.

Exploration. The search for natural accumulations of oil and natural gas by any geological, geophysical or other suitable means.

6

Exploratory Well. A well drilled to find and produce oil or natural gas in an unproved area, to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir, or to extend a known reservoir.

Field. An area consisting of either a single reservoir or multiple reservoirs, all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.

Finding and Development Costs. The total capital expenditures, including acquisition costs, and exploration and abandonment costs, for oil and gas activities divided by the amount of proved reserves added in the specified period.

Gross Acres. The total surface acres under which we have a working interest in an oil & gas lease.

Gross Wells. Oil and gas wells, as the case may be, in which we have a working interest.

Lease. An instrument which grants to another (the lessee) the exclusive right to enter to explore for, drill for, produce, store and remove oil and natural gas on the mineral interest, in consideration for which the lessor is entitled to certain rents and royalties payable under the terms of the lease. Typically, the duration of the lessee’s authorization is for a stated term of years and “for so long thereafter” as minerals are producing.

Lease Net Acres. Usually synonymous with the term gross acres. In some circumstances, lease net acres may be less than gross acres, such as circumstances where a lease is given by parties having only a portion of the mineral rights to land below a given surface area or a given drill spacing unit. If we have a 50% working interest in leases by owners of 90% of the mineral interests for 100 gross acres, then there are 90 lease net acres, and we are said to own 45 net acres relating to the 100 gross acres.

Mcf. One thousand cubic feet of natural gas at standard atmospheric conditions.

Mcf/d. One Mcf per day.

Mcfe. One thousand cubic feet equivalent of natural gas, calculated by converting oil to equivalent Mcf at a ratio of six Mcf to one barrel of oil.

MMcf. One million cubic feet of natural gas.

MMcfe. One million cubic feet equivalent of natural gas, calculated by converting oil to equivalent Mcf at a ratio of six Mcf to one barrel of oil.

Net Acres. A net acre is deemed to exist when the sum of our fractional ownership working interests in lease net acres equals one. The number of net acres is the sum of the fractional working interests owned in lease net acres expressed as whole numbers and fractions thereof.

Net Wells. A net well is deemed to exist when the sum of our fractional ownership working interests in gross wells equals one. The number of net wells is the sum of the fractional working interests owned in gross wells expressed as whole numbers and fractions thereof.

NGL. Natural gas liquids

Operator. The individual or company responsible to the working interest owners for the exploration, development and production of an oil or natural gas well or lease.

Participant Group. The individuals and/or companies that, together, comprise the ownership of 100% of the working interest in a specific well or project.

7

PV-10 value. The present value of estimated future revenues to be generated from the production of proved reserves calculated in accordance with SEC guidelines, net of estimated lease operating expense, production taxes and future development costs, using prices and costs as of the date of estimation without future escalation, without giving effect to non-property related expenses such as general and administrative expenses, debt service and depreciation, depletion and amortization or federal income taxes, and discounted using an annual discount rate of 10%.

Productive well. A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the production exceed production expenses and taxes.

Prospect. A specific geographic area which, based on supporting geological, geophysical or other data and also preliminary economic analysis using reasonably anticipated prices and costs, is deemed to have potential for the discovery of commercial hydrocarbons.

Proved developed reserves. Reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

Proved reserves. The estimated quantities of oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating conditions.

Proved undeveloped reserves (PUD). Proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for re-completion.

Re-entry. Entering an existing well bore to re-drill or repair.

Reserves. Natural gas and crude oil, condensate and natural gas liquids on a net revenue interest basis, found to be commercially recoverable.

Reservoir. A porous and permeable underground formation containing a natural accumulation of producible natural gas and/or oil that is confined by impermeable rock or water barriers and is separate from other reservoirs.

Royalty. An interest in an oil and natural gas lease that gives the owner of the interest the right to receive a portion of the production from the leased acreage, or of the proceeds of the sale thereof, but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowner’s royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.

SEC. The United States Securities and Exchange Commission

Undeveloped Acreage. Lease acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and gas regardless of whether or not such acreage contains proved reserves.

Working Interest. An interest in an oil and gas lease that gives the owner of the interest the right to drill and produce oil and gas on the leased acreage and requires the owner to pay a share of the costs of drilling and production operations. The share of production to which a working interest owner is entitled will always be smaller than the share of costs that the working interest owner is required to bear, with the balance of the production accruing to the owners of royalties.

8

Title to Properties

As is customary in the oil and gas industry, only a preliminary title examination is conducted at the time we acquire leases or enter into other agreements to obtain control over interests in acreage believed to be suitable for drilling operations. In many instances, others have acquired rights to the prospective acreage, and we have a contractual right to have our interests in that acreage assigned to us. In some cases, we are in the process of having those interests so assigned. Prior to the commencement of drilling operations, an extensive title examination of the drill site tract is conducted by independent attorneys. Once production from a given well is established, the operator will prepare a division order title report indicating the proper parties and percentages for payment of production proceeds, including royalties. We believe that titles to our leasehold properties are good and defensible in accordance with standards generally acceptable in the oil and gas industry.

Item 1A: Risk Factors

You should be aware that the occurrence of any of the events described in this section and elsewhere in this annual report or in any other of our filings with the SEC could have a material adverse effect on our business, financial position, liquidity and results of operations. In evaluating our company, you should consider carefully, among other things, the factors and the specific risks set forth below. This annual report contains “forward-looking statements” that involve risks and uncertainties. Some of the following risks relate principally to the industry in which we operate and to our business. Other risks relate principally to the securities markets and ownership of our common shares. If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially adversely affected, the trading price of your shares could decline, and you may lose all or part of your investment. Our business operations could also be affected by additional factors that apply to all companies operating in the United States and globally, as well as other risks that are not presently known to us or that we currently consider to be immaterial to our operations. To better appreciate this discussion of risks, we encourage you to first read the descriptions of our business and assets in Item 2 “Properties” of this Part I and read Part 2 of this Form 10-K.

Risks related to our industry, business and strategy

We have incurred losses from operations in the past and may do so in the future.

Although we had net income in 2006, we incurred a net loss in 2007 and in 2008. Our future financial results depend primarily on our ability to discover commercial quantities of oil and gas and to implement our exploration and development program. We cannot predict that our future operations will be profitable. In addition, our operating results may vary significantly during any financial period. These variations may be caused by significant periods of time between discovery and development of oil or gas reserves in commercial quantities.

Oil and natural gas prices are volatile and have substantially declined in recent months. The recent decline has adversely affected our financial results. Further price declines or even continuation of current low oil and natural gas prices could significantly affect our future financial results and impede our growth.

Our revenues, profitability and liquidity are substantially dependent upon prevailing prices for oil and natural gas, which can be extremely volatile. Even relatively modest drops in prices can significantly affect our financial results and impede our growth. Prices for oil and natural gas may fluctuate widely in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and a wide variety of additional factors that are beyond our control, such as the domestic and foreign supply of oil and natural gas; the price of foreign imports; the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; technological advances affecting energy consumption; domestic and foreign governmental regulations; and the variations between product prices at sales points and applicable index prices. Our operations are focused on oil and gas exploration and production in the Rocky Mountain region of the United States. Regional oil and gas prices may vary from national prices due to regional factors such as regional gas production being constrained by regional gas pipeline capacity.

The current global and US economic and financial crises may have impacts on our business and financial condition that we currently cannot predict

The current global and US economic recessions, credit crisis and related turmoil in national and global financial systems have substantially contributed to the dramatic decrease in oil and gas prices in the second half of 2008 and in the first three months of 2009. The price declines have adversely affected US oil and gas producers including us. The economic downturn and decline in oil and gas prices are providing declines in drilling costs and increased availability of field equipment, but those cost reductions may only partially mitigate the adverse effects of lower oil and gas prices.

9

Uncertainties as to the extent, duration and impacts of the global and US crises increase uncertainties and risks for us. With the general economic and financial crises, (i) our ability to access capital markets is more restricted now than a year ago and may be restricted in the future when we may like, or need, to raise financing, (ii) our suppliers, customers and business partners may be unable to meet their obligations to us, (iii) we may be unable to profitably sell, extend or explore oil and gas lease rights we currently own and (iii) we may face unanticipated challenges to our business and financial condition. Unexpected bankruptcies of financial institutions or unexpected illiquidity of funds in cash-equivalent investments, such as money market funds, may limit or delay our access to our cash equivalent deposits, causing us to lose some or all of those funds or to incur additional costs to borrow funds needed on a short-term basis.

Our development and exploration operations require substantial capital, and we may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a loss of properties and a decline in our natural gas and oil reserves.

The oil and natural gas industry is capital intensive. We make, and expect to continue to make, substantial capital expenditures in our business and operations for the exploration for and development, production and acquisition of oil and natural gas reserves. To date, we have financed capital expenditures primarily with sales of our securities, sale of certain oil and gas properties and, to a lesser extent, from cash generated by operations. We intend to finance our known capital expenditures for 2009 primarily with existing capital. We currently do not generate meaningful cash flow from our oil and natural gas production, even though our future depends on our ability to generate oil and natural gas operating cash flow. We may generate additional capital to fund increases in capital expenditures through any of: (i) the sale of some oil and gas lease interests, (ii) additional sales of our securities, and/or (iii) debt financing. We may not be able to obtain equity or debt financing on terms favorable to us, or at all. Our ability to grow our oil and natural gas reserves and cash flow may be severely impacted if we are unable to obtain equity or debt financing as we may not be able to continue to drill all or some of our projects.

Oil and gas operations are inherently risky.

The nature of the oil and gas business involves a variety of risks, particularly the risk of drilling wells that are found to be unable to produce any oil and gas or unable to produce and sell oil and gas at prices sufficient to repay the costs of the wells and the costs of producing the wells. As we have experienced in 2006 and in 2008, we may in the future recognize substantial impairment expenses when uneconomic wells and declines in oil and gas prices result in impairments of the capitalized costs of our oil and gas properties.

The oil and gas business also includes operating hazards such as fires, explosions, cratering, blow-outs and encountering formations with abnormal pressures. The occurrence of any of these risks could result in losses. The occurrence of any one of these significant events, if it is not fully insured against, could have a material adverse effect on our financial position and results of operations.

We currently conduct our oil and gas activities in joint ventures with other oil and gas companies, whereby one of the other companies serves as the joint venture’s operator for the day-to-day management of the venture. Under terms of joint operating agreements, the operator is required to carry stated levels and types of casualty and liability insurance. In addition, we carry our own casualty and liability insurance for our interests in such ventures and carry additional insurance against well blow-outs and other unusual risks in the drilling, completion and operation of oil and gas wells. However, there may still be fires, blow-outs and other events that result in losses not fully covered by our insurance.

We may be unable to find additional reserves.

Our revenues depend on whether we find or acquire additional reserves. Unless we conduct successful exploration and development activities, or acquire properties, our proved reserves will decline. Our future oil and natural gas reserves and production as well as our cash flow and income are dependent on our ability to efficiently develop and exploit our current reserves and economically find or acquire additional reserves. Our planned exploration and development projects may not result in significant additional reserves, and we may be unable to drill productive wells at low reserve replacement costs.

10

We could be adversely impacted by changes in the oil and gas market.

The marketability of our oil and gas production depends in part upon the availability, proximity and capacity of gas gathering systems, pipelines and processing facilities. Federal and state regulation of oil and gas production and transportation, general economic conditions, changes in supply and changes in demand all could adversely affect our ability to produce and market oil and natural gas. If market factors were to change dramatically, the financial impact could be substantial because we would incur expenses without receiving revenues from the sale of production. The availability of markets is beyond our control.

We are subject to extensive government regulations.

Our business is affected by numerous federal, state and local laws and regulations, including energy, environmental, conservation, tax and other laws and regulations relating to the oil and gas industry. These include, but are not limited to:

• the prevention of waste,

• the discharge of materials into the environment,

• the conservation of oil and natural gas,

• pollution,

• permits for drilling operations,

• drilling bonds, and

• reports concerning operations, spacing of wells, and the unitization and pooling of properties.

Failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief, or both. Moreover, changes in any of the above laws and regulations could have a material adverse effect on our business. Concerns of global warming may result in changes to laws and regulations that increase the cost of oil and gas operations and decrease the use and demand for crude oil and natural gas. In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to us, we cannot predict the overall effect of such laws and regulations on our future operations.

New government regulation and environmental risks could increase our costs.

Many jurisdictions have at various times imposed limitations on the production of oil and gas by restricting the rate of flow for oil and gas wells below their actual capacity to produce. Because current regulations covering our operations are subject to change at any time, compliance in the future may require us to incur significant costs or activity restrictions.

Our operations and financial condition may be impacted adversely by new taxes and changes to tax laws.

The federal, state and local governments in which we operate impose taxes on the oil and gas products we sell and for many of our wells, sales and use taxes on significant portions of our drilling and operating costs. In the past, there has been a significant amount of discussion by legislators and presidential administrations concerning a variety of energy tax proposals. U.S. President Obama has recently proposed sweeping changes in federal laws on the income taxation of small oil and gas exploration and production companies such as us. President Obama has proposed to eliminate allowing small US oil and gas companies from (i) deducting intangible US well costs as incurred and (ii) taking percentage depletion deductions. Many states have raised state taxes on energy sources, and additional increases may occur. Changes to the laws could adversely affect our business and our financial results.

11

Shortages of rigs, equipment, supplies and personnel could delay or otherwise adversely affect our cost of operations or our ability to operate according to our business plans.

As we have encountered at times in the past, we or our joint venture operators may experience shortages of drilling and completion rigs, field equipment and qualified personnel which may cause delays in our ability to continue to drill, complete, test and connect wells to processing facilities. At times in the past, these costs have sharply increased in various areas. The demand for and wage rates of qualified drilling rig crews generally rise in response to the increased number of active rigs in service and could increase sharply in the event of a shortage. Shortages of drilling and completion rigs, field equipment or qualified personnel could delay, restrict or curtail our exploration and development operations, which may materially adversely affect our business, financial condition and results of operations.

Shortages of transportation services and processing facilities may result in our receiving a discount in the price we receive for oil and natural gas sales or may adversely affect our ability to sell our oil and natural gas.

As we have experienced at times in the past, we may experience limited access to transportation lines, trucks or rail cars used to transport our oil and natural gas to processing facilities. We may also experience limited access to processing facilities. If either or both of these situations arise, we may not be able to sell our oil and natural gas at prevailing market prices. We may be completely unable to sell our oil and natural gas, which may materially adversely affect our business, financial condition and results of operations.

We could be adversely impacted by customer(s) and industry partners unable to meet their obligations

Substantially all of our accounts receivable arise from oil and natural gas sales or joint interest billings to third parties in the oil and gas industry. Our financial results could be adversely impacted by one or more of such third parties being unable to meet their obligations to us.

Risks Related to our Common Stock

Our common stock is thinly traded, so investors may not be able to sell any significant number of shares of our stock at prevailing market prices.

The average daily trading volume of our common stock was approximately 172,000 shares per trading day over the 90-day period ended March 6, 2009. If limited trading of our stock continues, it may be difficult for investors to sell their shares in the public market at any given time at prevailing prices.

We meet normal exchange guidelines for the continuation of trading of our common stock, but unexpected de-listing may occur.

The Company trades on the NYSE Alternext U.S. exchange (i.e., the American Stock Exchange, which was acquired by the New York Stock Exchange in 2008). NYSE Alternext U.S. continues to use the AMEX Corporate Guide on criteria as to whether the exchange should “de-list” a listed company. Under that Guide, the exchange has the right, at its discretion, to cease trading the stock of any company but normally considers de-listing of a company’s common stock in one of four general cases, none of which we believe is true for us:

1. the listed company has stockholders equity of less than $6 million or if the Exchange believes it questionable that the issuer will be able to continue operations or meet its obligations as they mature;

2. the listed company has less than 200,000 shares outstanding (excluding shares held by insiders and controlling shareholders);

3. the listed company has sold its operating assets and ceased to be an operating company or its shares have no value; and

4. the listed company fails to comply with Listing Requirements of the exchange or with SEC requirements.

12

Our stock price and trading volume may be volatile, which could result in losses for our stockholders.

The equity trading markets may experience periods of volatility, which could result in highly variable and unpredictable pricing of equity securities. The market of our common stock could change in ways that may or may not be related to our business, our industry or our operating performance and financial condition. In addition, the trading volume of our common stock may fluctuate and cause significant price variations to occur. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:

• conditions generally affecting the oil and natural gas industry, such as declines in the prices of oil and gas,

• actual or anticipated quarterly variations in our operating results,

• changes in expectations as to our future financial performance or changes in financial estimates, if any,

• announcements relating to our business or the business of our competitors,

• the success of our operating strategy and

• the operating and stock performance of other comparable companies.

Many of these factors are beyond our control, and we cannot predict their potential effects on the price of our common stock. If the market price of our common stock declines significantly, you may be unable to resell your shares of common stock at or above the price you acquired those shares. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly.

We may issue debt or preferred stock with rights that are preferential to, and could cause a decrease in the value of, our common stock.

We may issue debt and/or up to 24.1 million shares of preferred stock without action by our stockholders. Rights or preferences of the debt or preferred shares could include, among other things:

• the establishment of principal and interest obligations or dividends which must be paid prior to declaring or paying dividends or other distributions to our common stockholders,

• a security interest in some or all of our assets that could be foreclosed upon in the event of default of a loan agreement or similar instrument,

• greater or preferential liquidation rights which could negatively affect the rights of common stockholders and

• the right to convert the debt or preferred stock at a rate or price which would have a dilutive effect on the outstanding shares of common stock.

PART III

Item 10: Directors, Executive Officers and Corporate Governance

Board of Directors

The following table sets forth each of the Company’s directors’ name, age, and positions and offices with the Company. The expiration of each of their current terms as directors of the Company expires at the next annual meeting of the Company’s stockholders.

Name	Age*		Position
Patrick D. O’Brien		60	Chief Executive Officer and Chairman of the Board of Directors
Andrew P. Calerich		44	President, Treasurer and Director
Jon R. Whitney		65	Director
C. Scott Hobbs		55	Director
Nick DeMare		54	Director

* Ages of directors and officers disclosed in Item 10, as amended, are as of June 23, 2009, consistent with ages in the Definitive Proxy Statement filed on June 23, 2009.

13

Patrick D. O’Brienhas served as our CEO and as a director of the Company since February 19, 2003. Mr. O’Brien served as our President from February 19, 2003 until July 16, 2003. Mr. O’Brien was chief executive officer, president, co-founder and a director of Tower Colombia Corporation, which we acquired in April 2005 by merger. Prior to co-founding Tower Colombia Corporation in 1995, Mr. O’Brien co-founded Tower Energy in 1984 and co-founded Tower Drilling Company in 1980. Mr. O’Brien began his career in the oil and gas industry with the Dowell Division of Dow Chemical Company where he engineered and supervised all phases of well stimulation and cementing. He joined the Colorado Interstate Gas Company in 1974 where he was responsible for the design, acquisition and development of company-owned gas storage fields. In 1980, Mr. O’Brien joined Montana Power Company as Senior Petroleum Engineer with the responsibility for design, long-range planning and performance economics for its exploration and development programs. Mr. O’Brien has over 30 years oil and gas experience. Mr. O’Brien received his B.S. in Petroleum Engineering from the Montana College of Mineral and Science and Technology.

Andrew P. Calerichhas served as our President since July 17, 2003, and as a director since October 30, 2003. He also served as our Chief Financial Officer from July 17, 2003 to June 30, 2006. Mr. Calerich has over 16 years of public company oil and gas finance experience in a variety of capacities for various companies. Most recently prior to joining us, he served as Vice President and Chief Financial Officer for Denver Colorado based PYR Energy Corporation. From 1993 to 1997, he was a business consultant specializing in accounting and finance for public and private oil and gas producers in Denver. From 1990 to 1993, Mr. Calerich was employed as corporate Controller at Tipperary Corporation, a public oil and gas exploration and production company. He began his professional career in public accounting with an international accounting firm. Mr. Calerich earned B.S. degrees in both Accounting and Business Administration at Regis University in Denver.

Jon R. Whitneyhas served as a director since February 2005. Mr. Whitney began his employment with Colorado Interstate Gas Company, a natural gas transmission company, on October 1, 1968 as an accountant and in 1970 was promoted to accounting supervisor. Mr. Whitney joined the regulatory area in 1971 and in 1973 was promoted to Vice President, Regulatory Affairs and Controller. He was subsequently promoted to Senior Vice President and then Executive Vice President, with the additional responsibilities of Administration, Marketing, Engineering and Operations. In 1990, he was promoted to President and Chief Executive Officer and ultimately held various officer positions with 15 different companies within the corporate family until a merger with the El Paso Corporation in 2001. He also has held committee positions with the Interstate Natural Gas Association of America and the American Gas Association and has held directorships with several outside companies and community organizations. Prior to his employment with Colorado Interstate Gas Company, he was a Certified Public Accountant in private practice. Since 2001, Mr. Whitney has been a member of Peak Energy Ventures, LLC, a natural gas consulting company.

C. Scott Hobbshas served as a director since July 2008. Mr. Hobbs has been in the energy industry for over 30 years and is presently the managing member of his consulting firm, Energy Capital Advisors, LLC. Over the last eight years as a principal of Energy Capital Advisors, LLC and Peak Energy Ventures, LLC, Mr. Hobbs has provided consulting and advisory services to state government, investment bankers, private equity firms, and other investors evaluating major projects, acquisitions, and divestitures principally involving oil and gas pipelines, processing plants, power plants, and gas distribution assets. He presently serves as a director of Buckeye Partners, L.P. and CVR Energy, Inc., both public reporting companies. From February 2005 until March 2006, Mr. Hobbs served as Executive Chairman of Optigas, Inc., and prior to that from January 2004 until February 2005 as President and Chief Operating Officer of Evergreen Energy Inc. (f/k/a Kfx, Inc.). From 1977 until 2001 he worked for the Coastal Corporation last serving as Executive Vice President and Chief Operating Officer for Colorado Interstate Gas and its affiliate pipeline operations in the Rocky Mountain region. In his different positions at Coastal’s pipeline subsidiaries, Mr. Hobbs was responsible for operations, engineering, regulatory compliance, and all commercial activities including gas transportation and storage, gathering and processing, gas production and development, and merchant activities. Prior to joining the Coastal Corporation, Mr. Hobbs worked for Price Waterhouse and Co. in New Orleans, LA. He received a Bachelor of Science degree in Accounting from Louisiana State University and holds a CPA license in inactive status.

14

Nick DeMarehas served as a director and as Chairman of the Audit Committee since October 30, 2003. Mr. DeMare holds a Bachelor of Commerce degree from the University of British Columbia and is a member in good standing of the Institute of Chartered Accountants of British Columbia. Since May 1991, Mr. DeMare has been the President of Chase Management Ltd., a private company which provides a broad range of administrative, management and financial services to private and public companies engaged in mineral exploration and development, gold and silver production, oil and gas exploration and production and venture capital. Mr. DeMare indirectly owns 100% of Chase. Mr. DeMare currently serves as an officer and director of the following other public reporting companies:

Names of Reporting Issuers	Positions Held	Market
Aguila American Resources Ltd.	Director	TSXV
Andean American Mining Corp.	Director	TSXV
Astral Mining Corp.	Director	TSXV
Salazar Resources Ltd.	Director	TSXV
Enterprise Oilfield Group, Inc.	Director	TSXV
GGL Diamond Corp.	Director	TSXV
GeoPetro Resources Company	Director	NYSE Amex
Golden Peaks Resources Ltd.	Director	TSXV
Halo Resource, Ltd.	Director, CFO	TSXV
Kola Mining Corp.	Director	TSXV
Lariat Resources Ltd.	Director	TSXV
Mawson Resources Limited	Director	TSXV
Mirasol Resources Ltd.	Director	TSXV
Tinka Resources Limited	Director	TSXV
Tumi Resources Limited	Director	TSXV

Executive Officers:

Joseph B. Feiten, 57, has served as Chief Financial Officer since June 29, 2006. A Certified Public Accountant for the past 35 years, Mr. Feiten served as Chief Financial Officer for publicly traded Tipperary Corporation from June 2002 until its acquisition by Santos, Ltd in late October 2005, for $466 million. Tipperary was a Denver-based independent oil and natural gas exploration, development and production company. From November 2005 through February 2006, Mr. Feiten was employed by Santos USA, as Vice-President of Accounting for Tipperary Corporation to assist in the transition of Tipperary operations to subsidiaries of Santos, Ltd. From March 2006 through June 28, 2006, Mr. Feiten was taking time off for family and church activities. He also provided accounting consulting services to American from April 24, 2006 through May 11, 2006. From June 1974 through May 2000, Mr. Feiten was a CPA with PricewaterhouseCoopers, serving 18 of the last 20 years there as a national or global director in its energy and mining program. Mr. Feiten holds a BSBA in accounting and an MBA from the University of Denver. He is the co-author of the 4^th (1996) and 5^th (2000) editions ofPetroleum Accounting Principles, Procedures, & Issues, the world’s leading reference book on U.S. financial accounting rules for the exploration, development and production of oil and natural gas.

Don E. Schroeder, 58, has served as Vice President of Land since February 12, 2007. Mr. Schroeder began his career in 1978 as a petroleum land man with Amoco Production Company, and later worked in various land management and executive positions in the oil and gas industry. Since September 2005, he has been the managing member of Eagle Path Properties, Inc. assembling and marketing exploration projects in the Rockies. From October 2004 to September 2005, he was land manager for Black Hills Exploration and Production, Inc. He served as the team leader for Northern Rockies Land of EnCana Oil & Gas (USA), Inc. from August 2002 to October 2004. Mr. Schroeder’s primary focus has been in the Rocky Mountains, but he also has experience in Texas, Oklahoma and Canada. Mr. Schroeder holds a B.B.A. degree in petroleum land management from the University of Texas at Austin and an MBA (with honors) from the University of Denver.

15

Peter T. Loeffler, 55, has served as Vice President of Exploration and Development since June 15, 2007. Since 2001, Mr. Loeffler has worked for Encana Oil and Gas, Inc., and was lead member of the Southern Rocky Mountain Exploration Team. Among his many accomplishments while with Encana, his team designed a 1,200 well development program in the Piceance Basin of Colorado, and he supervised the growth of the annual program budget from $4 million to $320 million over a four year period. Mr. Loeffler has over 30 years of oil and gas experience, and holds a B.A. in Geology from the University of Minnesota and an M.S. in Geology from the University of North Dakota. He began his professional career in 1977 with Kerr McGee Corporation in Casper, WY and has worked for Exxon Company USA and El Paso/Coastal Corporation.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934 requires the Company’s officers and directors, and persons who own more than 10% of a registered class of its equity securities, to file initial reports of ownership and reports of changes in ownership with the SEC. During 2008, based solely on the Company’s review of these reports, it believes that the Company’s Section 16(a) reports were filed timely by its executive officers and directors, other than (i) one Form 4 filed by Mr. Schroeder on April 21, 2008 reporting a transaction on February 12, 2008, and (ii) one Form 4 filed by Mr. Hobbs on July 29, 2008 reporting a transaction on July 22, 2009.

Code of Ethics

Our Code of Ethics can be found on our internet website located at www.americanog.com. If we amend the Code of Ethics or grant a waiver, including an implicit waiver, from the Code of Ethics, we intend to disclose the information on our internet website.

Audit Committee.

The audit committee of the Company reviews the adequacy of systems and procedures for preparing the financial statements and the suitability of internal financial controls. The audit committee also reviews and approves the scope and performance of the Company’s independent registered public accounting firm. In 2008, the audit committee consisted of Nick DeMare, Jon Whitney, M.S. Minhas (who resigned from the Company’s board of directors in July 2008) and C. Scott Hobbs (who was appointed to the Company’s board of directors in July 2008), with Mr. DeMare being appointed the Chairman of the committee. A copy of the audit committee’s charter can be found on our website at http://www.americanog.com. The audit committee reviews and assesses the adequacy of the audit committee charter annually. The board of directors has determined that all of the current committee members are “audit committee financial experts” as that term is used in SEC rules requiring that at least one member of the audit committee be an “audit committee financial expert.”

Item 11: Executive Compensation

Compensation Discussion and Analysis

The following discussion and analysis of compensation arrangements of our named executive officers for 2008 should be read together with the compensation tables and related disclosures set forth below. This discussion contains forward looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs. Actual compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.

Compensation Philosophy

Our overall compensation philosophy is to provide a compensation package that enables us to attract, retain and motivate named executive officers (“NEOs”) to achieve our short-term and long-term business goals. Consistent with this philosophy, the following goals provide a framework for our NEO compensation program:

• Pay competitively to attract, retain and motivate NEOs;

• Relate total compensation for each NEO to overall company performance as well as individual performance;

16

• Aggregate the elements of total compensation to reflect competitive market requirements and to address strategic business needs;

• Expose a portion of each NEO’s compensation to risk, the degree of which will positively correlate to the level of the NEO’s responsibility and performance; and

• Align the interests of our NEOs with those of our stockholders.

Executive Compensation Program Overview

The executive compensation package available to our named executive officers is comprised of:

• base salary,

• cash bonuses at the discretion of our board of directors,

• long-term incentive compensation, and

• other welfare and health benefits.

All elements of our compensation are valued and compared, although for 2008 we did not establish specific company and individual target performance goals in determining the compensation for our executives.

In reviewing our officers’ 2008 compensation levels, our Compensation Committee considered management-prepared tables of what our publicly traded peers pay to their officers, as disclosed in recent SEC filings by our peers. Our peers for compensation analysis typically are US-based companies whose primary business is exploration and production of oil and natural gas and whose size or market capitalization is similar to ours. For the Committee’s annual officer compensation reviews in January 2008 and January 2009, the peer group consisted of twenty-five and seventeen companies, respectively.

The January 2008 Peer Group’s twenty-five companies were Abraxas Petroleum (AXAS), BPZ Resources (BPZ), Brigham Exploration (BEXP), Cano Petroleum (CFW), Contango Oil & Gas (MCF), Double Eagle Petroleum (DBLE), Dune Energy (DNE), Evolution Petroleum (EPM), Far East Energy (FEEC.OB), Foothills Resources (FTRS.OB), FX Energy, Inc. (FXEN), Gasco (GSX), Gastar Exploration (GST), GeoPetro Resources (GPR), Infinity Energy Resources (IFNY.PK), Kodiak Oil & Gas (KOG), New Frontier Energy (NFEI.OB), NGAS Resources (NGAS), Panhandle Oil & Gas (PHX), PetroQuest Energy (PQ), PetroResources (now Magnum Hunter Resources, MHR), RAM Energy (RAME), StormCat Energy (SCU), Tengasco (TGC), and Teton Energy (TEC).

The January 2009 Peer Group’s seventeen companies were Abraxas Petroleum (AXAS), Approach Resources (AREX), Aurora Oil & Gas (AOGS), Brigham Exploration (BEXP), Cano Petroleum (CFW), Double Eagle Petroleum (DBLE), Energy Partners Ltd. (EPL), Gasco (GSX), GeoMet (GMET), GeoResources (GEOI), Kodiak Oil & Gas (KOG), NGAS Resources (NGAS), Quest Resource (QRCP), RAM Energy (RAME), REX Energy (REXX), Teton Energy (TEC), and TXCO Resources (TXCOQ.PK). Changes in this list from that of the January 2008 list generally were due to changes in companies’ size and operational characteristics in comparison to our characteristics.

Our CEO’s $95,000 salary in 2008 was lower than any of January 2008 and January 2009 Peer Groups’ CEO annual salaries, which averaged $372,639 and $332,556, respectively. On January 14, 2009, our Board of Directors increased the CEO’s annual salary to $142,500 and awarded him a $50,000 cash bonus. As the largest individual shareholder in the Company, our CEO continues to have substantial motivation and potential reward beyond his direct CEO compensation to do his best as CEO and Chairman of the Board in enhancing shareholder value.

The other four Named Executive Officers received in 2008 cash compensation (salaries and bonuses) that collectively averaged 95% (and individually ranged from 91% to 104%) of the median cash compensation of their counterparts’ salaries and bonuses in the January 2008 Peer Group. On January 14, 2009, our Board of Directors increased the annual salaries of these four NEOs and awarded each of them a $50,000 cash bonus. The increased salaries collectively averaged 100% (and individually ranged from 94% to 103%) of the median cash compensation of their counterparts in the January 2009 Peer Group. The median of those counterparts’ reported bonuses approximated $45,000.

Base Salary

Base salary is designed to provide competitive levels of base compensation to our executives and be reflective of their experience, duties and scope of responsibilities. We pay competitive base salaries required to recruit and retain executives of the quality that we must employ to ensure the success of our Company. The Company’s compensation committee, which is comprised of all non-employee directors, determines the appropriate level and timing of increases in base compensation for the NEOs.

17

In making determinations of salary levels for the named executives, the compensation committee considers the entire compensation package for executive officers, including the equity compensation provided under long-term compensation plans. The Company intends for the salary levels to be consistent with competitive practices of comparable institutions and each executive’s level of responsibility. The compensation committee reviews and recommends to the Board of Directors adjustments in the base salaries of the Company’s executive officers when deemed appropriate, with consideration of several factors, most notably the following:

• the executive officer’s long-term employment agreement;

• the executive officer’s entire compensation package;

• the qualifications, experience and performance of the particular executive officer;

• the compensation paid to persons having similar duties and responsibilities in other competitive institutions; and

• the nature of the Company’s business, the complexity of its activities and the importance of the executive’s experiences to the success of the business.

Cash Bonuses

Cash bonus awards are an important periodic tool in rewarding individual performance. Cash bonuses also help, in addition to other parts of an overall compensation package, to attract and retain executive officers. On a periodic basis, cash bonuses may be awarded to executive officers based on a subjective evaluation of the performance of the Company and such individual. Cash bonuses are discretionary and not awarded pursuant to a formal plan or an agreement with any executive officer.

Equity Awards

Equity awards for our executives are granted from our 2004 Stock Option Plan (the “2004 Plan”) and our 2006 Stock Incentive Plan (the “2006 Plan,” and together with the 2004 Plan, the “Plans”). The compensation committee grants awards under the Plans in order to align the interests of the named executive officers with our stockholders, and to motivate and reward the named executive officers to increase the stockholder value of the Company over the long term.

Under the 2004 Plan and 2006 Plan, the Company had at December 31, 2008, 2,690 shares of our common stock and 649,400 shares of our common stock, respectively, eligible for issuance as awards to employees, officers, and directors of the Company and its related companies, as well as to other persons who provide services to the Company. The Plans provide for the grant of all equity awards to officers and directors; grants may include, but are not limited to, awards of stock options, restricted stock awards and restricted stock unit awards.

Executive management and the compensation committee believe that stock ownership is a significant incentive in aligning the interests of employees and stockholders, building stockholder value and retaining the Company’s key employees.

Health and Welfare Benefits

All full-time employees, including our named executive officers, may participate in our health and welfare benefit programs, including medical and dental coverage. We provide these benefits to meet the health and welfare needs of employees and their families.

Employment Agreements

In order to retain the Company’s senior executive officers, the compensation committee and the board of directors of the Company determined it was in the best interests of the Company to enter into employment agreements with certain officers. The employment contracts are referenced as exhibits to our Report on Form 10-K. We entered into these agreements to ensure that the executives perform their respective roles for an extended period of time. In addition, we also considered the critical nature of each of these positions and our need to retain these executives when we committed to the agreements.

18

In July 2003, we entered into an employment agreement with Andrew Calerich, who was then our President and Chief Financial Officer. The three-year employment agreement called for a base salary of $8,000 per month, family health and medical benefits and payment of 500,000 shares of common stock upon continued employment as follows: 250,000 shares vesting on July 1, 2004 and 250,000 shares vesting on July 1, 2005. As part of the employment agreement, only that portion of the shares of common stock that had a market value equal to the income tax liability realized upon the vesting of the shares may have been sold prior to July 1, 2005. Effective April 21, 2005, a new five-year employment agreement was entered into and as a part of the new agreement, 125,000 of the 250,000 shares scheduled to vest on July 1, 2005 vested on May 1, 2005. The new agreement provides for a base annual salary of $95,000, and we granted options to purchase 500,000 shares of our common stock to Mr. Calerich at an exercise price of $3.66 per share, which was the closing price of our common stock on the date of grant. One-sixth of the options vested on each of April 21^st of 2005, 2006, 2007, 2008 and 2009, and one-sixth of the options will vest on April 21, 2010. These options expire on the fifth anniversary of the date of vesting. Effective May 1, 2007, Mr. Calerich’s annual salary was increased to $180,000. In 2008, Mr. Calerich was granted a bonus of $30,000. Effective January 16, 2009, Mr. Calerich’s annual salary was increased to 207,000.

Effective April 21, 2005, we entered into an employment agreement with Patrick O’Brien, our Chief Executive Officer. The five-year agreement provides for base salary of $95,000 per year and family health and medical benefits. Effective January 16, 2009, Mr. O’Brien’s salary was increased to $142,500.

Effective June 29, 2006, we entered into an employment agreement with Joseph Feiten, our Chief Financial Officer. The five year agreement provides for a base salary of $144,000 per year, subject to salary increases and performance-based bonuses at the discretion of our board of directors. Effective May 1, 2007, Mr. Feiten’s annual salary was increased to $170,000. In 2008, Mr. Feiten was granted a bonus of $30,000. Effective January 15, 2009, Mr. Feiten’s annual salary was increased to $205,700. In November 2008, the Board granted Mr. Feiten and other employees who were not directors option exchanges, whereby Mr. Feiten exchanged stock options granted in June 2006 (250,000 shares at an exercise price of $4.95/share) and April 2008 (90,000 shares at an exercise price of $3.37/share) for new stock options for 340,000 shares at an exercise price of $2.00, vesting 1/5^th on November 5, 2009, 2010, 2011, 2012 and 2013 or upon a change in control.

Effective June 15, 2007, we entered into an employment agreement with Mr. Loeffler for a five-year term with an annual salary of $165,000, subject to salary increases and performance-based bonuses at the discretion of our board of directors. The Company also made a grant to Mr. Loeffler of 100,000 shares of the Company’s common stock, which was subject to a five-year vesting provision for all 100,000 shares. Effective January 16, 2009, our board of directors increased Mr. Loeffler’s annual salary to $204,600. In November 2008, the Board granted Mr. Loeffler and other employees who were not directors option exchanges, whereby Mr. Loeffler exchanged stock options granted in June 2007 (150,000 shares at an exercise price of $5.84/share) and April 2008 (60,000 shares at an exercise price of $3.37/share) for new stock options for 210,000 shares at an exercise price of $2.00, vesting 1/5^th on November 5, 2009, 2010, 2011, 2012 and 2013 or upon a change in control. Mr. Loeffler retained an option granted in April 2008 and vested on April 17, 2009 to acquire 30,000 shares at an exercise price of $3.37/share.

Our Vice President of Land, Don Schroeder is employed at will and not subject to a long-term employment agreement.

19

Summary Compensation Table

The following table sets forth in summary form the compensation earned during the years ended December 31, 2008, 2007 and 2006 by our Chief Executive Officer, our Chief Financial Officer, and up to three additional most highly compensated executive officers, each of whom had total annual compensation (as defined by the SEC) exceeding $100,000. The individuals named in the following table are referred to collectively as the “Named Executive Officers,” or “NEOs”.

														Pensions &
								Stock		Option		Non-Equity		Deferred		All Other
Name and Principal								Awards		Awards		Incentive Plan		Earnings		Compensation
Position	Year			Salary		Bonus		(A)		(A)		Compensation		(B)		(C)		Total
Patrick O’Brien,		2008		$	95,000	$	30,000		—		—		—		—	$	19,393	$	144,393
Chief Executive Officer		2007		$	95,000		—		—		—		—		—	$	15,986	$	110,986
		2006		$	95,000		—		—		—		—		—	$	15,158	$	110,158
Andrew Calerich,		2008		$	180,000	$	30,000		—	$	159,337		—		—	$	28,751	$	398,088
President		2007		$	151,667	$	25,000		—	$	158,902		—		—	$	25,502	$	361,071
		2006		$	95,000		—		—	$	269,479		—		—	$	20,077	$	384,556
Joseph Feiten,		2008		$	170,000	$	30,000		—	$	50,639		—		—	$	35,816	$	286,455
Chief Financial Officer		2007		$	161,333	$	20,000		—	$	75,559		—		—	$	12,187	$	269,079
		2006	(1)	$	64,091		—		—	$	132,797		—		—	$	4,322	$	201,210
Don Schroeder,		2008		$	150,000	$	30,000	$	23,360	$	62,371		—		—	$	27,707	$	293,438
VP of Land		2007	(2)	$	115,568		—	$	49,640	$	79,289		—		—	$	20,330	$	264,827
		2006			—		—		—		—		—		—		—		—
Peter Loeffler,		2008		$	165,000	$	30,000	$	116,800	$	58,075		—		—	$	32,413	$	402,288
VP of Exploration & Development		2007	(3)	$	90,000		—	$	63,267	$	57,812		—		—	$	14,019	$	225,098
		2006			—		—		—		—		—		—		—		—

(A)	The amounts in these columns reflect the dollar amount expensed for financial statement reporting purposes for the fiscal year ended December 31, 2006, 2007 or 2008, as applicable, in accordance with FAS 123(R) of awards and thus may include amounts from awards granted in and prior to such year.
(B)	This column reflects changes in pension value and non-qualified deferred compensation earnings. The Company has no pension plans or non-qualified deferred compensation plans.
(C)	Other Compensation primarily consists of health and dental insurance, Company contributions to 401(k) accounts and smaller amounts for office parking and life insurance.
(1)	Mr. Feiten’s employment with the Company started on June 29, 2006.
(2)	Mr. Schroeder’s employment with the Company started on February 12, 2007.
(3)	Mr. Loeffler’s employment with the Company started on June 15, 2007.

20

2008 Grants of Plan Based Awards

																	All Other
			Estimated Future						Estimated Future						All Other		Option Awards:
			Payouts Under Non-						Payouts Under						Stock Awards:		Number of			Exercise or		Grant Date Fair
			Equity Incentive Plan						Equity Incentive Plan						Number of		Securities			Base Price		Value of Stock
	Grant		Awards						Awards						Shares of Stock		Underlying			of Option		and Option
	Date		A*		B*		C*		A*		B*		C*		or Units		Options			Awards ***		Awards
Patrick O’Brien		—		—		—		—		—		—		—		—		—			—		—
Andrew Calerich		—		—		—		—		—		—		—		—		—			—		—
Joseph Feiten		4/17/08		—		—		—		—		—		—		—		90,000		$	3.37	$	94,500
		11/5/08		—		—		—		—		—		—		—		340,000	**	$	2.00	$	183,600	**
Don Schroeder		4/17/08		—		—		—		—		—		—		—		90,000		$	3.37	$	94,500
		11/5/08		—		—		—		—		—		—		—		340,000	**	$	2.00	$	183,600	**
Peter Loeffler		4/17/08		—		—		—		—		—		—		—		90,000		$	3.37	$	94,500
		11/5/08		—		—		—		—		—		—		—		210,000	**	$	2.00	$	113,400	**

*	A = Threshold. B = Target. C = Maximum
**	Options granted on 11/5/08 were in exchange for the surrender of options granted on 4/17/08 and surrender of all options granted prior to 2008 for the same number of shares as granted on 11/5/08. All previously granted options were surrendered except Mr. Loeffler did not exchange that portion of the 4/17/08 option vesting on 4/17/09 for 30,000 shares.
***	The $3.37 exercise price corresponds to the $3.37 stock closing price at the date of grant. The $2.00 exercise price was set by the board of directors on the date such options were approved, November 5, 2008, when the Company’s common stock closed at $1.55 per share. All stock options granted in 2008 to these officers were under the 2006 Stock Incentive Plan other than (i) the options granted to Don Schroeder and (ii) a portion (280,000 shares) of the options granted to Joseph Feiten; which were granted under the 2004 Plan.

2008 Outstanding Equity Awards at Fiscal Year-End (December 31, 2008)

	Option Awards											Stock Awards
					Equity
					Incentive
					Plan Awards:									Market		Unearned		Market
					Number of							Number of		Value of		shares in		Value of
					Securities							Shares or		Shares or		Equity		Unearned
	Number of Securities				Underlying							Units of		Units of		Incentive		Shares in
	Underlying Unexercised				Unexercised		Option		Option			Stock That		Stock That		Plan		Equity Plan
	Options (#)				Unearned		Exercise		Expiration			Have Not		Have Not		Awards(#),		Awards ($),
Name	Exercisable		Unexercisable		Options		Price		Date			Vested (#)		Vested ($)		Note (A)		Note (B)
Patrick O’Brien		125,000		—		—	$	1.25		7/15/2009	*		—		—		—		—
Patrick O’Brien		125,000		—		—	$	1.25		7/14/2010	*		—		—		—		—
Andrew Calerich		333,333		—		166,667	$	3.66		10/21/2013	**		—		—		—		—
Joseph Feiten		—		—		340,000	$	2.00		11/5/2016	**		—		—		—		—
Don Schroeder		—		—		340,000	$	2.00		11/5/2016	**		—		—		16,000	$	12,800
Peter Loeffler		—		—		210,000	$	2.00		11/5/2016	**		—		—		100,000	$	80,000
Peter Loeffler		—		—		30,000	$	3.37		4/17/2014			—		—		—		—

(A)	This column refers to number of unearned shares, units or other rights that have not vested with regards to Equity Incentive Plan awards.
(B)	This column refers to the market or payout value of unearned shares, units or other rights that have not vested with regards to Equity Incentive Plan awards.

21

*

Expiration dates reflect option terms as of December 31, 2008. On January 14, 2009, our Board of Directors extended the expiration date to July 15, 2014 for Mr. O’Brien’s stock options, but not options for other officers.

**

Average option expiration date. For Mr. Calerich’s stock options, options expire five years after vesting, i.e., options for 83,333 shares expire each April 21 of 2010, 2011, 2012, 2013, 2014 and 2015. For Mr. Feiten, Mr. Schroeder and Mr. Loeffler, the options with a $2.00 exercise price, granted 11/5/08, vest one-fifth on the first five anniversary dates of grant (or upon an earlier change in control) and expire five years after vesting.

2008 Option Exercises and Stock Vested Table

	Option Awards				Stock Awards
	Number of Shares		Value Realized		Number of Shares		Value Realized
Name	Acquired on Exercise		on Exercise (A)		Acquired on Vesting		on Vesting (B)
Patrick O’Brien		—		—		—		—
Andrew Calerich		—		—		—		—
Joseph Feiten		—		—		—		—
Don Schroeder		—		—		4,000	$	17,720
Peter Loeffler		—		—		—		—

(A)	The value realized is equal to the amount that is taxable to the plan participant, which was the difference between the market price of the underlying securities at exercise and the exercise price of the options.
(B)	The value realized by the named executive officer upon the vesting of stock or the transfer of such instruments for value is the aggregate dollar amount realized upon vesting by multiplying the number of shares of stock or units by the market value of the underlying shares on the vesting date.

Potential Payments Upon Termination

Under current officer employment agreements, in the event that the board of directors determines, in its sole discretion, that it is in the best interests of the Company to terminate Patrick O’Brien, Andrew Calerich, Joseph Feiten, or Peter Loeffler, and the board of directors does not desire to base such termination for “Cause” (as defined in their respective employment agreements), then such terminated officer’s compensation and benefits will continue for three months (six months for Mr. Loeffler) after the effective date of such termination. For example, if the Board of Directors had terminated Mr. O’Brien, Mr. Calerich, Mr. Feiten and Mr. Loeffler at December 31, 2008, without Cause, such termination payments would have been $23,750, $45,000, $42,500 and $82,500, respectively, plus fringe benefits of less than $10,000.

Potential Payments Upon Change In Control

At December 31, 2008, the named executive officers had no rights to receive additional compensation upon a change in control of the Company, except: (a) the accelerated vesting of Mr. Loeffler’s rights to 100,000 shares of the Company’s common stock and (b) the accelerated vesting of stock options classified as “unearned” in the accompanying table “2008 Outstanding Equity Awards at Fiscal Year-End.” At December 31, 2008, such options had exercise prices more than double the $0.80 per share closing price of our common stock on that date, whereby the accelerated vesting of such options would have had less than $7,000 of value per affected named executive officer if there had been a change in control on December 31, 2008.

22

2008 Director Compensation Table

The following table contains information pertaining to the compensation of the Company’s board of directors for the 2008 fiscal year.

									Change
									in Pension Value
	Fees								and Nonqualified
	Earned						Non-Equity		Deferred
	Or Paid		Stock		Option		Incentive Plan		Compensation		All Other
Name	In Cash		Awards		Awards		Compensation		Earnings		Compensation		Total
Patrick O’Brien		—		—		—		—		—		—		—
Andrew Calerich		—		—		—		—		—		—		—
Jon Whitney		—		—	$	48,750		—		—		—	$	48,750
Scott Hobbs		—		—	$	30,000		—		—		—	$	30,000
Nick DeMare		—		—	$	48,750		—		—		—	$	48,750
M.S. Minhas		—		—	$	24,375		—		—		—	$	24,375

The amounts under Option Awards reflect the dollar amount expensed for financial statement reporting purposes for the fiscal year ended December 31, 2008, in accordance with FAS 123(R) of awards and thus may include amounts from awards granted in and prior to 2008.

Item 12: Securities Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information as of April 18, 2009 concerning the beneficial ownership of the Company’s voting common stock by: (a) each director, director nominee and named executive officer; (b) each person the Company knows to beneficially own more than 5% of the issued and outstanding shares of a class of common stock; and (c) all of the Company’s executive officers and directors as a group. The persons named in the table have sole voting and investment power with respect to all shares they owned, unless otherwise noted. In computing the number of shares beneficially owned by a person and the percentage of ownership held by that person, shares of common stock subject to options held by that person that are currently exercisable or will become exercisable within 60 days after April 18, 2009 are deemed exercised and outstanding, while these shares are not deemed exercised and outstanding for computing percentage ownership of any other person.

	Number of Shares
	of Common Stock			Percent of Shares of
	Beneficially			Common Stock
Name (1)	Owned			Outstanding**
Patrick D. O’Brien		2,873,859	(2)		5.92	%
Andrew P. Calerich		1,468,853	(3)		3.01	%
Nick DeMare		408,300	(4)		*
C. Scott Hobbs		86,000	(5)		*
Jon R. Whitney		195,000	(6)		*
Joseph B. Feiten		88,000	(7)		*
Don E. Schroeder		29,000			*
Peter T. Loeffler		160,000	(8)		*
Bobby G. Solomon		2,619,858	(9)		5.42	%
Executive officers and directors as a group (9 persons)		7,928,870			16.35	%
Kendall V. Tholstrom		2,433,858	(10)		5.04	%
Wellington Management Company, LLP		3,021,265	(11)		6.25	%
75 State Street, Boston, MA 02109
North Finn LLC		2,910,000	(12)		5.68	%
950 Stafford, Casper, WY 82609

*	Less than 1% of the issued and outstanding shares of the class.
**	Percentage is calculated on the basis of 48,307,399 shares, the total number of shares of voting common stock outstanding on April 18, 2009.

23

(1)	Unless otherwise stated, the address for each person in this table is 1050 17th Street, Suite 2400, Denver, Colorado 80265.
(2)	Includes options to purchase 250,000 shares of common stock that are currently exercisable at $1.25 per share, and 82,500 shares of restricted common stock that vest on January 14, 2014, or upon change of control.
(3)	Includes options to purchase 416,665 shares of common stock that are currently exercisable at $3.66 per share, and 90,000 shares of restricted common stock that vest on January 14, 2014, or upon change of control. 962,188 shares are pledged.
(4)	Includes options to purchase 65,000 shares of common stock that are currently exercisable at $6.03 per share, and 20,000 shares of common stock that are restricted until Mr. DeMare is no longer a Director.
(5)	Includes options to purchase 37,500 shares of common stock that are currently exercisable at $3.29 per share and 20,000 shares of common stock that are restricted until Mr. Hobbs is no longer a Director.
(6)	Includes options to purchase 65,000 shares of common stock that are currently exercisable at $6.03 per share, includes options to purchase 100,000 shares of common stock that are currently exercisable at $2.38 per share, and includes 20,000 shares of common stock that are restricted until Mr. Whitney is no longer a Director.
(7)	Includes 24,000 shares owned indirectly.
(8)	Includes options to purchase 30,000 common shares and currently exercisable at $3.37 per share.
(9)	Includes 82,500 shares of restricted common stock that vest on January 14, 2014, or upon change of control.
(10)	Includes 82,500 shares of Common Stock that vest on January 14, 2014, or upon change of control.
(11)	Based upon Amendment No. 4 to Schedule 13G dated February 17, 2009. According to Amendment No. 4 to Schedule 13G, Wellington Management Company, LLP (“Wellington Management”), in its capacity as investment adviser, may be deemed to beneficially own 3,021,625 shares of American which are held of record by clients of Wellington Management whereby Wellington Management has shared voting power with respect to 3,021,265 shares, and shared power to dispose of 3,021,265 shares.
(12)	Includes an option to acquire 2,900,000 common shares in exchange for giving us certain oil and gas properties, as further explained in Note 13 to the audited financial statements contained in this Form 10-K for the fiscal year ended December 31, 2008. North Finn LLC has until July 31, 2012 to exercise the option and transfer the properties to us. Either of North Finn LLC’s two managers, Wayne Neumiller or Mike Neumiller (the “Managers”) have the power to exercise North Finn LLC’s option to acquire 2,900,000 shares of our common stock and to vote or dispose of such shares if acquired. North Finn LLC owned 10,000 shares of our common stock, of which either Manager has the power to vote or dispose.

Equity Compensation Plan Information

The following table shows the number of securities to be issued upon exercise of outstanding options, warrants and rights as of December 31, 2008.

	Number of Securities				Number of Securities
	To Be Issued Upon		Weighted Average		Remaining Available
	Exercise of		Exercise Price of		for Future Issuance
	Outstanding Options,		Outstanding Options,		Under Equity
Plan Category	Warrants and Rights		Warrants and Rights		Compensation Plans
Equity compensation plans approved by security holders		3,087,000	$	2.50		652,090
Equity compensation plans not approved by security holders		—		—		—
Total		3,087,000	$	2.50		652,090

24

The table excludes (1) the aforementioned North Finn LLC unexercised option to receive 2,900,000 common shares in exchange for oil and gas properties and (2) warrants issued in 2005 expiring September 30, 2009 to buy 835,626 common shares at $6.00 per share. On January 14, 2009, the Board of Directors granted 427,500 share of stock to certain directors and employees, reducing to 224,590 the shares available for future issuance under existing plans approved by security holders.

Item 13: Certain Relationships and Related Transactions, and Director Independence

Company policies provide that (a) our audit committee is to approve all related party transactions (as defined for financial reporting) before such transactions are consummated and (b) our nominating and corporate governance committee is to monitor and review any other issues involving potential conflicts of interest. The Company compiles information about transactions between the Company and its directors, officers, and greater-than-five-percent stockholders (and their immediate family members and their affiliated entities). Such information includes the nature of each transaction and the amount(s) involved. The board of directors reviews and evaluates this information, with respect to directors, as part of its assessment of each director’s independence. Based on a review of the transactions between the Company and its directors, officers, and greater than-five-percent stockholders (and their immediate family members, and their affiliated entities), the Company has determined that, during the 2008 fiscal year, it was not a party to any transaction (excluding compensation paid to a party as a Company director or employee) in which the amount involved exceeds $120,000 and in which (i) any of the Company’s directors, executive officers or any of their immediate family members or affiliates, has a direct or indirect material interest in the other party to the transaction, and (ii) any greater-than-five-percent stockholder of the Company {other than North Finn LLC (“North Finn”), as operator of some of our oil and gas projects and as described below} has a direct or indirect material interest in the other party to the transaction.

North Finn beneficially owns 5.68% of our common stock (including an option to acquire approximately 5.67% of our common stock) as noted in Item 12 above. North Finn is not a related party for financial reporting purposes because its beneficial ownership is less than 10% of our outstanding common shares, but it is a related party for Item 13 disclosure of transactions with greater-than-five-percent stockholders (and their affiliates). In 2008, in accordance with participation agreements entered into between the Company and North Finn, we paid a total of $9,951,449 in reimbursements to North Finn for our working interest share of oil and gas project costs paid by North Finn to project vendors. In 2008, we received a total of $1,852,793 from North Finn to either (a) reimburse us for its share of project costs (primarily lease acquisition costs) that we paid to project vendors or (b) pay us our proportionate share of project revenues received by North Finn on behalf of project working interest owners.

Director Independence

The board of directors has determined that each director other than Patrick O’Brien and Andrew Calerich qualifies as an “Independent Director” as defined in the NYSE Amex listing standards.

PART IV

Item 15: Exhibits, Financial Statement Schedules

(a)(1) Financial Statements (included in Item 8 to the Original 10-K)

	Original 10-K
	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2008 and 2007	F-3
Consolidated Statements of Operations for years ended December 31, 2008, 2007 and 2006	F-4
Consolidated Statements of Cash Flows for years ended December 31, 2008, 2007 and 2006	F-5
Consolidated Statements of Stockholders’ Equity and Comprehensive Income for years ended December 31, 2008, 2007 and 2006	F-6
Notes to Consolidated Financial Statements	F-7 to F-28

25

(a)(2) All other schedules have been omitted because the required information is inapplicable or is shown in the Notes to the Financial Statements.

(a)(3) Exhibits required to be filed by Item 601 of Regulation S-K.

Exhibit No.			Description
	2	(i)	Agreement and Plan of Merger with Tower Colombia Corporation dated effective April 21, 2005. (Incorporated by reference from the Company’s Post-Effective Amendment No. 1 to Form SB-2, filed on April 27, 2005.)
	3	(i)	Articles of Incorporation of the Company, as amended. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.)
	3	(ii)	Certificate of Designation of Series A Preferred Stock. (Incorporated by reference from the Company’s Amendment No. 2 to Form SB-2, filed on January 31, 2005.)
	3	(iii)	Certificate of Designation of Series AA 8% Preferred Stock. (Incorporated by reference from the Company’s Amendment No. 1 to Form S-3, filed on March 6, 2006.)
	3	(iv)	Bylaws of the Company (as revised on December 20, 2007). (Incorporated by reference from the Company’s Current Report on Form 8-K, filed on December 21, 2007.)
	10	(i)*	2004 Stock Option Plan. (Incorporated by reference from the Company’s Definitive Proxy Statement, filed on June 16, 2004)
	10	(ii)	Form of Warrant Certificate issued as part of the private placement completed on July 22, 2005. (Incorporated by reference from the Company’s Registration Statement on Form S-3, filed on October 4, 2005.)
	10	(iii)	Form of Placement Agent Warrant Certificate issued in connection with the private placement completed on July 22, 2005. (Incorporated by reference from the Company’s Registration Statement on Form S-3, filed on October 4, 2005.)
	10	(iv)	January 17, 2003 Purchase and Sale Agreement by and between the Company, Tower Colombia Corporation and North Finn, LLC. (Incorporated by reference from the Company’s Form 8-K, filed on February 3, 2003.)
	10	(v)	January 17, 2003 Participation Agreement by and between the Company, Tower, North Finn, and the principals of Tower and North Finn. (Incorporated by reference from the Company’s Form 10-KSB for the calendar ending December 31, 2002, filed on March 31, 2003.)
	10	(vi)	Model Form Operating Agreement dated February 18, 2003. (Incorporated by reference from the Company’s Form 10-KSB/A, filed on November 18, 2003.)
	10	(vii)*	Employment Agreement between the Company and Andrew P. Calerich dated effective April 21, 2005. (Incorporated by reference from the Company’s Post-Effective Amendment No. 1 to Form SB-2, filed on April 27, 2005.)
	10	(viii)*	Employment Agreement between the Company and Patrick D. O’Brien dated effective April 21, 2005. (Incorporated by reference from the Company’s Post-Effective Amendment No. 1 to Form SB-2, filed on April 27, 2005.)

26

Exhibit No.			Description
	10	(ix)*	Employment Agreement between the Company and Bobby G. Solomon dated effective April 21, 2005. (Incorporated by reference from the Company’s Post-Effective Amendment No. 1 to Form SB-2, filed on April 27, 2005.)
	10	(x)*	Employment Agreement between the Company and Kendell V. Tholstrom dated effective April 21, 2005. (Incorporated by reference from the Company’s Post-Effective Amendment No. 1 to Form SB-2, filed on April 27, 2005.)
	10	(xi)	Participation Agreement between the Company and North Finn LLC dated January 5, 2006. (Incorporated by reference from the Company’s Form 10-KSB for the fiscal year ended December 31, 2005.)
	10	(xii)*	Employment Agreement between the Company and Joseph B. Feiten. (Incorporated by reference from the Company’s Current Report on Form 8-K filed on August 31, 2006.)
	10	(xiii)*	Stock Option Agreement between the Company and Joseph B. Feiten. (Incorporated by reference from the Company’s Current Report on Form 8-K filed on August 31, 2006.)
	10	(xiv)	Purchase and Sale Agreement, dated September 1, 2006, between SunStone Oil & Gas, LLC and the Company. (Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 6, 2006.)
	10	(xv)	Registration Rights Agreement, dated September 1, 2006, by and among the Company and the investors listed therein. (Incorporated by reference from the Company’s Current Report on Form 8-K filed on September 6, 2006.)
	10	(xvi)	Purchase and Sale Agreement dated March 31, 2006 by and between the Company and Enerplus Resources (USA) Corporation. (Incorporated by reference from the Company’s Quarterly Report on Form 10-QSB for the period ended September 30, 2006.)
	10	(xvii)	Participation Agreement dated January 17, 2007 among the Company, Red Technology Alliance LLC and North Finn LLC. (Incorporated by reference from the Company’s Current Report on Form 8-K filed on January 23, 2007.)
	10	(xviii)*	2006 Stock Incentive Plan. (Incorporated by reference to the Company’s Definitive Proxy Statement, as amended, filed on July 26, 2006.)
	10	(xix)*	Form of Stock Option Agreement for awards under 2006 Stock Incentive Plan. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 5, 2007.)
	10	(xx)	Placement Agency Agreement dated April 11, 2007 by and between the Company and A.G. Edwards & Sons, Inc. and C.K. Cooper & Company. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 12, 2007.)
	10	(xxi)	Form of Subscription Agreement. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on April 12, 2007.)
	10	(xxii)*	Employment Agreement dated June 15, 2007 by and between the Company and Peter Loeffler. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on June 19, 2007.)

27

Exhibit No.			Description
	10	(xxiii)	Participation Agreement dated June 25, 2007 by and among Red Technology Alliance, LLC, the Company and North Finn, LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on July 3, 2007.)
	10	(xxiv)	Promissory Note and Security Agreement dated March 14, 2008 by and between the Company and Jefferies Group, Inc. (Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.)
	10	(xxv)	Letter Agreement dated August 22, 2008. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on October 28, 2008.)
	21	(i)	Subsidiary List (filed as Exhibit 21(i) to the Original 10-K).
	23	(i)	Consent of Independent Petroleum Engineers and Geologists (filed as Exhibit 23(i) to the Original 10-K).
	23	(ii)	Consent of Independent Registered Public Accounting Firm (filed as Exhibit 23(ii) to the Original 10-K).
	31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished as Exhibit 32.1 to the Original 10-K).
	32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished as Exhibit 32.2 to the Original 10-K).

* Management contracts or compensatory plans or arrangements

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, this 22nd day of September, 2009.

American Oil & Gas, Inc.
 

/s/ Andrew P. Calerich  

Andrew P. Calerich 

President 

/s/ Joseph B. Feiten

Joseph B. Feiten
Chief Financial Officer
(principal financial officer and
principal accounting officer)

28