EXHIBIT 99.1
On August 17, 2004, the Registrant issued the following news release:
"AMERICAN OIL & GAS PROVIDES OPERATIONS UPDATE AND
SECOND QUARTER FINANCIAL RESULTS
DENVER - American Oil and Gas, Inc. (OTC Bulletin Board:AOGI) today
announced oil and gas revenues of $79,763 and a net loss of $188,705, or one
cent per share, for the quarter ended June 30, 2004. For the prior year quarter
ended June 30, 2003, the Company reported no revenues and a net loss of
$141,424, or one cent per share. For the six months ended June 30, 2004, the
Company had oil and gas revenues of $147,677 and a net loss of $350,704, or two
cents per share, and for the prior year six months ended June 30, 2003, the
Company reported no revenues and a net loss of $377,304, or two cents per share.
During the quarter and six month periods ended June 30, 2003, the Company did
not have any oil and gas operations, and the primary activities were the raising
of capital and the transition into the business of oil and gas exploration and
production.
During the quarter ended June 30, 2004, the Company sold 815 barrels of oil
at an average price of $37.47 per barrel, for total oil revenues of $30,527, and
sold 11,228 mcf of gas at an average price of $4.39 per mcf, for total gas
revenues of $49,236. For the six month period ended June 30, 2004, the Company
sold 1,587 barrels of oil at an average price of $34.37 per barrel, for total
oil revenues of $54,548, and sold 23,361 mcf of gas at an average price of $3.99
per mcf, for total gas revenues of $93,129. Production taxes and lease operating
expenses for the quarter and six month periods ended June 30, 2004 were $14,710
and $34,922, respectively.
Depreciation, depletion and amortization expense for the quarter ended June
30, 2004 relating to the Company's oil and gas operations was $19,305, or $7.18
per barrel of oil equivalent produced. The Company reflected general and
administrative expenses of $233,625 and $141,424 for the current and prior year
quarterly periods, respectively. Included in the quarterly amount for 2004 are
stock based deferred compensation expense of $70,625 and stock based directors'
expense of $15,738.
At June 30, 2004, the Company had working capital of approximately
$1,541,000, approximately $1,838,000 in cash and cash equivalents, $4,433,033 in
total assets, a long term asset retirement obligation of $31,507, and $3,967,228
in stockholders' equity. There are currently 25,938,702 common shares
outstanding.
Operations Update
At the Company's Big Sky project in Richland County, Montana, the Matador
1-13H well (13.3% working interest), which is located near the Williams 34x-14
and Frasca 34x-14 wells in the central portion of the fairway, has been drilled
and is scheduled for completion in the next few weeks. The Obergfell Trust
13X-13 well (1.67% working interest) has been drilled and completed in the
southeastern portion of the producing fairway, approximately 20 miles from the
Williams and Frasca wells. The Avenger 1-12H well (6.48% working interest),
located in the northwest portion of the fairway, commenced drilling on July 31,
2004 and is expected to take approximately 45 days to drill and complete. During
the quarter ended June 30, 2004, cumulative production from the Company's
interest in three producing wells at Big Sky was 678 barrels of oil equivalent
(gross production of 97,400 boe). The Company expects to participate in four
additional wells resulting in ownership of 10 gross wells (approximately 0.7 net
well) here by year-end 2004.
The Company recently reported that it has signed an agreement for a private
company to initiate drilling at the Company's Krejci project in Niobrara County,
Wyoming. Initial drilling, in which American has the right to participate, is on
schedule to commence by August 31, 2004. The 39,000 acre Krejci project (50%
working interest, subject to terms of agreement) is targeting the 7,500 foot
deep Mowry shale formation. The Company and its partners plan to evaluate
several different drilling and completion techniques in the initial phase of
development which may include both vertical and horizontal drilling.
The Company continues technical evaluations within its 103,000 gross acre
(50% working interest) Douglas project, located in the southern Powder River
Basin of Wyoming. The Company has started to present the Fetter field project,
which is located within its Douglas project acreage, to potential industry
participants for possible joint venture participation.
American Oil and Gas, Inc. is an independent oil and natural gas company
engaged in exploration, development and production of hydrocarbon reserves
primarily in the Rocky Mountain region. Additional information about American
Oil and Gas, Inc. can be found at the Company's website:
www.americanoilandgasinc.com.
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This release and the Company's website referenced in this release contain
forward-looking statements regarding American Oil and Gas, Inc.'s future plans
and expected performance that are based on assumptions the Company believes to
be reasonable. A number of risks and uncertainties could cause actual results to
differ materially from these statements, including, without limitation, the
success rate of drilling efforts and the timeliness of development activities,
fluctuations in oil and gas prices, and other risk factors described from time
to time in the Company's reports filed with the SEC. In addition, the Company
operates in an industry sector where securities values are highly volatile and
may be influenced by economic and other factors beyond the Company's control.
This press release may include the opinions of American Oil and Gas, Inc. and
does not necessarily include the views of any other person or entity."