American Petro-Hunter Acquires Victory Gas Project in California

American Petro-Hunter has executed a Purchase and Sale Agreement to acquire a 25% Working Interest in the Victory Gas Project. This is the second California gas play that the Company has added to its growing portfolio.

The Victory Gas Project is located approximately 20 miles south of the city of Sacramento and is within the "Eastside Stratigraphic Trend" along the southern edge of the Sacramento Valley. The project is within a region that contains some of the most prolific gas reservoirs in the Sacramento Valley, accounting for over 400 BCF of gas produced to date along this trend.

The prospect encompasses 668 gross acres under lease and based on interpretation, has the potential to contain 8 BCF gas. Gas is indicated at depths of 7,900 feet over a pay thickness of 20+ feet. The exploratory well planned will be testing Winters Sands, which produce at analog fields such as Merritt Island with 5.6 BCF cumulative production and Snodgrass Slough with 4.6 BCF cumulative production. In the event of a commercially viable well, the estimates on projected initial production rates would be 5,000 MCF per day. The current plan is to spud a gas well in late July 2009 based on rig availability. The drainage and acreage of Victory will allow additional wells to fully exploit the reservoir.

The Victory Gas Project is very close to an existing pipeline offering a convenient, low cost and rapid tie-in to enable gas sales. The California gas market continues to be one of the highest priced in the nation due to the high demand for natural gas that feed regional gas powered electrical generating plants.

Under the terms of the agreement, the Company will pay the vendor of the play $142,000.00 which includes a prospect fee, re-payment of pro-rata cost for the recently completed and interpreted 3D seismic shoot, as well as geological and engineering costs for the development of the gas target. Subsequently, the Company will be responsible for 25% of all ongoing project development costs for drilling, completion and well tie-in.


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