American Oil & Gas Acquires Stake in Two Utah Properties

American Oil & Gas and its partners Tower/North Finn were the successful bidders on two leases in the May 2003 State of Utah lease sale. The two leases located in Box Elder County total 5,120 acres and completely cover a large accumulation of heavy oil at a depth of about 2,250 feet. American will have a 50% interest in these two leases.

The West Rozel field was discovered by Amoco as a result of an extensive exploration program conducted over the Great Salt Lake from mid-1978 to early 1981. The seismically defined structure at West Rozel is a complexly faulted anticline about 3 miles long and over a mile wide. The reservoir is Pliocene basalt with an oil column up to 290 feet in thickness. All three test wells drilled on the structure encountered oil pay. The West Rozel No. 2 tested up to 90 barrels of oil per hour. Oil-in-place estimates range as high as 100 million barrels.

West Rozel was not put on production in 1981 due to high costs associated with offshore development and heavy oil. American believes that new drilling and production technologies developed over the last twenty years and improved economic incentives could combine to make development of this significant resource possible.

"We are very excited about acquiring this property. It is a great addition and adds diversification to our portfolio of properties," stated CEO and President Patrick O'Brien. "We believe the value proposition warrants further exploration and look forward to moving ahead with this prospect."