SOURCE: American Exploration

January 28, 2010 08:47 ET

American Exploration Corp. and Avere Energy Inc. Enter Into Letter Agreement to Jointly Develop Mississippi Acreage

CALGARY, AB--(Marketwire - January 28, 2010) - American Exploration Corp., a Nevada company ("the Company"), (OTCBB: AEXP) (FRANKFURT: EQO) and Avere Energy Inc. (AVO.H-V) have entered into a Letter Agreement enabling Avere to farm-in to the Company's Haynesville acreage in Mississippi.

Avere will pay 20% of the costs of the initial deep gas well (an estimated US$2 million net to Avere) to earn a 20% working interest in the play. It must also make payments aggregating US$850,000 to American Exploration Corp., including a non-refundable US$75,000 deposit.

American Exploration signed an agreement with Mainland Resources Inc. in October 2009, whereby the two companies pooled their Mississippi lands totaling 13,325 acres. In this Farm-in agreement. Mainland Resources was named Operator of the project area and they agreed to pay 80% of the initial well (drilling and completion costs) for a 51% working interest in the well and total project area. American Exploration was to pay 20% of the initial well (drilling and completion costs) to earn a 49% working interest in the well and total project area. The additional costs (ie. drilling, completions etc.) for oil and gas activities on the 13,225 net acre project area will be split on a 49% / 51% basis between American and Mainland respectively.

Subsequent to this agreement, Mainland signed an agreement with Guggenheim Energy Opportunities LLC, whereby Guggenheim would pay 10% of Mainland's working interest, to earn a 5.1% net interest in the total project area.

With the new Avere agreement dated January 15th, whereby Avere pays 20% of the drilling costs, American will have no capital exposure in the initial well to earn a 29% revenue interest in the project.

Company President Steve Harding states, "We are very pleased to bring Avere into the Partnership. They have a strong technical focus and will complement the alliance we currently have with Mainland and Guggenheim. Should we consummate this agreement, American will be in the envious position of earning a 29% interest in what could be a giant multi-TCF gas field, without bearing any financial exposure."

About American Exploration Corp.

American Exploration Corp. is engaged in the exploration and development of oil and gas prospects with the potential for discovery of new or unconventional hydrocarbon resources in the continental United States.

SAFE HARBOR STATEMENT -THIS NEWS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS", AS THAT TERM IS DEFINED IN SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE UNITED STATES SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. STATEMENTS IN THIS NEWS RELEASE, WHICH ARE NOT PURELY HISTORICAL, ARE FORWARD-LOOKING STATEMENTS AND INCLUDE ANY STATEMENTS REGARDING BELIEFS, PLANS, EXPECTATIONS OR INTENTIONS REGARDING THE FUTURE.

EXCEPT FOR THE HISTORICAL INFORMATION PRESENTED HEREIN, MATTERS DISCUSSED IN THIS NEWS RELEASE CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH STATEMENTS. STATEMENTS THAT ARE NOT HISTORICAL FACTS, INCLUDING STATEMENTS THAT ARE PRECEDED BY, FOLLOWED BY, OR THAT INCLUDE SUCH WORDS AS "ESTIMATE", "ANTICIPATE", "BELIEVE", "PLAN" OR "EXPECT" OR SIMILAR STATEMENTS ARE FORWARD-LOOKING STATEMENTS. RISKS AND UNCERTAINTIES FOR THE COMPANY INCLUDE, BUT ARE NOT LIMITED TO, THE RISKS ASSOCIATED WITH PROPERTY DEVELOPMENT AND FUNDING AS WELL AS THE RISKS SHOWN IN THE COMPANY'S MOST RECENT ANNUAL REPORT ON FORM 10-KSB AND ON FORM 10-QSB AND FROM TIME-TO-TIME IN OTHER PUBLICLY AVAILABLE INFORMATION REGARDING THE COMPANY. OTHER RISKS INCLUDE RISKS ASSOCIATED WITH THE REGULATORY APPROVAL PROCESS, COMPETITIVE COMPANIES, FUTURE CAPITAL REQUIREMENTS AND THE COMPANY'S ABILITY AND LEVEL OF SUPPORT FOR ITS EXPLORATION AND DEVELOPMENT ACTIVITIES. THERE CAN BE NO ASSURANCE THAT THE COMPANY'S DEVELOPMENT EFFORTS WILL SUCCEED AND THE COMPANY WILL ULTIMATELY ACHIEVE COMMERCIAL SUCCESS. THESE FORWARD-LOOKING STATEMENTS ARE MADE AS OF THE DATE OF THIS NEWS RELEASE, AND THE COMPANY ASSUMES NO OBLIGATION TO UPDATE THE FORWARD-LOOKING STATEMENTS, OR TO UPDATE THE REASONS WHY ACTUAL RESULTS COULD DIFFER FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY BELIEVES THAT THE BELIEFS, PLANS, EXPECTATIONS AND INTENTIONS CONTAINED IN THIS NEWS RELEASE ARE REASONABLE, THERE CAN BE NO ASSURANCE THOSE BELIEFS, PLANS, EXPECTATIONS OR INTENTIONS WILL PROVE TO BE ACCURATE. INVESTORS SHOULD CONSIDER ALL OF THE INFORMATION SET FORTH HEREIN AND SHOULD ALSO REFER TO THE RISK FACTORS DISCLOSED IN THE COMPANY'S PERIODIC REPORTS FILED FROM TIME-TO-TIME WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.

THIS NEWS RELEASE HAS BEEN PREPARED BY MANAGEMENT OF THE COMPANY WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENTS. EACH OF THE NASD, THE SEC AND THE OTCBB NEITHER APPROVES NOR DISAPPROVES OF THE CONTENTS OF THIS NEWS RELEASE. THIS NEWS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

Contact Information

  • Mr. Steve Harding
    Tel. 403-233-8484

    American Exploration Corp.
    Suite 700, 407 2nd St. SW,
    Calgary, Alberta T2P 0G7
    Canada