MINERAL WELLS, Texas, Dec. 10, 2003 (PRIMEZONE) -- American Energy Production Inc. (OTCBB:AMEPE) announced today it has closed the acquisition of Production Resources Inc. AMEP will acquire substantially all of the assets of PRI in a stock and note exchange. The PRI properties include over 1,500 producing acres and 193 existing oil wells fully equipped and capable of producing oil. However only a small portion of the wells are currently in production leaving a tremendous opportunity for future revenue. PRI will become a wholly owned subsidiary of American Energy Production Inc., continuing to operate as an independent company.
The purchase price for Production Resources Inc. will be $400,000 worth of AMEP restricted common stock and a $400,000 2 year term note at 5% interest payable in two years. American Energy Production Inc. will take control of the properties on January 1, 2004.
In the past five months American Energy Production Inc. has been treating and testing wells on the PRI property with the new heavy oil additive, AMEP HOA-800. Oil produced on the PRI property is 20 gravity. The initial results look very favorable and AMEP has completed a new injection pump trailer to expand its injection system of the AMEP HOA-800 into further wells. Five more oil wells will be treated immediately with the new heavy oil additive in a five-point test. The potential proven produceable oil reserves on the lease is approximately 62,000,000 barrels, as per engineers reports and calculations by the Texas Railroad Commission that only 2% to 4% of these oil reserves have been produced over the last 20 years. AMEP plans to eventually treat all 193 of the oil wells and then have an ongoing treatment program.
Charles Bitters, President of AMEP said, "This new heavy oil additive has been very interesting and at this time has the potential to radically change the way secondary recovery of heavy oil is produced in the future. However, it will take more treating and testing to refine the most efficient treatment methods." Mr. Bitters also stated, "The purchase of the PRI properties along with the opportunity to use the AMEP HOA-800 additive on these properties will allow the Company to add tremendous value to AMEP in a very short time."
Statements contained in this release, which are not historical facts, may be considered "forward-looking statements" and are based on current expectations and the current economic environment. We caution the reader that such forward-looking statements are not guarantees of the future performance. Unknown risk, uncertainties as well as other uncontrollable or unknown factors could cause actual results to materially differ from the result, performance, or expectations exposed or unknown factors could cause actual results to materially differ from the result, performance, or expectations exposed or implied by such forward-looking statements.