2010-03-10-2009-12-15

To acquire 25% WI in 30,000 acres in Williams Co., ND, targeting Bakken/Three Forks formations.

An unidentified buyer has entered into a participation agreement with American Oil & Gas Inc., Denver, (Amex: AEZ) at its Williams County, North Dakota, Goliath project in the Bakken and Three Forks shale plays for drilling and completion costs.

The buyer can earn a 25% working interest in approximately half of the 60,000 net acres at Goliath by funding 100% of American's interest in a one well drill-to-earn arrangement. American will be carried for and will retain 30% of its original interest in the well and the drill site spacing unit. The buyer will also pay up to an additional $1.1 million. The drilling location has been prepared for the Tong Trust 1-20H earning well in sections 17 and 20 of T157N-R96W in Williams County.

The Tong Trust earning well is spaced on 1,280 acres and is designed for an approximate 9,000-foot horizontal lateral to be drilled in the Bakken formation. Completion is expected to include fracture stimulation with up to 24 stages. American has retained the rights to operate all future wells in the project.

The agreement does not include American's recently announced 16,000 additional net acre position north and adjacent to the 60,000 net acre Goliath project.

Pat O'Brien, American chief executive, says, "Recent advancements in drilling and completion techniques that have resulted in successful Bakken and Three Forks wells by other operators in this area of North Dakota will be incorporated into our upcoming program. We are excited to be moving forward in the next phase of drilling and developing the Bakken and Three Forks potential within our Goliath acreage position."