Hycarbex-American Energy, Inc. Announces Resumption of Continuous Production from Haseeb Gas Field

WESTPORT, Conn.--(BUSINESS WIRE)--

The American Energy Group, Ltd. (OTC.BB: AEGG) announced today that Hycarbex-American Energy, Inc. (“Hycarbex”) has advised that continuous gas production from the Haseeb Gas Field resumed on July 12, 2011 under the Extended Well Test (EWT) project and the Haseeb #1 Well is currently producing 3.5 million cubic feet of gas per day. According to Hycarbex, the Haseeb #1 Well is expected to reach 15 million cubic feet of gas per day once the commissioning of the gas processing facility is optimally completed. Hycarbex further advised that as of August 11, 2011, around 106 million standard cubic feet has been delivered to Sui Southern Gas Company Limited under the Gas Sale and Purchase Agreement. Hycarbex had previously announced the interruption of the EWT project caused by mechanical problems encountered in the commissioning of the gas processing facility owned and operated by a third party.

The Haseeb Gas Field is a part of the Yasin 2768-7 Block Exploration Licence in which The American Energy Group, Ltd. owns an 18% royalty. Hycarbex is the operator of the Exploration License and owns a 95% Working Interest. A 5% (carried) Working Interest in the Exploration Block is held by Government Holdings (Pvt) Limited (GHPL). However, during the temporary EWT production phase, Hycarbex holds 75% Working Interest, including the cost obligations related to the EWT production facilities, and GHPL holds 25% Working Interest.

Hycarbex further advised that based upon evaluation of currently available technical data by GSM, USA, the Haseeb Gas Field is estimated to contain 174 billion cubic feet of P90 recoverable reserves, 177 billion cubic feet of P50 recoverable reserves and 196 billion cubic feet of P10 recoverable reserves, however these reserve estimates provided by Hycarbex are subject to further confirmation and full data evaluation after the appraisal program, as approved by the Pakistan Government, including the EWT.

Hycarbex further advised that it intends to undertake additional work in the Yasin 2768-7 Exploration Block outside the Haseeb Discovery area so as to evaluate the productivity potential of the remaining Licence area. Since its initial license acquisition, Hycarbex has made an investment of approximately US$27 million in petroleum exploration and development in Pakistan, where it has exclusively focused its activities. In addition to the Yasin 2768-7 Block, Hycarbex currently operates two other petroleum exploration licences (i.e. the Peshawar and Karachi Blocks) and is a working interest owner in two other exploration blocks (i.e. the Zamzama North and Sanjawi Blocks) operated by Heritage Oil Plc. The American Energy Group, Ltd. owns a 2.5% working interest in each of the Zamzama North and Sanjawi Blocks which is a carried interest for the initial 2 wells on the Sanjawi Block and the initial 3 wells on the Zamzama North Block. The American Energy Group, Ltd. has the option to convert its working interest in any well at any time to a 1.5% gross royalty interest free of any exploration costs or operating costs.

This news release contains forward-looking statements, including estimated time lines for future events. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, or performance and underlying assumptions and other statements, including potential production rates and potential reserves, which estimates are unproven and not based upon actual production data or historical facts. Forward-looking statements are subject to uncertainties and risks including, but not limited to, economic conditions, drilling risks and actual operating conditions and results, deviation in costs of critical equipment and services, deviation in production decline rates, the impact of competition and commodity pricing, and domestic and foreign governmental regulation and approvals.

The United States Securities and Exchange Commission (“SEC”) permits the disclosure in SEC filings of only “proved reserves” by oil and gas companies. Proved reserves are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. The term “probable reserves” when used by the Company in its disclosures means reserves which are more likely than not to be recoverable. The term “possible reserves” when used by the Company in its disclosures means reserves which are less likely to be recoverable than probable reserves. Estimates of probable reserves and possible reserves are more uncertain than estimates of proved reserves and thus are subject to substantially greater risk of not being realized.

All forward-looking statements in this disclosure, whether made by, or on behalf of the Company or by or on behalf of the project operator, are expressly qualified by the above cautionary statements and any other cautionary statements which accompany the forward-looking statements. In addition, the Company disclaims any obligation to update forward-looking statements to reflect events or circumstances after the date hereof.