AAPH's chart is looking good since
mid March. Trading volume is steadily increasing and the stock price
moved into the $.40 to $.48 range and has been consolidating around
$.45 in recent weeks. Also you can see from the chart below that there
has been a pretty steady accumulation of stock going on for some time
now with accumulation outpacing selling of shares.
Oil Chart
As you can see from the chart below
for Brent Crude Oil, oil prices have been on a steady upward trend
since mid February. During that time AAPH has been has acquired working
interest in several new gas and oil projects and have active drilling
work going on. They just announced they are in final stages of completing
the #1 Lutters Well at the Poston Project and that should commence
production on June 15th. Higher oil prices, acquisitions of new working
interest in existing oil and gas projects, and actively ramping up
production activities all spell good things for AAPH. We do not believe
that the company's stock price has kept up with rising oil and gas
prices and the stock is probably due for a run.
Company Overview
AMERICAN PETRO-HUNTER is a goal-oriented exploration
and production (E&P) Company dedicated to the acquisition,
exploration and development of outstanding traditional energy
sector opportunities across North America. The Company is aiming
to become an intermediate level oil and gas producer within
12 months. American Petro-Hunter’s first acquisition is
a 25% working interest in an exceptional natural gas project
located west of Modesto in the Central Valley of California.
Potential Recoverable Reserves have
been calculated to be 42 BCF at a depth of 7,400 feet within
sands that are indicated by 2D seismic to be in excess of 50
feet of gross pay.
In April 2009, a payment of $200,000
was made for the acquisition of a 25% working interest in a California
gas project in the Central Valley of California.
A seismic shoot is in the final
planning stage towards ultimately setting the first gas well drilling
location, to commence in May 2009 with the well to be spud in late
July 2009.
The Company believes that the
project, if proven to be commercially viable, may represent a venture
with an in-situ value of greater than $20 million in contained gas
to its working interest. A total of 4 wells could ultimately be
drilled on the existing leased acreage.
In May 2009 American Petro-Hunter
acquired a 25% Working Interest in the Poston Prospect, located
in Trego County Kansas.
The 750 acre block in Kansas contains
a potential multi well program with the first location to be drilled
named the #1 Lutters Well.
The potential production from the Kansas pay-zone
of 7-10 feet is between 35 and 100 barrels per day from a successful
well. Full development of the field could produce up to 400 BOPD
of light oil. Estimates are for recoverable barrels of oil to be
up to 60,000 per well location, or 240,000 barrels total under lease
with 4 locations drilled.
American Petro-Hunter aims to benefit from what
would be a very short pay out period for seismic, drilling and pipeline
tie-in costs at the target well in its 2009 California Project.
The company plans to provide shareholder value
through the assembly of asset and property combinations which will
include exploratory promise, ongoing production, in-place infrastructure,
growth potential and the ability to offer both short term returns
as well as significant value over the long term.
American Petro-Hunter’s portfolio is believed
to be high quality prospects. Its Californian interests holds potential
to bring to commercially viable 2,000-3,000 Mcfd natural gas production
that could create a positive cash flow position by end of Q3 2009.
Estimated dry hole drilling costs are forecast
to cost $625,000 to the 100% working interest.
With PG&E Citygate pricing near $4.40 and given
the Company’s 25% NRI to the 100% WI, we expect thus 20% of
all revenues to its 25% WI and an ROI of less than 1 year.
With oil prices approaching $60 per barrel the
Company has a 25% working interest in the Kansas project. If a successful
commercial oil well is established, the Company will receive an
81.5% NRI.
American Petro-Hunter plans
to rapidly enhance its portfolio of energy projects by means of
strategic acquisitions in the petroleum sector across North America.
Projects
California - Sacramento Gas Project
AMERICAN PETRO-HUNTER has executed a Purchase
and Sale Agreement with the vendors of the "Sacramento
Gas Project" whereby American Petro-Hunter has acquired
a 25% working interest in the play. The project is located west
of Modesto in the Central Valley of California, near Sacramento.
Potential Recoverable Reserves have been calculated to be 42
BCF at a depth of 7,400 feet within sands that are indicated
by 2D seismic to be in excess of 50 feet of gross pay.
Estimates by the play generator, a private
third party engineering group, is that if the pay zone is 100%
gas filled and the well is brought into commercial production
that an IPR (initial production rate) of 5,000 Mcf per day may
be achieved. American Petro-Hunter would anticipate similar
rates to commercial wells in the region at analog fields that
produce on a daily basis between 2,000 to 4,000 Mcf per day.
Natural Gas wells in these analog field's exhibit long life,
relatively stable rates of production and predictable decline.
The Central Valley in the Sacramento region
of California is called "California's Gas Country"
and nearby fields contains some of the most prolific gas reservoirs
in the Sacramento Valley. They have accounted for over 400 BCF
of gas production to-date. In proximity to the prospects are
prolific gas fields such as Union Island (271 BCF), McMullin
Ranch (63 BCF) and Vernalis (103 BCF). The project, if commercially
viable would produce gas that would be purchased by PG&E
Citygate that supplies gas to the Capital region of Sacramento
and is used in electrical power generation in the area. PG&E
Citygate prices are some of the highest in the country and prices
can be found at outlets such as www.intelligencepress.com.
California - Victory Gas Project
American
Petro-Hunter has acquired a 25% working interest in the Victory
Gas Project which is located approximately 20 miles south of
the city of Sacramento along the Upper Cretaceous Winters "Eastside
Stratigraphic Trend" of the southern Sacramento Valley.
Winters sandstones are one of the most prolific
gas reservoirs in the Sacramento Valley, accounting for over
400 Bcf of gas produced to date along this trend. Winters sands
are deep-water sands with gas fields and pools stratigraphically
trapped along their eastern depositional edge. The traps are
primary stratigraphic traps
formed either by channels shaling out up dip into coeval slope
shales or by sands shaling out up dip over structural noses.
Many of the structural noses are compaction anticlines formed
by drape over deeper thick Winters channels.
Detailed mapping of individual Winters sands
indicate that many sands trend westerly into the basin perpendicular
to depositional strike and compaction anticlines are present
over many of the thicker sands. As an example, the Snodgrass
Slough gas field is trapped gas caused by the shale out of Winters
"Upper Clarksburg" sands across the southwest plunging
of an anticlinal nose. The nose was formed by the rapid lateral
shale out of the deeper "Main" Winters sand. Over
4.6 Bcf of gas was produced from this ~200-acre closure.
The Victory Gas Project is northwest of production
at Snodgrass Slough and the potential reservoir trap is very
similar to that at Snodgrass Slough. The same "Upper Clarksburg"
sands that are the reservoirs at Snodgrass Slough form another
potential stratigraphic trap when they intersect another southwest
plunging nose.
American Petro-Hunter plans to participate
with the operator in the drilling of an 8,300 foot well required
to test the Prospect through all prospective Winters sandstones.
Poston Prospect - Oil Target
American PetroHunter has acquired a 25% Working
Interest in the Poston Prospect, located in Trego County Kansas.
The project is targeting productive oil targets
in the Mississippi Dolomite and /or Cherokee sands showing significant
3D Seismic anomalies. The 750 acre block contains a potential
multi well program with the first location to be drilled named
the #1 Lutters Well. In the event of success and/or commercial
production at the #1 Lutters Well, an additional 2 to 3 offset
locations are likely in order to fully exploit the acreage.
Engineering estimates of the potential production
from the indicated pay zone of 7-10 feet is between 35 and 100
barrels per day from a successful well. Full development of
the field could produce up to 400 BOPD of light oil. Estimates
are for recoverable barrels of oil to be up to 60,000 per well
location, or 240,000 barrels total under lease with 4 locations
drilled.
There is excellent transportation and support
infrastructure in the area easily supporting a requisite storage
tank battery at the location.
Under the terms of the agreement, the Company
has paid to S&W Oil & Gas, LLC of Wichita Kansas, as
vendor of the play a total of $64,500 for the 25% Working Interest
in the well. If a successful commercial oil well is established,
the Company will receive an 81.5% Net Revenue Interest (NRI).
Management
Robert B. McIntosh - President &
CEO
Mr. McIntosh is a businessman and consulting
geologist with a proven track record spanning the past 25 years.
He brings diverse experience both as a resource exploration
geoscientist alongside noteworthy strengths in all facets of
corporate development. Since 1983 his career has taken him across
the Americas and abroad where he has been instrumental in the
design, implementation, execution and management of programs
in the oil, gas, precious and base metals segments of the resource
sector. His skills encompass virtually every aspect of oil &
gas exploration, well completion and production techniques along
with extensive experience in project acquisition, contract negotiation,
and project divestitures within the petroleum industry. He has
developed singular expertise and broad industry contacts in
his various roles across the publicly traded market sector as
well as with private junior E&P companies. Mr. McIntosh
has successfully assisted his clients and stakeholders in the
U.S.A. and Canada on projects that ultimately became producing
properties where he has significantly contributed towards full-field
exploitation programs utilizing both traditional and secondary
forms of drilling and completion along with ongoing wellsite
supervisory management aimed at fully optimizing the potential
of each asset.
Dan Holladay
- Director
Mr. Dan Holladay is oil industry management
consultant based in Wichita Kansas. He graduated in 1983 graduate
from the University of Eastern New Mexico with an Associate
degree in Petroleum Management following extensive studies at
the University of Kansas in geology. After a short career in
a variety of oil field work he began a 25 year career as an
Investment Adviser for firms such as AG Edwards where he advised
high net worth clients. Recently, Mr. Holladay has been working
as an independent oil industry management consultant where he
has been identifying, evaluating and assisting companies and
individuals on a variety of Kansas based oil and gas prospects
for both exploration and production projects. He will continue
this role for American Petro-Hunter with a focus on the current
Kansas asset as well as the development of future prospects.
John J. Lennon - Director &
Secretary Treasurer
Mr. Lennon has served as Treasurer and
VP of Finance of Brite-Strike Tactical Illumination Products,
Inc., since May 30, 2008. Previously, he was President of LED
Power Group, Inc. from December 2008, President of Chamberlain
Capital Partners from 2004, Director of American Durahomes from
2006 and Treasurer/Director/VP of Finance of US Starcom from
2005-2007. Chamberlain Capital Partners assists companies in
the area of maximizing shareholder value through increased sales,
cost reduction and refined business strategy. Mr. Lennon has
also assisted companies in obtaining debt financing, private
placements or other methods of funding. On December 31, 2007,
Mr. Lennon was appointed Chief Executive Officer, President,
Chief Financial Officer, Secretary, Treasurer and director of
Explortex Energy Inc., a publicly reporting company, which is
a natural resource exploration company engaged in the participation
in drilling of oil and gas in the United States. From 1987 to
2004, Mr. Lennon served as Senior Vice President of Janney Montgomery
Scott, Osterville, MA, Smith Barney and Prudential Bache Securities,
managing financial assets for high net worth individuals.
Recent AAPH News:
June
9 - American
Petro-Hunter Announces Arrival of Completion Rig at #1 Lutters Well
American Petro-Hunter, Inc. (OTCBB: AAPH) ("American
Petro-Hunter" or the "Company") today is pleased
to announce that the Company has been informed by the operator of
the Poston Prospect, S & W Oil & Gas, LLC of Wichita, that
the #1 Lutters Well service rig arrived yesterday June 8th in order
to begin the completion process at the oil well. The program will
involve the installation of rods and tubing following the perforation
of the oil pay zones.
The Company anticipates that commercial production
at the #1 Lutters Oil Well at the Poston Prospect will begin on
June 15th. The oil tank battery and separator equipment is scheduled
to be delivered and set in place this week as surface construction
nears completion. A permanent connection to local electric power
is also planned during this upcoming week. Current arrangements
and information provided by the operator indicate that their proposed
production schedule is currently on-track and should readily facilitate
the planned commencement of oil extraction on or near June 15th.
As announced previously, an oil purchase contract
has been executed with N.C.R.A. (National Co-op Refinery Assoc.)
of McPherson, Kansas to purchase all production at the Lutters lease.
About the Prospect:
The #1 Lutters Well targeted oil in the Mississippi
Dolomite and/or Cherokee sands. The location showed a significant
3D Seismic anomaly pinpointing an oil bearing zone. In addition,
the 750 acre lease block has the potential for a multi-well program
with 2 to 3 offset locations possible to fully exploit the acreage.
Engineering estimates of the potential production from the indicated
pay zone is between 35 and 100 barrels per day from a successful
well. Full development of the field could produce up to 400 BOPD
of light oil. There is excellent transportation and support infrastructure
in the area easily supporting a requisite storage tank battery at
the location.
June
4- American
Petro-Hunter Acquires Victory Gas Project, California
American Petro-Hunter, Inc. (OTCBB: AAPH) announced
that it has executed a Purchase and Sale Agreement to acquire a
25% Working Interest in the Victory Gas Project. This is the second
California gas play that the Company has added to its growing portfolio.
The Victory Gas Project is located approximately
20 miles south of the city of Sacramento and is within the "Eastside
Stratigraphic Trend" along the southern edge of the Sacramento
Valley. The project is within a region that contains some of the
most prolific gas reservoirs in the Sacramento Valley, accounting
for over 400 BCF of gas produced to date along this trend.
The prospect encompasses 668 gross acres under
lease and based on interpretation, has the potential to contain
8 BCF gas. Gas is indicated at depths of 7,900 feet over a pay thickness
of 20+ feet. The exploratory well planned will be testing Winters
Sands, which produce at analog fields such as Merritt Island with
5.6 BCF cumulative production and Snodgrass Slough with 4.6 BCF
cumulative production. In the event of a commercially viable well,
the estimates on projected initial production rates would be 5,000
MCF per day. The current plan is to spud a gas well in late July
2009 based on rig availability. The drainage and acreage of Victory
will allow additional wells to fully exploit the reservoir.
The Victory Gas Project is very close to an existing
pipeline offering a convenient, low cost and rapid tie-in to enable
gas sales. The California gas market continues to be one of the
highest priced in the nation due to the high demand for natural
gas that feed regional gas powered electrical generating plants.
Under the terms of the agreement, the Company
will pay the vendor of the play $142,000.00 which includes a prospect
fee, re-payment of pro-rata cost for the recently completed and
interpreted 3D seismic shoot, as well as geological and engineering
costs for the development of the gas target. Subsequently, the Company
will be responsible for 25% of all ongoing project development costs
for drilling, completion and well tie-in.
June
2- American
Petro-Hunter Appoints Senior Executives
American Petro-Hunter, Inc. (OTCBB: AAPH) ("American
Petro-Hunter" or the "Company") today is pleased
to announce that in light of the Company's recent success at our
Kansas oil exploration project, Mr. Dan Holladay of Wichita, Kansas
has agreed to join the Company's Board of Directors. In addition,
we are further pleased to announce that Mr. Robert McIntosh has
assumed the role of President and C.E.O. for the Company.
Mr. Dan Holladay is an oil industry management
consultant based in Wichita, Kansas. He graduated in 1983 from the
University of Eastern New Mexico with an Associate degree in Petroleum
Management following extensive studies at the University of Kansas
in geology. After a short career in a variety of oil field work
he began a 25 year career as an Investment Adviser for firms such
as AG Edwards where he advised high net worth clients. Recently,
Mr. Holladay has been working as an independent oil industry management
consultant where he has been identifying, evaluating and assisting
companies and individuals on a variety of Kansas based oil and gas
prospects for both exploration and production projects. He will
continue this role for American Petro-Hunter with a focus on the
current Kansas asset as well as the development of future prospects.
Incoming Company President & C.E.O. Mr. McIntosh
is a consulting geologist with a proven track record spanning the
past 25 years. He brings diverse experience as a resource exploration
geoscientist alongside noteworthy strengths in all facets of corporate
development. Since 1983 his career has taken him across the Americas
and abroad where he has been instrumental in the design, implementation,
execution and management of programs in the oil, gas, precious and
base metals segments of the resource sector. His skills encompass
virtually every aspect of oil & gas exploration, well completion
and production techniques, along with extensive experience in project
acquisition, contract negotiation, and project divestitures within
the petroleum industry. He has developed singular expertise and
broad industry contacts in his various roles across the publicly
traded market sector as well as with private junior E&P companies.
The Company thanks Mr. John J. Lennon for
his past services and wish to advise that he will remain as a Director
and Secretary Treasurer of the Company.
American
Petro Hunter
17470 N. Pacesetter Way
Scottsdale, AZ 85255
Email:
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Website: www.americanpetrohunterinc.com
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in May 2009.
American
Petro-Hunter has acquired a 25% working interest in the Victory
Gas Project which is located approximately 20 miles south of
the city of Sacramento along the Upper Cretaceous Winters "Eastside
Stratigraphic Trend" of the southern Sacramento Valley.
traps
formed either by channels shaling out up dip into coeval slope
shales or by sands shaling out up dip over structural noses.
Many of the structural noses are compaction anticlines formed
by drape over deeper thick Winters channels.
