American Energy Announces Final Settlement With Northern Lights Energy, Ltd. and Acquisition of Yasin Concession in Pakistan.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--Aug. 23, 2001

The American Energy Group, Ltd. (OTCBB:AMEL) announced it's subsidiary; The American Energy Operating Corp. has finalized its settlement with Northern Lights Energy, Ltd. The Company previously announced a settlement, which would have permitted Northern Lights to tender the agreed purchase price in installments. These settlement terms were made subject to the approval of the Canadian securities authorities, which had jurisdiction over one of the other defendants. The prior settlement was submitted to the Canadian Venture Exchange for approval and that approval was declined. As a result of the Commission's rejection, the Company and Northern Lights have restructured the settlement terms such that Northern Lights has relinquished all purchase rights and has accepted a negotiated sum in full payment of its outstanding debit. In connection with such resolution, the Company has assumed operational control of all of the Texas oil and gas properties through its subsidiary, The American Energy Operating Corp.

Effective July 25, 2001, William M. Aber, Jr. assumed the presidency of The American Energy Operating Corp. Mr. Aber stated that the Company has ceased its near term efforts to market the domestic properties while the efforts to enhance production through an accelerated development plan has begun.

In the last thirty (30) days re-completion and workovers of existing shut in wells have increased the domestic field production by approximately 100 BBL/Day. Additional shut in and non-profitable well will continue to be improved and brought on line over the course of the next year. In addition, a program to cut expenses and lower lifting costs was begun in order to increase the companies profitability. The company will also be spudding a new development well (B-72) on the Blakely lease, in the Blueridge Field, on or about Aug. 27, 2001.

Mr. Aber stated he "is committed to making our U.S. properties profitable again in order to contribute directly to the financing of the company's Pakistan exploration programs."

The American Energy Group, Ltd (OTCBB:AMEL) also announced that it's subsidiary; Hycarbex-American Energy (Hycarbex) Inc. has been officially awarded the Yasin Concession (1211.68 sq. km) in the Sindh Province of Pakistan. Dr. Iftikhar Zahid, Hycarbex's vice president of administration and resident director signed the Concession Agreement Aug. 11, 2001, in Islamabad with representatives of the Government of Pakistan. Hycarbex has committed USD $2,400,000.00 over the course of the next three years to explore and test this concession. At least 100 km of new 2-D seismic will be shot, 150 km of older vintage 2-D data will be evaluated and one exploration well will be drilled to test the Sui Main Limestone formation for potential gas.

Hycarbex-American Energy Inc. has also bid and applied for two additional Pakistan concessions in the area. The Bahadurpur Concession 211.62 sq. Km is east of the Yasin Concession and north of Pakistan Petroleum Ltd. Block 22 Concession. The Miro Khan Concession (4764.87 sq. km.) is immediately to the west of the Yasin Concession on the west flank of Hycarbex's Jacobabad Concessions. The Jacobabad concession was released to the Pakistan Government in favor of the newly awarded Concession. The new concessions are closely associated structurally and geographically with Hycarbex's Jacobabad Concession, where four exploration wells and over 300 km of seismic was previously shot and evaluated. The exploration information gained, while drilling on the Jacobabad Concession, plus a high tech DHI (direct hydrocarbon indicator) evaluation technique have guided management in the selection of these new concessions and its optimism concerning exploration potential for the area.

The company has also announced a new exploration well will be spudded within the next year, in order to fulfill Hycarbex's exploration commitment with the Government of Pakistan. The well location will be determined after additional seismic shooting is evaluated in the near future.

The American Energy Group, Ltd. is an independent oil and gas exploration, drilling, and Production Company based in Houston, Texas, involved in both domestic and international exploration and production projects.

Certain matters described above are forward looking statements and are subject to risks and uncertainties that could cause actual results to differ materially from those projected.