American Energy Reports Additional Results From Jacobabad 3 and Settlement of Northern Lights Lawsuit.

Business/Energy Editors

HOUSTON--(BUSINESS WIRE)--April 5, 2001

The American Energy Group, Ltd. (OTCBB:AMEL) has completed initial evaluation of data recovered from the Jacobabad No. 3 well. In order of prospectivity, the 3 zones targeted by this well included the Sui Main Limestone as the most promising target, followed by the Chiltan and Habib Rahi.

The top of the Habib Rahi was encountered at a depth of 1714ft, some 300ft deeper than predicted by seismic data. The limestone was found to be interbedded with marl and thin bands of shale. No indication of hydrocarbon was seen while drilling and open-hole logs did not show the required porosity and hydrocarbon indications necessary to warrant further testing. Data acquired during open-hole testing will be used in conjunction with existing seismic to improve our understanding of existing seismic data. The unconformity immediately above the Habib Rahi has had a significant impact upon our seismic interpretation in this particular area of the concession, and information obtained from Jacobabad No. 3 will be useful in assessing the prospectivity of this zone elsewhere in the concession. The Habib Rahi formation is productive in other fields near Jacobabad, and will continue to be a zone of interest in other sections of the concession.

The Sui Main Limestone was encountered at a depth of 3580ft., at the precise location predicted by the seismic data. Prior to penetrating the Sui Main Limestone, drilling equipment was reconfigured to drill the zone "underbalanced." Underbalanced drilling methods, although quite expensive, minimize formation damage while drilling, and allow both qualitative and quantitative estimates of the formation's productive potential to be made while drilling. While drilling underbalanced through the Sui Main Limestone, indications of hydrocarbon gas, carbon dioxide and hydrogen sulfide were detected. Subsequent open-hole electrical logs further indicated the presence of porosity and gas. Drill-stem flow tests were then conducted, which showed a strong presence of water overriding the gas present. Traces of hydrocarbon gas, along with more substantial volumes of carbon dioxide and hydrogen sulfide were produced along with the water. From this test we have learned that although our understanding of the structure of the Sui Main Limestone zone in this section of the concession is accurate, additional geologic work to more clearly define the nature of migration and trapping of hydrocarbons is required for a commercial discovery to be located.

The Chiltan formation was encountered at a depth of 5355ft, some 350ft deeper than anticipated. While drilling, indications of hydrocarbon gas, carbon dioxide and hydrogen sulfide were seen. Open-hole electrical logs further confirmed that drill-stem flow testing was warranted. The flow tests confirmed the existence of very good reservoir rock properties, but water production suppressed the flow of any significant volume of gas. For confirmation, a second test was performed, and the results were identical. While drilling to the Chiltan, two additional zones were encountered that were thought to have pinched-out to the east. This fact, while not having a direct impact upon the surrounding zones, does point to the requirement for additional geologic work which would lead to a more complete understanding of all the factors required for the formation of a commercial hydrocarbon reservoir.

AMEL's exploration program in Pakistan continues to identify the location of hydrocarbon, but not yet in significant or commercial quantities. Nevertheless, the additional information acquired continues to bolster our confidence in this section of the Middle Indus Basin, and our exploration efforts there will continue. Additional geologic work will be required to supplement our considerable data set of geophysical information as we progress our efforts in search of commercial hydrocarbon reservoirs.

In addition to the small section of the structure tested by the Jacobabad No. 3 well and the areas tested by wells previously drilled by AMEL, there are numerous other identified structures that have not yet been drilled and tested. We are confident that the Middle Indus Basin will continue to be seen as a very prospective basin for exploration efforts of not only AMEL, but other operators as well.

The Company also announced the settlement of its lawsuit against Northern Lights Energy, Ltd. and others pertaining to the May, 2000 agreement to sell all of its Texas-based assets and the stock of its operating subsidiary for the Texas oil and gas leases, The American Energy Operating Corp. Under the original sales agreement, the assets and subsidiary stock were to be sold for $4,000,000, $750,000 of which was paid to the Company when the agreement was signed. Under the original agreement terms, if Northern Lights failed to consummate the purchase after conducting its due diligence, then the Company's sole obligation was to repay the $750,000 advance out of monthly production from the oil and gas leases. The lawsuit was filed by the Company in October, 2000 to obtain a cancellation of the sales agreement based upon Northern Lights' failure to consummate the purchase in a timely manner. Under the terms of the settlement documents, the sales agreement was modified to permit Northern Lights to purchase the assets and stock only if it meets minimum required instalment payments of the purchase price over the next six (6) months. The Company also obtained financial concessions in the settlement documents reducing the total expenses of the transaction which are previously attributed to the Company. These reductions increase the net total proceeds to the Company if the transaction closes and reduce the total repayment obligation of the Company to Northern Lights to $250,000 if the transaction does not close for any reason. Under the terms of the settlement, any failure to meet the instalment obligations will result in automatic forfeiture of Northern Lights' right to purchase. The Company would be free to market the assets to third parties upon such a forfeiture. The settlement is subject to approval by the Canadian securities authorities who have jurisdiction over one of the Defendants.

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.