American International Petroleum Secures Aggregate $15 Million in Financings; Funds To Be Utilized Primarily For Year 2000 Drilling Programs on Kazakhstan Licenses.

Business Editors

NEW YORK--(BUSINESS WIRE)--July 20, 2000

American International Petroleum Corporation (NASDAQ- NMS: AIPN) reported that it has renewed its $2 million revolving line with Actrade Capital Inc. and completed a $3,000,000 conventional bridge financing and entered into a new $10 million convertible preferred line of credit ("Equity Line"), with an option for an additional $8 million, with GCA Strategic Investment Fund Limited.

Additionally, GCA has agreed to extend an aggregate principal amount of $4.35 million of previously completed conventional bridge financings until November 28, 2000.

The new bridge financing represents the fifth such transaction, totaling an aggregate of approximately $11 million in conventional non-convertible financings, which the Company has completed with GCA since January 1999. GCA is a professional management firm with a family of funds specializing in "direct investment" financing for growth driven small-cap and micro-cap companies, both public and private, with market capitalization between $10 million and $500 million.

The Company also renewed its $2 million revolving line of credit with Actrade Capital for another year. The Company utilizes the line, primarily, to purchase feedstocks for its refinery operations. The Company has borrowed an aggregate $9.5 million from Actrade since September 1998, and currently has an outstanding balance of approximately $2 million.

The Equity Line has no coupon and, upon an effective registration statement, allows the Company, at its sole option, to draw down on the line on a monthly basis in exchange for shares of the Company's preferred stock which is convertible at an 8% discount to the market. The term of the Equity Line is 12 months, renewable under the same terms for another year, at the option of the Company, for an additional $8 million. The agent for the GCA transactions was LKB Financial LLP, Cummings, Georgia.

Company CFO Denis Fitzpatrick said, "This is an important round of financing as it allows us to begin the 2000 drilling program on both License 1551 and License 953. We intend to drill two horizontal and two vertical wells on License 1551 and continue exploration drilling on License 953. The extent to which we plan to utilize the capital available under the Equity Line will be determined in large part by the amount of proceeds we may receive from the sale of a working interest in one or both Licenses."

American International Petroleum Kazakhstan, a wholly-owned subsidiary of the Company, owns two licenses in the Republic of Kazakhstan: Production License 1551, the Shagyryl-Shomyshty gas field, in which it has a 100% interest, has technically proved reserves of 604 billion cubic feet of gas as previously reported, and exploration License 953, a 4.7 million acre exploration block, in which the Company has a 70% working interest.

American International Petroleum Corporation is a diversified petroleum company which, through various wholly-owned subsidiaries, is involved in oil and gas exploration and development in the Republic of Kazakhstan, and in processing, marketing and transportation of a wide array of refined products, from naphtha to asphalt, in the United States.

Statements herein may be identified as forward-looking for purposes of safe harbor provisions under Section 21E of the Securities and Exchange Commission Act of 1934. Such statements relating to the Company's future business are subject to risks and uncertainties that could cause actual results to differ materially from those statements, and other risks and factors, identified in the Company's SEC filings.