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The American Energy Group, Ltd. (AEGG.PK) announced today that it has received a notification from Hycarbex-American Energy, Inc. (“Hycarbex”) that its Board of Directors has made the decision to suspend all royalty payments to American Energy and other corporate payment obligations due to severe liquidity constraints. The notification indicated that the royalty payments will be accrued and paid once sufficient funds are available. The Haseeb #1 Well continues to produce gas into the Sui Southern Gas Company Limited pipeline under the Extended Well Test. Production recommenced in July, 2011, at approximately 3.5 million cubic feet of gas per day and is expected to be gradually increased under the Extended Well Test to 15 million cubic feet of gas per day. American Energy has been paid its royalty for the July and August production, but has not received payment for the months of September and October. The notification further indicated that Hycarbex will continue its efforts to refinance the company and that if such refinancing efforts are unsuccessful, that it may face bankruptcy proceedings.
The existing agreement between American Energy, Hycarbex and the parent company of Hycarbex, Hycarbex Asia Pte. Limited, contains provisions requiring that Hycarbex pay the American Energy royalty without deductions or setoff. Management intends to evaluate this event and to pursue the best course to enforce the contractual obligations and assure a continuous royalty revenue stream to American Energy.
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.
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.
For further information contact Pierce Onthank, President and CEO at (203) 222-7315 or [email protected]