American Oil & Gas Inc (f/k/a AEZ)

[Golden Cross]

AEZ/TEC: Teton Energy Announces Participation in North Dakota Bakken Oil Play
Tuesday April 11, 8:00 am ET


DENVER, April 11 /PRNewswire-FirstCall/ -- Teton Energy Corporation (Amex: TEC - News) today announced that it has signed a definitive agreement with American Oil and Gas, Inc. (Amex: AEZ - News) to acquire a 25% working interest in approximately 45,000 net acres in the Williston Basin located in North Dakota. The acreage is located in Williams County, directly west of the prolific Nesson Anticline. The transaction is scheduled to close at the completion of due diligence on May 5, 2006.
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The Mississippian Bakken Formation is the target zone in this emerging basin centered oil play. Horizontal drilling is generally used to access oil productive zones within the formation. The partnership, consisting of American (50%), Teton (25%) and Evertson Operating Company (25%), the designated operator, plans to drill two multi-lateral horizontal wells in 2006 to test the acreage. Based on 640-acre spacing, there are an estimated 100 gross drilling locations across the acreage block.

Per the terms of the agreement, Teton will pay American approximately $2 million in cash at closing and will pay approximately $3 million of American's 50% share for drilling and completion on the two planned wells. In additional to the $3 million that Teton will pay with respect to American's working interest, Teton will also pay its 25% share of drilling and completion costs. Teton anticipates that it will fund the acquisition from existing cash on hand.