American Patriot Oil & Gas Ltd. (fka ANPOF)

[TradingGems]

$ANPOF IS ONLY TRADING AT .0167 BECAUSE ITS UNKNOWN. HAS NEVER HAD A PR. 50 cents very doable. I feel good about this one.

TEXAS ACQUISITIONS SIGNAL TRANSFORMATION
• Acquisition of Foothills Resources Inc and Magnolia/Burnett Assets
• Deals deliver 550 net boepd/ 6.5 million barrels additional 2P oil and gas reserves
• Attractive acquisition price less than half PV 10 value
• CY19 EBITDA estimated to increase to US$12m with low capex spend
• Total AU$7m equity secured via $4m oversubscribed placement completed and
underwritten $3m rights issue
• Major US-based private credit fund provided a non-binding term sheet for a US$17m
debt facility closing August 2018
American Patriot Oil and Gas Ltd (ASX:AOW) (“American Patriot” or “the Company”) has signed two
separate acquisition deals for oil and gas assets in Texas that will significantly increase the Company’s
EBITDA for the 2019 calendar year based on company financial modelling.
The acquisitions of the Foothills Resources Inc and Magnolia/Burnett assets will provide a total of
450boepd net of producing oil and gas assets, delivering an additional 5.6 million barrels of oil equivalent
2P reserves (90% oil) (4 million 1P proven reserves) certified by independent reserve reports.
The acquisitions combined with the previously announced Peak Energy deal will deliver in total 550 net
boepd of production and 6.5 million barrels of oil equivalent.
Total AOW company reserves will increase to seven million barrels of oil equivalent 2P reserves.
The combined cost of all acquisitions was US$20.5 million, with $15m for the Foothills asset, $3.2m for
Magnolia and Burnett and $2.3m for the Peak Energy Asset. The assets are estimated to be worth
US$48m PV 10 based on current NYMEX strip pricing, according to independent engineering reports.
On transaction close, American Patriot will have a total company production of 570 boepd net in 2018 with
more than 7mmboe 2P reserves (5.3mmboe of 1P proven oil and gas reserves) certified by independent
reserve Reports with a PV10 value of USD$55m.
The net production from the assets generates net cash flow of USUS$6m per annum at current oil prices.
With a low capex investment of US$1.8m, the Company aims to add an additional 180boepd of production
and the Company’s net production is expected to grow from 570boepd in 2018 to 750boepd in 2019.
The program includes work-overs and recompletions which will commence immediately after the close of
the transaction.
Estimated EBITDA is expected to increase to approximately US$12m per annum in CY2019 (for all assets)
following completion of the capex program based on an oil price of US$70bbl.
Importantly, 75 per cent of production will be hedged at current oil prices, which average US$70bb
Release Date: 24 July 2018
ASX Announcement
AOW.ASX ANPOF.OTC

American Patriot Oil and Gas Ltd Level 1, 23 Oxford Street Oakleigh Vic 3166
ACN: 154 049 144 Ph: [phone] Fax: [phone]
Email: [e-mail] website: www.ap-oil.com 2
\\DE - 041216/000018 - 769543 v1
The American Patriot board will consider capital management initiatives in 2019 and beyond, such as
dividends and share buybacks after consideration of future acquisitions and additional debt repayments.
The Company has received a non-binding term sheet from White Oak Global Advisers LLC, a major US-
based investment manager to private credit funds, for a US$17m debt facility. The lenders have completed
initial due diligence with only confirmatory validation remaining.
The total transaction size of US$20.5m will be funded via the debt facility and an AU$7m (approximate
conversion US$5m) equity raise which includes a $4m placement and a $3m rights issue fully underwritten
by Capital Investment Partners (CIP), an existing major shareholder of AOW.
The placement has been made at $0.025 (2.5 cents) per share with one free attaching option for every
two shares subscribed for, exercisable at $0.045 (4.5 cents) per share on or before 20th of September
2019. The options will be listed and are subject to shareholder approval. The Company will utilise its
current placement capacity in accordance with ASX Listing Rule 7.1 and 7.1A for the placement, and its
additional 100,000,000 shares that were approved at the Company’s General Meeting held on 16 May
2018.
A total of 33,329,735 fully paid ordinary shares will be issued under Listing Rule 7.1 and 26,670,265 fully
paid ordinary shares issued under Listing Rule 7.1A, with the balance being issued under the additional
100,000,000 share capacity as approved by shareholders at the General Meeting held on 16 May 2018.
Further information about the Rights Issue including the timetable for completion will be released by the
Company as soon as possible.
The transaction is expected to close in August 2018. The projected cash flows from the new assets, based
on current oil prices, will result in the debt facility being fully paid back in less than four years.
American Patriot CEO Alexis Clark said:
“This development will see American Patriot become the most significant operator in the region, with
potential to introduce a number of new acquisition targets to rapidly build scale and increase production.
“The market response has been overwhelming.
“Our capital raising was heavily oversubscribed, creating an opportunity to take more but we
strategically chose not to, instead focusing on creating shareholder value.
“The production potential and the reserves base of the acquired assets will shift AOW into a significant
explorer and producer.
“Receiving this endorsement and financial backing provides us with significant resources to secure
larger deals in the future.
“The Foothills asset is an important strategic acquisition located adjacent to our existing Lost
Lake/Goose Creek assets.
“We plan to use existing operational staff and infrastructure across both assets to achieve further
efficiencies.
Release Date: 24 July 2018
ASX Announcement
AOW.ASX ANPOF.OTC

American Patriot Oil and Gas Ltd Level 1, 23 Oxford Street Oakleigh Vic 3166
ACN: 154 049 144 Ph: [phone] Fax: [phone]
Email: [e-mail] website: www.ap-oil.com 3
\\DE - 041216/000018 - 769543 v1
“With the support of funding from our partner, we will continue to build a significant reserve base with
upside potential to grow production and cash flow in line with increasing oil prices.
“AOW is now positioned for a period of significant growth and on a path to becoming cash flow positive.”
-ENDS-
Investor inquiries: Media inquiries:
Alexis Clark Luke Derbyshire
Chief Executive Officer Managing Director
American Patriot Oil & Gas Ltd Spoke Corporate Pty Ltd
(613) 9945 8739 (614) 488 664 246
[e-mail] [e-mail]
American Patriot Oil and Gas Net Reserves*
*Please refer Appendix 1,2 and 3 below for additional information on reserves methodology
Definitions
Mboe means thousands barrels of oil equivalent (BOE) with a BOE determined using a ratio of 6,000 cubic feet of natural gas to one barrel of oil
6:1 conversion is based on an energy equivalency conversion method and does not represent value equivalency
MMcf means millon standard cubic feet
MMboe means million barrels of oil equivalent
AOW’s net Reserves have not been adjusted for fuel or shrinkage (estimated at approximately 3%) and have been calculated at the wellhead (which is the
reference point for the purposes of Listing Rule 5.26.5).
Equity Placement and Transaction Funding
The acquisition will be partially funded via a placement to institutional, professional and sophisticated
investors to raise approximately $A4m by issuing approximately 160m new fully paid ordinary shares in
AOW. In conjunction with the placement AOW will be conducting a $3m rights issue fully underwritten by
Capital Investment Partners (CIP) current existing major shareholder of AOW.
The issue price for the new shares will be of $0.025 (2.5 cents) per share and will come with a free option
for every two shares issued with an exercise price of $0.045 (4.5 cents) per share with an expiry date 20th
Oil Gas Oil Gas
Asset mbbl mmcf mboe mbbl mmcf mboe
Peak Energy 237.7 3,732.3 859.8 237.7 3,732.3 859.8
Foothills 2,848.0 0.0 2,848.0 4,585.0 0.0 4,585.0
Magnolia & Burnett 482.0 3,396.0 1,048.0 482.0 3,396.0 1,048.0
Lost Lake/Goose Creek 226.6 102.9 243.7 226.6 102.9 243.7
Anasazi & CWS 254.0 251.2 295.9 254.0 251.2 295.9
Total 4,048.3 7,482.4 5,295.4 5,785.3 7,482.4 7,032.4
1P 2P
Release Date: 24 July 2018
ASX Announcement
AOW.ASX ANPOF.OTC

American Patriot Oil and Gas Ltd Level 1, 23 Oxford Street Oakleigh Vic 3166
ACN: 154 049 144 Ph: [phone] Fax: [phone]
Email: [e-mail] website: www.ap-oil.com 4
\\DE - 041216/000018 - 769543 v1
of September 2019. The shares when issued, will rank equally in all respects with AOW’s existing ordinary
shares.
In addition to the equity raise detailed above, the balance of the acquisition will be funded through US$17m
senior debt facility provided by a major US Hedge Fund, subject to the negotiation and completion of
transaction documents and completion of confirmatory due diligence.
Foothills Resources Inc Acquisition
A Purchase and Sale Agreement (PSA) to acquire additional conventional oil and gas assets in the Gulf
Coast of Texas from Foothills Resources Inc (Foothills). The assets currently produce a net 300 barrels of
oil a day (bopd) and have significant upside potential to grow the production significantly by over 200bopd
additional production via a low cost capex programme including work overs and recompletions. The
operated assets contain 2,848,000 boe proven oil and gas 1P reserves certified by independent reserve
reports. In addition to this there are an additional 1.8mmboe additional propable reserves resulting in a
total 4.6mmboe of total 2P reserves. These reserves have been acquired for US$15 million and are
estimated to be worth US$33m PV10 based on current NYMEX strip pricing per Independent Engineering
reports. The current net production generates net cash flow of USD$320k per month/US$3.8m per annum
which we will be able to increase to approximately US$7.9m post the capex programme which will be
commenced immediately post transaction close.
The acquisition comes with an existing operational team which will be transitioning across to American
Patriot who will become the operator. Significantly, the assets being acquired in this transaction are
located adjacent to the Lost Lake/Goose Creek assets American Patriot acquired out of bankruptcy in late
2017. American Patriot will be able to integrate these assets into the Foothills assets and operate them
using the one team as well as utilising the existing infrastructure across the larger asset base gaining
further economies of scale. In addition to this we have also been introduced to a number of additional
assets in the region that can be further acquired growing the reserves and production base and enabling
American Patriot to become the largest operator in the region.
This is a unique opportunity to acquire a PDP-heavy asset prospective for multiple oil horizons with stable
cash flows - long life, shallow decline oil production with significant upside potential through low cost
workovers. Future development at Goose Creek will target numerous, vertically stacked sand packages
(~40 productive stacked pay reservoirs between 800 and 4,500 feet). The existing infrastructure is in place
and with ready access to market and delivery to nearby oil refineries where the oil from this field is sold at
premium. All in operating costs in this region have averaged approximately US$26/bbl including all taxes,
ensuring the wells are economic at low oil prices.
Engineering due diligence has been completed to the Company’s satisfaction and land title and
environmental due diligence is well advanced. The asset consists of 62 producing wells, 100% operated
with significant behind pipe and new drill upside potential to significantly increase production. The assets
cover 4,393 net acres with an Average WI / NRI (PDP): 100% / 81%.
The assets are located in Harris, Liberty and Hardin Counties, Texas and are mature legacy assets with
current daily production of net 297 bopd oil/100% oil from multiple formations. All wells are vertical
completions with significant behind pipe and new drill upside. Total proved reserves of 2,848 mboe with
a PV10 value of $33m. Total 2P reserves are 4,585 mboe. There are over 62 producing wells 100%
operated with significant behind pipe and new drill upside potential to significantly increase production with
over 14 new PUD cases. The assets cover 4,393 net acres with an Average WI / NRI (PDP): 100% / 81%.
These are shallow historical oil production decline rate of 2.8%/year over the last 5 years with a modest
level of recompletion/drilling activity. The assets produce from salt domes and future development at
Goose Creek will be targeting numerous, vertically stacked sand packages (~40 productive stacked pay
reservoirs between 800 and 4,500 feet).
Release Date: 24 July 2018
ASX Announcement
AOW.ASX ANPOF.OTC

American Patriot Oil and Gas Ltd Level 1, 23 Oxford Street Oakleigh Vic 3166
ACN: 154 049 144 Ph: [phone] Fax: [phone]
Email: [e-mail] website: www.ap-oil.com 5
\\DE - 041216/000018 - 769543 v1
Magnolia/Burnett Acqusition
American Patriot Oil and Gas Ltd (ASX:AOW) (“American Patriot” or “the Company”) has signed a Letter
of Intent (LOI) to acquire additional conventional oil and gas assets in South Texas and the Gulf Coast of
Texas. The assets currently produce 62 barrels of oil a day (bopd) and 535 mcfd of gas (151 boepd) and
have significant work over and upside drilling potential. The non-operated assets contain 1,048,000 boe
proven oil and gas 1P reserves certified by independent reserve reports. These reserves have been
acquired for US$3.2 million.
American Patriot is acquiring the assets from two separate private oil and gas companies, Magnolia
Petroleum Company and Burnett Petroleum LLC, in a transaction expected to close in August 2018.
Engineering due diligence has been completed to the Company’s satisfaction, while land title and
environmental due diligence remains to be carried out. The asset consists of 51 producing wells with
significant behind pipe and new drill upside potential to significantly increase production. The existing
operators who are significant US private oil and gas companies will remain in place on these assets.
The existing infrastructure is in place and with ready access to market through gas pipelines and delivery
to nearby refineries. Operating costs in this region are approximately US$18/bbl, ensuring the wells are
economic at low oil prices.
The assets acquired from Magnolia Petroleum Company are are located in Calhoun, Hidalgo, Jefferson,
Live Oak, Matagorda and Willacy Counties, Texas. They are mature legacy assets with current daily
production of 16 bopd oil and 513 mcfd gas production from multiple formations. It is a non-operated asset
with various operating companies. All wells are vertical and directional completions with significant behind
pipe and new drill upside. Total proved reserves of 663mboe with a PV10 value of $4m. There are over
19 producing wells with 5.9%-30.9% Working Interest/ 4.5%-24.3% NRI.
The assets acquired from Burnett Petroleum Company are located in Hardin, Jasper, Polk and Tyler
Counties, Texas. The package is spread out between two properties defined as the Rose Joint Venture
and Lucky Leon Field and they are mature legacy assets with current daily production of 46 bopd oil and
22 mcfd gas production from the Yegua and Wilcox formations. It is a non-operated asset with the
operators being the Davis Southern Operating Co LLC and Davis Bros Oil Producers Inc. All wells are
vertical and directional completions with significant behind pipe and new drill upside. Total proved reserves
of 386mboe with a PV10 value of $6.3m. There are over 32 producing wells with 5.0%-25.0% Working
Interest/ 0.3%-20.4% NRI.
Goose Creek Field
Cleveland Field
Saratoga Field
American Patriot Assets
Goose Creek Field