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Saturday, 08/11/2007 3:21:33 PM

Saturday, August 11, 2007 3:21:33 PM

Post# of 44006
Why I Voted YES.

I have just voted yes with my 2.9 million shares, for the following reasons.

In reading the numerous posts by those vehemently opposed to the reverse split proposal, I marvel at the frequent involvement of matters concerning personality, offense, putative wrongdoing, and the utter disregard for what actually is being proposed and what actually might occur as a consequence of the passage of the proposal.

In the majority of negative postings, I find virtually no real business or investment analysis, just personal invective and hearsay. I don’t make investment decisions with any of those considerations. Purely, I want to determine whether or not an investment will bring future financial rewards to me.

That’s what all AMEP investors of record must do now, determine whether or not the reverse split proposal will bring a financial reward or not.

And that’s the ONLY question. The matters of whether company principals are nice guys, good communicators, or any other such issue is not what we are voting for or against. Like it or not (and virtually all of us do not like the proposal as it was presented), we are forced to vote on only one thing, yes or no on the reverse split. Everything else, no matter how it might be personally perceived or expressed, is immaterial. The sole question is whether or not AMEP shareholders will be better off with or without the share split proposal now on the table. Everything else should be reserved for casual conversations over a beer or such (which pretty much describes the level of discourse of the majority of AMEP postings of late).

So, will I be better off in a few quarters if the proposal passes, or will things be better for me if it fails? That, alone, is the question.

REDUCED NUMBER OF SHARES I WILL OWN. An inordinate number of posters believe that share value is based upon the number of shares owned, that if ones share count is reduced by a factor of 25, so will ones relative ownership of the company. I’m not interested at all in how many shares I own. I’m interested in what percent of the outstanding shares I own. Right now, I own a bit over one half of one percent of AMEP. With the reverse split, this will be unchanged. The passage of the proposal will not immediately reduce my relative percentage of company ownership.

DILUTION EFFECT OF THE CONVERSION OF THE PREFERRED SHARES. The information here is disconcerting. In effect, the passage of the proposal can result in Charles Bitters owning up to 30% or so of the outstanding shares, effectively diluting my ownership percentage. I don’t like this, as it moderately reduces my percentage ownership.

If there were no other results from the approval, this would cause me to vote no.

But there are other, very significant outcomes that I must also consider.

NEED FOR IMMEDIATE OPERATING FUNDS. As I analyze the issues, this is one of the most important considerations. With the reverse split’s passage, there will be far fewer shares in the float, causing the new shares to trade at increased prices. This will be particularly significant when new production results are announced — and only a few fools are claiming that AMEP’s results at the Nash-Murphy and Padgett wells don’t exist or are insignificant. The implications of the significantly expanded production for the Proco wells is unknown. But it’s surely not negative.

Taken together, all cogent information shows that AMEP production figures will trend upwardly in coming quarters.

But the real need now is to bring new wells into production, and that costs money, which the company doesn’t much have right now. To date—without incurring debt—corporate financial assets have been turned into 7000 acres of valuable drilling leases, two drilling rigs (and other equipment), along with some new extraction technologies that will perhaps yield great results when fully developed and installed.

In a quarter or two, when these things fall into place, after a reverse split, monies can come to AMEP by diligent borrowing, or sale of new shares. With funds in hand, I have no doubt that AMEP will be able to soon bring new wells into production and dramatically increase corporate revenues.

Without those immediate, new funds, corporate development will still go forward, but at the plodding pace we’ve experienced recently. That pace hasn’t elevated the unsplit share price much in the last year or so. Why anyone would believe that continuing as we have will somehow change things is beyond me.

Without any other consideration, the advantages of the reduction of outstanding shares is worth a try. Some are certain that the share price will plummet if the reverse split happens. Right now, that’s utterly foolish. At less than two cents a share, there can’t possibly be any price plunge. That’s already happened.

And why, please tell, should the share price begin to elevate when the proposal fails, when the number of outstanding shares in the float remains the same, when corporate operating funds yet remain meager?

For me, there is no choice. One must pick the better of two disagreeable alternatives. Stay the same, at less than a nickel or so for the foreseeable future. Or, change the number of shares (but reducing each shareholder’s ownership percentage by about 30%), and let the market react to new production results at the reduced share counts.

SUBSEQUENT NEW-SHARES DILUTION. But yes, after the approval, won’t there still be hundreds of millions new shares authorized to be sold? Won’t a quick sale of millions of these at pennies-each simply get us right back to sub-dime share prices? Sure would.

But massive, cheap dilution is in the interests of absolutely no one, including Charles Bitters himself. The most remunerative course would be to diligently sell new shares at increasing share prices, thereby gaining new operating funds while at the same time elevating market share prices.

I don’t believe that the Board of Directors or company officials will play games with new share sales. More and more shareholders are in this for the long term, to eventually make lots and lots of money. Instant share-count dilution just isn’t going to happen.

Yes, those sorts of shenanigans are common in most penny stocks, but exclusively in companies that have no real assets, only a story or promise. That’s not the case with AMEP. This is not a story stock. The company has phenomenal assets that now require a few million dollars to begin to bring on remarkable production. The reverse share split will do this.

No one likes the way this was presented, especially the lack of detailed information regarding the proposal’s operation and outcomes. AMEP severely lacks investor information skills. But they know where and how to purchase drilling leases, have in-house drilling rigs, and now have a number of completed (but not fully on-line) productive wells.

With the increased funds the reverse share proposal will bring, I (and all other AMEP investors) will be significantly ahead in coming quarters. If it fails, we will be exactly where we are right now.

Privately, I’ve done a much more detailed analysis. I have not touched upon the remarkable advantages and outcomes of moving AMEP to the Amex or other exchange.

I have voted yes on the proposal. If it passes, I will be ahead. If it fails, things will continue just as they have, and that’s not acceptable.

–falconer66a

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