Same news just a rehash of what they still have not completed. Read the next to last paragraph which I find very telling of the incompetance of this management team.
They have produced little oil in montana in the 6 plus years they have had presence in montana, though they have decided to source additional wells in another state, spent dollars for the Alaska project which is currently dead in the water, and let us not forget about Windhaus, and the general fall of the vertical wind turbine industry with some notable high capitalized companies going bankrupt.
Read the letter and form your own opinions as to the general value and health of the company!
Investors
January 3, 2013
Dear Fellow Shareholders, Business Partners and Friends,
2012 was an important year for Native American Energy Group as we persisted in our efforts to confront and overcome the numerous obstacles that have served to both challenge and fortify our resolve to succeed. The source of this resolve can be credited to our staunch loyalty to our many fellow shareholders who have stood by us through all the adversity and setbacks we’ve encountered over the past several years. We greatly appreciate the unwavering support and trust that you have placed in us – and we intend to continue working very hard to ensure that your faith and confidence in NAGP is handsomely rewarded.
Key Accomplishments in 2012
Removal of DTC Global Lock
Perhaps our most meaningful corporate accomplishment in the past year was securing the removal of the ‘Global Lock’ also known as a ‘DTC Chill,’ imposed on the clearing, trading and settlement of our common shares by the Depository Trust Company. Thanks in large measure to Harvey Kesner, Esq. of the New York law firm Sichenzia Ross Friedman Ference LLP, who was retained as special counsel to represent us in this matter, NAGP prevailed in reestablishing full service clearance and settlement privileges with the DTC for our shareholders this past June.
Balance Sheet Enhancements
We also succeeded in notably strengthening our balance sheet through the reduction of over $854,000 in corporate debt in 2012. We achieved this through a series of productive negotiations, which included the settlement of an outstanding liability in the amount of $245,000 which was converted into equity of the Company at a price of $2.00 per share. Additionally, in late April we renegotiated the terms of our Technology License and Distribution Agreement with Windaus Energy originally entered into in February 2007. Pursuant to the amended Agreement, we adjusted the license fee of shares and cash payable to Windaus, decreasing the amount of shares from two million to 100,000; and decreasing the cash portion of the fee from $500,000 to $100,000, of which $30,500 has already been paid. Other creditors have also kindly agreed to work with us, granting us favorable terms to satisfy outstanding payables due them over the coming year.
Settlement of Litigation
NAGP is also very pleased to use this opportunity to share that in the final week of 2012, we finalized a formal Settlement Agreement with High Capital Funding, LLC (HCF) for unpaid principal and interest owed by our Company pursuant to various loans made to it by HCF. Both parties agreed to terms of a Settlement Agreement in an effort to avoid further litigation. In accordance with the Settlement and confirmation of certain share amounts, NAGP will issue a combination of common shares and warrants totaling approximately 2,500,000 common shares on a fully converted basis and remit 35% of Net Revenue proceeds received by Shell or any other purchaser(s) of oil from any of the five existing wells in Montana on a monthly basis until all legal fees, expenses, interest and principal have been paid in full on all outstanding loans.
In consideration for the above and other conditions in the settlement agreement, Native American Energy Group, Inc. and High Capital Funding LLC agreed to jointly execute a Stipulation of Dismissal of the Foreclosure Action and all counterclaims and affirmative defenses alleged by NAGP against HCF with prejudice as settled in full.
Commenting on the Settlement, Frank Hart, Manager of HCF, said, “We are very pleased to have this pending litigation with NAGP behind us, so that we may now all focus on supporting the Company’s enhanced oil recovery program in northeastern Montana and the future value it promises to create for NAGP’s shareholders – among which we are delighted to count ourselves.”
Status of Enhanced Oil Recovery (EOR) Program in the Williston Basin in Montana
This past October, we announced that we had completed electrical system repairs and upgrades to surface equipment and subsurface flow-lines at the Wright 5-35 and Beery 2-24 wells.
As a result, the Wright well initially flowed approximately 62 barrels of oil in the first 18 hours and settled at 53 barrels of oil per day. The Beery well flowed between eight to ten barrels of oil per day with no water. Subject to securing necessary financing, we look forward to moving both wells into full commercial production in early 2013. In October, we sold approximately 239 barrels of oil from the Wright lease.
Presuming we prove successful at raising the capital we need to fully implement our Montana enhanced oil recovery program in 2013, the workovers of Beery 2-24, Beery 22-24, Cox 7-1 and Sandvick 1-11 wells will also be completed in the coming year. In fact, notwithstanding any delay with our capital formation plan, it is our goal to have all five wells online and sustaining oil production in the range of 300-400 barrels per day by mid-year.
Presuming we successfully raise the capital we need to fully implement our Montana enhanced oil recovery program in 2013, the workovers of Beery 22-24, Cox 7-1 and Sandvick 1-11 wells will also be completed in this coming year. In fact, notwithstanding any delay with our capital formation plan, it is our goal to have all five wells online and sustaining oil production in the range of 300-400 barrels per day by mid-year.
Update on Coal Bed Methane (CBM) Assets in Cook Inlet, Alaska
In October 2007, our Company was issued the first and only Coal Bed Methane (CBM) drilling permit by the Matanuska-Susitna (“Mat-Su”) Borough Planning Commission for drilling a CBM well in the Mat-Su Valley, an area known for its significant coal reserves larger than those in the prolific Powder River Basin of the United States. The issuance of the Mat-Su drilling permit was followed by the economic downturn and further decline in commodity prices in 2008 which changed the economics and fundability of the project. The permit expired on October 1, 2012. Today, we remain the only applicant that has ever received a CBM drilling permit in the Mat-Su Valley due to the Mat-Su Borough Assembly having adopted some of the strictest regulations for coal bed methane drilling in the United States. In addition, we have been approached by other local government agencies in the Mat-Su Valley that are pro-development of CBM and have the authority to issue drilling permits individually using the same permitting guidelines.
It is very important to note that the price of natural gas in Alaska is typically three to four times the Henry Hub natural gas spot price, which is generally the primary price set for the natural gas market in the lower 48 states.
Natural gas production is in high demand by purchasers in the Mat-Su Valley such as the local gas and electric utilities including the Conoco Phillips LNG plant (“Conoco”) as they export liquefied natural gas to Japan directly from Alaska. Since 2008 and until recently, we have continued to maintain communication with the various prospective purchasers in the Cook Inlet area such as Conoco, Chugach Electric Association Inc. and the Matanuska Electric Association (“MEA”). In addition, MEA is working to build a 180 megawatt natural gas power generation plant as part of its mission of bringing reliable, affordable power to the residents of the Cook Inlet. Construction is proposed to begin 2013 and they expect to be ready for testing by October 2014. MEA expects to begin generating power by January 1, 2015.
As per our discussions with local officials, city governments, landowners, gas purchasers and the various permitting agencies in the region, we are confident that once adequate financing is identified, lease acquisitions and re-permitting can be achieved in an expeditious manner due to our relationships in the region as well as the growing demand and the dwindling supply of natural gas in the region.
Assessing EOR Opportunities in Oklahoma
Since early 2011, we have been pursuing several leasehold interests and joint venture relationships in Northeastern Oklahoma, whereby we can apply the same Enhanced Oil Recovery (EOR) techniques that showed great results in Montana. The areas we are evaluating have oil & gas wells featuring multiple pay-zones with total well depths averaging 800 feet, which also include coal seams for development of Coal Bed Methane (CBM) gas. From our initial evaluation, we’ve concluded that there are up to four oil & gas pay-zones and as much as two coal seams that are accessible by these wells.
Wells throughout Oklahoma and Kansas are historically known to have longevity in production and we believe are great candidates to introduce new techniques to access more of the underlying reserves that have not been previously tapped. Morever, recently there have been additional discoveries of undeveloped reserves at deeper depths, which we’re confident we can access by drilling deeper into these wells using our Workover Rig and additional field equipment.
In Oklahoma, we’ll be able to further develop all wells using our own equipment which will dramatically lower development costs. Since our well enhancement techniques showed great results at depths exceeding 7,000 feet in Montana, we’re looking forward to the great potential in these shallow depth wells in Oklahoma.
The properties being evaluated are situated on both native and non-native lands in Oklahoma which include, but are not limited to, Tulsa, Osage, Pawnee, Okmulgee, Muscogee, Wagoner and Rogers Counties.
Outlook for 2013 and Beyond
Looking ahead, our views and strategies on the development of our valuable energy assets will remain unchanged in 2013. Our first priority will remain devoted to formulating effective capital formation strategies so that we may, in turn, attain robust, sustainable, positive cash flow from our Montana enhanced oil recovery projects. To fuel our future success, we look forward to advancing our pipeline of new business development opportunities, such as our coal bed methane project in Alaska and the possible workover projects in Oklahoma that we will be carefully investigating over the next several months.
We look forward to providing you with many detailed updates on our progress in 2013 and encourage you to visit our web site (www.nativeamericanenergy.com) often to view our photo and video gallery, where we strive to give you a front row seat to our field operations in Montana.
While we are not perfect and will likely make some mistakes in the years ahead, please know that we will never lose sight of who we are, for what we stand and for whose benefit we ultimately pledge our efforts – our shareholders, our employees and our business partners.
In closing, we’d like to wish you all a very safe, happy and prosperous New Year!
Sincerely,
NATIVE AMERICAN ENERGY GROUP, INC.
Joseph D’Arrigo
Chairman, President & CEO
Raj Nanvaan
Chief Financial Officer & Chief Operating Officer
AI
Market Data 
Markets 
