American Energy Group Ltd – ‘DEF 14C’ for 6/1/00

On:  Wednesday, 6/14/00, at 3:57pm ET   ·   For:  6/1/00   ·   Accession #:  890566-0-968   ·   File #:  0-26402

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Definitive Proxy Information Statement   —   Schedule 14C
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14C     Definitive Proxy Information Statement                 8     35K 

Document Table of Contents

DEF 14C
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SCHEDULE 14C INFORMATION

 Information Statement Pursuant to
Section 14(c) of the
 Securities Exchange Act of 1934
(Amendment No. __)

Check the appropriate box:                                                      

[ ] Preliminary Information Statement                                           
[X] Definitive Information Statement                                            

 THE AMERICAN ENERGY GROUP, LTD.
(Name of Registrant as Specified in Charter)

Payment of Filing Fee (Check the appropriate box):                              

[ ] No fee required.                                                            
[X] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.       

1) Title of each class of securities to which transaction applies:              
N/A                                                                 
2) Aggregate number of securities to which transaction applies:                 
N/A                                                                 
3) Per unit price or other underlying value of transaction computed pursuant to 
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is   
calculated and state how it was determined):                              
$4,000,000 is the sale price of the assets to be sold.              

4) Proposed maximum aggregate value of transaction:                             
$4,000,000                                                          

5) Total fee paid:                                                              
$800                                                                

[X] Fee paid with preliminary materials.                                        
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 
0-11(a)(2) and identify the filing for which the offsetting fee was paid
  previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                     

1) Amount Previously Paid:                                                      
$800                                                                
2) Form, Schedule or Registration Statement No.:                                
Schedule 14C                                                        
3) Filing Party:                                                                
The American Energy Group, Ltd.                                     
4) Date Filed:                                                                  
June 1, 2000                                                        

DEF 14C
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SCHEDULE 14C INFORMATION

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY  

YOU ARE REQUESTED TO GIVE YOUR CONSENT TO A SALE OF ASSETS PROPOSED BY THE      
COMPANY. THE INFORMATION IN THIS SCHEDULE IS MATERIAL TO THE PROPOSED           
TRANSACTION AND SHOULD BE REVIEWED IN ITS ENTIRETY IN CONNECTION WITH YOUR      
DECISION WHETHER TO GIVE OR WITHHOLD YOUR CONSENT.                              

ITEM 1.  INFORMATION TO BE CONSIDERED BY EACH SHAREHOLDER                       

BRIEF DESCRIPTION OF MATTER TO BE ACTED UPON                                    

The American Energy Group, Ltd., a Nevada corporation (the "Company") is  
requesting the consent of the shareholders of the Company to a sale of its
Texas-based oil and gas leases, including all equipment used or associated
with the Texas operations held by the Company or its operating subsidiary,
  The American Energy Operating Corp., a Texas corporation ("AEOC"). A sale of
the Texas-based assets would divest the Company of all of its assets other
than its oil and gas concession in the Republic of Pakistan, comprised of 
approximately one million acres, which is held by its wholly-owned        
   subsidiary, Hycarbex-American Energy, Inc., a Texas corporation ("Hycarbex").
The purpose of a sale is to focus the business of the Company upon the    
development of its Pakistan concession. The timing of the proposed sale is
prompted by the Company's need for working capital to meet the current    
   financial deposit requirements and near term development requirements imposed
by the Government of Pakistan in connection with the concession. The net  
proceeds of the sale will be utilized toward these Pakistan financial     
  requirements. Without a sale of the Texas-based properties, the Company does
not have sufficient capital to meet the near term Pakistan financial      
obligations.                                                              

BRIEF HISTORY OF THE COMPANY'S TEXAS AND PAKISTAN ASSETS AND REASONS FOR        
PROPOSED SALE OF TEXAS ASSETS                                                   

  The Company currently owns and operates a total of 107 existing wellbores in
two producing Texas oil fields, the Blue Ridge Field and the Boling Dome  
Field, each of which are within fifty (50) miles of the Houston, Texas    
metropolitan area. Most of these existing wells were drilled by other oil 
companies prior to the Company's acquisition of the properties and were   
  inactive at the time of such acquisition. Since its acquisition, the Company
has drilled new developmental wells and has reactivated certain of the    
existing inactive wells present on the Texas leases at the time of        
  acquisition. During the three (3) months ending March 31, 2000, the Company,
through its operating subsidiary, AEOC, drilled and successfully completed
 one (1) new developmental well in the Blue Ridge Field. During the quarter,
an average of twenty-                                                     

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eight (28) of the Company's 107 wells were producing daily with varying   
production ranging from 2 barrels per day to 55 barrels per day. A small  
number of these producing wells flow without mechanical pumping but the   
  majority require mechanical pumping assistance. Both the number of producing
wells and the daily production from those wells remained stable throughout
   the quarter. Moderate increases in the overall daily production rate occurred
throughout the quarter as a result of field work in progress. Quoted oil  
   prices during the quarter, at one point, exceeded $30 per barrel and sales of
oil by the Company during the quarter averaged $27.38 per barrel.         

   In the initial four years in which Hycarbex has held the Jacobabad concession
 in the Middle Indus Basin of central Pakistan, it has expended in excess of
$8.0 Million in acquisition, geological, seismic, drilling and associated 
costs. Hycarbex has drilled three exploratory wells on the Jacobabad      
concession to date without achieving a commercial discovery, but has      
encountered natural gas shows in all three wells. Hycarbex suspended      
operations on one well pending further testing, plugged one well due to   
mechanical and downhole difficulties while drilling, and plugged a second 
well due to contact with natural gas containing a high content of hydrogen
sulfide and carbon dioxide. While previous exploration activity by the    
Company on the Pakistan concession has been unsuccessful, Management is of
   the opinion that technical information obtained from the previous seismic and
  drilling activity suggests that further exploration in Pakistan is warranted
and that efforts should be made to preserve and develop the concession.   

  The plugging and abandonment of the David #1A well in the spring of 1999 due
to the contact with hydrogen sulfide and carbon dioxide triggered a       
  requirement under the exploration license that a substitute well be drilled.
Hycarbex was granted an extension until June 1, 2000 for the drilling of a
substitute well on its Pakistan Concession. The extension was conditioned 
upon Hycarbex's compliance with all other requirements of the exploration 
   license, including the requirement that a minimum of $1,100,000 be maintained
on deposit in its Pakistan operating account toward the anticipated costs 
   associated with the drilling of the substitute well, as well as an additional
   $1,100,000 for the anticipated costs of the next exploration well required by
the exploration license. Hycarbex has not complied with these deposit     
   requirements because of a lack of funds, and efforts to raise the entirety of
 the funds to date through loans, equity placements or other means have been
unsuccessful.                                                             

An additional $500,000 was deposited in the Pakistan account subsequent to
 the end of the quarter. These funds were received upon the execution of the
 agreement to sell the Texas oil and gas leases described below. Should this
sale transaction be consummated, the balance of the funds would be paid in
cash to the Company and would be applied to discharge the existing liens  
   against these assets, outstanding operating expenses and the Pakistan deposit
and drilling requirements.                                                

Under the applicable local rules pertaining to petroleum concessions, the 
Government of Pakistan can revoke the exploration license for any material
  breach which is not cured within 60 days of written notice of noncompliance.
  Hycarbex has not received a notice of default as of the date of this report.

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Since Hycarbex does not have the present ability to satisfy the deposit   
  requirements, a notice of default from the Pakistan Government could only be
cured by successfully raising the necessary funds from the closing of the 
 sale of the Texas oil and gas leases, a sale of securities, a joint venture
 arrangement, or outside sources within the 60-day period. A failure to make
the required deposits after a default notice from the Pakistan Government 
could result in a forfeiture of the exploration license and a loss of the 
concession. The exploration license could also be revoked if Hycarbex is  
  unable to comply with the June 1, 2000 drilling deadline for the replacement
well, if that deadline is not extended. Hycarbex is currently in active   
negotiations with the Pakistan Government for an extension of the June 1  
 drilling date for the replacement well and the required deposits associated
with the replacement well and the succeeding well.                        

LEGAL BASIS AND METHOD FOR OBTAINING SHAREHOLDER CONSENTS                       

Nevada law, which governs the Company's general corporate operations,     
 provides that any action permitted to be taken at a meeting of shareholders
may be taken without a meeting if, before or after the action, a written  
consent is executed by a majority of shareholders.                        

The Company has engaged the services of ADP, an independent, third-party  
 organization in the shareholder communication and solicitation business, to
deliver the necessary consents with accompanying information to the       
shareholders of record and to receive and tally the returned consents. ADP
  has provided instructions to each shareholder as a part of the informational
   materials submitted. The shareholders shall be determined as of a record date
  of May 30, 2000. The Company has only one class of voting stock outstanding,
   being its Common Stock. As of the most recent quarterly report of the Company
 for the period ended March 31, 2000, the outstanding shares of Common Stock
totaled 34,928,895. Currently, there are 36,196,944 outstanding shares of 
Common Stock.                                                             

In the event that the Company receives consents representing a majority of
the outstanding shares of Common Stock of the Company, being 18,098,473   
shares, the proposed sale of the Texas-based assets will be considered    
   approved by the shareholders and management will proceed to consummate a sale
 transaction. A specific sale transaction is described below, but should the
described transaction fail to close for any reason, management intends to 
promptly seek an alternative purchaser under comparable terms. Any        
   shareholder who is opposed to a sale of the Texas-based assets shall have the
   right to withhold his, her or its consent. A non-response shall be treated as
a negative vote.                                                          

SUMMARY DESCRIPTION OF THE PROPOSED TRANSACTION                                 

During the quarter ended March 31, 2000, the Company entered with         
negotiations with several interested third parties for the sale of all the
   Company's Texas-based oil and gas leases, the equipment associated with those
 leases owned by the Company, and the stock of AEOC, the Company's operating
   subsidiary. AEOC does not own any of the leases but does solely in connection
with such leases. The Company received several written and verbal offers. 
After consideration of the relative merits of each such offer, the Company
entered into an agreement to sell its Texas-based assets to Northen Lights
 Energy, Ltd., a Nassau, Bahamas corporation ("NLE") for a purchase price of
$4,000,000, the highest written offer received for the assets.            

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The NLE Agreement provides for an advance payment prior to closing of     
$750,000, which has been fully funded. A total of $500,000 of this initial
  sum was deposited in Hycarbex's Pakistan account. The remaining $250,000 was
 utilized by the Company for transaction related liabilities. The closing of
the sale transaction is currently scheduled for June 26, 2000, subject to 
satisfactory due diligence by NLE and further subject to approval by the  
   Company's shareholders. Upon this initial funding, NLE assumed control of the
field operations managed by AEOC.                                         

  In the event that NLE elects to close, the sum of $2,950,000 will be paid to
the Company at the closing date. The Company must utilize approximately   
   $1,750,000 of these funds to discharge existing liens against the oil and gas
 leases as a part of its closing responsibilities. The NLE Agreement further
  provides that the $300,000 balance of the purchase price shall be held in an
escrow account by NLE for an additional 45 days beyond the closing date as
  security for repayment of any Company liabilities paid by NLE during the due
 diligence period and as security for any well plugging liabilities or other
liabilities of the Company which may affect the assets acquired.          

   The book value of the Company's Total Assets was $24,729,130 as of the end of
the March 31, 2000 fiscal period, based upon the full cost method of      
accounting for the Company's oil and gas properties whereby all costs     
associated with the acquisition, exploration and development of the       
  properties are capitalized in a "full cost pool". The portion of these Total
  Assets attributed to the Texas oil and gas leases is $15,643,873 and the sum
of $8,428,554 has been capitalized in connection with the Pakistan        
concession. The book value of an oil and gas property which is calculated 
   using the full cost method of accounting does not necessarily approximate the
  fair market value of the particular property. The fair market value approach
is generally determined by the price a willing purchaser will pay for the 
  property. Many factors can affect the market value, including the recoupment
period for the investment based upon the particular property's income     
generating potential over a finite period. Book value, on the other hand, 
  will generally incorporate as a part of the calculation the long-term income
based upon development of the proven reserves. If the proposed sale is    
consummated, the Company will realize a loss against book value equal to  
 $11,643,873 based upon the difference between the $15,643,873 in book value
attributed to these assets and the $4,000,000 sale price.                 

  In the event that NLE elects not to close the transaction, the NLE Agreement
  provides that the $750,000 advance payment made by NLE upon execution of the
  Agreement shall be treated as loan by NLE to the Company and shall be repaid
 by the Company out of 25% of the proceeds of production received each month
 from the Texas assets until paid in full. NLE shall maintain control of the
  field operations through AEOC during this repayment period. In the event NLE
fails to close the transaction for any reason, the Company intends to     
  promptly seek another purchaser for the Texas-based assets under terms which
take into account all factors then affecting market value, such as the    
  prevailing price for oil, the level of productivity of the existing wells at
that time, the value of the equipment and the then estimated proved       
  hydrocarbon reserves under the oil and gas leases. Management expects that a
 sale to a purchaser other than NLE would be under comparable purchase price
terms. THE CONSENT HEREBY REQUESTED FROM EACH SHAREHOLDER LIKEWISE        

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SEEKS APPROVAL OF A SALE OF THE TEXAS-BASED ASSETS TO AN ALTERNATIVE      
PURCHASER SHOULD THE NLE TRANSACTION FAIL TO CLOSE FOR ANY REASON.        

ADDITIONAL ITEM 1 INFORMATION TO BE CONSIDERED BY EACH SHAREHOLDER              

(i) The principal executive officers of the Company are located at 9315 FM
 1489, Simonton, Texas. The mailing address of the Company is P. O. Box 489,
  Simonton, Texas 77456-0489. The address of Northern Lights Energy, Ltd., the
proposed purchaser, is East Bay Center, Suite B-66, Box N-1836, Nassau,   
Bahamas. Its principal contact is Brian Longpre.                          

(ii) Nevada State law does not require that a submission date for the     
consents be specified.                                                    

(iii) There are no dissenter's rights applicable to any shareholder who is
not in favor of the transaction which is the subject of the requested     
consents.                                                                 

(iv) The only class of outstanding voting securities is Common Stock and  
there were 36,196,944 Common shares outstanding as of May 31, 2000. Each  
  share is entitled to one vote. The Company is unaware of the identity of any
 principal or major holders. The officers and directors of the Company, as a
group, hold less than 5% of the Common Stock.                             

(v) No action is to be taken in connection with the election of directors,
  any compensation plan, any pension plan, any retirement plan, or any options
warrants or rights to purchase.                                           

 (vi) No action is to be taken in connection with the selection, approval or
ratification of the Company's accountant.                                 

(vii) No action is to be taken in connection with any cash or noncash     
compensation plan.                                                        

(viii) No action is to be taken in connection with the modification of any
class of securities or the authorization or issuance of any securities.   

 (ix) No action is to be taken with respect to the restatement of any asset,
capital or surplus account.                                               

(x) No action is to be taken with respect to any report of the Company.   

   (xi) No action is to be taken with respect to any amendment of any charter or
bylaw provision.                                                          

  (xii) No other action is to be taken on any matter not specifically referred
to in this Schedule.                                                      

ITEM 2.  STATEMENT THAT PROXIES ARE NOT SOLICITED.                              

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. 

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ITEM 3. INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE ACTED     
UPON.                                                                     

 No director or officer of the Company during the period commencing with the
  beginning of the last fiscal year, or an associate of the foregoing persons,
has an interest in the proposed transaction. No director has informed the 
Company that he intends to oppose the solicitation of consents to the sale
transaction.                                                              

ITEM 4.  PROPOSALS BY SECURITY HOLDERS.                                         

There are no known alternative or opposing proposals by existing          
shareholders.                                                             

EXHIBITS AND ITEMS INCORPORATED BY REFERENCE                                    

 The Company hereby incorporates by reference its Form 10-Q Quarterly Report
  for the quarter ended March 31, 2000, filed with the Securities and Exchange
Commission on May 12, 2000.                                               

 Attached to this Information Statement as an Exhibit is the form of Consent
delivered to the shareholders of record.                                  

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 EXHIBIT - FORM OF CONSENT

 THE AMERICAN ENERGY GROUP, LTD.
WRITTEN CONSENT OF SHAREHOLDER

THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
 THE AMERICAN ENERGY GROUP, LTD.

    The undersigned, as the record holder of shares of Common Stock, par value
$.001 per share (the "Common Stock") of the American Energy Group, Ltd., a      
Nevada corporation (the "Company") hereby takes the following action with       
respect to all of the shares of the Company's Common Stock of which the         
undersigned is the record holder on May 30, 2000.                               

[ ] CONSENTS           [ ] DOES NOT CONSENT 

    PROPOSAL: To the sale by the Company of all of its Texas-based oil and gas
leases and related assets (including the stock of its operating subsidiary, The 
American Energy Operating Corp. (i) to Northern Lights Energy, Ltd. for a       
purchase price of $4,000,000 pursuant to an existing purchase agreement with    
such party; or, (ii) to an alternative purchaser on comparable terms, in the    
discretion of the Board of Directors, should the proposed purchase by Northern  
Lights Energy, Ltd. fail to be consummated by the parties for any reason.       

   If the undersigned has signed and returned this Consent but has failed to
check a box marked "CONSENTS" or "DOES NOT CONSENT" for the proposal, the       
undersigned agrees that he, she or it shall be deemed to have CONSENTED to the  
actions described in the proposal.                                              

                             X____________________________________
                              (Signature of Stockholder)

                             X____________________________________
                                 (Signature of Stockholders if
                               held jointly)

                              Dated:________________________________
                                    (Please Date this Consent)

NOTE: Your signature should appear as your name appears hereon. If signing as   
attorney, executor, administrator, trustee or guardian, indicate such capacity. 
All joint tenants should sign. When the Consent is given by a corporation, it   
should be signed by an authorized officer. If your shares are held in the name  
of a brokerage firm, bank nominee or other institution, only such holder can    
sign the Consent. Please contact the person responsible for your account and    
give instructions to sign and return the Consent. The Board of Directors        
requests that you sign and date the Consent and return it as soon as possible.  
Below are instructions for voting your shares by access to an Internet site or, 
alternatively, a toll-free telephone number. If you have questions about giving 
your Consent or require assistance, please contact James M. Hughes at (210)     
227-2200 between 8:30 and 5:00 p.m. Central Daylight Time.                      

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14C’ Filing		Date		First		Last			Other Filings
		6/26/00		5
Filed on:		6/14/00
For Period End:		6/1/00		1		4
		5/31/00		6
		5/30/00		4		8
		5/12/00		7					10-Q
		3/31/00		2		7			10-Q
									List all Filings