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1 Release Date: 31 October 2014 ASX Announcement Quarterly Report for the period ending 30 September 2014 Release Date: 31 October 2014, Melbourne, Australia: Highlights American Patriot strikes oil with first well in Montana Fort Peck 6-32 IP s at 508bopd Oil producer less than four months post listing Expanded Northern Star project JV to include Anadarko Minerals adding the producing Lustre field Second conventional well drilling end of November part of a 17 well programme First of four horizontal unconventional wells due to be drilled November 2014 (AOW free carried) Acquired an additional 13,796 net acres during the quarter in Montana and DJ Basin Colorado Exposure to 35,000 net acres in Montana, Colorado, Utah, Wyoming Successful completion of IPO during the quarter and listing on ASX on 9 July 2014 It has been a busy quarter for American Patriot (AOW.ASX) since listing in early July. American Patriot have acquired more acreage across all projects, entered into new joint ventures and importantly become an oil producer less than 4 months after listing. As a company AOW have delivered on every aspect of the business plan as explained to investors at the outset: and will continue to focus on new acreage acquisitions, new JVs and further low risk drilling in the next quarter This initial success validates AOW s JV business model protecting shareholder funds with the recently completed company making JV with experienced and proven US producing operators Anadarko Minerals and Great Western bringing the producing Lustre and Midfork oil fields along with significant development acreage into a single project. Key project updates are outlined below: Northern Star Project, -12,602 net acres Valley County, Montana AOW strikes oil with first well - Fort Peck 6-32 well IP s at 508bopd at the Lustre field, Montana Post quarter end on the 21 st October AOW announced that it had become a commercial oil producer less than four months after listing on the ASX. The first conventional well Fort Peck 6-32 has been successfully completed with an Initial Production (IP) of 508bopd and has settled to an average flow rate of 216bopd (99% oil) in the Lustre Field at the Northern Star project, Montana. The well has been producing for 9 days and is naturally flowing to the surface at a sustained rate from the Mission Canyon formation on a 12/64 choke. Anadarko Minerals, the operator of the well is in the advanced stages of planning for the next conventional well with drilling expected by the end of November. There is existing infrastructure in the region to store and transport the oil from the site. AOW successfully negotiated the right to back into the first conventional well at cost, post completion of the drilling with testing recently commencing. Commercial oil production so soon after listing is a major milestone for American Patriot and secures the future of the company, significantly de-risking the Northern Star project. The well results have exceeded our expectations and with a stabilised natural flow rate of 216bopd (double the 100bopd average for nearby wells), the economics of the project are compelling. The well is flowing naturally and is capable of info@ap-oil.com.au website: 1

2 a significantly higher flow rate on pump. Vertical wells can be drilled cheaply and with a low decline rate the wells should payback in less than 6 months at current oil prices and are economic at very low oil prices. At the current flow rate the estimated ultimate recovery of the well is potentially double nearby producers which have averaged almost 200,000bbls each. With a 17 well programme ahead of us and the potential for many more infill wells, this discovery represents a significant potential new conventional oil resource, worth hundreds of millions of dollars which could create significant shareholder wealth and cash flow to underpin the business. The Upper Mission Canyon zone was a secondary target in this well so with the benefit of an experienced operator, Anadarko Minerals, we have potentially discovered a significant new oil play in this area and with an additional two zones in the Mission Canyon still to be tested, even higher rates are possible. Importantly, we have yet to test the primary targets in the Charles B and Ratcliffe intervals, which well logs and an independent petrophysical analysis, all indicate are the most prospective zones in the well. Nearby wells in the field produce oil from some or all of these reservoir intervals. The successful Fort Peck 6-32 well is the first of a potential 17 conventional oil prospects generated from modern 3D seismic data, with multiple stacked reservoirs that are proven producers in the region with access to infrastructure and significant upside potential. The 3D seismic survey, and subsequent interpretation shows a multitude of targets which were missed when the field was developed in the early 80 s without the aid of the 3D. Success in all or some of these prospects open up the possibility of extended in-fill drilling and additional field development. This well result is also significant for the potential of the unconventional drilling programme which is to commence in late November as the data will be used to optimise the location and orientation of the horizontal well which will be drilled up-dip of this conventional well. Drilling on the first Ratcliffe unconventional horizontal well is expected in November 2014 and AOW is free carried with no cost cap by Great Western on the first two Ratcliffe horizontal wells with an additional 2 optional wells. Success on these wells could unlock a significant, new, tight oil resource with the potential to create significant acreage value and upside for shareholders. The vertical Fort Peck 6-32 well was drilled to a depth of 7273ft into the Duperow formation. The well was swabbed first and it has then flowed naturally. The target reservoir is a fractured limestone. The well is a direct offset to a well which produced over 200,000bbls from the Ratcliffe.The timing for testing of these additional zones will depend on production from the upper Mission Canyon and if production continues at present rates, the upper zones may not be tested for months. There are 16 productive wells within a mile of the Fort Peck 6-32 location that have produced at an average of over 150,000 barrels of oil. Expanded Northern Star project JV to include Anadarko Minerals adding producing Lustre field On the 9 th September 2014, AOW announced that Anadarko Minerals has partnered with AOW and Great Western (through its 100% subsidiary Treasure Exploration Company LLC ( Treasure )) on the Northern Star project in Valley County Montana. The new JV brings the producing Lustre and Midfork conventional oil fields into AOW s wider Northern Star JV project. Anadarko delivers 11,957 gross acres and with all partners pooling their acreage the Northern Star JV project now covers 61,489 gross acres. AOW s net acreage position is unchanged post the transaction at 12,602 net mineral acres and importantly AOW remains free carried for 2 horizontal Ratcliffe wells and 2 optional horizontal wells by Treasure. This company making transaction fulfills the company s ambition at the outset of bringing the Lustre and Midfork oil fields into a single project. AOW is now in partnership with two experienced and proven US producing operators. Planning is well underway for the first horizontal well scheduled for late November with three drilling permits applied for in August on its key Northern Star Project in Montana, USA. info@ap-oil.com.au website: 2

3 The new JV with Anadarko and Treasure delivered a portfolio of 17 new conventional oil prospects generated by 3D seismic data, with multi stacked targets and proven producers in the region. These prospects are in addition to AOW s existing Ratcliffe unconventional oil play. Significantly Anadarko provided the JV with access to a proprietary multimillion dollar 3D survey covering the entire Lustre and Midfork fields and access to its geophysical data base including well logs, cores and drill stem tests. Following this transaction AOW now controls a significant acreage position in the Rocky Mountain Basins with 35,260 net mineral acres to AOW under lease across 5 key projects and we are in advanced discussions on a new JV on our acreage in Colorado. Prior to completion of this transaction on the 21 st August AOW announced that it had acquired an additional 12,638 gross acres (3,369 net acres to AOW) under the Area of Mutual interest (AMI) the lease terms are for 3 to 5 years and there are no seismic or drilling commitments on the acreage acquired. *American Patriots JV partner is Treasure Exploration who is operator and 100% subsidiary of Great Western Oil and Gas Company which is an affiliate of Denver, USA based Broe Group of Companies. Rough House Project, 8,251 net acres DJ Basin, Colorado Acquisition of 26,943 gross acres in DJ Basin, Washington, Arapahoe & Elbert County, Colorado Post completion of the IPO the Rough House heads of agreement transaction was completed whereby AOW has acquired a 90% interest in 6,633 Gross Acres (3,747 net acres) On 17 July 2014 the Company announced that it had acquired a 100% working interest in 15,910 additional gross acres (2,678 net acres) in the DJ Basin, Washington County Colorado. This acreage has been acquired from a private company, on 16 July The purchase price is undisclosed, the lease terms are for 5 years with 4 years remaining and there are no seismic or drilling commitments on the acreage acquired. The transaction settled on 8 th August AOW has an 82% net retained interest in the net mineral acres. On the 31 July 2014 the Company announced that it had acquired a 100% working interest in 4,400 additional gross acres (2,200 net acres) in the DJ Basin, Elbert County, Colorado. This acreage has been acquired from a private company, on 31 July The lease terms are for 5 years with 4 years remaining and there are no seismic or drilling commitments on the acreage acquired. The transaction settled on 8 th August Both these transactions lifted AOW s holding to 26,943 gross acres (8,251 net acres), in the oil producing DJ Basin in Colorado (Rough House project). Recently prospective acreage in Washington County and the DJ Basin has been the subject of very significant leasing activity supported by positive drilling results from a number of major companies. For example, Nighthawk Energy has 14 conventional wells producing at a combined rate of 2000bopd and Cascade Petroleum has over 10 wells permitted for drilling nearby in 2014.Both companies have significant acreage positions right next door to AOW s acreage. AOW is in advanced discussions with a potential JV partner on the Colorado acreage and is looking to close a JV transaction in the 4 th quarter Panther Project, 10,293 net acres, Garfield County, Montana AOW acquired an additional 3,360 gross acres (1,803 net acres to AOW) during the quarter on the Panther project, lifting its holding to 12,150 gross acres/10,293 net mineral acres to AOW, in Garfield County in Montana. This acreage was acquired from a private company, on 21 August 2014 and the lease terms are for 5 years with 4 years remaining and there are no seismic or drilling commitments on the acreage acquired. AOW is in the process of marketing this project to potential JV partners. Successful completion of IPO and listing on ASX During the quarter, American Patriot Oil and Gas Limited (ASX: AOW) closed its initial public offering (IPO) after successfully raising over $8 million and began trading on the Australian Securities Exchange info@ap-oil.com.au website: 3

4 (ASX) on 9 th July The IPO was backed by institutional and high net worth investors in Australia, encouraged by the company s extensive portfolio of assets in the Rocky Mountain basins of the USA and also the business model which is focused on early entry into oil fields and establishing joint ventures to fund exploration across its portfolio. American Patriot listed with million shares on issue and a market capitalisation of $28 million based on the offer price of 20 cents per share. American Patriot has a tight and committed register focussed on maximising shareholder value. Corporate Subsequent to the end of quarter, the Company completed its pro-rata entitlements offer of options raising $193,204 through the issue of 64,401,284 options. Current Petroleum tenements as at 30 September 2014 United States Acreage Location Working Interest Joint Venture Partner Gross Acres Held at 30 September 2014 Acres acquired during the quarter Northern Star (includes 230 leases) Montana Depth Dependent Treasure Exploration/Andarko Minerals 61,489 24,775 Panther Prospect (includes 28 leases) Montana 100% 12,150 3,360 Southern Sun (includes 6 leases) Utah 100% 3,728 - Overthrust (includes 1 lease) Wyoming 100% Rough House (includes 58 leases) Colorado 90% CLM 26,943 26,943 There were no acres disposed of during the period. For further information please contact: American Patriot Oil and Gas: CEO Alexis Clark Media & Investor Enquiries: Ian Howarth Collins Street Media ( ) Or visit the website: info@ap-oil.com.au website: 4

5 About American Patriot Oil and Gas American Patriot Oil and Gas (AOW) is an oil and natural gas exploration and development (E&P) group headquartered in Melbourne, Australia with a U.S. office in Denver Colorado. The company has approximately 35,260 net mineral acres under lease across 5 key projects. The projects are geographically focused on tight oil exploration and development opportunities in the Rocky Mountain Basins. Since its establishment, AOW has assembled a portfolio of prospective oil and gas exploration assets in the USA and has completed joint venture agreements on its key Northern Star asset in Montana with US based operators Great Western Oil and Gas and Anadarko Minerals. AOW s business model is to internally generate prospects using geological knowledge, capture significant land positions at a low cost, and then reduce or remove risk capital exposure through a farm- out of a majority interest to a qualified US operator in a cash and carry deal. The directors of AOW all have significant experience with public companies in the oil and gas industry and will use their experience and energy to build an outstanding oil and gas production and exploration company. AOW project map: info@ap-oil.com.au website: 5