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1 Release Date: 21 October 2014 ASX Announcement American Patriot strikes oil with first well Fort Peck 6-32 well IP s at 508bopd at the Lustre field, Montana American Patriot - oil producer less than 4 months after listing First conventional well - Fort Peck 6-32, IP s at 508 bopd, settles at 216bopd Producing from Upper Mission Canyon zone, a secondary target Best targets still to be tested Second conventional well drilling end of November 17 well programme Validates recent company making JV and acquisition of the Lustre field First of four horizontal unconventional wells due to be drilled November 2014 (AOW free carried) American Patriot Oil and Gas Ltd (ASX: AOW) has 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. American Patriot CEO Alexis Clark said, 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 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. info@ap-oil.com.au website: 1

2 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. This initial success validates our 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. Since listing in early July we have delivered on every aspect of our business plan as explained to investors at the outset: acquiring more acreage, entering into new joint ventures and early drilling. As a company we will continue to focus on new acreage acquisitions, new JVs and further low risk drilling The vertical Fort Peck 6-32 well was drilled to a depth of 7273ft into the Duperow formation and has successfully produced from the Upper Mission Canyon formation at 216bopd over the last 9 days. The well was swabbed first and it has then flowed naturally. There are additional highly prospective zones to test in the Charles B and Ratcliffe intervals with the Ratcliffe interval a proven nearby producer. 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. For further information please contact: American Patriot Oil and Gas: CEO Alexis Clark Media & Investor Enquiries: Or visit the website: Collins Street Media Simon Jemison Ian Howarth info@ap-oil.com.au website: 2

3 Devonian Mississippian Madison Group Mission Canyon Charles Northern Star Project The JV covers 61,489 gross acres and 53,199 mineral acres for the entire project in Valley County, Montana and contains the producing Lustre and Midfork conventional oil fields. AOW controls 12,602 net mineral acres in the Northern Star project. The JV contains conventional and unconventional prospects across two separate play areas the conventional project and the unconventional Ratcliff oil and gas prospect. The working interests are split as follows: Conventional Project: Mission Canyon, Charles, Nisku, Lodgepole formations Operator Anadarko Minerals Working interests Anadarko Minerals 46.75% Great Western* 37.5% American Patriot 15.75% Unconventional Project: Ratcliffe formation Operator Great Western* Working interests Anadarko Minerals 27.5% Great Western 51.0% American Patriot 21.5% Anadarko Minerals has used a recently shot 66 square mile 3D survey to develop an inventory of 17 conventional oil prospects. These prospects are significant because they contained multiple stacked targets, thus significantly reducing risk and because the prospects were missed by Exxon in the mid 1980 s when only 2D seismic was available to aid in development of the field. On the conventional wells, the Mission Canyon, Charles, Nisku and Lodgepole formations have been prolific oil producers in the region within 10 miles of AOW s acreage and with over 100 wells drilled to date. Some of these wells have EUR s of over 500mbbl oil with a few producing up to 2mmbbl oil. Drilling costs for the vertical wells are expected to be in the vicinity of $1.5-2m per well fully completed. AOW is fully funded for its 15.75% share of any conventional well costs estimated to be $0.236-$0.284m. On the Ratcliffe prospect the operator, Great Western Oil and Gas, is in the process of permitting two horizontal Ratcliffe wells with the first well planned in November AOW is free carried with no cost cap by Great Western on the first two Ratcliffe horizontal wells with an additional 2 optional wells. The stratigraphic column for the basin is as follows: Mississippian and Devonian Stratigraphy, Williston Basin, Montana Charles A zone Charles B zone Ratcliffe zone Upper zone Lower Mission Canyon Lodgepole Bakken Three Forks Nisku Duperow *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 info@ap-oil.com.au website: 3

4 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 Montana project map: Northern Star Project Montana South Dakota Idaho Wyoming Nebraska Utah Colorado DISCLAIMER Certain statements included in this release constitute forward looking information. This information is based upon a number of estimates and assumptions made on a reasonable basis by the Company in light of its experience, current conditions and expectations of future developments, as well as other factors that the Company believes are appropriate in the circumstances. While these estimates and assumptions are considered reasonable, they are inherently subject to business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company s actual results to differ materially from those expressed or implied in any forward-looking information provided by the Company, or on behalf of, the Company. Such factors include, among other things, risks relating to additional funding requirements, oil prices, exploration, acquisition, development and operating risks, competition, production risks, regulatory restrictions, including environmental regulation and liability and potential title disputes. Forward looking information is no guarantee of future performance and accordingly investors are cautioned not to put undue reliance on forward looking information due to the inherent uncertainty therein. Forward looking information is made as at the date of this release and the Company disclaims any intent or obligation to update publicly such forward looking information, whether as a result of new information, future events or results or otherwise. Technical information contained in this announcement in relation to the projects of the Company have been reviewed by Mr Robert Hoar, Chief Geologist American Patriot, BA Geology (Hamilton College), MSc Geology (University of Vermont) who has more than 30 years experience in the practise of petroleum geology. Mr Hoar is a member of the American Association of Petroleum Geologists AAPG and the Rocky Mountain Association of Petroleum Geologists (RMAG) and he consents to the inclusion in this announcement of the information in the form and context in which it appears. info@ap-oil.com.au website: 4

5 Figure 1: Northern Star Project American Patriot/Great Western/Anadarko Fort Peck website: 5