AMERICAN ENERGY GROUP LTD - FORM 10-Q/A

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EX-31.1 - CERTIFICATION - AMERICAN ENERGY GROUP LTD	american_ex311.htm
EX-32.1 - CERTIFICATION - AMERICAN ENERGY GROUP LTD	american_ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2011

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _______________

Commission file number: 0-26402

THE AMERICAN ENERGY GROUP, LTD.

(Exact name of Registrant as specified in its charter)

Nevada		87-0448843
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1 Gorham Island Suite 303 Westport, Connecticut		06880
(Address of principal executive offices)		(Zip code)

203-222-7315

(Registrant’s telephone number including area code)

___________________________

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, Par Value $.001 Per Share

___________________________

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes x No o

APPLICABLE ONLY TO CORPORATE ISSUERS

As of November 14, 2011, the number of Common shares outstanding was 34,385,333

Transitional Small Business Issuer Format (Check one) Yeso No x

EXPLANATORY NOTE

This Amendment No. 1 (this “Amendment”) on Form 10-Q/A amends the Quarterly Report of The American Energy Group, Ltd. (the “Company”) for the quarterly period ended September 30, 2011, as filed with the Securities and Exchange Commission (the “SEC”) on November 14, 2011 (the “Original Form 10-Q”). The Company is filing this Amendment solely to update management’s discussion of the Company’s liquidity and capital resources in light of the sudden cessation in November, 2011, of the royalty payments due from Hycarbex, Inc. for production from the Yasin petroleum concession block in Pakistan.

This Amendment does not amend or otherwise update any other information in the Original Form 10-Q. Accordingly, this Amendment should be read in conjunction with the Original Form 10-Q and with the Company’s filings with the SEC subsequent to the Original Form 10-Q.

THE AMERICAN ENERGY GROUP, LTD.

INDEX TO FORM 10-Q

		PAGE
PART I-FINANCIAL INFORMATION

Item 1.	Financial Statements		4

Item 2.	Management’s Discussion and Analysis of Financial Condition And Results of Operations		9

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		13

Items 4 and 4T.	Controls and Procedures		13

PART II-OTHER INFORMATION

Item 1.	Legal Proceedings		14

Item 1A	Risk Factors		14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		14

Item 3.	Defaults Upon Senior Securities		14

Item 4.	Submission of Matters to a Vote of Security Holders		14

Item 5.	Other Information		14

Item 6.	Exhibits		14

PART I-FINANCIAL INFORMATION

THE AMERICAN ENERGY GROUP, LTD.

Balance Sheets

	September 30, 2011			June 30, 2011

Assets
Current Assets
Cash	$	65,847		$	246,061
Oil and gas sales receivable		57,869			-
Prepaid expenses		39,439			47,955
Total Current Assets		165,930			294,016
Property and Equipment
Office equipment		29,265			29,265
Leasehold improvements		26,458			26,458
Accumulated depreciation		(33,797	)		(32,544	)

Net Property and Equipment		21,926			23,179
Other Assets
Investment in oil and gas working interest – related party		1,583,914			1,583,914
Security deposit		26,209			26,209
Total Other Assets		1,610,123			1,610,123
Total Assets	$	1,795,204		$	1,927,318

Liabilities and Stockholders’ Equity

Current Liabilities
Accounts payable	$	54,948		$	64,336
Security deposits		13,200			13,200
Note payable		11,408			19,811
Accrued liabilities		918,387			889,840
Total Current Liabilities		997,943			987,187
Total Liabilities		997,943			987,187
Stockholders’ Equity

Common stock, par value $0.001 per share; authorized 80,000,000 shares; 34,385,333 and 34,385,333 shares issued and outstanding, respectively		34,353			34,353
Capital in excess of par value		10,948,465			10,948,465
Accumulated deficit		(10,185,557	)		(10,042,687	)
Total Stockholders’ Equity		797,261			940,131
Total Liabilities and Stockholders’ Equity	$	1,795,204		$	1,927,318

See accompanying unaudited notes to the financial statements.

THE AMERICAN ENERGY GROUP, LTD.

Statements of Operations

For the Three Months Ended September 30, 2011 and 2010

(Unaudited)

	2011			2010

Revenue – Oil and gas royalties	$	67,579		$	-

General and Administrative Expenses
Administrative salaries		104,420			115,791
Legal and professional		34,152			31,793
General and administrative		50,311			28,648
Office overhead expenses		18,509			32,723
Depreciation		1,253			1,579
Total Expenses		208,645			210,534
Net Operating (Loss)		(141,066	)		(210,534	)

Other Income and (Expense)
Interest expense		(1,804	)		(3,779	)

Total Other Income and (Expense)		(1,804	)		( 3,779	)

Net (Loss) Before Tax		(142,870	)		(214,313	)
Income Tax		-			-

Net (Loss)	$	(142,870	)	$	(214,313	)
Basic Loss per Common Share	$	(0.00	)	$	(0.01	)

Weighted Average Number of Shares Outstanding		34,385,333			33,182,325

See accompanying unaudited notes to the financial statements.

THE AMERICAN ENERGY GROUP, LTD.

Statements of Cash Flows

For the Three Months Ended September 30, 2011 and 2010

(Unaudited)

	2011			2010
Cash Flows From Operating Activities
Net loss	$	(142,870	)	$	(214,313	)

Adjustments to reconcile net loss to net cash
(used in) operating activities:
Depreciation		1,253			1,579
Common stock issued for current debt and services		-			19,500
Changes in operating assets and liabilities:
(Increase) decrease in oil and gas sales receivable		( 60,644	)		-
(Increase) decrease in prepaid expenses		8,516			-
Increase (decrease) in accounts payable		(9,388	)		1,163
Increase (decrease) in accrued expenses
and other current liabilities		20,144			64,667

Net Cash (Used In) Operating Activities		( 180,214	)		(127,404	)

Cash Flows From Investing Activities
Funds reserved for acquisitions		-			106,000
Net Cash Provided By Investing Activities		-			106,000

Cash Flows From Financing Activities
Net Cash Provided By (Used In) Financing Activities		0			0
Net (Decrease) in Cash		( 180,214	)		(21,404	)
Cash and Cash Equivalents, Beginning of Period		246,061			25,585
Cash and Cash Equivalents, End of Period	$	65,847		$	4,181

Cash Paid For:
Interest	$	1,804		$	3,779
Taxes	$	-		$	-

Non-Cash Financing Activities:
Common stock issued for payment of debt	$	-		$	19,500

See accompanying unaudited notes to the financial statements.

THE AMERICAN ENERGY GROUP, LTD.

Notes to the Financial Statements

September 30, 2011

Note 1 - General

The accompanying unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements include normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its June 30, 2011 Annual Report on Form 10-K. Operating results for the three months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending June 30, 2012.

Note 2 – Basic Loss Per Share of Common Stock

	For the three			For the three
	months ended,			months ended,
	Sept 30, 2011			Sept 30, 2010
Loss (numerator)	$	(142,870	)	$	(214,313	)
Shares (denominator)		34,385,333			33,182,325
Per Share Amount	$	(0.00	)	$	(0.01	)

The basic loss per share of common stock is based on the weighted average number of shares issued and outstanding during the period of the financial statements. Stock warrants convertible into 2,360,000 shares of common stock are not included in the basic calculation because their inclusion would be antidilutive, thereby reducing the net loss per common share.

Note 3 - Revenue Recognition

Revenue from oil and gas royalties consists solely of overriding royalty interests and recognized after production has occurred on the oil and gas concession in which the Company has an interest. Royalty income is reported on a net revenue basis.

Note 4 - Common Stock

No shares of common stock were issued during the quarter ended September 30, 2011.

THE AMERICAN ENERGY GROUP, LTD.

Notes to the Financial Statements

September 30, 2011

Note 5 – Investment in Oil and Gas Working Interest – Related Party

During the quarter ended December 31, 2009, the Company executed an agreement to acquire from Hycarbex – American Energy, Inc. (Hycarbex), a related party, a two and one half percent (2-1/2%) working interest in each of the 2,258 square kilometer Sanjawi Block No. 3068-2, Zone II, Baluchistan Province, Pakistan, and 1,229 square kilometer Zamzama North Block No. 2667-8, Zone III, Sindh Province, Pakistan. In exchange for the working interest, the Company issued (1) 2,000,000 shares of common stock to Hycarbex, (2) 100,000 warrants with a three year duration to purchase an additional 100,000 shares at $1.75 per share and (3) $100,000 in cash.

The Company has the option to convert the two and one half percent working interests described above to a one and one half percent gross royalty working interest at any time.

Note 6 – Subsequent Events

In accordance with ASC 855-10, management of the Company has reviewed all material events from September 30, 2011 through the date the financial statements were issued and has determined that there were no material events that warrant any additional disclosure.

Note 7 – Going Concern

The Company’s financial statements have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments related to the recoverability of assets or classification of liabilities that might be necessary should the Company be unable to continue as a going concern. At September 30, 2011, while the Company’s current assets exceeded its current liabilities, it has recorded negative cash flows from operations and net losses in this period and prior fiscal periods. The preceding circumstances combine to raise substantial doubt about the Company’s ability to continue as a going concern. The Company has received its initial two royalty payments from the operator of the Pakistan petroleum concession and based upon management’s expectation of continuous production in future periods, management expects that a regular royalty revenue stream will be forthcoming.

ITEM 2- MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains statements about the future, sometimes referred to as “forward-looking” statements. Forward-looking statements are typically identified by the use of the words “believe,” “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “project,” “propose,” “plan,” “intend” and similar words and expressions. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that describe our future strategic plans, goals or objectives are also forward-looking statements.

Readers of this report are cautioned that any forward-looking statements, including those regarding the Company or its management’s current beliefs, expectations, anticipations, estimations, projections, proposals, plans or intentions, are not guarantees of future performance or results of events and involve risks and uncertainties, such as:

. The future results of drilling individual wells and other exploration and development activities;

. Future variations in well performance as compared to initial test data;

. Future events that may result in the need for additional capital;

. Fluctuations in prices for oil and gas;

. Future drilling and other exploration schedules and sequences for various wells and other activities;

. Uncertainties regarding future political, economic, regulatory, fiscal, taxation and other policies in Pakistan;

. Our future ability to raise necessary operating capital.

The forward-looking information is based on present circumstances and on our predictions respecting events that have not occurred, which may not occur or which may occur with different consequences from those now assumed or anticipated. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including the risk factors detailed in this report. The forward-looking statements included in this report are made only as of the date of this report. We are not obligated to update such forward-looking statements to reflect subsequent event or circumstances.

Overview

In November, 2003, we sold our Hycarbex-American Energy, Inc. (“Hycarbex”) subsidiary, which was the owner and operator of the Yasin 2768-7 Petroleum Concession Block in the Republic of Pakistan, to a foreign corporation. We retained in the sale an 18% overriding royalty interest in the Yasin Block. Drilling of the first well in Pakistan as to which our overriding royalty pertains, named the Haseeb No. 1 Well, was successfully completed by Hycarbex-American Energy, Inc. (“Hycarbex”), in the fourth quarter of the fiscal year ended June 30, 2005. A state-of-the-art, third party owned, surface facility for the well was constructed for Hycarbex after well completion. During September 2010, Hycarbex connected the well to the Sui Southern Gas Company pine line, and commenced gas sales under an Extended Well Test but the production quickly ceased due to mechanical difficulties encountered in the commissioning of the surface facility owned by the third party. The production re-commenced into the pipe line in July, 2011, at the initial rate of 3.5 million cubic feet of gas per day (MMCFD). Hycarbex has advised that this rate is expected to be gradually increased to 15 MMCFD during the Extended Well Test. Such production can likewise experience temporary interruptions to permit testing, calibration and other activities common with an extended well test.

In the fall of 2011, we received the initial two production revenue payments for Yasin production, but in November, 2011, Hycarbex, the operator of the Yasin concession, suspended the monthly revenue payments due to Hycarbex’s financial difficulties and advised that it would continue to accrue the revenues to the Company until it resolved its financial difficulties. Although the daily production rate has increased to over 8 million cubic feet per day under the Extended Well Test, the accrued production revenues due to the Company from August through the date of this report have not been distributed to the Company. In December, 2011, we initiated legal proceedings against Hycarbex and others in the High Court of Islamabad, Pakistan to enforce the revenue payment obligations. In November, 2011 and February, 2012, we sold shares of Common Stock to certain private investors to provide working capital to the Company and anticipate making future sales as needed for working capital requirements should the pending litigation not result in the near term resumption of production revenue payments to the Company.

Results of Operations

Our operations for the three months ended September 30, 2011 reflected a net operating loss of $141,066 as compared to $210,534 for the three months ended September 30, 2010. The decrease in net loss from operations in the amount of $69,468 for the quarter ended September 30, 2011 as compared to the quarter ended September 30, 2010 is a direct result of oil and gas revenue earned during the current quarter in the amount of $67,579. There were no revenues from operations during the quarter ended September 30, 2010. Prior to September, 2011, we had no recurring income stream and relied upon the proceeds of securities sales and loans. In the fall of 2011, Hycarbex, the operator of the Yasin concession, commenced revenue payments to the Company but then abruptly suspended the monthly revenue payments in November, 2011, due to Hycarbex’s financial difficulties after only two revenue payments totaling $30,425.11covering Hycarbex’s April 2011 and July 2011 production. Hycarbex advised us in its notice of suspension that it would continue to accrue the revenues to the Company until it resolved its financial difficulties. As a result, the accrued production revenues due to the Company from August through the date of this report have not been distributed to the Company.

Hycarbex performed scheduled maintenance on the surface gas treatment facility and replaced the amine fluid in September, 2011, which enabled production to increase from 3.6 million cubic feet per day to 7.6 million cubic feet per day in October. Unofficial verbal reports have indicated to Company management that production has temporarily climbed as high as 9.2 million cubic feet per day, but the written reports from Hycarbex to the Pakistan Oil Ministry in February indicate a daily production rate of 8.3 million cubic feet per day. Furthermore, the production rate volumes actually reported by Hycarbex to the Pakistan Oil Ministry indicate that the average daily production for October, 2011 was 7.4 million cubic feet per day, for November, 2011, was 8.4 million cubic feet per day, and for December, 2011, was 8.3 million cubic feet per day. Thus, we have based our production and revenue accrual estimates and assumptions near that daily figure due to Hycarbex’s failure to provide us with updated, accurate production and sale information. Given the early information received from Hycarbex as to the BTU content of the gas sold, management believes that the appropriate estimated gas price applicable to these estimated sale volumes is $1.76 per million cubic feet of gas sold. Using this price and using the actual production reported by Hycarbex to the Pakistan Oil Ministry for the period, would result in an estimated accrual to the Company for the quarter ending December 31, 2011, of $235,623. Actual monthly accruals for the period could be higher or lower depending upon the actual BTU content.

In December, 2011, we initiated legal proceedings against Hycarbex and others in the High Court of Islamabad, Pakistan to enforce the revenue payment obligations. Management is optimistic that such proceedings will be successful in causing the resumption of payments to the Company. In order to provide necessary working capital for the Company while these revenue payments are being wrongfully withheld, we sold to private investors 1,500,000 shares of Common Stock in November, 2011, for $150,000 and 666,667 shares of Common Stock in February, 2012, for $100,000. The funds will be utilized for general and administrative expenses incurred by the Company for the first four (4) months of 2012, including the non-recurring legal costs associated with the pending litigation in Pakistan. We will make additional sales of securities in the future to fund the Company’s working capital needs as they arise in the event that the pending litigation in Pakistan does not result in a near term resumption of monthly revenue payments from Hycarbex. Despite management’s expectations, there can be no assurance of litigation success in the short term or upon final resolution on the merits, and there can be no assurance of management’s ability to consummate securities sales to meet working capital requirements. (See Note 7 – Going Concern footnote to Financial Statements above).

Liquidity and Capital Resources

Prior to the connection of the Haseeb No. 1 to the gas marketing pipe line, we funded our operations through private loans, all of which have been repaid, and through the private sale of securities. The re-connection to the marketing pipe line and resulting gas sales under the Extended Well Test were expected to provide future cash flow sufficient to meet the Company’s ongoing expenses because the level of production was sufficiently high to cause production revenues to exceed the Company’s monthly operating capital requirements. As stated above, written reports from Hycarbex to the Pakistan Oil Ministry in February indicate a daily production rate of 8.3 million cubic feet per day. Furthermore, the production rate volumes actually reported by Hycarbex to the Pakistan Oil Ministry indicate that the average daily production for October, 2011 was 7.4 million cubic feet per day, for November, 2011, was 8.4 million cubic feet per day, and for December, 2011, was 8.3 million cubic feet per day. Given the early information received from Hycarbex as to the BTU content of the gas sold, management believes that the appropriate estimated gas price applicable to these estimated sale volumes is $1.76 per million cubic feet of gas sold. Based upon these figures, the accrued production revenues, if paid by Hycarbex, are sufficient to fund our ongoing operations.

The November, 2011, suspension of revenue payments by Hycarbex due to its financial difficulties after just two (2) monthly revenue payments caused management to develop a different short term approach to funding its operations. In order to provide necessary working capital for the Company while these revenue payments are being wrongfully withheld, we sold to private investors 1,500,000 shares of Common Stock in November, 2011, for $150,000 and 666,667 shares of Common Stock in February, 2012, for $100,000. The funds will be utilized for general and administrative expenses incurred by the Company through the first four (4) months of 2012, including the non-recurring legal costs associated with the pending litigation in Pakistan which was initiated in December, 2011 against Hycarbex and others in the High Court of Islamabad, Pakistan to enforce the revenue payment obligations. Management is optimistic that such proceedings will be successful in causing the resumption of payments to the Company. However, we will make additional sales of securities in the future to fund the Company’s working capital needs as they arise in the event that the pending litigation in Pakistan does not result in a near term resumption of monthly revenue payments from Hycarbex. Despite management’s expectations, there can be no assurance of litigation success in the short term or upon final resolution on the merits, and there can be no assurance of management’s ability to consummate securities sales to meet working capital requirements. (See Note 7 – Going Concern footnote to Financial Statements above).

Business Strategy and Prospects

In July, 2011, the Haseeb #1 Well began producing into the Sui Southern Gas Company line under the Extended Well Test Gas Sales and Purchase Agreement covering the sale of gas from the Haseeb Gas Field on Yasin Block (2768-7) signed by the parties in December, 2009. While the Company received only the initial two production payments from Hycarbex before the wrongful suspension and accrual of payments, we are optimistic and pending litigation in Pakistan will be successful in causing a resumption of monthly payments. We are further optimistic that the Company will continue to be successful in making sales of securities to private investors to fund the Company’s working capital requirements. We further expect that the monthly production currently being accrued by Hycarbex to the Company’s interest will increase as the sale volume under the Extended Well Test is gradually increased to the target daily production level of 15 million cubic feet per day . Our business strategy is to use these sales of securities to meet our administrative expenditure requirements until the monthly payments derived from production are resumed. Further, since the accrual rate exceeds the Company’s actual and historical monthly cash requirements for operations, management expects to seek similar non-cost bearing production purchase opportunities in Pakistan and other petroleum producing regions.

The Yasin Block, to date, has no reported Proved Reserves as that term and the calculation for discounted future net cash flows for reporting purposes is mandated by the Financial Accounting Standards Board in Statement of Financial Accounting Standards No. 69, titled “Disclosures About Oil and Natural Gas Producing Activities”. However, based upon test results upon the Haseeb No. 1 and other data collected by Hycarbex from its drilling and seismic activities, we strongly believe that the Yasin Block acreage contains oil and gas producing physical structures which are worthy of further exploration. If successfully developed, our reserved 18% production interest will likely be a good source of cash revenues because the royalty, by its nature, entitles us to share in gross, rather than net, production. We expect to use these anticipated revenues for further investment in other revenue generating assets or business activities.

On October 29, 2009, the Company executed an agreement to acquire from Hycarbex a two and one half percent (2-1/2%) working interest in each of the 2,258 square kilometer Sanjawi Block No. 3068-2, Zone II, Baluchistan Province, Pakistan, and 1,229 square kilometer Zamzama North Block No. 2667-8, Zone III, Sindh Province, Pakistan, concessions, each of which is operated by Heritage Oil and Gas Limited. Heritage is an affiliate of Heritage Oil, PLC, an independent oil and gas company which focuses its oil and gas operations in Africa, the Middle East, and Russia. Heritage’s shares trade on the London Stock Exchange under the symbol HOIL with a secondary listing on the Toronto Stock Exchange under the symbol HOC. Heritage owns a 54% interest in the Zamzama North Block and a 48% interest in the Sanjawi Block. Other working interest participants in the two Blocks are Sprint Energy (Private) Limited, an affiliate of Pakistan-based JS Group, and Tracker Energy (Private) Limited, an affiliate of Pakistan-based TPL Holdings, Ltd. Under the terms of the agreement with Hycarbex, the American Energy Group, Ltd’s 2-1/2% working interests are “carried” by Hycarbes for the initial two (2) wells on the Sanjawi Block and the initial three (3) wells on the Zamzama North Block. The term “carried” means that the costs associated with work programs, seismic, road preparation, drillsite preparation, rig and equipment mobilization, drilling, reworking, testing, logging completion and governmental fees (except taxes and production) shall be borne by Hycarbex. Infrastructure costs such as pipelines and surface facilities constructed after the first discovery well on each Block are not carried. After the initial carried wells have been drilled, American Energy Group, Ltd. shall bear its proportionate share of drilling and exploration costs. The agreement provides and option to American Energy group, Ltd. to convert its working interest in any well at any time to a 1.5% gross royalty interest free of any exploration costs or operating costs.

According to information set forth on Heritage’s website [www.heritageoilplc.com], the Sanjawi Block is considered a very viable prospect due to the recent oil discovery to the West, a number of gas fields to the Southeast and the presence of oil seeps. The Sanjawi Block is dominated by a series of broad East-West trending surface features including the Dabbar and Warkan Shah anticlines. These are large structures, with the Dabbar anticline being some 300 square kilometers in area. The Zamzama North Block is immediately to the North of the Zamzama Gas Field, a major Upper Cretaceous gas accumulation. Heritage has acquired approximately 750 kilometers of fair to good quality, 2D seismic and has mapped a number of structural leads. According to Heritage, further seismic is being acquired and a new well on the Zamzama North Block is planned in the near future . If such development activities occur and are successful, then our Zamzama North interest would also be a source of revenue in the future.

Off Balance Sheet Arrangements

We had no off balance sheet arrangements during the three months ended September 30, 2011.

ITEM 3-QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not a party to nor does it engage in any activities associated with derivative financial instruments, other financial instruments and/or derivative commodity instruments.

ITEMS 4 AND 4T - CONTROLS AND PROCEDURES

In conjunction with this Report on Form 10-Q and the certification of the disclosures herein, and as required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), the Company’s principal executive officer and principal financial officer, Pierce Onthank, evaluated the effectiveness of the Company’s disclosure controls and procedures and the Company’s internal control over financial reporting as of September 30, 2011. The assessment was conducted in accordance with the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, the Company’s management concluded that there was no material weakness in the Company’s internal control over financial reporting, and concluded that the Company’s disclosure controls and procedures and the Company’s financial control over financial reporting are effective as of September 30, 2011. The Company is extremely small and has just begun receiving revenues from gas royalties. Management believes that the internal control over financial reporting should be improved through an increase in staff size, segregation of financial duties and responsibilities and appointment of an audit committee by the Board of Directors.

There have been no changes in the Company’s internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 which occurred during the fiscal quarter ended September 30, 2011, that have materially affected or are reasonably likely to materially affect the internal control over financial reporting. This report does not include an attestation report of the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission because the attestation rules are not yet applicable to the Company.

PART II-OTHER INFORMATION

ITEM 1-LEGAL PROCEEDINGS

There were no legal proceedings affecting the Company during the quarter ended September 30, 2011.

ITEM 1A-RISK FACTORS

Not applicable.

ITEM 2-UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The consideration paid by American Energy Group, Ltd. for the Sanjawi and Zamzama North carried working interests includes 2,000,000 shares of Common Stock and 100,000 Warrants to purchase Common Stock with a 3-year duration and an exercise price of $1.75 per share. We are entitled to redeem the Warrants in the event that our Common Stock trades at $2.00 or more for twenty (20) consecutive trading days by providing written notice to the Warrant holder, upon which notice, the holder shall have thirty (30) days to exercise the Warrant. The parties have stipulated that the value of the Carried Working Interests to be purchased and the corresponding value of the securities given for the Carried Working Interests is equal to $3,500,000. Since the securities were issued to acquire oil and gas convertible working interests, the issuance did not result in any proceeds to the Company.

ITEM 3-DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the quarter ended September 30, 2011.

ITEM 5-OTHER INFORMATION

None.

ITEM 6-EXHIBITS

The following documents are filed as Exhibits to this report:

Exhibit 31.1 – Certification by R. Pierce Onthank, President, Chief Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a);

Exhibit 32.1 – Certification by R. Pierce Onthank, President, Chief Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Section 1350(a) and (b).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	THE AMERICAN ENERGY GROUP, LTD.

DATED: March 2, 2012	By:	/s/ R. Pierce Onthank
		R. Pierce Onthank, President, Chief Executive Officer,
		Principal Financial Officer and Director

AMERICAN ENERGY GROUP LTD - FORM 10-Q/A - March 2, 2012

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AMERICAN ENERGY GROUP LTD Reports