CROSS - ASSIGNMENT AND STIPULATION OF INTEREST

CROSS - ASSIGNMENT AND

STIPULATION OF INTEREST

STATE OF TEXAS	§
	§
COUNTY OF GALVESTON	§

THIS CROSS - ASSIGNMENT and STIPULATION OF INTEREST (“Assignment”) is between XXXXX ENERGY 1986A PARTNERSHIP, a New York limited partnership (“Xxxxx Energy”), XXXXXX X. XXXXX (“Xxxxx”) and THE AMERICAN ENERGY GROUP, LTD., a Nevada corporation (“AEG”).

WHEREAS, Xxxxx Energy, Xxxxx and AEG each own interests in certain oil and gas leases and lands located in Galveston County, Texas, which leases and lands are described more particularly on Exhibit “A” attached hereto and incorporated by reference herein (the “Leases”);

WHEREAS, disputes have arisen between AEG, on the one hand, and Xxxxx Energy and Xxxxx on the other hand, concerning the extent of the interests owned by each in the Leases and the rights of each with respect to the interests owned; and

WHEREAS, AEG, Xxxxx Energy and Xxxxx have resolved their differences and desire to stipulate to the interests owned by each in the Leases.

Now, therefore, in consideration of the premises and to effect the settlement of the disputes between AEG, Xxxxx Energy and Xxxxx, it is hereby covenanted, granted, concluded and agreed by and between the parties, and each of them covenants, grants, concludes and agrees, for itself and its successors and assigns, that a stipulation of interest and cross - conveyance of the Leases be made as follows, viz:

1. Xxxxx Energy shall from henceforth have, hold, possess and enjoy, in severalty, by itself and to itself and its successors and assigns, free from any and all claims of AEG the following rights, title and interest:

i) All interests owned or claimed by AEG including and above the depth of ten thousand feet (10,000’) in the Leases;

ii) All interests owned or claimed by AEG in and to the interest reserved to Luck Petroleum Corporation as a 15% back in reversionary interest at 125% recoupment of Xxxxx Energy 1986A Partnership and O & G’s investment costs, as specified in paragraph 8 of that certain Partial Assignment of Oil and Gas Leases dated May 12, 1986, between Luck Petroleum Corporation, Xxxxx Energy, Xxxxx Energy Co., Inc., Xxxxx and O & G Carriers, Inc., recorded under Film Code number ###-##-####, of the Official Public Records of Galveston County, Texas, as same was conveyed to AEG pursuant to that certain Assignment of Oil and Gas Leases dated June 13, 1997, from Xxxxxx Xxxx Xxxxxxx, Chapter 7 Trustee for the Estate of Luck Petroleum Corporation under Case Number 93-48561-H3-7, reference to which is made for all purposes.

Cross - Assignment and

Stipulation of Interest

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AEG hereby grants, conveys, releases, and confirms unto Xxxxx Energy the above described property, to have and to hold in severalty, with all and singular the hereditaments and appurtenances thereto unto Xxxxx Energy, its successors and assigns, forever. And for the same consideration, AEG hereby binds itself, its successors and assigns, respectively, to warrant and forever defend all and singular the said premises against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through or under AEG, but not otherwise.

2. AEG shall from henceforth have, hold, possess and enjoy, in severalty, by itself and to itself and its successors and assigns, free from any and all claims of Xxxxx Energy the following rights, title and interest:

i) All interests and rights owned or claimed by Xxxxx Energy and Xxxxx below the depth of ten thousand feet (10,000’) in the Leases;

ii) All interests and rights owned or claimed by Xxxxx Energy and Xxxxx in and to a three percent (3%) overriding royalty interest in the Xxxx Xxxxxxx A Lease designated on Exhibit “A” as the “Xxxx Xxxxxxx ‘A’ Lease as specified in that certain Partial Assignment of Oil and Gas Leases dated May 12, 1986, between Luck Petroleum Corporation, Xxxxx Energy, Xxxxx Energy Co., Inc., Xxxxx and O & G Carriers, Inc., recorded under Film Code number 000-00-0000, of the Official Public Records of Galveston County, Texas, reference to which is made for all purposes, including any interests in said overriding royalty which Xxxxx Energy or Xxxxx may have acquired from O & G Carriers, Inc. by subsequent instrument.

Xxxxx Energy hereby grants, conveys, releases, and confirms unto AEG the above described property, to have and to hold in severalty, with all and singular the hereditaments and appurtenances thereto unto AEG, its successors and assigns, forever. And for the same consideration, Xxxxx Energy hereby binds itself, its successors and assigns, respectively, to warrant and forever defend all and singular the said premises against every person whomsoever lawfully claiming or to claim the same or any part thereof by, through or under Xxxxx Energy but not otherwise.

This Assignment shall be effective at _________ o’clock, ___. m. C.S.T. on April ___, 2006.

Xxxxx Energy, Xxxxx and AEG agree to execute, to acknowledge and to deliver to the other any additional instruments, notices, division orders, transfer orders and other documents and to do any other acts and things which may be necessary to more fully and effectively assign and convey to the other the Leases intended to be assigned hereby.

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Stipulation of Interest

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IN WITNESS WHEREOF, Xxxxx Energy, Xxxxx and AEG have executed this Assignment on the date of the acknowledgment annexed hereto, but this Assignment shall be effective as of the Effective Date hereinabove recited.

THE BALANCE OF THIS PAGE IS INTENTIONALLY BLANK.

SIGNATURES APPEAR ON THE FOLLOWING PAGE.

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Stipulation of Interest

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XXXXX ENERGY 1986A PARTNERSHIP

acting by and through its general partner,

By:  

Xxxxxx X. Xxxxx, General Partner

Xxxxx Energy 1986A Partnership

XXXXXX X. XXXXX

THE AMERICAN ENERGY GROUP, LTD.

By:  

Xxxxxx Xxxxxxx, President and CEO

STATE OF NEW YORK	§
	§
COUNTY OF _______	§

Before me the undersigned authority on this ____ day of ________, 2006, personally appeared Xxxxxx X. Xxxxx, individually and as general partner of Xxxxx Energy 1986A Partnership, a New York limited partnership, and acknowledged to me that he executed the same in his individual capacity and in the capacity therein stated on behalf of such partnership for the purposes and consideration therein expressed.

Notary Public in and for the Xxxxx Xx Xxx Xxxx

XXXXX XX XXX XXXX	§
	§
XXXXXX OF _______	§

Before me the undersigned authority on this ____ day of ________, 2006, personally appeared Xxxxxx Xxxxxxx, as President and CEO of The American Energy Group, Ltd., a Nevada corporation, and acknowledged to me that he executed the same in the capacity therein stated on behalf of such partnership for the purposes and consideration therein expressed.

Notary Public in and for the State Of Connecticut

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Stipulation of Interest

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EXHIBIT “A”

Xxxx Xxxxxxx A Lease:

Oil and Gas Lease dated April 30, 1935, between XXXX XXXXXXX, as Lessor and COAST PETROLEUM CORPORATION, as Lessee, covering 393 acres, more or less, recorded in Volume 516, Page 313, Oil and Gas Records, Galveston County, Texas.

Xxxx Xxxxxxx B Lease:

Oil, Gas and Mining Lease dated May 4, 1949, between XXXX XXXXXXX and XXXXXX XXXXXX XXXXXXX, as Lessors, and XXXX X. XXXXX, as Lessee, covering 1,400 acres, more or less, recorded in Volume 779, Page 573, Oil and Gas Records, Galveston County, Texas, insofar and only insofar as said lease is described as containing 280 acres in that certain Partial Release, dated January 28, 1985, between ATLANTIC RICHFIELD COMPANY, as Lessee, and XXXXXXXX X. XXXX, XXXX XXXXXXX III, XXXXX XXXXXXX and XXXXXX XXXXXX GISBEY, Trustee, as Lessors, recorded in Film Code ###-##-####, Deed Records, Galveston County, Texas, and also in that unrecorded Partial Release of January 28, 1985, between ATLANTIC RICHFIELD COMPANY, as Lessee, and XXXXXXXX X. XXXX, XXXX XXXXXXX XX, XXXXX XXXXXXX and XXXXXX XXXXXX XXXXXX, Trustee, as Lessors.

Cross - Assignment and

Stipulation of Interest

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