Investment in Oil and Gas Working Interest - Related Party

3 Months Ended

Sep. 30, 2012

Notes to Financial Statements

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.