CROSS
      - ASSIGNMENT AND

    STIPULATION
      OF INTEREST

    


    
      	STATE OF TEXAS	§
	 	§
	COUNTY OF GALVESTON	§


    

     

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

    


    WHEREAS,
      Smith Energy, Smith 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 Smith Energy and Smith
      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, Smith Energy and Smith 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, Smith Energy and Smith, 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. Smith
      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 Smith 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, Smith Energy, Smith Energy
      Co., Inc., Smith 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 Pamela Gale Johnson, 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

        

      

      
        Page
          1

        
          

        

      

      
         

      

       

    

    AEG
      hereby grants, conveys, releases, and confirms unto Smith Energy the above
      described property, to have and to hold in severalty, with all and singular
      the
      hereditaments and appurtenances thereto unto Smith 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 Smith
      Energy the following rights, title and interest:

    


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

    


    ii) All
      interests and rights owned or claimed by Smith Energy and Smith in and to a
      three percent (3%) overriding royalty interest in the Maco Stewart A Lease
      designated on Exhibit
      “A”
      as the
“Maco Stewart ‘A’ Lease as specified in that certain Partial Assignment of Oil
      and Gas Leases dated May 12, 1986, between Luck Petroleum Corporation, Smith
      Energy, Smith Energy Co., Inc., Smith and O & G Carriers, Inc., recorded
      under Film Code number 004-56-0395, 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 Smith Energy or Smith may have
      acquired from O & G Carriers, Inc. by subsequent instrument.

    


    Smith
      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, Smith 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 Smith Energy but
      not
      otherwise.

    


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

    


    Smith
      Energy, Smith 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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            - Assignment and

          Stipulation
            of Interest

        

      

      
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          2

        
          

        

      

      
         

      

    

    


    IN
      WITNESS WHEREOF, Smith Energy, Smith 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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            - Assignment and

          Stipulation
            of Interest

        

      

      
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	 	SMITH
              ENERGY 1986A PARTNERSHIP
	 	acting by and through its general
              partner, 
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Howard
              A. Smith, General Partner
	 	Smith
              Energy 1986A Partnership
	 	 
	 	 
	 	
              
HOWARD
              A.
              SMITH


    

     

    
      	 	 	 
	 	THE
              AMERICAN ENERGY GROUP, LTD.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Pierce
              Onthank, President and CEO
	 	 


    

    


    
      


      
        	STATE OF NEW YORK	§
	 	§
	COUNTY OF _______	§


      

    

    


    Before
      me
      the undersigned authority on this ____ day of ________, 2006, personally
      appeared Howard A. Smith, individually and as general partner of Smith 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 State Of New York
	 	 


    

     

    
      
        
          	STATE OF NEW YORK	§
	 	§
	COUNTY OF _______	§


        

      

    

     

    Before
      me
      the undersigned authority on this ____ day of ________, 2006, personally
      appeared Pierce Onthank, 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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            - Assignment and

          Stipulation
            of Interest

        

      

      
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    EXHIBIT
      “A”

    


    Maco
      Stewart A Lease:

    Oil
      and
      Gas Lease dated April 30, 1935, between MACO STEWART, 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.

    


    Maco
      Stewart B Lease:

    Oil,
      Gas
      and Mining Lease dated May 4, 1949, between MACO STEWART and LOUISE BISBEY
      STEWART, as Lessors, and JOHN W. MECOM, 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 VIRGINIA B. BALL, MACO STEWART III, WELLS
      STEWART and ROBERT GEORGE 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 VIRGINIA B. BALL, MACO STEWART II, WELLS STEWART and ROBERT GEORGE
      BISBEY, Trustee, as Lessors.

     

    
      
        
          Cross
            - Assignment and

          Stipulation
            of Interest

        

      

      
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