UNITED
STATES SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549











QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF


THE SECURITIES EXCHANGE ACT
OF 1934.




For
the quarterly period ended March 31, 2009





333-52812


(Commission
File Number)




American
Energy Production, Inc.


(Exact
name of registrant as specified in its charter)




Delaware
              
              74-2945581(State
      or other jurisdiction of incorporation)
              
              (IRS
      Employer Identification Number)


6073 Hwy 281 South, Mineral
Wells, TX 76067


(Address of principal executive
offices including zip code)





(940) 445-0698


(Registrant’s telephone number,
including area code)





Indicate
by check mark whether the registrant (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 xNo o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.


Large accelerated filer o                                      Accelerated
filer                      
o


Non-accelerated filer   o                                        
Smaller reporting company x


(Do
not check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes 
o  No 
x





As of May
1, 2009, the Registrant had 20,360,389 shares outstanding of its $0.001 par
value common stock.


-1-





American
Energy Production, Inc. and Subsidiaries


Form 10-Q
Index


March 31,
2009





PagePart I-Financial
InformationItem 1. Financial Statements
                3Consolidated
      Balance Sheets at March 31, 2009 (Unaudited) and December 31, 2008
      (Audited)
                4Consolidated
      Statements of Operations for the Three Months Ended March 31, 2009 and
      2008 (Unaudited)
                5Consolidated
      Statements of Cash Flows for the Three Months Ended March 31, 2009 and
      2008 (Unaudited)
                6Notes
      to Consolidated Financial Statements (Unaudited)
                7Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
                12Item 4T. Controls and
      Procedures
                16Part
      II-Other InformationItem 6.
      Exhibits
                18Signatures
                20





-2-





PART
I


FINANCIAL
INFORMATION





Item
1-Consolidated Financial Statements (Unaudited)


American
Energy Production, Inc. and Subsidiaries


Consolidated
Balance Sheets





(Unaudited)3/31/2009
                
                
                12/31/2008Current
      AssetsCash
                
                $
                63,574
                
                
                $
                88,937Accounts
      receivable
                
                
                19,369
                
                
                
                -Other
      current assets
                
                
                -
                
                
                
                146Total
      Current Assets
                
                
                82,944
                
                
                
                89,083Property
      and equipment, net
                
                
                3,883,211
                
                
                
                4,011,903Other
      AssetsDevelopment
      programs - related party
                
                
                140,128
                
                
                
                134,092Other
                
                
                1,724
                
                
                
                1,188Total
      Other Assets
                
                
                141,852
                
                
                
                135,280Total
      Assets
                
                
                4,108,007
                
                
                
                4,236,266Current
      LiabilitiesAccounts
      payable
                
                $
                333,756
                
                
                $
                312,903Other
      current liabilities
                
                
                12,347
                
                
                
                11,855Due
      to related parties
                
                
                3,483,236
                
                
                
                3,295,763Notes
      payable
                
                
                2,115,348
                
                
                
                2,115,062Accrued
      interest payable
                
                
                987,954
                
                
                
                946,385Accrued
      payroll taxes and penalties
                
                
                84,314
                
                
                
                84,161Lease
      payable
                
                
                16,131
                
                
                
                16,131Total
      Current Liabilities
                
                
                7,033,086
                
                
                
                6,782,260Asset
      Retirement Obligations
                
                
                514,878
                
                
                
                509,155Total
      Liabilities
                
                $
                7,547,964
                
                
                $
                7,291,415Commitments
      and Contingencies (Note 8)Convertible
      preferred stock, Series A, $0.0001 par value,5,000,000
      shares authorized, 3,500,000 shares outstanding
                
                $
                350
                
                
                $
                350Common
      stock, $0.0001 par value,500,000,000
      shares authorized, 20,360,389 shares outstanding
                
                
                2,037
                
                
                
                2,037Additional
      paid in capital
                
                
                24,067,655
                
                
                
                24,067,655Accumulated
      deficit
                
                
                (26,607,998
                )
                
                
                (26,223,191
                )(2,537,956
                )
                
                
                (2,153,149
                )Less:  Subscription
      Receivable
                
                
                (902,000
                )
                
                
                (902,000
                )Total
      Stockholders' Deficit
                
                
                (3,439,956
                )
                
                
                (3,055,150
                )Total
      Liabilities and Stockholders' Deficit
                
                $
                4,108,007
                
                
                $
                4,236,266





See
accompanying notes to unaudited consolidated financial statements.


-3-


American
Energy Production, Inc. and Subsidiaries


Consolidated
Statements of Operations


(Unaudited)


Three
      Months Ended March 31,2009
                                                                                                  
                                                                                                  
                                                                                                  2008Revenues:Oil
      sales, net
                                                                                                  
                                                                                                  $
                                                                                                  230,936
                                                                                                  
                                                                                                  
                                                                                                  $
                                                                                                  438,219Operating
    ExpensesCompensation
                                                                                                  
                                                                                                  
                                                                                                  57,078
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  46,243Consulting
                                                                                                  
                                                                                                  
                                                                                                  1,500
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -Depreciation,
      depletion and accretion
                                                                                                  
                                                                                                  
                                                                                                  134,415
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  141,301Rent
                                                                                                  
                                                                                                  
                                                                                                  1,740
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  11,810General
      and administrative
                                                                                                  
                                                                                                  
                                                                                                  27,445
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  55,631Production
                                                                                                  
                                                                                                  
                                                                                                  290,656
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  424,347Professional
                                                                                                  
                                                                                                  
                                                                                                  29,290
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  50,766Taxes
                                                                                                  
                                                                                                  
                                                                                                  30,057
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  24,345Total Operating
      Expenses
                                                                                                  
                                                                                                  
                                                                                                  572,181
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  754,442Operating Loss
                                                                                                  
                                                                                                  
                                                                                                  (341,245
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (316,223
                                                                                                  )Other Income
      (Expense)Other
      income (expense)
                                                                                                  
                                                                                                  
                                                                                                  100
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  -Interest
      expense
                                                                                                  
                                                                                                  
                                                                                                  (42,161
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (42,335
                                                                                                  )Payroll
      tax expense and penalties
                                                                                                  
                                                                                                  
                                                                                                  (1,501
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (1,501
                                                                                                  )Total Other Income
      (Expense)
                                                                                                  
                                                                                                  
                                                                                                  (43,562
                                                                                                  )
                                                                                                  
                                                                                                  
                                                                                                  (43,836
                                                                                                  )Net Loss
                                                                                                  
                                                                                                  $
                                                                                                  (384,807
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  (360,059
                                                                                                  )Net Loss Per Share - Basic and
      Diluted
                                                                                                  
                                                                                                  $
                                                                                                  (0.02
                                                                                                  )
                                                                                                  
                                                                                                  $
                                                                                                  (0.02
                                                                                                  )Weighted average Shares
      Outstanding
                                                                                                  
                                                                                                  
                                                                                                  20,360,389
                                                                                                  
                                                                                                  
                                                                                                  
                                                                                                  20,363,386


See
accompanying notes to unaudited consolidated financial statements


-4-


American
Energy Production, Inc. and Subsidiaries


Consolidated
Statements of Cash Flows


(Unaudited)


Three Months
    EndedMarch 31,2009
                
                
                2008Cash Flows From Operating
      Activities:Net
      loss
                
                $
                (384,807
                )
                
                $
                (360,059
                )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:Depreciation
      expense
                
                
                109,798
                
                
                
                115,506Depletion
      expense
                
                
                18,894
                
                
                
                19,901Accretion
      expense
                
                
                5,723
                
                
                
                5,894Changes
      in operating assets and liabilities:Accounts
      receivable
                
                
                (19,369
                )
                
                
                -Other
      current assets
                
                
                146
                
                
                
                -Other
      assets
                
                
                (536
                )
                
                
                (402
                )Accounts
      payable
                
                
                20,853
                
                
                
                (32,999
                )Other
      current liabilities
                
                
                492
                
                
                
                68Due
      from related party
                
                
                -
                
                
                
                -Due
      to related party
                
                
                187,474
                
                
                
                297,682Accrued
      interest payable
                
                
                41,569
                
                
                
                41,604Accrued
      payroll taxes payable
                
                
                153
                
                
                
                1,800Net
      Cash Provided By (Used In) Operating Activities
                
                
                (19,612
                )
                
                
                88,996Cash
      Flows From Investing Activities:Investment
      in property and equipment
                
                
                -
                
                
                
                (158,326
                )Payments
      for development programs - related party
                
                
                (6,037
                )
                
                
                (7,180
                )Net
      Cash Used In Investing Activities
                
                $
                (6,037
                )
                
                $
                (165,506
                )Cash Flows From Financing
      Activities:Proceeds
      from note payable
                
                
                1,500
                
                
                
                -Proceeds
      from sale of common stock
                
                
                -
                
                
                
                103,725Proceeds
      from repayment of subscription receivable
                
                
                -Repayment
      of note payable
                
                
                (1,214
                )
                
                
                -Net Cash Provided By Financing
      Activities
                
                
                286
                
                
                
                103,725Net (Decrease) Increase in
      Cash
                
                
                (25,3636
                )
                
                
                27,215Cash
      at Beginning of Period
                
                
                88,937
                
                
                
                133,220Cash at End of
      Period
                
                
                63,574
                
                
                
                160,435Cash
      interest paid
                
                $
                -
                
                
                $
                -


See
accompanying notes to unaudited consolidated financial statements


-5-


American
Energy Production, Inc.
 Notes
to Consolidated Financial Statements
 March 31, 2009
 (Unaudited)




1.  HISTORY
AND NATURE OF BUSINESS





Basis
of Presentation and Concentration





The
accompanying unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form 10-Q
of Regulation S-K.  They do not include all information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. However, except as disclosed herein,
there has been no material change in the information disclosed in the notes to
the consolidated financial statements at December 31, 2008 included in the
Company's Form 10-K (“2008 10-K”) filed with the Securities and Exchange
Commission (“SEC”) on May 6, 2009. The interim consolidated unaudited financial
statements should be read in conjunction with those consolidated financial
statements included in the 2008 10-K.




In the
opinion of Management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments, have been
made.  Operating results for the three months ended March 31, 2009 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2009.




2.  HISTORY
AND NATURE OF BUSINESS





American
Energy Production, Inc. (“American Energy”, “the Company”, “we”, “us”, “our”
“its”) is a publicly traded oil and gas company that is engaged primarily in the
acquiring, developing, producing, exploring and selling of oil and natural gas.
The Company traditionally has acquired oil and gas companies that have the
potential for increased oil and natural gas production utilizing new
technologies, well workovers and fracture stimulation systems. Additionally, the
Company has expanded its scope of business to include the drilling of new wells
with its own equipment through its wholly-owned subsidiary
companies.




The
Company’s wholly-owned subsidiaries are primarily involved in three areas of oil
and gas operations.




1.
Leasing programs.




2.
Production acquisitions




3.
Drilling and producing with proven and emerging technologies.




The
Company believes that for the foreseeable future, the world will be highly
dependent on oil and natural gas. Currently, alternative fuels are far more
expensive than fossil fuels and because of the politically unstable conditions
of many of the energy producing regions of the world.  As a result,
the Company believes that oil and natural gas will remain a key yet volatile
component of the world energy future and furthermore, with the ever increasing
world demand for energy, the domestic production of oil and gas will play an
even greater role in America’s future then it already has to date.


-6-


American
Energy Production, Inc.
 Notes
to Consolidated Financial Statements
 March 31, 2009
 (Unaudited)


3.  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES





Going
Concern





As
reflected in the accompanying financial statements, the Company has a net loss
of $384,807 for the three months ended March 31, 2009.  Additionally,
at March 31, 2009, the Company has minimal cash, has a negative working capital
balance of $6,950,142, a stockholders’ deficit of $3,439,956 and is subject to
certain contingencies as discussed in Notes 1 and 7, which could have a material
impact on the Company’s financial condition and operations. The ability of the
Company to continue as a going concern is dependent on the Company’s ability to
raise capital and generate sufficient revenues and cash flow from its business
plan as an oil and gas operating company.  The financial statements
included in this report do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.





The time
required for us to become profitable is highly uncertain, and we cannot assure
you that we will achieve or sustain profitability or generate sufficient cash
flow from operations to meet our planned capital expenditures, working capital
and debt service requirements. If required, our ability to obtain additional
financing from other sources also depends on many factors beyond our control,
including the state of the capital markets and the prospects for our business.
The necessary additional financing may not be available to us or may be
available only on terms that would result in further dilution to the current
owners of our common stock.





Management
believes that as a result of the one-for-twenty five reverse stock split
recently approved by the shareholders of the Company, the Company will have
several options available to obtain financing from third parties in order to
carry out the business plan of the Company.





Principles
of Consolidation





The
accompanying unaudited consolidated financial statements as of March 31, 2009
include the general accounts of American Energy and its wholly-owned
subsidiaries Bend Arch Petroleum, Inc., Production Resources, Inc., Oil America
Group, Inc. and AMEP Strategic Investments, Inc.  All significant
intercompany transactions, accounts and balances have been
eliminated.





Net
Loss per Common Share




Basic
loss per share is computed only on the weighted average number of common shares
outstanding during the respective periods.




4. PROPERTY
AND EQUIPMENT




Property
and equipment is comprised of the following:





Mar.
      31,
                  
                  
                  Dec.
      31,2009
                  
                  
                  2008Oil
      and gas properties, successful efforts method
                  
                  $
                  4,283,365
                  
                  
                  $
                  4,283,365Other
      property and equipment
                  
                  
                  1,744,067
                  
                  
                  
                  1,744,0676,027,431
                  
                  
                  
                  6,027,431Less:
      Accumulated depreciation and depletion
                  
                  
                  2,144,220
                  
                  
                  
                  2,015,528Property
      and equipment, net
                  
                  $
                  3,883,211
                  
                  
                  $
                  4,011,903




-7-


American
Energy Production, Inc.
 Notes
to Consolidated Financial Statements
 March 31, 2009
 (Unaudited)




5.     DEBT





T
here were no significant changes in our debt during the three months ended March
31, 2009.




6.  DUE
TO RELATED PARTIES




Due to Related Parties:Mar.
      31,
                    
                    
                    Dec.
      31,2009
                    
                    
                    2008Due
      to Chief Executive Officer from salary and
                      rental
      agreement with Company.
                    
                    $
                    510,925
                    
                    
                    $
                    555,125Due
      to Chief Executive Officer from advances
                      and
      rental agreement with Bend Arch
                    
                    
                    894,103
                    
                    
                    
                    932,561Due
      to President of Oil America Group, Inc. from salary agreement with
      Company
                    
                    
                    260,000
                    
                    
                    
                    276,250Due
      to Operator of oil and gas properties
                    
                    
                    1,630,734
                    
                    
                    
                    1,719,300Total
      Due To Related Parties
                    
                    $
                    3,295,763
                    
                    
                    $
                    3,483,236








Effective
July 1, 2003, the Company entered into a salary and equipment rental agreement
with its Chief Executive Officer.  As of January 1, 2005, the $3,500
per month equipment rental agreement with the Chief Executive Officer was
terminated. As of December 31, 2008, the Company owed the Chief Executive
Officer $510,925 for unpaid amounts under the agreement.  During the
three months ended March 31, 2009, the Company accrued but did not pay $30,000
for compensation and increased the balance $14,200 for advances made by the
Chief Executive Officer on behalf of the Company.  As a result, the
accrued balance as of March 31, 2009 is $555,125 and is classified as a
component of Due To Related Parties in the accompanying unaudited consolidated
financial statements.





As of
December 31, 2008, Bend Arch, the Company’s wholly-owned subsidiary, owed the
Chief Executive Officer $894,103 for previous advances and equipment rental
charges at $4,500 per month.  During the three months ended March 31,
2009, the Chief Executive Officer advanced $34,650 of funds to Bend Arch; the
Company recorded $13,500 for equipment rental charges and repaid $9,692 to the
Chief Executive Officer.  As a result, the accrued balance as of March
31, 2009 is $932,561 and is classified as a component of Due to Related Parties
in the accompanying unaudited consolidated financial
statements.




As of
December 31, 2008, the President of Oil America Group, Inc. was owed $260,000
for unpaid salary per an agreement effective January 1, 2005.  The
agreement is for annual compensation of $65,000 and none of this amount has been
paid since the inception of the agreement.  During the three months
ended March 31, 2009, the Company accrued but did not pay $16,250 for
compensation. As a result, the accrued balance as of March 31, 2009 is $276,250
and is classified as a component of Due To Related Parties in the accompanying
unaudited consolidated financial statements.


-8-


American
Energy Production, Inc.
 Notes
to Consolidated Financial Statements
 March 31, 2009
 (Unaudited)


As of
December 31, 2008, the operator of the Company’s oil and gas properties was owed
$1,630,734 for services as the operator of the Company’s oil and gas production
activities.  During the three months ended March 31, 2009, the
operator balance owed was increased for the net activities performed such that
as of March 31, 2009, the net amount due to the operator of the Company’s oil
and gas production activities was $1,719,300 and is classified as a component of
Due to Related Parties in the accompanying financial statements.  The
operator is Proco Operating Co., Inc. (“Proco”) and is a related party as Proco
is controlled by the brother of the Company’s Chief Executive Officer (See Note
10 –Related Party Transactions).




7.  ASSET
RETIREMENT OBLIGATIONS




The
following represents a reconciliation of the asset retirement obligations for
the three months ended March 31, 2009:





Asset
      retirement obligations at December 31, 2008
                    
                    $
                    509,155Revision
      to estimate and additions
                    
                    
                    -Other
      adjustments
                    
                    
                    -Liabilities
      settled during the period
                    
                    
                    -Accretion
      of discount
                    
                    
                    5,723Asset
      retirement obligations at end of period
                    
                    $
                    514,878




8.  STOCKHOLDERS’
EQUITY




Capital
Structure






The
Company is authorized to issue up to 500,000,000 shares of common stock, $0.0001
par value per share, of which 20,360,389 were issued and outstanding as of March
31, 2009.




The
Company is authorized to issue up to 5,000,000 shares of preferred stock,
$0.0001 par value per share, of which 3,500,000 were issued and outstanding as
of March 31, 2009.





The
Company is authorized to issue up to 10,000,000 shares of common stock under the
2008 Non-Qualified Stock Option Plan (the “Plan”).  The Plan is to
assist the Company in securing and retaining Key Participants of outstanding
ability by making it possible to offer them an increased incentive to join or
continue in the service of the Company and to increase their efforts for its
welfare through participation in the ownership and growth of the
Company.  As of March 31, 2009, no grants under the Plan had been
issued by the Company.





There
were no changes in the common stock or preferred stock outstanding balances
during the three months ended March 31, 2009.


-9-


American
Energy Production, Inc.
 Notes
to Consolidated Financial Statements
 March 31, 2009
 (Unaudited)


9.     COMMITMENTS
AND CONTINGENCIES





From time
to time we may become subject to proceedings, lawsuits and other claims in the
ordinary course of business including proceedings related to environmental and
other matters.  Such matters are subject to many uncertainties, and
outcomes are not predictable with assurance.





Prior to
December 31, 2007, the Company and certain of its wholly-owned subsidiaries were
delinquent in the filing of franchise tax reports with the State of Texas and
the State of Delaware and as a result, the Company and certain of its
wholly-owned subsidiaries were not in good standing.  The Company and
its wholly-owned subsidiaries have filed the required reports for both 12-31-07
and 12-31-08 and as a result, management anticipates that the Company and all of
its wholly-owned subsidiaries will be declared in good standing in the near
future.  However, the Company has not received notice that all of the
filings have been accepted and as a result, may face certain penalties and
interest due to the delinquent status of the reports before they were
filed.





In
November 2003, a settlement was negotiated with a lessor to forgive the
outstanding principal and interest on the related note payable resulting from
leased computers once the transfer of 4,000 shares (100,000 shares prior to the
one-for-twenty five reverse stock split) personally held by the Company’s Chief
Executive Officer occurred (see Note 5 – Debt and Note 8 – Related Party
Transactions).  As of December 31 the transaction has not been
finalized as the lessor has not agreed to the settlement.  However,
the shares were transferred to the lessor in September 2003.  The
Company expects to fully resolve this matter in the future at which time the
value of the shares exchanged and any related gain or loss will be determined
and recognized.





The
Company has included $84,314 of unpaid federal payroll taxes and employee
withholdings and related penalties and interest in its accrued expenses as of
March 31, 2009.  Although the unpaid federal taxes are from the
predecessor company, Communicate Now.com, Inc., such amounts are subject to
potential federal tax liens for the Company.





The
Company has $333,756 of accounts payable as of March 31, 2009 and the majority
of this balance is from the predecessor company, Communicate Now.com,
Inc.  Since these trade accounts payable have been outstanding for an
extended period of time with no communication between the Company and any of the
vendors, the Company is commencing the process of eliminating the liabilities
from its records.  However, there can be no assurance that the Company
will be successful in its efforts to eliminate the liabilities.




In
December 2005 and January 2006, the Company determined that certain issuances of
common stock had not been properly disclosed in reports made by the Company’s
transfer agent. The Company discussed these items with the transfer agent and
the transactions have been reconciled and recorded properly in the Company
records. However, the Company believes that two of these transactions, an
unauthorized issuance by the transfer agent of 600,000 shares (15,000,000 shares
prior to the one-for-twenty five reverse stock split) and an additional
unauthorized issuance of 100,000 shares (2,500,000 shares prior to the
one-for-twenty five reverse stock split), should be reimbursed to the Company by
either the third party who received the shares or the transfer agent. The
Company has recorded the fair market valuation of the two transactions in the
amount of $875,000 as a subscription receivable as of March 31, 2009 and is in
discussions with both the third party and the transfer agent to resolve the
issue. As of the date of these financial statements, no resolution of the matter
has been completed.





10.  RELATED PARTY
TRANSACTIONS




We
currently do not have a lease and we are not paying rent on our space. It is
being provided to the Company by the Chief Executive Officer free of
charge.




On
November 1, 2003, the Company entered into an operating agreement for its oil
and gas production activities with Proco, a company controlled by the brother of
the Company’s Chief Executive Officer (See Note 6 – Due to Related Parties). The
term of the operating agreement is equal to the term of the oil and gas leases
held by the Company.  In general, the operator incurs costs which are
billed to the Company and the operator markets and sells oil and collects
payments from customers. Such payments are then remitted to the
Company.  The operator has a first and preferred lien on the leasehold
interests of the Company against any sums due to the Operator by the
Company.




See Note
6 – Due to Related Parties for additional related party
transactions.


-10-




Item
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.





The
following analysis of our financial condition and results of operations
contained in this section should be read in conjunction with our financial
statements and related notes and schedules thereto appearing elsewhere in this
Quarterly Report, as well as the sections entitled "Selected Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and related notes and
schedules thereto included in our annual report on Form 10-K for the year ended
December 31, 2008 filed with the SEC on May 6, 2009.





This
Quarterly Report, including the Management's Discussion and Analysis of
Financial Condition and Results of Operations, contains forward-looking
statements that involve substantial risks and uncertainties. These
forward-looking statements are not historical facts, but rather are based on
current expectations, estimates and projections about our industry, our beliefs,
and our assumptions. Words such as "anticipates", "expects", "intends", "plans",
"believes", "seeks", and "estimates" and variations of these words and similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to risks,
uncertainties, and other factors, some of which are beyond our control and
difficult to predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements, including
without limitation:


•
            economic
      downturns or recessions may impair our portfolio companies'
      performance;


•
            a
      contraction of available credit and/or an inability to access the equity
      markets could impair our lending and investment
  activities;


•
            the
      risks associated with the possible disruption in the Company's operations
      due to terrorism;


•
            future
      changes in laws or regulations and conditions in our operating areas;
      and•
            the
      risks, uncertainties and other factors we identify from time to time in
      our filings with the Securities and Exchange Commission, including our
      Form 10-Ks, Form 10-Qs and Form
8-Ks.





Although
we believe that the assumptions on which these forward-looking statements are
based are reasonable, any of those assumptions could prove to be inaccurate and
as a result, the forward-looking statements based on those assumptions also
could be inaccurate. In light of these and other uncertainties, the inclusion of
a projection or forward-looking statement in this Quarterly Report should not be
regarded as a representation by us that our plans and objectives will be
achieved. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of this Quarterly Report. We
undertake no obligation to update such statements to reflect subsequent
events.





OVERVIEW





American
Energy Production, Inc. (“American Energy”, “the Company”, “we”, “us”,
“our”)  is a publicly traded oil and gas company that is engaged
primarily in the acquiring, developing, producing, exploring and selling of oil
and natural gas. The Company traditionally has acquired oil and gas companies
that have the potential for increased oil and natural gas production utilizing
new technologies, well workovers and fracture stimulation systems.  We
have expanded our scope of business to include the drilling of new wells with
its own equipment through our wholly-owned subsidiary companies.




Our
subsidiaries are primarily involved in three areas of oil and gas
operations.




1.
Leasing Programs.


2.
Production Acquisitions


3.
Drilling and Producing with Proven and Emerging Technologies.


-11-


We
believe that for the foreseeable future, the world will be highly dependent on
oil and natural gas. Currently, alternative fuels are far more expensive than
fossil fuels and because of the politically unstable conditions of many of the
energy producing regions of the world.  We believe that oil and
natural gas will remain a key yet volatile component of the world energy future
and furthermore, that with the ever increasing world demand for energy, the
domestic production of oil and gas will play an even greater role in America’s
future then it already has to date.




As
reflected in the accompanying consolidated financial statements, the Company has
a net loss of $384,807 for the three months ended March 31,
2009.  Additionally, the Company has a negative working capital
balance of $6,950,142 and a stockholders’ deficit of $3,439,956 at March 31,
2009 and is subject to certain contingencies as discussed in Notes 1 and 7 to
the accompanying unaudited consolidated financial statements, which could have a
material impact on the Company’s financial condition and operations. The ability
of the Company to continue as a going concern is dependent on the Company’s
ability to raise capital and generate sufficient revenues and cash flow from its
business plan as an oil and gas operating company.  The financial
statements included in this report do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.





The time
required for us to become profitable is highly uncertain, and we cannot assure
you that we will achieve or sustain profitability or generate sufficient cash
flow from operations to meet our planned capital expenditures, working capital
and debt service requirements. If required, our ability to obtain additional
financing from other sources also depends on many factors beyond our control,
including the state of the capital markets and the prospects for our business.
The necessary additional financing may not be available to us or may be
available only on terms that would result in further dilution to the current
owners of our common stock.




RESULTS
OF OPERATIONS





The
following discussion of the results of operations should be read in conjunction
with our unaudited consolidated financial statements and notes thereto for the
periods presented included in this Form 10-Q.


Three
      Months Ended March 31,2009
                                                              
                                                              
                                                              2008Revenues:Oil
      sales, net
                                                              
                                                              $
                                                              230,936
                                                              
                                                              
                                                              $
                                                              438,219Operating
      ExpensesCompensation
                                                              
                                                              
                                                              57,078
                                                              
                                                              
                                                              
                                                              46,243Consulting
                                                              
                                                              
                                                              1,500
                                                              
                                                              
                                                              
                                                              -Depreciation,
      depletion and accretion
                                                              
                                                              
                                                              134,415
                                                              
                                                              
                                                              
                                                              141,301Rent
                                                              
                                                              
                                                              1,740
                                                              
                                                              
                                                              
                                                              11,810General
      and administrative
                                                              
                                                              
                                                              27,445
                                                              
                                                              
                                                              
                                                              55,631Production
                                                              
                                                              
                                                              290,656
                                                              
                                                              
                                                              
                                                              424,347Professional
                                                              
                                                              
                                                              29,290
                                                              
                                                              
                                                              
                                                              50,766Taxes
                                                              
                                                              
                                                              30,057
                                                              
                                                              
                                                              
                                                              24,345Total Operating
      Expenses
                                                              
                                                              
                                                              572,181
                                                              
                                                              
                                                              
                                                              754,442Operating Loss
                                                              
                                                              
                                                              (341,245
                                                              )
                                                              
                                                              
                                                              (316,223
                                                              )Other Income
      (Expense)Other
      income (expense)
                                                              
                                                              
                                                              100
                                                              
                                                              
                                                              
                                                              -Interest expense
                                                              
                                                              
                                                              (42,161
                                                              )
                                                              
                                                              
                                                              (42,335
                                                              )Payroll tax expense and penalties
                                                              
                                                              
                                                              (1,501
                                                              )
                                                              
                                                              
                                                              (1,501
                                                              )Total Other Income
      (Expense)
                                                              
                                                              
                                                              (43,562
                                                              )
                                                              
                                                              
                                                              (43,836
                                                              )Net Loss
                                                              
                                                              $
                                                              (384,807
                                                              )
                                                              
                                                              $
                                                              (360,059
                                                              )
 -12-


Three Months ended March 31,
2009 compared to 2008.





Revenues:





Revenues
decreased $207,283 or 47%, to $230,936 for 2009 from $438,219 for
2008.  Revenues for 2009 were comprised of $140,780 of oil sales
(4,131 barrels of oil at an average price of $34.08 per barrel), $86,656 of
natural gas sales (20,994 MCF at an average price of $4.13 per MCF) and $3,500
of royalties.   Revenues for 2008 were comprised of $279,693
of oil sales (3,163 barrels of oil at an average price of $88.43 per barrel),
$158,179 of natural gas sales (16,991 MCF at an average price of $9.31 per MCF)
and $347 of royalties.  Although production volume increased, revenues
decreased due to significantly reduced market pricing for oil and gas
products.





Operating
Expenses:





Operating
expenses decreased $182,261, or 24%, to $572,181 for 2009 from $754,442 for
2008.  The decrease was primarily related to a reduction in production
expenses related to the downturn in the oil and gas market as well as the entire
economy.





Other Income
(Expense):





Other
income (expense) decreased $274 of expense, or less than 1% to $43,562 of
expense for 2009 from $43,836 of expense for 2008.  The increase in
expense was primarily from a decrease in interest expense related to notes
payable.





Liquidity
and Capital Resources





Cash and
cash equivalents were $63,574 at March 31, 2009 as compared to $88,937 at
December 31, 2008, and working capital deficit was $6,950,142 at March 31, 2009
as compared to a working capital deficit of $6,693,177 at December 31,
2008.  The increase in the working capital deficit was primarily from
an $187,474 increase in due to related parties and a $41,569 increase in accrued
interest payable.





Operating
Activities





Cash used
in operating activities was $19,612 for the three months ended March 31, 2009
compared to cash provided of $88,996 for the three months ended March 31,
2008.  The decrease in cash provided by operations to cash used in
operations from 2008 to 2009 was primarily from a decrease in the change for due
to related parties and an increase in accounts payable for 2009 as compared to a
decrease in 2008.





Investing
Activities





Cash used
in investing activities was $6,037 for the three months ended March 31, 2009
compared to cash used of $165,506 for the three months ended March 31,
2008.  The decrease in cash used resulted primarily from a decrease in
the investment in property and equipment in 2008 to zero in 2009.





Financing
Activities





Cash
provided by financing activities was $286 for the three months ended March 31,
2009 compared to $103,725 cash used in financing activities for the three months
ended March 31, 2008. The 2008 amount is all from the sale of common stock with
no comparable amount in 2009.


-13-





Our
principal uses of cash to date have been for operating activities and we have
funded our operations previously primarily by incurring indebtedness in the form
of convertible debentures and issuing common stock.  Our debt
obligations pose a significant liquidity risk to our business and stockholders
by requiring us to dedicate a substantial portion of our cash flow to principal
and interest payments on our debt obligations, thereby reducing the availability
of our cash flow to fund working capital, capital expenditures and other
corporate requirements.  Additionally, these debt obligations may
impede us from obtaining additional financing in the future for working capital,
capital expenditures and other corporate requirements and may make us more
vulnerable to a downturn in our business and limit our flexibility to plan for,
or react to, changes in our business.





Debt





There
were no significant changes in our debt for the three months ended March 31,
2009.







Equity
Financing





There was
no equity financing for the three months ended March 31, 2009.





Liquidity




To
continue with our business plan, we will require additional working capital as
we have not been generating sufficient cash from operations to fund our
operating activities through the end of fiscal 2009.  The ability of
the Company to continue as a going concern is dependent on the Company’s ability
to raise capital and generate revenues and cash flow from its business plan as
an oil and gas operating company.





Our
ability to obtain additional financing depends on many factors beyond our
control, including the state of the capital markets, the market price of our
common stock and the prospects for our business.  Additionally, any
necessary additional financing may not be available to us or may be available
only on terms that would result in further dilution to the current owners of our
common stock. Failure to obtain commitments for interim financing and subsequent
project financing would have a material adverse effect on our business, results
of operations and financial condition. If the financing we require to sustain
our working capital needs is unavailable or insufficient or we do not receive
the necessary financing, we may be unable to continue as a going
concern.





Management
believes that as a result of the one-for-twenty five reverse stock split
recently approved by the shareholders of the Company, the Company will have
several options available to obtain financing from third parties in order to
carry out the business plan of the Company.





Off-Balance
Sheet Arrangements





We have
no off-balance sheet arrangements.





-14-


Item
4T.  Controls and Procedures




Under the
supervision and with the participation of our senior management, consisting of
our chief executive officer and our chief financial officer, we conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended, as of the end of the period covered
by this report (the "Evaluation Date").  Based on that evaluation, the
Company’s management, including our chief executive officer and chief financial
officer, concluded that as of the Evaluation Date our disclosure controls and
procedures are not effective to ensure that the information relating to us
required to be disclosed in our Securities and Exchange Commission ("SEC")
reports (i) is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms, and (ii) is accumulated and
communicated to our management, including our chief executive officer and chief
financial officer, as appropriate to allow timely decisions regarding required
disclosure.





Management's Quarterly
Report on Internal Control Over Financial Reporting. (a) The Company's
management is responsible for establishing and maintaining an adequate system of
internal control over financial reporting (as defined in Exchange Act Rule
13a-15(f)).  Our management, including our principal executive officer
and principal accounting officer, conducted an evaluation of the effectiveness
of our internal control over financial reporting using the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control—Integrated Framework.  Based on its evaluation, our
management concluded that there is a material weakness in our internal control
over financial reporting and that our financial reporting controls were not
effective.  A material weakness is a deficiency, or a combination of
control deficiencies, in internal control over financial reporting such that
there is a reasonable possibility that a material misstatement of the Company’s
annual or interim financial statements will not be prevented or detected on a
timely basis.





The
material weakness(s) identified are:





1.
            The
      Company does not have a full time Accounting Controller or Chief Financial
      Officer and utilizes part time consultants to perform these critical
      responsibilities.  This lack of full time accounting staff
      results in a lack of segregation of duties and accounting technical
      expertise necessary for an effective system of internal
      control.





Additionally,
management determined during its internal control assessment the following
weakness(s), while not considered material, are items that should be considered
by the Board of Directors for resolution in the near future:





1.
            The
      management of oil and gas leases including a schedule of oil and gas lease
      agreements and related documents to ensure that the Company has rights to
      Oil and Gas, expiration and renewal dates, contractual payments regarding
      royalties, taxes, improvements, etc.   This ensures correct
      oil and gas capital accounts, revenues and related expenses are calculated
      correctly by Accounting.  Additionally, the CFO should review
      all Oil and gas lease agreements.


2.
            The
      Company should take steps to require that oil and gas expenditures are
      properly classified into the proper categories such as acquisition costs
      and intangible and tangible drilling costs.  Without this, the
      Company cannot properly determine the proper recording and disclosure of
      oil and gas expenditures.


3.
            The
      Company should take steps to enhance the security for bank wire
      transfers.  Currently, the Subsidiary President’s and CEO
      provide instruction to the bookkeepers to initiate a wire
      transfer.  As a security enhancement, the Bank should be
      required to obtain approval from the CEO or CFO to make the wire
      transfer.


4.
            The
      Company IT process should be strengthened as there is no disaster recovery
      plan, no server, and the company accounting records are maintained through
      a consultant accountant.  The Company should consider the
      purchase and implementation of a server and proper backups off site to
      ensure that accounting information is
  safeguarded.


5.
            The
      Company should take steps to implement a policies and procedures
      manual.





In order
to mitigate all of the above weaknesses(s), to the fullest extent possible, all
financial reports are reviewed by the Chief Executive Officer as well as the
Board of Directors for reasonableness. All unexpected results are investigated.
At any time, if it appears that any control can be implemented to continue to
mitigate such weaknesses, it is immediately implemented. The Company has
retained a third-party accounting and financial consulting firm to assist with
the complex technical oil and gas issues and as soon as our finances allow, we
will hire sufficient accounting staff and implement appropriate procedures as
described above.





This
quarterly report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit the Company to provide only management's
report in this quarterly report.





(b)  Changes
in Internal Control over Financial Reporting.  There were no changes
in our internal control over financial reporting that occurred during the last
fiscal quarter that has materially affected or is reasonably likely to
materially affect our internal control over financial reporting.


-15-


PART
II - Other Information




Item
6.  Exhibits





The
following exhibits are filed with this report or are incorporated herein by
reference to a prior filing, in accordance with Rule 12b-32 under the Securities
Exchange Act of 1934.


Exhibit
      No.
                
                Description
      of Exhibit2.1
                
                Certificate
      of Amendment to Articles of Incorporation of American Energy Production,
      Inc. filed with the Delaware Secretary of
    State  (1)3.1
                
                Form
      S-8 Registration Statement under the Securities Act of 1933 filed January
      31, 2003. (1)3.2
                
                Form
      8-A12G for Registration of Certain Classes of Securities Pursuant to
      Section 12 (b) or (g) of the Securities Act of 1934 filed October 10,
      2003. (1)3.3
                
                Definitive
      Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
      filed November 19, 2003. (1)3.4
                
                Form
      N-54 Notification of Election as a Business Development Company dated
      January 12, 2004. (1)3.5
                
                Form
      1-E Notification under Regulation E dated January 14, 2004.
      (1)3.6
                
                Form
      1-E/A Notification under Regulation E dated June 24, 2005.
    (1)3.7
                
                Form
      2-E Notification under Regulation E dated June 27, 2006.
    (1)3.8
                
                Form
      2-E Notification under Regulation E dated December 11, 2006.
      (1)3.9
                
                Definitive
      Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
      filed February 8, 2007. (1)3.10
                
                Form
      N-54C Notification of Withdrawal of Business Development Companies dated
      April 23, 2007. (1)3.11
                
                Definitive
      Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
      filed July 5, 2007. (1)3.12
                
                Form
      S-8 Registration Statement under the Securities Act of 1933 filed
      September 25, 2008. (1)14.1
                
                Code
      of Ethics (1)20.1
                
                Oil
      and Gas property valuation by Blue Ridge Enterprises as of December 31,
      2007 (1)20.2
                
                Oil
      and Gas property valuation by Blue Ridge Enterprises as of December 31,
      2008 (1)21.1
                
                Subsidiaries
      of American Energy Production, Inc. (1)31.1
                
                Certification
      of the Chief Executive and Chief Financial Officer of American Energy
      Production, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.*32.1
                
                Certification
      of the Chief Executive and Chief Financial Officer of American Energy
      Production, Inc. pursuant to Section 906 of the Sarbanes- Act of
      2002.*


*           Filed
herewith





(1)
            Incorporated
      by reference.


-16-


SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this
report has been signed by the following persons on behalf of American Energy
Production, Inc., in the capacities and on the dates indicated.







Signature
              Title
              Date/s/ Charles Bitters
                Charles
      Bitters
              Chief
      Executive Officer, Principal Executive and Financial Officer,
      Director
              May
      14, 2009







-17-