# Exhibit 10.1

# ASSET AND STOCK
PURCHASE AGREEMENT

This Asset Purchase Agreement
(Agreement) is entered into as of the 1st day of January 2004 (Effective
Date) between PRODUCTION RESOURCES, INC.(PRI)EARL R. WALKER(Walker)and American Energy Production Inc.
(Purchaser)

# RECITALS:

A.           
Walker is the owner of one thousand (1,000) shares of common stock of PRI, being all of
its outstanding capital stock.  PRI is the owner of certain oil and gas leases
situated in Medina County, Texas together with the wells thereon and various items of
equipment and personal property located on or about the leases or used in connection
therewith, which Leases are more particularly described in Exhibit A
attached hereto and made a part hereof.

B.     PRI and
Walker desire to sell and Purchaser desires to purchase all of the assets and stock of PRI
and each has agreed that the sale should be consummated under the terms and conditions
hereof.

# TERMS OF AGREEMENT:

NOW, THEREFORE, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, PRI, Walker
and Purchaser covenant and agree as follows:

1.           
Agreement to Sell Assets/Excluded Items.  As of Closing (hereinafter
defined), PRI hereby agrees to sell to Purchaser one hundred percent (100%) of the assets
of PRI, save and except the excluded assets described herein (collectively, the
Assets).  Excluded from this sale and reserved to PRI shall be (a)
all Medina Electric Cooperative Capital Credits in PRIs name or in its
predecessors name, Jenex Operating Company, (b) an overriding royalty interest in
the Leases equal to 5% of 100%, and (c) any check from Superior Crude Gathering payable to
PRI for any production sold from the Leases prior to the Effective Date above which the
parties hereto stipulate may be endorsed by Walker as President of PRI and negotiated when
received.

2.           
Purchase Price.  The Purchase Price to be paid by Purchaser to PRI (or
on PRIs behalf directly to third party banks described herein) for the Purchase
Shares shall be comprised of ($800,000.00) [the Purchase Price] payable as
$400,000.00 worth of

AMEP restricted 144 common shares
plus Purchasers execution and delivery to PRI of a Secured Convertible Debenture in
the original principal sum of $400,000.00 and payable as follows:  [See Exhibit
B]

The obligations of Purchaser to pay
the Purchase Price as evidenced by the Secured Convertible Debenture described above shall
be secured by Purchasers execution of a Deed of Trust and Security Agreement (and
accompanying UCC-1) granting to PRI a first lien on the Assets.

3.           
Payments At Closing In Addition To Purchase Price.  [Insert any agreed reimbursements or payments]

4.           
Employment of Walker.  Subsequent to Closing, Purchaser shall employ
Walker at a salary equal to (a) $5,000.00 per month net of withholding and FICA taxes;
plus (b) health insurance coverage for Walker (and if Walker elects at his own expense,
coverage for his spouse); plus (c) a 3/4 ton pickup licensed for highway use
(including Walkers reasonable personal usage) suitable for hauling equipment,
including Purchasers payment of all purchase installments, license fees, insurance
and fuel.  Walker agrees to serve as a superintendent of field operations for a
minimum of the length of term of the Secured Convertible Debenture, health
permitting.   The employment terms set forth herein shall be evidenced by a
written Employment Agreement executed by the parties at Closing.

5.           
Option to Acquire PRI Stock.  At Purchasers option, at such time
as the Purchase Price is paid in full, Purchaser may purchase all of the outstanding stock
of PRI for ten dollars ($10.00) plus the cost of any document preparation by any attorney
engaged by Purchaser to assist with the purchase transaction.

6.           
Operations by PRI.  Upon Closing, Walker shall cause the PRI P-5 to be
amended to reflect new officers.  Operations by PRI subsequent to Closing, but prior
to acquisition of the PRI Stock by Purchaser shall be without charge other than the actual
expenses incurred in operations, which expenses shall be borne entirely by
Purchaser.  PRI shall not be required to advance funds or extend credit for payroll,
expenses or any other expense item to Purchaser.  ________________ Shall, upon
Closing, be appointed Director of Field Operations for PRI and shall be in charge of all
field decisions pertaining to the Leases and all personnel engaged to work on the
Leases.  In conducting his management of field operations for PRI, ______________
shall comply with all applicable laws of the State of Texas and all rules of the Railroad
Commission of Texas.  Purchaser shall have the right to make other acquisitions and
to place such acquisitions under the operations of PRI but only upon first securing a
letter of credit or bond from a reputable bank or bonding company payable to the Railroad
Commission of Texas in the amount of the aggregate estimated plugging costs of each well
which forms a part of the new acquisition.  The letter of credit or bond shall
further provide that Railroad Commission of Texas may draw on the letter of credit
beginning on the forty-fifth (45th ) day after the date the Railroad Commission orders a
particular well to be plugged if Purchaser fails to fund such plugging within the 45-day
period or fails to fund any available alternative to plugging which is acceptable to the
Railroad Commission, such as a W-1X filing.   While PRI acts as operator for
Purchaser, Purchaser agrees to promptly comply with all Railroad Commission directives so
as to preserve the current good reputation of PRI as an
operator.

7.           
Sale AS IS. Purchaser acknowledges that it has inspected the
Leases, Wells and Equipment and that it is acceptable. Purchaser has been advised that
certain of the existing wells are located in the 100-year flood plain.  Purchaser
further acknowledges that other than a warranty of title and the warranties set forth
below, PRI has made no warranties or representations whatsoever and that the Leases, Wells
and Equipment shall be delivered as is, where is and with all
faults.  Purchaser has been afforded a full and complete opportunity to perform due
diligence.

8.           
Closing.  Closing shall occur on the Effective Date above in the
offices of James M. Hughes, 1777 N.E. Loop 410, 15th Floor, San Antonio, Texas, or at such
other time and place as PRI, Walker and Purchaser shall mutually agree.

9.           
Items to be Exchanged at Closing.  At Closing, the parties shall
exchange and/or deliver the following items, fully executed where appropriate:

By
PRI and Walker:

|(a) | Assignment and Bill of Sale With Reservation of Overriding Royalty Interest
          conveying the Assets; and
|--- | ---------------------------------------------------------------------------------------------------------------

|(b) | All pertinent records pertaining to the Assets.
|--- | -----------------------------------------------

By
Purchaser:

|(c) | The $400,000.00 portion of the Purchase Price in AMEP 144 restricted shares
|--- | ---------------------------------------------------------------------------

|(d) | Secured Promissory Note and the Deed of Trust securing same in the form
          approved by PRIs counsel; and
|--- | ----------------------------------------------------------------------------------------------------------------

|(e) | Walkers Employment Agreement.
|--- | ------------------------------

10.           
Warranties and Representations of Walker. Walker hereby warrants and represents to Purchaser the following:

(a)       
          All sales of crude oil produced from the Leases prior to the Effective Date
          hereof have been in substantial compliance with applicable local, state and
          federal law, rules and regulations and there are not any known conditions on the
          lands covered by the Leases which would constitute a violation of any such laws,
          rules or regulations.

(b)       
          There are no bankruptcy proceedings pending, being contemplated by, or to the
          knowledge of Walker, threatened against Walker or PRI.

(c)       
          Walker is not aware of any claims, lawsuits, actions or other proceedings
          pending or threatened for any Court, tribunal, agency or governmental entity,
          which affect the Leases or the Purchase Shares.

(d)       
          All pertinent Railroad Commission filings affecting or pertaining to the Leases
          are current and there are no outstanding violations of any Railroad Commission
          rule of which PRI or Walker has received notice.

(e)       
          There are no delinquent taxes or assessments pertaining to the Assets;

(f)WALKER AGREES TO DEFEND, INDEMNIFY AND HOLD PURCHASER HARMLESS FROM ANY
          AND ALL CLAIMS, DAMAGES OR CAUSES OF ACTION, INCLUDING, ATTORNEYS FEES, SUFFERED BY PURCHASER RELATING TO THE LEASES AND THE BUSINESS
          ACTIVITIES OF PRI PRIOR TO THE EFFECTIVE DATE.

11.           
Representations and Warranties of Purchaser. Purchaser hereby warrants and represents to Walker the following:

(a)       
          Purchaser is duly incorporated under the laws of the State of Texas and is in
          good standing under that State.

(b)       
          Purchaser is duly authorized to enter into this Agreement and to deliver the
          consideration described in this Agreement.

(c)       
          PURCHASER AGREES TO DEFEND, INDEMNIFY AND HOLD WALKER HARMLESS FROM ANY
          AND ALL CLAIMS, DAMAGES OR CAUSES OF ACTION, INCLUDING, ATTORNEYS FEES, SUFFERED BY WALKER RELATING TO THE LEASES AND THE BUSINESS
          ACTIVITIES OF PRI ON AND AFTER THE EFFECTIVE DATE.

12.           
Covenants and Representations to Survive Closing. This Agreement and the covenants and representations of each party
to this Agreement shall survive the Closing.

13.           
Time is of the Essence/Attorneys Fees.  Time is of the essence with
regard to all obligations to be performed under this Agreement.  If either party
seeks to enforce, in law or in equity, any provision contained herein, then the prevailing
party in such proceeding shall be entitled to attorneys fees, interest and all such
other disbursements and relief provided under law.

14.           
Payment of Expenses.  Except as otherwise provided herein, all of the
fees and expenses incurred by any party prior to the Closing in order to complete the
transactions required or permitted hereby shall be paid by the party incurring such fees
and expense.  The parties shall each pay one-half (1/2) of the fees of James M.
Hughes, attorney, in the preparation of this Agreement and other Closing documents.

15.          
Modification or Amendment.  The parties hereto may modify or amend this
Agreement only by written agreement executed and delivered by the respective parties.

16.           
Binding on Heirs and Assigns.  This Agreement shall inure to and be
binding upon the undersigned and their respective heirs, representatives, successors and
assigns, provided, however, that neither this Agreement or the interests conveyed or to be
conveyed pursuant to this Agreement shall be assigned without the prior written consent of
the non-transferring party.

17.           
Counterparts.  For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart being
deemed to be an original instrument, and all such counterparts shall together constitute
the same agreement.

18.           
No Waivers.  No waiver of or failure to act upon any of the provisions
of this Agreement or any right or remedy arising under this Agreement shall be deemed or
shall constitute a waiver of any other provisions, rights or remedies (whether similar or
dissimilar) nor shall such waiver or failure to act constitute a continuing waiver or
evidence of a binding course of conduct unless expressly provided herein or expressly
stipulated to in writing by the parties.

19.           
GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AND SHALL BE PERFORMABLE IN MEDINA COUNTY,
TEXAS.

20.          
Notices.           Any
notice, request, instruction or other document to be given hereunder by any party to the
others shall be in writing (by FAX, mail, telegram or courier) and delivered to the
parties as follows:

|To Walker or PRI: 
                  
                  
                  
                  
 
To Purchaser: | Earl R. Walker
1077 County Road 342
Hondo, Texas  78861
Telephone:  (830) 741-8401
Fax:   (830) 426-3406
American Energy Production Inc.
P.O. Box 1496
Mineral Wells, Texas 76068
Telephone:  940-327-0886
Fax:  940-327-8018
|-------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Notices shall be deemed given on the
date of actual receipt by the party.  Notices given by certified or registered mail
shall be deemed given three (3) days after deposit with the United States Postal Service,
properly posted and addressed to the partys last known address, unless actually
received prior to the expiration of the 3-day period.

21.           
Entire Contract.  This Agreement constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.

22.          
Captions for Convenience.  All captions herein are for convenience or
reference only and do not constitute part of this Agreement and shall not be deemed to
limit or otherwise affect any of the provisions hereof.

23.    
Severability.  In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or enforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such invalid, illegal or
enforceable provision had never been contained herein.

24.    
                     
          STIPULATIONS REGARDING ATTORNEY.   WALKER AND
          PURCHASER STIPULATE AND AGREE THAT JAMES M. HUGHES HAS PREPARED THIS DOCUMENT IN
          ACCORDANCE WITH THE JOINT DIRECTIONS OF THE PARTIES AND HAS NOT GIVEN LEGAL
          ADVICE TO EITHER PARTY.

EXECUTED
by the undersigned as of the Effective Date set forth above.

By:    __________________________ Date:  January 1, 2004
                                      Earl R. Walker, President

AMERICAN ENEERGY
PRODUCTION INC Name of Purchaser By: 
_____________________________Date: January 1, Charles Bitters,
President

# EXHIBIT A

# [Lease Description]

# Herring 
Holloway Leases:

|Lease Date:
           
Lessor:    
           
Lessee:    
           
Rec. Ref:  
           
Acreage: | [Lease 1] February 23, 1956
[Lease 2] February 23, 1956
[Lease 1] Elizabeth L. Herring, et vir.
[Lease 2]  Joseph W. Holloway, et ux.
[Lease 1] L. C. Collins
[Lease 2] L. C. Collins
[Lease 1] Volume 170, Page 65
[Lease 2] Volume 170, Page 60
[Lease 1] 71.23 acres, T. Mercier Sy. No. 328, A-669
[Lease 2] 20 acres, T. Mercier Sy. No. 328, A-669
|-------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Description of Lands

All
that certain tract of land situated in the County of Medina, State of Texas, described as
follows:

All situated in Medina County, Texas,
described in two tracts for a total of 91.23 acres, more or less, described by metes and
bounds as follows:

FIRST
TRACT: Twenty (20) acres of land out of Survey No. 328, Theophile Mercier, in
Medina County, Texas, described by metes and bounds as follows, to wit:

BEGINNING
at the stake and fence corner in the west boundary line of the Hondo-Biry Road, located at
the point where the west boundary line of said Hondo-Biry Road intersects with the South
boundary line of said, Survey No. 328;                 THENCE
N. 89 deg. W. with fence, along the south boundary line of a public road, 240 varas to a
stake;                 THENCE
North 461.3 varas to a stake under fence;                THENCE
with fence S. 89 deg. 47 E. 247.2 varas to a stake in the west boundary line of the Hondo-Biry Road;
                THENCE
with fence along the west boundary line of said Hondo-Biry road, S. 1 deg. W. 464.8
varas to the place of beginning.

SECOND TRACT:  71.23 acres more or less, out of Survey No. 328, in the name of Theophile Mercier, described by metes and bounds as
follows:

BEGINNING
at a stake and fence corner in the West boundary line of the Hondo-Biry Road, located a
point where the West boundary line of the said Hondo-Biry Road intersects with the South
boundary line of the said Survey No. 328;                 THENCE with fence along the South boundary line of said Survey N. 328, and along N. boundary line of a
public road, N. 89 deg. W. 1240 varas to a stake     for the place of beginning;
                THENCE
North 89 deg. West with fence along South boundary line of said Survey No. 328, and along
the North Boundary line of public road, 887.5 varas to a stake and fence corner; 
                THENCE North 1 deg. E. with fence, 449 varas to a stake and fence     corner;
                THENCE S. 89 deg. 47 min. with fence, 880 varas to a stake;
                THENCE South 461.3 varas to the place of beginning.

|J. N. Wilson Lease:
Lease Date:    January 19, 1995
Lessor:        J. N. Wilson, et ux.
Lessee:        R. S. Drilling Corporation
Rec. Ref.:     Volume 165, Page 620
Acreage:       190 acres, being 161 acres, P.E. Durst Sy. No. 15,
               A-303 and 29 acres, M. Griffin Sy. No. 343.
 Oscar Schmidt and Oscar Schmidt "B" Leases:
Lease Date:    July 20, 1995
Lessor:        Oscar F. Schmidt, et ux.
Lessee:        Texas Coast Oil & Gas Company
Rec. Ref.:     Volume 167, Page 100
Acreage:       148 acres, P.E. Durst Sy.15, A-303V.H. Neumann Lease:
Lease Date:    September 25, 1954
Lessor:        V. H. Neumann, et ux.
Lessee:        E. L. Kelley
Rec. Ref.:     Volume 165, Page 270
Acreage:       214.1 acres, being 107.8 acres out of Survey No. 247, Jos. Walker and
               106.3 acres out of Survey No. 328, T. Mercier.V. H. Neumann "B" Lease:
Lease Date:    November 4, 1954
Lessor:        Thomas Neumann, s.m.
Lessee:        E. L. Kelley
Rec. Ref.:     Volume 165, Page 400
Acreage:       311.9 acres, being 204.2 acres Jos. Walker Sy. No. 247, 106.7 acres,
               and 1 acre, T. Mercier, Sy. No. 328.Lenora Schmidt and Lenora Schmidt "B" Leases:
Lease Date:    July 20, 1955
Lessor:        Lenora Schmidt, f.s.
Lessee:        Texas Coast Oil & Gas Company
Rec. Ref.:     Volume 167, Page 104
Acreage:       277 acres, P. E. Durst Sy. No. 15, A-303, being more particularly
               described by metes and bounds in a partition deed dated May 2, 1953,
               recorded in Volume 158, Page 342, Deed Records of Medina County, Texas.O.K. Schmidt Lease:
Lease Date:    August 1, 1970
Lessor:        Overton K. Schmidt, Sr., et ux.
Lessee:        W. F. Seeger
Rec. Ref.:     Volume 231, Page 26
Acreage:       9.65 acres, P. E. Durst Sy. No. 15, A-303
 J. N. Wilson "B" Lease:
Lease Date:    January 19, 1955
Lessor:        J. N. Wilson, et ux.
Lessee:        R. S. Drilling Corporations
Rec. Ref.:     Volume 171, Page 340
Acreage:       51.94 acres, F. Vanderstucken Sy. No. 366, A-991 | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 

# Description of Lands

The North 34.44 acres of the above
51.94 acres tract out of Survey No. 366, F. Vanderstucken, Medina County, Texas.

|Clara Gray Unit I Lease:
Lease Date:    September 16, 1974
Lessor:        Clara Uzzell Gray, a widow
Lessee:        R. C. Buie
Rec. Ref.:     Volume 263, Page 122
Acreage:       190 acres, Henry Wilson Sy. No. 536, A-1042. | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 

# Description of Lands

The East 55.8701 acres of land, more
or less, out of the 190.0 acre Clara Gray Lease dated September 16, 1974, recorded
December 17, 1974 in Deed Records, Volume 263, Pages 122-124, Medina County, Texas, within
Survey No. 536, Henry Wilson, Abstract No. 1042, situated about 9 miles South 5 degrees
East of the City of Hondo, Medina County, Texas, and being more fully described by metes
and bounds as follows:

Beginning at a stake set for the E.
corner of Survey No. 536, Henry Wilson; Thence West 894.3 to a 5/8 steel pin
being the S.W. corner of this tract;  Thence North 00 degrees 40 East
2725.01 to a point for the N.W. corner of this tract;  Thence South 89 degrees
16 East 897.59 to a point for the N.E. corner of this tract;  Thence
South 00 degrees 21 West 417.8';  South 11 degrees 00 West 31.5'; 
South 00 degrees 40 West 2264.8 to the place of beginning.

NOTE:
There are actually 3 separate tracts located within the 55.8701 acres formerly known as
Clara Gray Unit II, and now of part of Unit I.  They are as follows:

| | Clara
Gray Unit II A, 24.72 acres of land, more or less.  Well Nos. 1 through 12, Tank Nos.
68152, 68153.         Clara Gray Unit II B, 4.12 acres, more or less.  Well Nos. 14 through
15, Tank No. 88146.        Clara Gray Unit II C, 27.0301 acres, more or less.  Well Nos. 12H, 13H,
16H through 23H, Tank Nos. 88895, 88896.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

136.0994
acres of land, more or less, out of the 190.00 acre Clara Gray Lease dated September 16,
1974, recorded December 17, 174 in Deed Records, Volume 263, Pages 122-124, Medina County,
Texas, within Survey No. 536, Henry Wilson, Abstract No. 1042, recorded in Deed Records,
Volume 153, Pages 636- 639, Medina County, Texas, situated about 9 miles South 5 degrees
East of the City of Hondo, Medina County, Texas, and being more fully described by metes
and bounds as follows:

Beginning at a 5/8 steel pin
set for the E. corner of this tract, said 5/8 steel pin being 894.3 West of a
stake set for the S.E. corner of Survey No. 536 Henry Wilson;  Thence, N. 88 degrees
27 W. 2528.4 to a pin set for with S.W. corner of this tract;  Thence, N.
20 degrees 31 E. along the F.M. Hwy No. 462, 2084.6 to a pin;  Thence; N.
19 degrees 05 E. along 04 E. along the F.M. Hwy No. 462, 645.0', 117.4
to a pin set for the N.W. corner of this tract;  Thence, S. 89 degrees 26 East
1764.81 to a pin set for the N.E. corner of this tract;  Thence S. 00 degrees
40 W. 2725.01 to the place of beginning.

[Net Revenue Interests]

|Herring - Holloway Lease (RRC Lease No. 01710):
         Production Resources, Inc.                                
J.N. Wilson Lease (RRC Lease No. 02189):
         Production Resources, Inc.                                
 
J.N. Wilson "B" Lease (RRC Lease No. 01829):
         Production Resources, Inc.                                
 Oscar Schmidt and Oscar Schmidt "B" Leases (RRC Lease No. 01724):
         Production Resources, Inc.                                
 V. H. Neumann Lease (RRC Lease No. 01865):
         Production Resources, Inc.                                
 V.H. Neumann "B" Lease (RRC Lease No. 01959):
         Production Resources, Inc.                                
Lenora Schmidt Lease (RRC Lease No. 01723):
         Production Resources, Inc.                                
Lenora Schmidt "B" Lease (RRC Lease No. 10480):
         Production Resources, Inc.                                
 O.K. Schmidt Lease (RRC Lease No. 04146):
         Production Resources, Inc.                                
 Clara Gray Unit I Lease (RRC Lease No. 04731):
         Production Resources, Inc. | 100% W.I.;  
100% W.I.;  
100% W.I.;  
100% W.I.;  
100% W.I.;  
100% W.I.;  
100% W.I.;  
100% W.I.;  
100% W.I.;  
100% W.I.; | 84.76562% N.R.I.
84.76563% N.R.I.
84.76560% N.R.I.
84.76560% N.R.I.
87.50000% N.R.I.
87.50000% N.R.I.
 84.37500% N.R.I.
 84.37500% N.R.I.
75.00000% N.R.I.
81.25000% N.R.I.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------