OMB APPROVAL
OMB
Number: 3235-0416 Expires: April 30,2003
Estimated
average burden hours per response: 32.00

# UNITED STATES SECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-QSB

(Mark One)

| | [x] | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
               1934
| | --- | ------------------------------------------------------------------------------------------------

For
the quarterly period ended September 30, 2003

| | [ ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
| | --- | ---------------------------------------------------------------

For the transition period from  to

Commission file number 333-52812

American
Energy Production Inc. (Exact name of small business issuer as specified in its charter)

|Delaware                                                        | 74-2945581                        
|--------------------------------------------------------------- | ----------------------------------
|(State or other jurisdiction of
 Incorporation or organization) | (IRS Employer
(Identification No.)

P.O.
           Box 1406 Mineral Wells, Texas 76068(Address of principal executive offices)

210-410-8158(Issuers
telephone number)

American Energy Production Inc.
310 Kitty Hawk RoadUniversal
City, Texas 78148(Former
name, former address and former fiscal year, if changed since last report)

# APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed
all documents and reports required to be filed by Section l2, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed by a court. Yes [x] No [ ]

# APPLICABLE ONLY TO
CORPORATE ISSUERS

State the number of shares
outstanding of each of the issuers classes of common equity, as of the latest
practicable date: common shares as of December 3, 2003.

101,551,449

Transitional Small
Business Disclosure Format (Check one): Yes [ ] No [ ]

American Energy
Production Inc.FORM 10-QSBFor
the quarterly period ended September 30. 2003

TABLE OF CONTENTS

|PART I | FINANCIAL INFORMATION                               |   
|------ | --------------------------------------------------- | --
|ITEM 1 | Financial Statements (Unaudited)                   
|       | Balance Sheet (Unaudited)                           | 1 
|       | Statements of Operations (Unaudited)                | 2 
|       | Statements of Cash Flows (Unaudited)                | 3 
|       | Notes to Financial Statements (Unaudited)           | 4 
|ITEM 2 | Plan of Operation                                   | 14
|ITEM 3 | Controls and Procedures                             | 16
|PART 2 | OTHER INFORMATION                                   | 16
|Item 1 | Legal Proceedings                                   | 16
|Item 2 | Changes in Securities and use of Proceeds           | 16
|Item 3 | Defaults upon Senior Securities                     | 17
|Item 4 | Submission of Matters to a vote of Security Holders | 17
|Item 5 | Other Information                                   | 17
|Item 6 | Exhibits and Reports on Form 8-K                    | 17

# PART I FINANCIAL INFORMATION

# Item 1 FINANCIAL
STATEMENTS

# AMERICAN ENEREGY PRODUCTION INC.(A DEVELOPMENT STAGE COMPANY)FINANCIAL STATEMENTS(UNAUDITED)September 30, 2003

Contents

|                                           | Page
|------------------------------------------ | ----
|Balance Sheet  (UNAUDITED)                 | 1   
|Statements of Operations  (UNAUDITED)      | 2   
|Statements of Cash Flows  (UNAUDITED)      | 3   
|Notes to Financial Statements  (UNAUDITED) | 4-13

American Energy
Production, Inc.(A Development Stage Company)Balance Sheet
September 30, 2003 (Unaudited)

ASSETS

|                                                               | 
|-------------------------------------------------------------- | 
|Current Assets                                                 | 
|Cash                                                           | 
|Prepaid Acquisition Cost                                       | 
|                                                               | 
|Total Current Assets                                           | 
|                                                               | 
|Property and Equipment, net                                    | 
|                                                               | 
|Total Assets                                                   | 
|                                                               | 
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                       | 
|Current Liabilities                                            | 
|Cash overdraft                                                 | 
|Accounts payable                                               | 
|Accrued interest payable - current                             | 
|Accrued payroll taxes and penalties                            | 
|Lease payable                                                  | 
|Notes payable - banks                                          | 
|Loan payable - officer                                         | 
|Note payable - related party                                   | 
|                                                               | 
|Total Current Liabilities                                      | 
|                                                               | 
|Convertible note payable                                       | 
|Accrued interest payable - long term                           | 
|                                                               | 
|Total Long Term Liabilities                                    | 
|                                                               | 
|Total Liabilities                                              | 
|                                                               | 
|Stockholders' Deficiency                                       | 
|Common stock, $0.0001 par value, 100,000,000 shares authorized | 
|79,586,919 shares issued and outstanding                       | 
|Common stock issuable, $0.0001 par value, 22,464,530 shares    | 
|Additional paid in capital                                     | 
|Accumulated deficit                                            | 
|Deficit accumulated during development stage                   | 
|                                                               | 
|                                                               | 
|Less:  Deferred stock based expenses                           | 
|Less:  Subscription Receivable (23,964,530 shares)             | 
|                                                               | 
|Total Stockholders' Deficiency                                 | 
|                                                               | 
|Total Liabilities and Stockholders' Deficiency                 | 
|                                                               | 

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

1

American Energy
Production, Inc. (A Development Stage Company)Statements of Operations
(Unaudited)

|                                                  | Three Months Ended September 30,
2003 2002 | Nine Months Ended September 30,
2003 2002 | From February 20, 2003
(Inception of Development
Stage) to September 30, 2003
|------------------------------------------------- | ------------------------------------------ | ----------------------------------------- | -----------------------------------------------------------------------------
|Revenues                                          |                                            |                                           | $                                                                            
|                                                  |                                            |                                           |                                                                              
|Operating Expenses                                |                                            |                                          
|Consulting                                        |                                            |                                           |                                                                              
|Compensation                                      |                                            |                                           |                                                                              
|Depletion                                         |                                            |                                           |                                                                              
|Depreciation                                      |                                            |                                           |                                                                              
|Equipment Rental                                  |                                            |                                           |                                                                              
|General and Administrative                        |                                            |                                           |                                                                              
|Production Expenses                               |                                            |                                           |                                                                              
|Professional Fees                                 |                                            |                                           |                                                                              
|Travel                                            |                                            |                                           |                                                                              
|Website                                           |                                            |                                           |                                                                              
|                                                  |                                            |                                           |                                                                              
|Total Operating Expenses                          |                                            |                                           |                                                                              
|                                                  |                                            |                                           |                                                                              
|Loss from Operations                              |                                            |                                           |                                                                              
|                                                  |                                            |                                           |                                                                              
|Other Income (Expense)                            |                                            |                                          
|Other income                                      |                                            |                                           |                                                                              
|Interest expense                                  |                                            |                                           |                                                                              
|Payroll tax interest and penalties                |                                            |                                           |                                                                              
|Settlement expense                                |                                            |                                           |                                                                              
|Loss on settlement                                |                                            |                                           |                                                                              
|                                                  |                                            |                                           |                                                                              
|Total Other Income (Expense)                      |                                            |                                           |                                                                              
|                                                  |                                            |                                           |                                                                              
|Net Loss                                          |                                            |                                           | $                                                                            
|                                                  |                                            |                                           |                                                                              
|Net Loss Per Share - Basic and Diluted            |                                            |                                           | $                                                                            
|                                                  |                                            |                                           |                                                                              
|Weighted average number of     shares outstanding |                                            |                                          
|during the period - basic and     diluted         |                                            |                                           |                                                                              
|                                                  |                                            |                                           |                                                                              

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

2

American Energy
Production, Inc.(A Development Stage Company)Statements of Cash
Flows(Unaudited)

|                                                              | Nine months ended September 30,
2003 2002 | From February 20, 2003
(Inception of Development
Stage) to September 30, 2003
|------------------------------------------------------------- | ----------------------------------------- | -----------------------------------------------------------------------------
|Cash Flows from Operating Activities:                         |                                           |                                                                              
|Net loss                                                      |                                           |                                                                              
|Adjustments to reconcile net loss to net cash used in         |                                           |                                                                              
|operating activities:                                         |                                           |                                                                              
|Stock issued for services                                     |                                           |                                                                              
|Stock issued in settlement                                    |                                           |                                                                              
|Depreciation                                                  |                                           |                                                                              
|Depletion                                                     |                                           |                                                                              
|Changes in operating assets and liabilities:                  |                                           |                                                                              
|Increase (decrease) in:                                       |                                           |                                                                              
|Accounts payable                                              |                                           |                                                                              
|Accrued interest payable                                      |                                           |                                                                              
|Accrued payroll taxes payable                                 |                                           |                                                                              
|                                                              |                                           |                                                                              
|Net Cash Used in Operating Activities                         |                                           |                                                                              
|                                                              |                                           |                                                                              
|Cash Flows from Investing Activities:                         |                                           |                                                                              
|Prepaid acquisition cost                                      |                                           |                                                                              
|Purchase of equipment                                         |                                           |                                                                              
|                                                              |                                           |                                                                              
|Net Cash Used in Investing Activities                         |                                           |                                                                              
|                                                              |                                           |                                                                              
|Cash Flows from Financing Activities:                         |                                           |                                                                              
|Cash overdraft                                                |                                           |                                                                              
|Proceeds from loan payable - officer                          |                                           |                                                                              
|Repayment of loan payable - officer                           |                                           |                                                                              
|Loan proceeds - other                                         |                                           |                                                                              
|Repayment of loan proceeds - other                            |                                           |                                                                              
|Proceeds from issuance of common stock, net of offering costs |                                           |                                                                              
|Repayment of lease payable                                    |                                           |                                                                              
|                                                              |                                           |                                                                              
|Net Cash Provided by Financing Activities                     |                                           |                                                                              
|                                                              |                                           |                                                                              
|Net Decrease in Cash                                          |                                           |                                                                              
|Cash at Beginning of Period                                   |                                           |                                                                              
|                                                              |                                           |                                                                              
|Cash at End of Period                                         |                                           |                                                                              
|                                                              |                                           |                                                                              
|Supplemental disclosure of cash flow information:             |                                           |                                                                              
|Asset acquisitions for convertible note payable               |                                           |                                                                              
|                                                              |                                           |                                                                              
|Stock Subscription Receivable (23,964,530 shares)             |                                           |                                                                              
|                                                              |                                           |                                                                              

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

3

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

Note 1 Basis of
Presentation

The accompanying unaudited financial
statements have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules and regulations of the United States
Securities and Exchange Commission for interim financial information. Accordingly, they do
not include all the information and footnotes necessary for a comprehensive presentation
of financial position and results of operations.

It is managements opinion,
however, that all material adjustments (consisting of normal recurring adjustments) have
been made which are necessary for a fair financial statement presentation. The results for
the interim period are not necessarily indicative of the results to be expected for the
year.

For further information, refer to the
audited financial statements and footnotes for the year ended December 31, 2002 included
in the Companys Form 10-KSB.

On February 20, 2003, upon the
acquisition of certain oil and gas assets (see Note 3), the Company entered a new
development stage. Activities during the development stage include acquisition of assets,
obtaining geological reports, developing an implementation plan to extract oil and gas and
seeking capital.

Note 2 Nature of
Operations and Significant Accounting Policies

(A) Nature of Operations

| | The
Company is engaged primarily in the acquisition, development, production, exploration for,
and the sale of oil and gas. The Company has not generated any sales through September 30,
2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(B) Use of Estimates

| | In
preparing financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements, revenues, and expenses
during the reported period. Actual results may differ from these estimates. Significant
estimates as of September 30, 2003 include valuation of stock issued for services and the
allocation of the purchase price to certain oil and gas related assets acquired.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(C) Property and Equipment - Oil and Gas Properties

| | The
Company uses the successful efforts method of accounting for acquisition, exploration,
development and production of oil and gas properties, whereby only the direct costs of
acquiring or drilling successful (proved reserves) are capitalized. Costs of acquisition,
development, and exploration activities that are not known to have resulted in the
discovery of reserves (unproved) are charged to operations. All capitalized costs of oil
and gas properties are depleted using the units-of-production method based on total proved
reserves. The capitalized cost of support equipment and fixtures will be depreciated over
their estimated useful life once they are placed into service.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

(D) Long-Lived Assets

| | The
Company reviews long-lived assets and certain identifiable assets related to those assets
for impairment whenever circumstances and situations change such that there is an
indication that the carrying amounts may not be recoverable. If the non-discounted future
cash flows of the enterprise are less than their carrying amount, their carrying amounts
are reduced to fair value and an impairment loss is recognized.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(E) Recent Accounting Pronouncements

| | In
May 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities (SFAS 149) which provides for certain
changes in the accounting treatment of derivative contracts. SFAS 149 is effective for
contracts entered into or modified after June 30, 2003, except for certain provisions that
relate to SFAS No. 133 Implementation Issues that have been effective for fiscal quarters
that began prior to June 15, 2003, which should continue to be applied in accordance with
their respective effective dates. The guidance should be applied prospectively. The
adoption of SFAS 149 is not expected to have a material impact on the Companys
financial position, results of operations or liquidity.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity (SFAS 150). This new statement
changes the accounting for certain financial instruments that, under previous guidance,
issuers could account for as equity. It requires that those instruments be classified as
liabilities in balance sheets. Most of the guidance in SFAS 150 is effective for all
financial instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15, 2003. The
adoption of SFAS 150 is not expected to have a material impact on the Companys
financial position, results of operations or liquidity.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
November 2002, the FASB issued FASB Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others (FIN 45). FIN 45 requires that a liability be
recorded in the guarantors balance sheet upon issuance of a guarantee. In addition,
FIN 45 requires disclosures about the guarantees that an entity has issued, including a
reconciliation of changes in the entitys product warranty liabilities.  The
initial recognition and initial measurement provisions of FIN 45 are applicable on a
prospective basis to guarantees issued or modified after December 31, 2002,
irrespective of the guarantors fiscal year-end.  The disclosure requirements of
FIN 45 are effective for the Company for financial statements of interim periods beginning
July 1, 2003.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

| | In
January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of Variable
Interest Entities (FIN 46), which represents an interpretation of
Accounting Research Bulletin No. 51 (ARB 51), Consolidated Financial
Statements. ARB 51 requires that a Companys financial statements include
subsidiaries in which the Company has a controlling financial interest. That requirement
usually has been applied to subsidiaries in which the Company has a majority voting
interest. However, the voting interest approach is not effective in identifying
controlling financial interests in entities (referred to as  variable interest
entities) that are not controllable through voting interests or in which the equity
investors do not bear the residual economic risks. FIN 46 provides guidance on identifying
variable interest entities and on assessing whether a Companys investment in a
variable interest entity requires consolidation thereof. FIN 46 is effective immediately
for investments made in variable interest entities after January 31, 2003 and it is
effective in the first fiscal year or interim period beginning after June 15, 2003 for
investments in variable interest entities made prior to February 1, 2003. The adoption of
FIN 46 is not expected to have a material impact on the Companys financial position,
results of operations, or liquidity.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 3 Prepaid
Acquisition Cost

The Company entered into a
non-binding Letter of Intent agreement to acquire substantially all of the assets and
related liabilities of Production Resources, Inc. (PRI). Under the terms of
the agreement, the Company would acquire all of PRIs oil and gas assets, property,
rights, goodwill and operating business in exchange for $400,000 cash plus an additional
$400,000 payable in shares of restricted stock. The acquisition will be accounted for as a
purchase and valued at fair market value at the date of acquisition. During the nine
months ended September 30, 2003, the Company had advanced $14,500 related to this
acquisition. Of the total, $7,000 was paid from personal funds of the Companys
president and sole director (See Note 5) and the remaining $7,500 was incurred and paid by
the Company. The entire $14,500 was capitalized and will be allocated accordingly once the
acquisition has been completed. During October 2003, the Company advanced an additional
$13,000 in connection with this contemplated transaction for an aggregate of $27,500 in
total advances paid.

Note 4 Property and
Equipment, Assets Acquisition and Convertible Promissory Note

On February 20, 2003 (the
Acquisition date), the Company acquired from a certain related party assignor,
who is the brother (see Notes 5 and 6) of the Companys president and sole director,
an interest in certain oil and gas leases, oil and gas wells located on those leases,
surface and underground equipment, pipelines and other property and fixtures in or on the
leases, rights of way, leases, contracts and agreements for pipeline compressor stations
or boosters utilized in the operations of the facilities by the assignors. The above
properties are located in Comanche and Eastland Counties, Texas, in the United States of
America. The Company plans to extract and sell oil and gas from existing wells. The
consideration paid was a convertible promissory note for $2,000,000 at 6% interest,
maturing July 25, 2007. All the leases and wells are collateral for the promissory note.
Upon the maturity date, and at the option of the holder, the promissory note and accrued
interest is payable in either (a) convertible preferred stock at $1.00 per share and this
preferred stock is convertible into common stock at $1.00 per share or (b) cash. The
Company accounted for the purchase as an asset acquisition at its fair market value of
$2,000,000 under the purchase method of Statement of Financial Accounting Standards No.
141 Business Combinations. The purchase price is allocated to the various
assets as discussed below. The results of any operations relating to the acquired assets
are included in the Companys financial statements from the Acquisition date.

6

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

The Company has evaluated that the
convertible promissory note in accordance with EITF Issue No. 98-5 does not have any
beneficial conversion feature as the exercise price of $1.00 exceeded the fair value of
the Companys common stock on the measurement date of $0.04.

Oil and Gas Properties

Acquisition costs of proved property
consists of oil and gas lease acquisition costs relating to proved, developed,
non-producing properties. The cost allocated to the lease was $1,642,500 on the
acquisition date. During the nine months ended September 30, 2003, the Company acquired an
additional $8,500 in oil and gas leases. Amortization of all of these costs into
production costs, using the units-of-production method, began when production commenced
during the three months ended September 30, 2003. The Company has extracted approximately
100 test barrels of saleable oil during the nine months ended September 30, 2003. The cost
of these barrels has been expensed as production costs as they were test barrels.
Depletion expense for the three and nine months ended September 30, 2003 was $73. Oil and
gas properties were as follows at September 30, 2003:

|Oil and gas properties
Accumulated depletion | $      1,651,000
             (73)
  --------------
$      1,650,927
  ========
|-------------------------------------------- | -------------------------------------------------------------------------------

Property and
Equipment-Capitalized Costs Relating to Oil and Gas Properties

Certain support equipment and
fixtures were acquired as part of the asset acquisition. The portion of the aggregate
$2,000,000 purchase price allocated to support equipment and fixtures, based on the fair
market values of such support equipment and fixtures, was $357,500. During the nine months
ended September 30, 2003, the Company acquired $5,300 in additional support equipment and
fixtures. Property and equipment were as follows at September 30, 2003:

|Support equipment and fixtures
Accumulated depreciation | $          362,800
     (9,031)
  ------------
$          353,769
  =======
|------------------------------------------------------- | ---------------------------------------------------------------------------

The Company began depreciation of the
acquired support equipment and fixtures when development commenced during the three months
ended September 30, 2003. Depreciation expense for the three and nine months ended
September 30, 2003 was $9,031.

Supplementary Oil and Gas Information
as of February 20, 2003, the lease acquisition date (Unaudited):

Property Acquisition Costs

|Proved properties | $           1,642,500
 ========
|----------------- | -------------------------------

7

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

Estimated Gross Reserves and Income
Data at February 20, 2003 for United States Properties:

PROVED

|                         | Developed
Non-Producing | Undeveloped | Total
Proved
|------------------------ | ----------------------- | ----------- | ------------
|Gross Remaining Reserves |                         |             |             
|Oil/Condensate - Barrels |                         |             |             
|Gas - MMCF               |                         |             |             
|Income Data              |                         |            
|Future Net Revenue       |                         |             | $           
|Deductions               |                         |             |             
|                         |                         |             |             
|Future Net Income (FNI)  |                         |             | $           
|                         |                         |             |             
|Discounted FNI at 10%    |                         |             | $           
|                         |                         |             |             

Note 5 Related Party
Transactions

On February  20,  2003,  the Company  acquired  certain oil and gas  properties  from the brother of the  Company's
president and sole director.  (See Note 4)

During the nine months ended
September 30, 2003, the Companys president and sole director paid $10,000 of
professional fees on behalf of the Company. The loan is non-interest bearing, unsecured
and due on demand.

During the nine months ended
September 30, 2003, the Companys president and sole director paid $15,297 of general
and administrative costs on behalf of the Company. This loan is non-interest bearing,
unsecured and due on demand. During the nine months ended September 30, 2003, the Company
repaid $115 of previously loaned funds.

During the nine months ended
September 30, 2003, the Companys president and sole director paid $7,000 in prepaid
acquisition costs. The loan is non-interest bearing, unsecured and due on demand (See Note
3).

Effective July 1, 2003, the Company
entered into a salary and equipment rental agreement with its president and sole director.
Under the terms of the agreement, the Company will pay a salary of $10,000 per month and
$3,500 in equipment rental per month for the use of the Companys presidents
personal pickup truck, car, pulling unit, winch truck, backhoe and water truck used in the
field operations. All amounts accrued were initially recorded as accounts payable related
party. During the nine months ended September 30, 2003, the Company had recorded and
charged to operations $30,000 for compensation and $10,500 for equipment rental fee. The
entire $40,500 for the three months ended September 30, 2003 was repaid from proceeds
received from the Companys Regulation S stock offering. There were no
amounts due under the terms of this agreement as of September 30, 2003.

See Note 11 for additional related
party transactions.

8

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

Note 6 Convertible Note
Payable and Loan Payable

On February 20, 2003, the Company
executed a $2,000,000 convertible promissory note accruing interest at 6% (See Note 4).
The maturity date is July 25, 2007. The note is payable at maturity in preferred stock of
the Company at $1.00 per share and. the preferred stock is convertible into common stock
at $1.00 per share. Additionally, at the option of the holder, the debt may be settled for
cash. As of September 30, 2003, the Company had not yet authorized the issuance of any
preferred stock. The note is secured by a deed of trust and a lien against the leases and
the wells and other liens against the same leases and wells of $25,000. Accrued interest
relating to the convertible promissory note at September 30, 2003 was $72,659.

During July 2003, the Company
received $35,000 from an unrelated party. The Company has repaid the principal portion of
this loan for $35,000 and $2,000 in interest.

Note 7 Legal Matters

The Company is subject to various
lawsuits and unasserted claims from vendors for non-payment of accounts payable plus
related legal fees. Excluding legal fees, which cannot be estimated, the Company has
included all amounts in its accounts payable as of September 30, 2003.

The Company is subject to a lawsuit
from one stockholder who invested $100,000 in the Company for 100,000 common shares during
a private placement. A tentative settlement has been reached with the stockholder. The
settlement is anticipated to be closed and finalized in December 2003 at which time the
fair value of the shares transferred in settlement will be known.

The Company has included $49,287 of
unpaid Federal payroll taxes and employee withholdings and related penalties and interest
in its accrued expenses as of September 30, 2003. Such amounts are subject to potential
IRS tax liens.

During 2002, the Company cancelled
various consulting contracts due to non-performance and demand was made for the return of
these shares to the treasury. As of the issuance date of these financial statements,
certain shares had been cancelled and returned to the treasury (See Note 8(B)).
Additionally, there are currently other demands for return that have not yet been
satisfied. The Company is pursuing these matters accordingly.

See Note 11 for additional legal
matters.

Note 8 Stockholders
Deficiency

(A) Common Stock
Issuances and Common Stock Issuable

On January 24, 2003, the
Companys Board of Directors adopted a resolution to remove from registration any and
all remaining shares of common stock registered under its Form S-8, which have not been
issued or reserved for issuance under the Communicate Now.Com, Inc. Employee Benefit Plan
as filed August 23, 2002.

9

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

On January 27, 2003, the
Companys Board of Directors adopted a resolution to create the 2003 Employee Benefit
Plan. The Company has authorized for registration 25,000,000 shares of its common stock on
Form S-8. As of the date of the accompanying financial statements, and under the terms of
this Employee Benefit Plan, the Company issued 22,800,000 shares of its common stock to
various unrelated third parties for future services. The shares are valued at the
Companys quoted market trading price at each grant date since the shares are deemed
fully vested at the grant date and the related expense will be recognized over the term of
the respective service agreement. The following provides details of these grants:

On January 1, 2003, 4,000,000 common
shares were granted for a six-month service period valued at $0.02 per share based on the
closing quoted market trading price or $80,000. All shares were fully vested at the grant
date. During the nine months period ended September 30, 2003, the Company recognized
$80,000 of consulting expense.

In February 2003, the Company reached
an oral agreement with the consultant to issue additional common stock under the terms of
the initial agreement. In May 2003, the Company issued an additional 250,000 shares of its
common stock valued at $0.07 per share based on the closing quoted market trading price or
$17,500. All shares were fully vested at the grant date. These shares were issued as part
of a settlement with the consultant based on work performed and to be performed. During
the three and nine months period ended September 30, 2003, the Company recognized $2,917
and $17,500, respectively, of a stock based settlement expense.

On January 29, 2003, 2,000,000 common
shares were granted for a six-month service period valued at $0.02 per share based on the
closing quoted market trading price or $40,000. All shares were fully vested at the grant
date. During the three and nine months period ended September 30, 2003, the Company
recognized $6,667 and $40,000 of consulting expense.

On February 8, 2003, 5,100,000 common
shares were granted for a one-year service period valued at $0.07 per share based on the
closing quoted market trading price or $357,000. All shares were fully vested at the grant
date. During the three and nine months ended September 30, 2003, the Company recognized
$89,250 and $238,000, respectively, of website expense and deferred $119,000 in
stockholders deficiency.

On March 1, 2003, 10,000,000 common
shares were granted for a six-month service period valued at $0.03 per share based on the
closing quoted market trading price or $300,000. All shares were fully vested at the grant
date. During the three and nine months ended September 30, 2003, the Company recognized
$100,000 and $300,000, respectively, of consulting expense.

On March 28, 2003, 1,700,000 common
shares were granted for a one-year service period valued at $0.038 per share based on the
closing quoted market trading price or $64,600. All shares were fully vested at the grant
date. During the three and nine months ended September 30, 2003, the Company recognized
$16,150 and $32,300, respectively, of consulting expense and deferred $32,300 in
stockholders deficiency.

On July 11, 2003, the Company issued
1,700,000 shares of common stock for consulting services to be rendered. The term of the
agreement was for six months. At the date of grant, the shares had a fair value of $0.07
per share based on the closing quoted market trading price or $119,000. All shares were
fully vested at the grant date. During the three and nine months ended September 30, 2003,
the Company recognized $59,500 and $59,500, respectively, of consulting expense and
deferred $59,500 in stockholders deficiency.

10

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

On July 23, 2003, the Board of
Directors adopted a resolution to issue up to 30,000,000 shares of common stock in
connection with a Regulation S offering. On August 4, 2003, the Company issued
10,975,227 shares of common stock under this offering that were sold overseas through an
unrelated third party for gross proceeds of $690,087. The unrelated party retained an
offering cost equivalent to 91% of gross proceeds totaling $621,079, which was offset
against additional paid in capital. The Company received net proceeds of $69,008.

Under the terms of the same offering,
during the three months ended September 30, 2003, an additional 21,964,530 shares (see
below) were sold to subscribing investors at approximately $0.055 per share. Gross
proceeds were $1,218,387. The unrelated party retained an offering cost equivalent to 88%
of gross proceeds totaling $1,076,272 which was offset against additional paid in capital.
The Company received $55,039. Total net proceeds due were $137,065 and the Company has
recorded a subscription receivable at September 30, 2003 for $82,026 (see Note 8(C)). All
21,964,530 shares are reflected as a common stock issuable at September 30, 2003. The
shares were issued in October 2003 (See Notes 8(C) and 11).

During the nine months ended
September 30, 2003, the Company sold subscriptions for 32,939,757 shares which exceeded
the 30,000,000 shares authorized for the Regulation S offering.

On August 15, 2003, the Company
issued 2,100,000 shares of common stock for consulting services to be rendered. The term
of the agreement was for four months. At the date of grant, the shares had a fair value of
$0.024 per share based on the closing quoted market trading price or $50,400. All shares
were fully vested at the grant date. During the three and nine months ended September 30,
2003, the Company recognized $18,900 and $18,900, respectively, of consulting expense and
deferred $31,500 in stockholders deficiency.

On August 15, 2003, the Company
issued 700,000 shares of common stock for consulting services to be rendered. The term of
the agreement was for four months. At the date of grant, the shares had a fair value of
$0.024 per share based on the closing quoted market trading price or $16,800. All shares
were fully vested at the grant date. During the three and nine months ended September 30,
2003, the Company recognized $6,300 and $6,300, respectively, of consulting expense and
deferred $10,500 in stockholders deficiency.

During the nine months ended
September 30, 2003, the Company had common stock issuable as follows:

500,000 shares (See Note 8(C)
21,964,530 shares (See above)

Aggregate common stock issuable at
September 30, 2003: 22,464,530 shares.

11

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

As total common shares issued and
issuable exceeds the Companys authorized shares the Company intends on increasing
its authorized shares.

(B) Common Stock
Cancellations

On June 30, 2003, the Company
cancelled 212,500 shares of its common stock previously issued to a former consultant for
non-performance under the terms of the original agreement (See Note 7). The transaction
was treated as a settlement. The shares were returned to the treasury. The transaction was
treated as a recapitalization by charging the par value of the common stock and crediting
additional paid in capital for $21. These shares were properly included and accounted for
in the loss per share computation for the periods they were outstanding.

On August 13, 2003, the Company
cancelled 2,474,400 shares of its common stock previously issued to a former attorney for
non-performance under the terms of the original agreement (See Note 7). The transaction
was treated as a settlement. The shares were returned to the treasury. The transaction was
treated as a recapitalization by charging the par value of the common stock and crediting
additional paid in capital for $247. These shares were properly included and accounted for
in the loss per share computation for the periods they were outstanding.

On September 2, 2003, the Company
cancelled 200,000 shares of its common stock previously issued to a former consultant for
non-performance under the terms of the original agreement (See Note 7). The transaction
was treated as a settlement. The shares were returned to the treasury. The transaction was
treated as a recapitalization by charging the par value of the common stock and crediting
additional paid in capital for $20. These shares were properly included and accounted for
in the loss per share computation for the periods they were outstanding.

(C) Stock Subscription
Receivable

On August 20, 2003, the Company
received a stock subscription for 500,000 shares (see below) of common at $0.0155 per
share for an aggregate stock subscription of $7,750. Management believes that these shares
will be traded with the subscription holders for oil chemical to be used in treating the
wells.

In August 2003, the Company received
a stock subscription for 1,500,000 shares (see below and Note 8(A)) of common at $0.011
per share for an aggregate stock subscription of $16,500. Management believes that
1,000,000 of these shares, or $11,000, which remain issuable at September 30, 2003, will
be traded with the subscription holders for oil chemical to be used in treating the wells.
Payment of $5,500 was received in October 2003 on the remaining 500,000 shares. (See Notes
8(A) and 11).

On September 15, 2003, the Company
issued 3,825,000 shares in error for $383. These shares were cancelled on October 22,
2003. In accordance with SFAS No. 128, these shares are not considered to be issued and
outstanding for purposes of computing loss per share. Additionally, these shares are not
reflected in the total shares issued and outstanding for the presentation of the balance
sheet (See Note 11).

12

American Energy
Production, Inc.(A Development Stage
Company)Notes to Financial
StatementsSeptember 30, 2003(Unaudited)

During the nine months ended
September 30, 2003, the Company had a subscription receivable balance as follows:
500,000 shares (See above and Note 8(A)). 1,500,000 shares (See above).21,964,530 shares (See
Notes 8(A) and 11).

Aggregate stock subscription
receivable at September 30, 2003: 23,964,530 shares.

Note 9 Operating Agreement

In June 2003 the Company executed an
agreement with a third party and Proco Operating, Inc. whereby the third party will
facilitate the sale of the Companys common shares under the proposed Regulation S
offering (see Note 8(A) and the Company and the third party would split the proceeds 50%
each, and then the Company and the third party would each invest such proceeds in the
development of the properties owned by the Company. Each party would then split the net
income from the properties 50% each. However, the Company intends to amend the terms of
this agreement so that the third party would essentially received 50% of the Regulation
S offering proceeds and not be further involved in the development of the
Companys properties. This amendment has not yet been formally executed, however, the
third party retained a larger percentage of the proceeds as discussed in Note 8(A).

Note 10 Going Concern

As reflected in the accompanying
financial statements, the Company has a net loss of $1,392,616 and net cash used in
operations of $114,434 for the nine months ended September 30, 2003 and a working capital
deficiency of $895,960, deficit accumulated during the development stage of $1,163,974 and
a stockholders deficiency of $963,923 at September 30, 2003. The ability of the
Company to continue as a going concern is dependent on the Companys ability to
further implement its business plan, raise capital, and generate revenues. The financial
statements do not include any adjustments that might be necessary if the Company is unable
to continue as a going concern.

The company has not secured adequate
debt or equity financing as of September 30, 2003 and is in the development stage. The
Company continues to grant stock for services. The Company acquired the assets of Proco
Oil on February 20, 2003 and intends to develop the oil/gas leases accordingly

Note 11 Subsequent Events

A stock subscription holder paid
$5,500 (See Note 8(C).

On October 10,2003, the Company
issued 21,964,530 of previous stock subscriptions receivable. (See Notes 8(A) and 8(C)).

On October 22, 2003, the Company
cancelled 3,825,000 common shares and a related $383 subscription receivable originally
issued and recorded in error. (See Note 8(C).

A settlement was reached with a
lessor to forgive the outstanding principal and interest on the related note payable
resulting from leased computers once the transfer of 100,000 shares personally held by the
Companys president and sole director occurs (See Note 5). This transaction has not
been finalized. The Company expects to fully resolve this matter in December 2003 at which
time the value of the shares exchanged and any related gain or loss will be determined and
recognized.

13

# Item 2 PLAN OF
OPERATION

American Energy Production Inc. is
hereinafter referred to as the Company, we or our.

The
following discussion contains certain forward-looking statements that are subject to
business and economic risks and uncertainties, and our actual results could differ
materially from those forward-looking statements. The following discussion regarding our
financial statements should be read in conjunction with the financial statements and notes
thereto.

(i)    
          LIQUIDITY AND CAPITAL RESOURCES

We
expect revenues from our oil and gas property development in 2004. Additionally, we
believe we can secure adequate debt financing from various sources. As a result, we
believe we will have sufficient resources to cover our working capital requirements for
the next twelve months.

Our
future revenues may be insufficient to fund our operations; accordingly, we may have to
seek additional financing from financial institutions or other sources. We maintain a line
of credit of $42,000 with Bank One. As of September 30, 2003, we have borrowed $42,000
against the Bank One line of credit and no more credit will be available from Bank One.

At
September 30, 2003 we had total cash of $13,295, compared to September 30, 2002 when we
had total cash of $0. The reason for the ability of the Company to continue in business
was a regulation S offering the company completed for approximately $212,000
in the third quarter of 2003 and various working capital loans received from the
Companys sole director and officer

In
June 2003 the Company executed an agreement with a third party and Proco Operating, Inc.
whereby the third party will facilitate the sale of the Companys common stock under
the proposed Regulation S offering and the Company and the third party would
split the proceeds 50% each and then the Company and the third party would each invest
such proceeds in the development properties owned by the Company. Each party would then
split the net income from the properties 50% each . However, the Company intends to amend
the terms of this agreement so that the third party would essentially receive 50% of the
regulation S offering proceeds and not be further involved in the development
of the Companys properties.

This amendment has not been executed
as of the issuance of this report but the Regulation S offering has been completed and the
third party has retained a larger percentage as a cost of the offering.

As reflected in the accompanying
financial statements for the nine months ended September 30, 2003, we had a net loss of
$1,392,616. and net cash used in operations of $114,434. In addition, at September 30,
2003, we had a working capital deficiency of $895,960, a deficit accumulated during the
development stage of $1,163,974 and a stockholders deficiency of $963,923 As of
September 30, 2003, we had no earnings. Management believes additional funding will be
necessary to continue as a going concern.

MATERIAL TRENDS OR EVENTS

Our
business plan is to acquire oil and gas properties for development and Production
operations, leading to revenue and profit growth. On July 30, 2002 the Company entered
into a letter of intent to purchase Proco Operating Co., Inc., Marble Falls Unit
properties via a convertible two million dollar promissory note ($2,000,000) Proco
Operating Co Inc. was owned by Johnnie Lee Bitters brother of Charles Bitters, President
of American Energy Production Inc. The term of the convertible promissory note is 5 years
bearing an interest rate of 6%. In 2007 at note maturity the promissory note will, at the
option of the holder be paid in cash or become convertible to Preferred Stock at a
conversion rate of $1.00 per share. Additionally, the preferred stock is convertible into
common stock at the rate of $1 per share. The Company has not authorized any Preferred
stock at this time and plans to file an amendment to our Articles of Incorporation. There
can be no assurance we will be successful in our efforts to implement our plan in the
Proco Marble Falls Unit.

The Company completed the acquisition of the Proco Operating Marble Falls Unit on
February 20, 2003 and the Company
entered into a new development stage. The Company plans to re-work or re-complete several
wells and use anew type of fracture stimulation on the 150 foot thick Barnett Shale
Formation that covers the entire 3000 plus acres on the Marble Falls Unit. The Marble
Falls unit has possible proven producible oil and gas reserve of approximately $33,000,000
not counting the Barnett Shale formation which has not been tested at this time.

14

The
Company has signed a Letter of Intent to purchase substantially all of the oil properties
of Production Resources Inc. The oil properties are located in Medina County, Texas and
have approximately 62,000,000 barrels of proven producing recoverable oil reserves. The
Company believes with several enhanced recovery systems substantially more oil can be
recovered in the future. The Company expects to complete the definitive purchase agreement
before the beginning of 2004 with Production Resources Inc.

The Company purchased an oil lease in
Fisher County, Texas that has one producing oil well. Management believes the property has
a Flippin high reef and there is a possibility that two more oil wells can be drilled on
the property.

The Company cancelled the 2002
Employee Benefit Plan on January 24, 2003 and created an Employee Benefit Plan for 2003
with 25,000,000 shares of S-8 common stock. The company granted 22,800,000 shares under
the 2003 Employee Benefit Plan. This common stock was issued to employees, consultants and
officers during the first quarter of 2003. From April 1, 2003 to June 30,2003 the Company
issued 1,950,000 shares of S-8 stock to consultants for services under the 2003 Employee
Benefit Plan and on July 11, 2003 issued an additional 1,700,000 shares under the same
Plan. On July the 30, 2003 the Company cancelled 212,500 shares of the 2002 Employee
Benefit Plan and returned the stock to the treasury that can be issued at a later date. In
July 2003 the Company cancelled 2,474,400 shares of the 2002 Employee Benefit Plan for
consulting services and returned the stock to the treasury that can be issued at a later
date.

MATERIAL SEASONAL ASPECTS

We
have identified several seasonal aspects that would have a material effect on our current
limited operations. Because of the volatile oil commodity markets world wide and various
political and weather changes world wide there may be a situation where oil and gas
markets could fall in price and effect the ability to sell oil and produced gas at
profitable prices.

(ii)    
          PRODUCT RESEARCH AND DEVELOPMENT

During the period January 1, 2003
through September 30, 2003 the operations of the Company consisted of a search for oil and
gas properties to acquire and operate. The Company was successful in securing additional
oil and gas properties during this period.

The
Company signed an exclusive distribution agreement with Natures Path on September
25, 2003 to treat, test and market AMEP HOA-800 a heavy oil additive that is used to
dissolve asphaltines and change the viscosity of heavy oil to allow the oil to travel
through the sand formation easier.

(iii)    
          EXPECTED PURCHASES OF PROPERTY AND EQUIPMENT

The Company is buying truck
transports and building a portable injection pump trailer to inject the AMEP HOA-800 into
heavy oil formations.

The management of the company
believes it will be successful in securing additional oil and gas properties but there can
be no assurance the management will be successful in it efforts to re-invent the company
as a profitable oil and gas operation Company.

(iv)    
          SIGNIFICANT CHANGE IN EMPLOYEES

The Company does not expect
a significant increase in the number of employees.

15

ITEM 3 Controls and
Procedures

Evaluation of Disclosure
Controls and Procedures

Our management, under the supervision
and with the participation of our chief executive officer/chief financial officer
conducted an evaluation of our disclosure controls and procedures (as defined
in the Securities Exchange Act of 1934 (the Exchange Act) Rules 13a-14I)
within 90 days of the filing date of this Quarterly Report on Form 10-QSB (the
Evaluation Date). Based on their evaluation, our chief executive officer/chief
financial officer has concluded that as of the Evaluation Date, our disclosure controls
and procedures are effective to ensure that all material information required to be filed
in this Quarterly Report on Form 10-QSB has been made known to them in a timely fashion.

Changes in Internal
Controls

There have been no significant
changes (including corrective actions with regard to significant deficiencies or material
weaknesses) in our internal controls or in other factors that could significantly affect
these controls subsequent to the Evaluation Date set forth above.

PART
II OTHER INFORMATION

# Item 1 Legal Proceedings

All material pending legal
proceedings in which we are involved has been reported in our 10 K SB.

# Item 2 Changes in
Securities

American Energy Production, Inc.
conducted an offering of shares pursuant to the regulations and requirements set forth by
the provisions of Regulation S of the Securities Act of 1933. All of the shares issued
pursuant to this offering were delivered to off-shore investors and were properly labeled
with a restrictive legend pursuant to Regulation S. A total of 32,939,757 shares were
issued from which the Company received proceeds of (est.) $212,000, this is approximately
10% of the selling price, which reflects payments of all costs and expenses related to the
offering and thus reflects the net proceeds received by the Company.

All share certificates have been
issued and delivered to the off-shore investors and the Company believes that it has fully
complied with all of the provisions of Regulation S of the Securities Act of 1933 in
conducting this off-shore offering. The offering was made through an attorney and has been
subjected to recent review and the issuance of an opinion letter that the offering was in
compliance with the provisions of Regulation S.

From April 1, 2003 to September 30,
2003 the Company issued 1,950,000 shares of S-8 stock to consultants for services under
the 2003 Employee Benefit Plan and on July 11, 2003 issue an additional 1,700,000 shares
under the same Plan. On July the 30, 2003 the Company cancelled 212,500 shares of the 2002
Employee Benefit Plan and returned the stock to the treasury that can be issued at a later
date. In July 2003 the Company cancelled 2,474,400 shares of the 2002 Employee Benefit
Plan for consulting services and returned the stock to the treasury that can be issued at
a later date Holders of our common stock are entitled to receive ratably dividends, if
any, as may be declared by our board of directors from funds legally available. We paid a
1 for 5 restricted stock dividend on August 16, 2002, this dividend stock was
restricted until August 16, 2003. We now anticipate that all earnings, if any, will be
retained for development of our business. Any future dividends will be at the discretion
of our Board of Directors and will depend upon our future earnings, operating and
financial condition, capital requirements, and other factors.

16

# Item 3 Defaults Upon
Senior Securities

# Item 4 Submission of
Matters to a Vote of Security Holders

There
have not been any matters submitted to a vote of the Security Holders.

# Item 5 Other Information

# Item 6 Exhibits and
Reports on Form 8-K

Exhibit No.     Description

31          
Rule 13a-14(a)/15d-14(a) Certification of Charles Bitters   32           Certification Pursuant
to 18 U.S.C Section 1350 as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|Dated:   December 8, 2003 | AMERICAN ENERGY PRODUCTION, INC.
By: /s/ Charles Bitters                        
Charles Bitters,
Chief Executive Officer,
President, Chief Financial Officer and Director
|------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------