AAG ENERGY HOLDINGS

AAG (AAG Energy Holdings Limited) is the leading independent CBM producer in China, focusing on the development and value optimization of unconventional gas resources to supply clean energy to the Chinese economy. Through Asian American Gas, Inc., their wholly-owned subsidiary, they have production sharing contracts with two of the four state-owned enterprises authorized by the Chinese government to partner with foreign companies to explore, develop and produce China’s CBM assets, namely CUCBM... and PetroChina (through its parent company, CNPC). Pursuant to these production sharing contracts, they are the operator of the Panzhuang and Mabi concessions, granting us the right to explore, develop and produce the CBM within them. The Panzhuang and Mabi concessions are located in the southern Qinshui Basin, which contains the largest amount of proved CBM geological reserves of any basin in China and is the most active CBM producing basin in China. The Panzhuang concession is the most commercially advanced Sino-foreign CBM asset in China and remains the first and only Sino-foreign CBM concession in China to have received overall development plan approval. The Panzhuang concession has the highest average per well production rate of any CBM concession in China as of December 31, 2014, according to SIA Energy. We began CBM pilot production in Mabi in the first half of 2010 and in November 2013 we received preliminary approval for the Mabi ODP I from the NEA.