PROPOSED ENERGY OPPORTUNITY:

JAPAN-AMERICAN OIL & GAS COMPANY

Summary

An enormous opportunity exists to exploit oil and natural gas prospects in the Southwestern United States. The proposed “Company” will combine the powerful network and experience of Chris Sanders within the Oil & Gas business with the capital and management resources of Mr. Ken Okura. The Company will generate revenues through Oil & Gas exploration and production, as well as accumulating and exploiting drilling equipment and other assets.

Chris Sanders

Under the guidance of his father, C. W. Sanders, who is a “Texas Legendary Golden Wildcatter” and former Chair of the Texas Alliance of Energy Producers, Chris has lived, breathed and been fed by the “oil patch” from birth. Chris has developed a unique set of resources that are invaluable for success in the petroleum business:

Seasoned experience and track record in both operations and legal/business issues
Knowledge of every aspect of oil & gas exploration and production
Robust network of contacts and relationships within every layer of the business

The oil and gas industry is like a chain and it consists of many critical components. These “links” span many different professions: lawyers, landmen, farmers, ranchers, investors, cementers, roustabouts, pumpers, drilling contractors, roughnecks, operators and producers. At some point or another during his 26 years of experience, Chris has “worn the hat” of every one of the above professions in managerial capacities. His reputation for honor and excellence has built many strong and valuable relationships across the range of the petroleum industry.

Mr. Sanders is regarded as one of the foremost experts on underground fracturing technologies. Chris has also defined the existence of anaerobic bacteria in source bedrocks such as the Barnett Shale and through this has invented new stimulation and frac techniques to increase natural gas production. This method creates oxygen and natural gas while simultaneously sequestering CO2, which are two powerful environmental benefits.

In 2005, Chris received the Landman in Action award from the AAPL (American Association of Professional Landmen). He is also a member of the Rocky Mountain Mineral Law Foundation, a continuing education institution for mineral law and a member of AAOGP (American Association of Oil and Gas Producers). Mr. Sanders will be responsible for the day-to-day management of the Company’s operations, as well as equal sharing with Mr. Okura, as representative of the investors, of major decision-making and Company strategy, direction and policy.

Ken Okura

Mr. Okura has over forty years experience in a wide array of business fields. He has been instrumental in connecting American and Japanese strategic alliances. Ken has earned a reputation for constructing and managing business relationships that reward each participant in the spirit of true cooperation toward mutual benefit. Mr. Okura’s role with the Company will be to represent the interests of the Japanese in the area of financial oversight, as well as equally sharing the responsibilities of determining major decision-making and Company strategy, direction and policy.

The Opportunity

Chris Sanders has identified two categories of opportunity for the Company:

1) Via Sanders’ knowledge and reputation, he has been able to secure dozens of promising oil & gas property leases, primarily in the Barnett Shale area of Texas. The Company will drill at least 12 wells by the end of 2007. Each of these wells has been carefully selected based on their high success-rate locations (in areas that are already proven), and their attractive potential (each is projected to have over $5,000,000 in first year production).

2) Equipment and drilling capabilities – Chris has uncovered and secured the acquisition of 5 drilling rigs and additional equipment necessary to drill hundreds of wells. These pieces represent powerful expense savings and revenue generators for the Company. There is currently a severe bottleneck of available drilling equipment in the industry, translating to lucrative rental opportunities for rigs and equipment that are not immediately needed for the Company’s own projects.

Advantages over Traditional Oil & Gas Investments

Most O & G investment rewards are limited to specific drilling projects and number of wells, constraining the upside for investors. The Company represents an opportunity for investors to own 50% of an enterprise that can secure and drill hundreds of wells over its lifetime.
For the majority of O & G investments, the drilling equipment and services represent a major expense to the project. By owning these assets, the Company will not only dramatically reduce these expenses, but will capture strong additional revenues from the rental of equipment and services.
The track record, experience and connections of the operating component represent a distinct set of advantages for the Company. In particular, Sanders’ ability to reduce and control expenses and uncover bargains will enhance profitability.
Federal and State incentives and other for environmentally friendly practices and techniques can be pursued. These opportunities will be mutually evaluated for their enhancement to profitability and incorporated as appropriate.

Financial Estimates

With the infusion of $10,000,000 of investment capital, the Company is projected to achieve the following results:

Gross Company Revenues though December 2007: $46,000,000

Land Owner/Leaseholder expenses though December 2007: $ 9,000,000

Working Capital expenses through December 2007: $12,000,000

Net Company revenues though December 2007: $25,000,000*

Investors’ share of net revenues though December 2007: $12,500,000*

Estimated value (4x net revenues) of the Company in December 2007: $100,000,000

Investors’ share (50%)of estimated value of the Company in December 2007: $50,000,000

*Does not account for applicable taxes

Chris Sanders (940) 300-4001 | productionclips@hotmail.com | www.thebarnettshale.com | www.sanco.us | www.enerag.com