AAA Energy Inc. Provides Business Focus and Operational Overview

Market Wire, March, 2007

AAA Energy Inc. (OTCBB: AAAE) has refocused its efforts in the natural resource arena on the premise of securing and developing a portfolio of oil and gas properties in new emerging markets. AAA Energy is poised and is positioning itself strategically in its first target market, the People's Republic of China

AAA Energy Inc. will focus its efforts on discoveries in emerging energy frontiers and horizons and provides the following operational overview for 2007:

China Focus

The People's Republic of China (China) is the world's most populous country and the second largest energy consumer behind the United States. Rising oil demand and imports have made China a significant factor in world oil markets. China is the world's most populous country and has a rapidly growing economy. China's real gross domestic product (GDP) is estimated to have grown at 9.9 percent in 2005. Economic forecasts remain strong for China, with real GDP expected to increase 9.9 percent in 2006. Inflows of foreign direct investment (FDI) into China totaled $86.1 billion in 2005, a new record and roughly double the level of 2001. China's merchandise trade surplus soared to $102 billion in 2005, its largest surplus ever and roughly three times larger than the 2004 figure.

Together with strong economic growth, China's demand for energy is surging rapidly. EIA forecasts that China's oil consumption will increase by almost half a million barrels per day in 2006, or 38 percent of the total growth in world oil demand. China is the world's third-largest net importer of oil behind the United States and Japan, an important factor in world oil markets.

With China's entry into the World Trade Organization (WTO) in November 2001, the Chinese government made a number of specific commitments to trade and investment liberalization which, when fully implemented, will substantially open the Chinese economy to foreign firms. In the energy sector, this will mean the lifting or sharp reduction of tariffs associated with imports of some classes of capital goods, and the eventual opening to foreign competition of areas such as retail sales of petroleum products.

China is the world's second-largest consumer of oil behind the United States, and the third-largest net importer of oil after the U.S. and Japan. China imported 95.80 million tons of crude oil in the first eight months of 2006, up 15.3 percent over the same period of last year. China also produces a significant amount of oil and contains sizeable proven oil reserves. China produced 122.93 million tons of crude oil in the first eight months of 2006 with a year-on-year growth of 1.8 percent.

According to Oil & Gas Journal (OGJ), China had 18.3 billion barrels of proven oil reserves as of January 2006, flat from the previous year. EIA estimates that China will produce 3.8 million barrels per day (Mmbbl/d) of oil in 2006, slightly higher than the previous year. Of this, 96 percent is expected to be crude oil. EIA estimates that China will consume 7.4 Mmbbl/d of oil in 2006, representing nearly a half million barrels per day increase from 2005. For 2006, EIA data forecasts that China's increase in oil demand will represent 38 percent of the world total increase in demand.

China's largest oil producing fields are mature and production has peaked, leading oil exploration activities to focus on developing largely untapped reserves in the western interior provinces and offshore fields. Roughly 85 percent of Chinese oil production capacity is located onshore. China's largest oil producing field, CNPC's Daqing field in northeastern China, accounts for more than 900,000 bbl/d, or one quarter of China's total crude oil production. Daqing is a mature oil field, and production levels have been reduced since 2004 while CNPC works to extend the life of the field. In April 2004, Chinese authorities announced several new oil discoveries in the existing Shengli field in northeastern China. These finds helped make Shengli, which is operated by Sinopec, the country's second-largest oil producing field, supplying more than 500,000 bbl/d according to OGJ's most recent estimate. CNOOC also produces more than 500,000 bbl/d from its offshore oil fields in the Bohai Bay and South China Sea.

Many foreign companies have been contracted to undertake oil exploration and production activities in China. According to Chinese law, however, China's national oil companies are entitled to take a majority (51 percent) stake in any commercial discovery, although they can choose to take a minority stake if they wish. The national oil companies can also take over field operations once the contracted firm has recovered its development costs. In offshore zones, CNOOC reserves the right to take over operations at any new discoveries, although certain shallow water locations such as the Zhao Dong field in the Bohai Bay are exempt. The Chinese government typically mandates a royalty fee of 12.5 percent for foreign companies involved in the oil sector, although discounts have been offered for development and exploration in more remote onshore areas, such as the western provinces of Qinghai and Xinjiang.