Welcome!

News Feed Item

American Eagle Energy Announces Operations Update and Guidance

DENVER, CO--(Marketwired - January 10, 2014) - American Eagle Energy Corporation (NYSE MKT: AMZG) (the "Company" or "American Eagle") announces an update to operations and guidance for production and operated well development in its Spyglass Project area in northwestern Divide County, North Dakota.

Well Development Activity

During the quarter ended December 31, 2013, American Eagle added four operated wells to production in its Spyglass Project area consisting of two field extension wells and two infill wells. The extension wells included one Three Forks producer and one Middle Bakken producer and the two infill wells are producing from the Middle Bakken formation. Two of the wells (Bryce and Erling) are part of the Farm-Out Agreement in which the Company's JV partner pays 100% of the Company's working interest share of well development costs for up to six wells, all of which will be operated by American Eagle. The Company does not have a net revenue interest in each well's production until the JV Partner has recouped 112% of development costs on a per-well basis, after which 30% of the Company's initial well bore interests revert back to it, including a 30% net revenue interest. The other two wells (Kent and Lauren) are part of the Carry Agreement in which the JV partner pays 100% of the Company's working interest share of well development costs for up to five wells, all of which will be operated by American Eagle. The Company initially receives 50% of its net revenue interest in each well's production over the first two years or until the JV partner has recouped 112% of its development costs on a per-well basis, after which 100% of the Company's initial well bore interests revert back to it.

The two Farm-Out wells were brought onto production during November and the two Carry wells were brought onto production during October. Since American Eagle receives no net revenue interest on the Farm-Out wells and only receives half of its net revenue interest on the Carry wells, contribution from these wells to fourth quarter net production was minimal. However, the wells are beneficial to American Eagle's future growth by extending the proved producing area in both the Three Forks and Middle Bakken formations to the west of the Company's current producing areas in Spyglass. 

The following operated wells were added to production during the fourth quarter ended December 31, 2013 for which the Company has received at least 30 days of cumulative production:

---------------------------------------------------------------------------
                          30 Day IP    Lateral                             
                            Rate        Length    Approximate Infill Number
     Well      Formation   BOEPD1         Ft       DSU2 Acres    in DSU2   
---------------------------------------------------------------------------
                                                                           
  Bryce 3-2N                                                               
 163-102, 2&11   Three                                                     
   Farm-Out      Forks       399         9851         1280         1st     
                                                                           
---------------------------------------------------------------------------
                                                                           
 Erling 15-33                                                              
164-102, 28&33  Middle                                                     
   Farm-Out     Bakken       192         5633         800          1st     
                                                                           
---------------------------------------------------------------------------
                                                                           
   Kent 1-3N                                                               
164-101, 27&34  Middle                                                     
     Carry      Bakken       177         6011         800          4th     
                                                                           
---------------------------------------------------------------------------
                                                                           
  Lauren 2-3N                                                              
164-101, 27&34  Middle                                                     
     Carry      Bakken       119         6055         800          3rd     
                                                                           
---------------------------------------------------------------------------

 1 Barrels of oil equivalent per day ("BOEPD")
 2 Drill spacing unit ("DSU")

The Bryce 3-2N well is the first Three Forks well of the Farm-Out Agreement and is the Company's furthest west Three Forks well, pushing production about four miles west of its most westerly operated Three Forks well (Anton 3-4). The Bryce 3-2N produced an average of 399 BOEPD during the first 30 days of production from a regular 1280 acre spacing unit.

The Erling 15-33 well is the first Middle Bakken well of the Farm-Out Agreement and is the Company's furthest west Middle Bakken well, pushing production about six miles west of its most westerly operated Middle Bakken well (Christianson Brothers 15-33N). The Erling 15-33 produced an average of 192 BOEPD during the first 30 days of production with a shorter lateral length in a correctional spacing unit of approximately 800 acres near the Canadian border.

The Kent 1-3N well is a Middle Bakken well of the Carry Agreement and is one section west of the Company's first Middle Bakken well (Silas 3-2N). The Kent 1-3N well produced an average of 177 BOEPD during the first 30 days of production with a shorter lateral length due to the location in another 800 acre spacing unit adjacent to the Canadian border. 

The Lauren 2-3N well is a Middle Bakken well of the Carry Agreement and is on the same section as the Kent 1-3N well. The Lauren 2-3N well produced an average of 119 BOEPD during the first 30 days of production with a similar lateral length as the other 800 acre spacing unit wells.

In addition to the wells detailed above, American Eagle has seven operated wells that were spud prior to the fourth quarter ended December 31, 2013, six of which remain to be completed with one of the wells completed but not yet producing at year end. One of the wells is part of the Farm-Out Agreement pushing development southwest, two are part of the Carry Agreement targeting the Middle Bakken formation in areas the Company already has producing Three Forks wells, and four are regular working interest wells (two Middle Bakken and two Three Forks). The Farm-Out well consists of a Middle Bakken well (Taylor 16-1E) that is about two miles southwest of the Christianson Brothers 15-33N well. The two Carry wells and four regular working interest wells are either in-fill wells or are adjacent to producing American Eagle wells. The Company is in the process of completing these wells and expects production on these wells to begin within weeks after completion. For wells that have accumulated at least 30 days of production, the Company will provide further details in the next operational update that will be in conjunction with the release of fourth quarter and year-end 2013 results in mid-March.

Severe Weather Impacts Production

During the month of December 2013, Williston, North Dakota had 19 days with temperatures below zero degrees Fahrenheit. The unusually severe weather caused delays to well completion schedules and negatively impacted production from existing wells due to freezing gas lines and equipment. Five of the six wells that were waiting on completion at the end of 2013 were originally scheduled to be completed during December. The Company plans to complete these wells over the next few weeks.

The Company estimates that average production for the fourth quarter ended December 31, 2013, will be approximately 1,800 BOEPD versus our previous guidance of 2,100 BOEPD. The severe weather was the primary culprit for the lower than expected production. The cold weather has continued into January and could cause delays during first quarter of 2014. American Eagle has frac crews scheduled over the next few weeks and anticipates completing most of this work by the middle of the first quarter. The Company anticipates that the increase in oil volumes as completed wells are added to production will be tempered by wells that may be shut-in as adjacent wells are fracture stimulated.

Operated Well Development Guidance

American Eagle currently has two rigs drilling with plans to maintain two rigs through at least the end of first quarter of 2014. During the quarter ended March 31, 2014, the Company plans to drill approximately six gross operated wells. One of the wells will be the last of the Carry Agreement wells, three will be the last of the Farm-Out Agreement wells, and the rest will be regular working interest wells. For the remainder of 2014, American Eagle plans to drill a mix of Three Forks and Middle Bakken wells, with a weighting towards Three Forks wells. The Company plans to continue drilling an even mix of step-out wells in new DSUs and in-fill wells in existing DSUs.

American Eagle is currently evaluating its development plan for 2014. The Company's previous 2014 budget estimated the cost of drilling and completing each long-lateral well, on 1,280-acre drill spacing units ("DSUs") to be approximately $6.8 million per well and approximately $6.2 million per well for shorter lateral wells on 800-acre DSUs. During the second half of 2013, American Eagle has been drilling and completing wells below these budgeted amounts. The Company's previous 2014 budget was based on utilizing one to two rigs to drill and complete approximately 18 gross wells during 2014, at an estimated aggregate cost to the Company of approximately $65 million. Given the efficiencies experienced over the last several months, American Eagle has the flexibility either to lower its capital spending to drill and complete the same number of wells or accelerate development while maintaining its capital spending budget. The Company plans to continue operating with a balanced approach to capital spending and will provide an operations update after the capital budget has been finalized.

Production Guidance

American Eagle estimates that average production for the first quarter ended March 31, 2014, will be approximately 1,850 to 1,950 BOEPD with quarter-over-quarter growth being held back due to the mix of Farm-Out and Carry Agreement wells that are expected to be brought onto production during the quarter. Although it is difficult to estimate the effect severe weather might have during the quarter, the Company believes production will return to a more normalized growth rate following the drilling and completion of Farm-Out and Carry Agreement wells and the higher number of work-overs that were completed during the second half of 2013 and are planned for the first quarter of 2014.

Management Comments

Brad Colby, President and CEO of American Eagle, said, "We are very pleased with the results of the Farm-Out Agreement wells as they help to delineate more of our Spyglass acreage and will directly increase our proved reserves. The results of our Carry Agreement wells reflect the more modest initial rates and flatter decline profiles expected from the short lateral, Middle Bakken wells. They have helped to increase proved reserve area for the Middle Bakken in Spyglass. Despite severe weather impacts in the near-term, we believe our current development plan will continue to support expected growth in proved reserves and production."

ABOUT AMERICAN EAGLE ENERGY CORPORATION

American Eagle Energy Corporation is an independent exploration and production operator that is focused on acquiring acreage and developing wells in the Williston Basin of North Dakota, targeting the Bakken and Three Forks shale oil formations. The Company is based in Denver, CO. More information about American Eagle can be found at www.americaneagleenergy.com or by contacting investor relations at 303-798-5235 or [email protected]. Company filings with the Securities and Exchange Commission can be obtained free of charge at the SEC's internet site at www.sec.gov.

SAFE HARBOR

This press release may contain forward-looking statements regarding future events and the Company's future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). All statements other than statements of historical facts included in this press release regarding the Company's financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "possible," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about, actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements. 

Forward-looking statements involve inherent risks and uncertainties and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies, or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company's operations, products, services, and prices. 

The Company has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks, contingencies, and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control. The Company does not assume any obligations to update any of these forward-looking statements.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
We’ve been doing it for years, decades for some. How many websites have you created accounts on? Your bank, your credit card companies, social media sites, hotels and travel sites, online shopping sites, and that’s just the start. We do it often without even thinking about it, quickly entering our personal information, our data, in a plethora of systems. Sometimes we’re not even aware of the information we are providing. It could be very personal information (think of the security questions you ...
@DevOpsSummit taking place June 7-9, 2016 at Javits Center, New York City, and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
In today's enterprise, digital transformation represents organizational change even more so than technology change, as customer preferences and behavior drive end-to-end transformation across lines of business as well as IT. To capitalize on the ubiquitous disruption driving this transformation, companies must be able to innovate at an increasingly rapid pace. Traditional approaches for driving innovation are now woefully inadequate for keeping up with the breadth of disruption and change facin...
As machines are increasingly connected to the internet, it’s becoming easier to discover the numerous ways Industrial IoT (IIoT) is helping to shape the business world. This is exactly why we have decided to take a closer look at this pervasive movement and to examine the desire to connect more things! Now if you need a refresher on IIoT and how it is changing the world, take a moment and listen to Greg Gorbach with ARC Advisory Group. Gorbach believes, "IIoT will significantly change the worl...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
"What we see what happens when you have a completely networked society and the potential to now drive the value creation and the collaboration and the ecosystems that are possible when you start to be able to connect people and industries together in ways that have never been possible before," explained Esmeralda Swartz, VP of Marketing Enterprise & Cloud at Ericsson, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
How will your company move to the cloud while ensuring a solid security posture? Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is ...
SYS-CON Events announced today that AppNeta, the leader in performance insight for business-critical web applications, will exhibit and present at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. AppNeta is the only application performance monitoring (APM) company to provide solutions for all applications – applications you develop internally, business-critical SaaS applications you use and the networks that deli...
SYS-CON Events announced today that Zerto will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Zerto is committed to keeping enterprise and cloud IT running 24/7 by providing innovative, simple, reliable and scalable business continuity software solutions. Through the Zerto Cloud Continuity Platform™, organizations can seamlessly move and protect virtualized workloads between public, private and hybrid clou...