Welcome!

News Feed Item

American Eagle Energy Announces Operations Update and Reaffirms 2014 Production Guidance

DENVER, CO--(Marketwired - July 16, 2014) - American Eagle Energy Corporation (NYSE MKT: AMZG) ("American Eagle" or the "Company"), announces its operational update and guidance for production and the Company's operated well development in its Spyglass Project area in northwestern Divide County, North Dakota.

Highlights

  • Added 9 gross (3.9 net) operated wells to production that included six Three Forks and three Bakken wells in eastern and central Spyglass and a step-out well in western Spyglass during the second quarter of 2014;
  • Ella well (Three Forks step-out in western Spyglass) produced an average of approximately 343 barrels of oil equivalent per day ("BOEPD") during the first 30 days and 424 barrels of oil equivalent yesterday;
  • Efficiently drilled 4-well pad in 62 days, averaging 11.6 days from spud-to-total-depth;
  • Net production is currently averaging approximately 2,200 to 2,300 BOEPD;
  • 6 gross (4.6 net) operated wells, including a 4-well pad, are being completed or awaiting completion and are expected to be added to production during the third quarter of 2014; and
  • On track to meet or exceed 2014 exit rate production guidance of over 3,000 BOEPD.

Second Quarter 2014 -- Well Development Activity

American Eagle added 9 gross (3.9 net) operated wells to production during second quarter 2014. The Company's May 13, 2014 operations update included initial results for two operated wells, the Blackwatch (Carry) well and the Haugen (Farm-Out) well that were brought onto production during early April 2014. In addition to these wells, American Eagle added seven more operated wells to production during second quarter 2014. The operated wells listed below have produced an average of 30 days, unless otherwise noted, and are listed from the most westerly located well to the most easterly well:

                                                                            
                                                                            
----------------------------------------------------------------------------
                               30-Day   Lateral                             
                              IP Rate    Length  Approximate  Infill Number 
      Well        Formation   BOEPD(1)    Feet   DSU(2)Acres    in DSU(2)   
----------------------------------------------------------------------------
Ella 4-15-163-                                                 1st well in  
 102 (15 & 22)   Three Forks    343      9,716      1,280     DSU, 1st Three
 Farm-Out                                                         Forks     
----------------------------------------------------------------------------
Murielle 16-1E-                                                3rd well in  
 163-101 (5 &    Three Forks    401      9.950      1,280     DSU, 2nd Three
 6)(3)                                                            Forks     
----------------------------------------------------------------------------
Warren 4-2- 163-                                               4th well in  
 101 (2 & 11)       Bakken      178      9,534      1,280    DSU, 1st Bakken
----------------------------------------------------------------------------
Braelynne 2-2N-                                                             
 164-101 (26 &      Bakken       68      6,012       800       5th well in  
 35) Carry                                                   DSU, 3rd Bakken
----------------------------------------------------------------------------
Richard 2-13N-                                                 5th well in  
 163-101 (1 &    Three Forks    195      10,158     1,280     DSU, 3rd Three
 12)(3)                                                           Forks     
----------------------------------------------------------------------------
                                                                            
                                                                            

 1 IP Rate BOEPD is calculated taking the cumulative production from each well divided by the number of days each well has been on production. Results above are based on the first 30 days of production unless otherwise noted.
 2 Drill spacing unit ("DSU").
 3 Based on first 10 days of production.

The Ella 4-15 step-out well is a Three Forks completion and part of the Farm-Out well program with the Company's JV partner. This well is located approximately 2 miles southwest of the Bryce 3-2 Three Forks producer and 4 miles southeast of the Haugen 15-12 Three Forks well. The good initial oil rates from the Ella 4-15 confirms a significant expansion of the productive Three Forks reservoir to the south and west of the current field area.

The Murielle 16-1E produced an average of 401 BOEPD during the first 10 days of production. It is a Three Forks well located in the central portion of the Spyglass acreage in the same DSU as the Stanley (Three Forks) and Taylor 16-1E (Bakken) wells and exhibits similarly strong production results. The Company is currently drilling the lateral section of the Eli 8-1E as an infill Bakken well in the same DSU. The Murielle 16-1E well came onto production the last week of June, and had minimal impact on second quarter average production.

The Warren 4-2 (Bakken) produced an average of 178 BOEPD during the first 30 days of production and has been steadily cleaning up with decreasing water cuts and flat to slightly increasing oil rates as it nears the end of its second month of production. The Richard 2-13N (Three Forks) produced an average of 195 BOEPD during the first 10 days of production. The Richard 2-13N well came onto production the last day of June. The Braelynne 2-2N is a short lateral Middle Bakken well and is the fourth of five carried working interest well that the Company drilled with its JV partner. The well is the poorest completion to date averaging only 68 BOEPD with a water cut in excess of 80%. The poor productivity and high water cuts observed seems to be attributable to an area of poor reservoir that is confined to approximately the 800 acre DSU defined by Sections 26 and 35 - 164-101 with the surrounding wells showing normal performance. 

The La Plata State 2-16 and the Shelly 3-2N wells are Three Forks completions that were put on pump in early June. Both wells had initial production rates similar to offset wells in their area for approximately 7 days prior to experiencing sharp drops (greater than 80% reductions) in total productivity that would have to be attributed to near wellbore plugging effects. Remedial work is being planned to go into the wells and check for pluging and re-establish good communication with the reservoir.

A follow-up on the Haugen 15-12, a Three Forks step out well drilled on the far western edge of the Spyglass acreage, shows that the well continues to produce at, essentially, a flat oil rate with an average of 91 BOEPD over the last 7 days. The production and emulsion problems observed in the initial production period and reported in our previous operations update have been sorted out and the well is producing steadily. 

Of the 9 gross (3.9 net) operated wells added to production during the second quarter of 2014, 2 wells are Farm-Out wells (Haugen and Ella), 3 wells are Carry wells (Blackwatch, Braelynne and LaPlata State), and 4 wells (Warren, Shelly, Murielle and Richard) are regular working interest wells.

Operated Well Development Guidance

The Company currently has 2 gross (1.0 net) operated wells that are in the process of being completed, 4 gross (3.5 net) operated wells on a 4-well pad that are awaiting completion, and 2 gross (1.4 net) operated wells that are being drilled. All eight of these operated wells (six Three Forks and two Bakken wells) are in the central portion of Spyglass, with high working interests and surrounded by wells that have exhibited strong production results.

The first two wells, the Annie 15-32 and James 15-20, have been stimulated and are being cleaned out and are projected to be on production during the second half of July. The remaining four wells on the single drill pad are expected to begin fracturing operations in late July and be put on production before the end of August. The last two wells, the Rick 13-31 and Eli 8-1E, are drilling in the lateral sections and are infill wells to the Tangedal 13-31 and the Taylor 16-1E, respectively. American Eagle plans to announce results of the wells once it has achieved approximately 30 days of cumulative production. The Company anticipates its next operations update will be included in second quarter financial results that will likely be reported during the first half of August.

Since September 2013, American Eagle has been running two rigs to develop its Spyglass area and has averaged approximately 24 days per well from spud-to-spud and 18 days from spud-to-rig release. On a recently drilled 4-well pad, the Company drilled all four wells including rig moves in 62 days, averaging 15.5 days per well spud-to-spud. Overall, the Company has reduced its average drilling time from spud to rig release by 55% over the last two years. 

Production Volume Guidance

While weather conditions improved during the second quarter, American Eagle's production was impacted by a number of road closures due to heavy rains that required wells to be shut in when storage tanks were full. The Company estimates that average second quarter 2014 production was approximately 2,000 to 2,100 BOEPD. The Company estimates that its current production is approximately 2,200 to 2,300 BOEPD.

American Eagle's accumulation of drilled wells with high working interest is anticipated to add significant production during the second half of 2014. The 6 gross (4.5 net) wells that are completing or awaiting completion should provide substantial uplift to third quarter production. The two wells (1.4 net) currently drilling should be completed during the third quarter with anticipation of contributing to fourth quarter 2014 production. These higher working interest wells along with additional planned development wells in 2014 should position American Eagle to meet or exceed its production volume guidance for 2014. As such, American Eagle reaffirms its 2014 exit rate production volume guidance at over 3,000 BOEPD.

Management Comments

Brad Colby, President and CEO of American Eagle, said, "During the second quarter of 2014 we added 9 gross (3.9 net) operated wells to production, which is the most wells the Company has added in a single quarter and more than were added in all of 2012 when we commenced drilling in Spyglass. We have continued to improve our drilling operations and have drilled 2-mile lateral wells in as little as 11 days. We are developing strategies and processes to realize improvements in well development costs and other operational efficiencies. We drilled our first 4-well pad in 62 days and look forward to completing and producing from these high working interest wells over the near term. While American Eagle was impacted by weather conditions, the Company's development program for the remainder of 2014 is intended to minimize future impact. Importantly, initial results from recent wells, including the Ella and Murielle, continue to de-risk and delineate our Spyglass well inventory and should be additive to future reserve and production growth."

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 website 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 amount we may invest, the location, and the scale of the drilling projects in which we intend to participate; our beliefs with respect to the potential value of drilling projects; our beliefs with regard to the impact of environmental and other regulations on our business; our beliefs with respect to the strengths of our business model; our assumptions, beliefs, and expectations with respect to future market conditions; our plans for future capital expenditures; and our capital needs, the adequacy of our capital resources, and potential sources of capital.

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
Digital transformation is too big and important for our future success to not understand the rules that apply to it. The first three rules for winning in this age of hyper-digital transformation are: Advantages in speed, analytics and operational tempos must be captured by implementing an optimized information logistics system (OILS) Real-time operational tempos (IT, people and business processes) must be achieved Businesses that can "analyze data and act and with speed" will dominate those t...
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
While DevOps promises a better and tighter integration among an organization’s development and operation teams and transforms an application life cycle into a continual deployment, Chef and Azure together provides a speedy, cost-effective and highly scalable vehicle for realizing the business values of this transformation. In his session at @DevOpsSummit at 19th Cloud Expo, Yung Chou, a Technology Evangelist at Microsoft, will present a unique opportunity to witness how Chef and Azure work tog...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
IoT is fundamentally transforming the auto industry, turning the vehicle into a hub for connected services, including safety, infotainment and usage-based insurance. Auto manufacturers – and businesses across all verticals – have built an entire ecosystem around the Connected Car, creating new customer touch points and revenue streams. In his session at @ThingsExpo, Macario Namie, Head of IoT Strategy at Cisco Jasper, will share real-world examples of how IoT transforms the car from a static p...
SYS-CON Events announced today that Pulzze Systems will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Pulzze Systems, Inc. provides infrastructure products for the Internet of Things to enable any connected device and system to carry out matched operations without programming. For more information, visit http://www.pulzzesystems.com.
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, will discuss the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports. The session will include a working demo and a technical d...