Market Overview

American Eagle Energy Not Expecting To Resume Drilling Until Crude Price Improve, Sees Q4 Output Btwn 2,600 & 2,700 BOEPD

American Eagle Energy Announces Sale of Certain Non-Core Assets to Enhance Liquidity
UPDATE: Wunderlich Securities Reiterates, Suspends PT On American Eagle Energy Until Crude Prices Improve
  • Company also monetized all crude oil hedge positions

Corporation (NYSE MKT: AMZG) ("American Eagle" or the "Company"), announces an operations update and production guidance for the fourth quarter ending December 31, 2014 and capital spending guidance for 2015.

Commodity Hedges Sold for $13.0 Million

The Company recently monetized all of its crude oil hedge positions for December 2014 through December 2015, generating proceeds of $13.0 million. The hedges represented approximately 414,000 barrels of oil at an average price of $89.59 per barrel. Proceeds will be used to improve American Eagle's liquidity position.

Credit Facility and $175 Million Bonds Outstanding

American Eagle has no outstanding indebtedness on its senior secured revolving credit facility ("Credit Facility") that had a
n initial
borrowing base of up to $60 million as of August 27, 2014. Effective December 24, 2014, the borrowing base was reduced to zero. The Company has been in compliance with the Credit Facility maintenance covenants.

American Eagle has $175 million of outstanding indebtedness on its 11% secured bonds. The bonds do not have maintenance covenants.

2015 Capital Spending Guidance

The Company continues to be focused on capital discipline and maintaining liquidity. After drilling the Huffman 15-34S well in November 2014, American Eagle released the drilling rig. Given current crude oil prices, American Eagle has suspended its 2015 operated drilling budget and does not anticipate resuming drilling operations until crude oil prices improve. The Company expects to conduct completion operations in the first quarter of 2015 on two gross (1.9 net) wells (Byron 4-4 and Shelley Lynn 4-4N) that were drilled during the fourth quarter ended December 31, 2014. These operations are estimated to require a capital expenditure of approximately $4.5 million in 2015.

Operated Well Development

During the fourth quarter ended December 31, 2014, American Eagle added to production 3 gross (1.8 net) new operated wells and 2 gross (1.3 net) operated wells that were re-completed. The Donald 15-33S (Three Forks long lateral) well was the last of six wells developed under the Company's Farm-Out program. The Donald 15-3
3S extends the
productive area two miles west of the Bryce 3-2 well and appears to prove up an additional 4 to 6 spacing units in the western part of the field. The well began producing oil in early October at an average of approximately 312 barrels of oil equivalent per day ("BOEPD") during the first 30 days of production.

The Rick 13-31 (Three Forks short-lateral) well with an 85% working interest was stimulated earlier in mid-October and began producing oil in late October. During the first 30 days of production, the Rick 13-31 well produced an average of approximately 267 BOEPD.

The Huffman 15-34S (Three Forks long-lateral) well with a 94% working interest was stimulated in November using a slickwater stimulation and has been cleaning up after being put on pump in mid-December with rates exceeding 250 BOEPD for the last few days, The Huffman 15-34S well is located between the Bryce 3-2 (Three Forks long-lateral) well that produced approximately 400 BOEPD during the first 30 days, and the Donald 15-33S (Three Forks long-lateral) well that produced approximately 312 BOEPD during the first 30 days.

Remedial completions to correct problems with faulty sleeves were performed during the fourth quarter of 2014 on the Shelly 3-2N (Three Forks short-lateral, 97% WI) and the La Plata State 2-16 (Three Forks long lateral, 39% WI) wells, both of which were drilled and completed during the first half of th
e year. Reperforating and restimulation
operations were successfully conducted on both wells and they have been cleaned out and put on pump but no meaningful production data is available yet.

Production Volume Guidance

The Company anticipates that its average production for the fourth quarter ended December 31, 2014, will be approximately 2,600 to 2,700 BOEPD. The new estimate is a reduction from its previous guidance of between 2,700 BOEPD to over 3,000 BOEPD due mostly to anticipated completion of the Byron 4-4 and Shelley Lynn 4-4N now scheduled for first quarter of 2015 rather than fourth quarter of 2014.

Posted-In: News Press Releases


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