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Eagle Energy Inc. Announces First Quarter 2018 Results and Confirms Annual General Meeting Date

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Eagle Energy Inc. Announces First Quarter 2018 Results and Confirms Annual General Meeting Date

Canada NewsWire

CALGARY, May 10, 2018 /CNW/ - (TSX:EGL):  Eagle Energy Inc. ("Eagle") is pleased to report its financial and operating results for the first quarter ended March 31, 2018. 

As a reminder, Eagle's annual general meeting ("AGM") will be held on June 26, 2018 at 10:00 a.m. at Altius Centre, 2nd Floor, 500 - 4 Avenue SW, Calgary for shareholders of record on May 14, 2018.

When reflecting on Eagle's first quarter performance, Wayne Wisniewski, President and Chief Executive Officer, stated, "Given our view of the growth opportunities in our North Texas asset, we are seeking to reduce debt and corporate costs, including interest costs, to better position Eagle to capitalize on this project.  Our disposition of Salt Flat in February, resulting in a 34% reduction in debt, was a step towards achieving that goal.  In addition, we continue to make strides in reducing our general and administrative expenses, which were 24% below first quarter 2017 levels."

Mr. Wisniewski continued, "We are pleased to report that Eagle's first horizontal well in North Texas continues to perform above expectations.  During the quarter, we drilled our second horizontal well in North Texas at a location over 10 miles from the first horizontal well.  Completion operations are currently underway."

First Quarter 2018 Financial Results

Eagle's unaudited condensed consolidated interim financial statements and accompanying notes for the three months ended March 31, 2018 and related management's discussion and analysis have been filed with the securities regulators and are available online under Eagle's issuer profile at www.sedar.com and on Eagle's website at www.EagleEnergy.com.

This news release contains non-IFRS financial measures and statements that are forward-looking.  Investors should read "Non-IFRS Financial Measures" and "Note about Forward-looking Statements" near the end of this news release.  Figures within this news release are presented in Canadian dollars unless otherwise indicated.

Highlights for the Three Months ended March 31, 2018

  • Disposed of the Salt Flat Field in Caldwell County, Texas for cash proceeds of $34.4 million in early February. 

  • Reduced long term debt by 34% (from $US 58.2 million to $US 38.5 million) and further funded the North Texas drilling program with net proceeds from the Salt Flat disposition.

  • Drilled a second horizontal well in North Texas at a location over 10 miles from the first horizontal well, with completion operations currently underway.

  • Field netback improved by 32% on a per barrel of oil equivalent ("boe") basis (from $20.81 to $27.47 per boe) when compared to the first quarter of 2017.

  • Increased funds flow from operations excluding one-time disposition costs and debt prepayment expenses by 219% (from $1.6 million to $5.1 million) when compared to the first quarter of 2017.

  •  Recorded $1.7 million of funds flow from operations and $5.1 million for funds flow from operations excluding one-time disposition costs and debt prepayment expenses.  

  • Reduced general and administrative costs, excluding one-time disposition costs, by 24% when compared to the first quarter of 2017.

2018 Outlook

Eagle remains focused on continuing to drill wells on its North Texas property due to its high netbacks and opportunities for meaningful growth.  This light oil development asset has approximately 25,000 net acres under lease and is the site of Eagle's first horizontal well in North Texas, which was brought on production in December 2017 and continues to perform above expectations.  Eagle has drilled its second horizontal well at a location over 10 miles from the first horizontal well, with completion operations currently underway.  Success on this second well would prove up additional leased acreage in the area.  A third horizontal well is planned for late 2018.

In light of our view of the growth opportunities in our North Texas asset, Eagle is seeking to reduce debt and corporate costs, including interest costs, in order to better position itself to capitalize on this project.  Alternatives for funding growth could potentially include asset sales.  The February 8, 2018 disposition of Eagle's assets in Salt Flat was an initial step towards Eagle achieving its overall goals.

The Salt Flat disposition reduced Eagle's total corporate production by approximately 1,200 boe per day ("boe/d").  Following the Salt Flat disposition, an improved corporate decline rate of 14% lends itself to Eagle sustaining 2018 average corporate production at post-Salt Flat disposition levels with low capital expenditures.

The Salt Flat disposition also reduced Eagle's term loan by 34% (from $US 58.2 million to $US 38.5 million).  On a go-forward basis, and excluding one-time debt prepayment expenses relating to the disposition, lower debt levels at current interest rates will result in reduced monthly interest costs.  In addition, general and administrative expenses are expected to decrease in 2018 as Eagle continues to focus on efficiencies and cost reduction.

Summary of Quarterly Results











Q1/2018

Q4/2017

Q3/2017

Q2/2017

Q1/2017

Q4/2016

Q3/2016

Q2/2016

($000's except for boe/d and
per share amounts)









Sales volumes – boe/d

2,974

3,804

3,749

3,966

3,767

3,803

4,085

4,147










Revenue, net of royalties

12,461

14,725

12,459

14,167

14,218

13,891

12,854

13,149


per boe

46.57

42.08

36.12

39.25

41.95

39.72

34.20

34.84










Operating, transportation and
marketing expenses

5,109

6,864

6,301

5,885

7,165

6,799

6,564

5,928


per boe

19.10

19.61

18.27

16.31

21.14

19.44

17.46

15.71










Field netback

7,352

7,861

6,158

8,282

7,053

7,092

6,290

7,221


per boe

27.47

22.47

17.85

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