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Eagle Energy Inc. Announces Second Quarter 2018 Results and Previously Announced Sale of Twining Assets

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Eagle Energy Inc. Announces Second Quarter 2018 Results and Previously Announced Sale of Twining Assets

Canada NewsWire

CALGARY, Aug. 9, 2018 /CNW/ - (TSX:EGL):  Eagle Energy Inc. ("Eagle") is pleased to report its financial and operating results for the second quarter ended June 30, 2018, as well as to reiterate the previously announced sale of its Twining assets.

When reflecting on Eagle's second quarter and the Twining asset sale announcement, Wayne Wisniewski, President and Chief Executive Officer, stated, "Eagle continues to execute its previously announced plan to reduce debt and corporate costs.  To the end of June, and excluding one-time costs associated with the Salt Flat disposition, our year to date general and administrative expenses are 34% lower than 2017.  In addition, when compared to 2017 year end, we have reduced our term loan by 34% and intend to use the net proceeds from our Twining asset sale closing in August 2018 to further reduce debt."

Mr. Wisniewski continued, "We are pleased to report that we plan to drill our third North Texas horizontal well late in the third quarter.  The well location is approximately one mile from our initial horizontal well, a well which has exceeded production expectations.  Although our second North Texas horizontal well (which is located 13 miles from our initial well) did not meet our budget expectations with a 30 day initial production rate of 70 barrels of oil equivalent per day, technical work is ongoing to better understand the lower than expected oil cut."

Second Quarter 2018 Financial Results

Eagle's unaudited condensed consolidated interim financial statements and accompanying notes for the three and six months ended June 30, 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 June 30, 2018

  • Field netback improved by 28% on a per barrel of oil equivalent ("boe") basis (from $22.94 to $29.26 per boe) when compared to the second quarter of 2017.

  • General and administrative expenses to the end of June 2018, excluding one-time costs associated with the Salt Flat disposition, are 34% lower than 2017.

  • Long term debt at the end of the second quarter is 34% lower than at 2017 year end ($US 38.5 million compared to $US 58.2 million).

Sale of Twining Assets

On July 20, 2018, and further to Eagle's previously announced strategy of reducing debt and interest charges, Eagle announced that it has signed an agreement to sell its entire interest in its oil and gas properties near Twining, Alberta to a third party for cash consideration of $13,820,000 before customary post-closing adjustments (the "Sale").

  • The Sale is expected to close on or about August 28, 2018.

  • Eagle intends to use the net proceeds from the Sale to reduce outstanding debt under its secured term loan and to further fund its North Texas development program.

  • The Sale will reduce leverage, increase corporate field netback per boe and lower Eagle's corporate decline rate.

2018 Outlook

For 2018, Eagle plans to:

  • Continue to focus on drilling wells on its North Texas property with opportunities for meaningful growth and high netbacks.

    • Eagle holds over 25,000 net acres on contiguous leases held in six different areas across Hardeman County that are prospective for horizontal development.

    • Eagle plans to spud its third horizontal well in the third quarter of 2018 approximately one mile from the location of its initial horizontal well, a well which has exceeded production expectations.

    • North Texas oil sells at par to WTI, while many producers in the Permian face negative WTI differentials.

  • Continue to reduce debt and corporate costs, including interest costs, in order to better position Eagle to capitalize the North Texas development program.

    • Alternatives for funding growth include asset sales.

    • The February 2018 Salt Flat disposition and the July 2018 announced Sale are steps towards achieving our overall goals.

    • Eagle has reduced its term loan by 34% from the end of 2017 to the end of June 2018 (from $US 58.2 million to $US 38.5 million) and intends to use the net proceeds from the Sale closing in August 2018 to further reduce debt.

    • On a go-forward basis, lower debt leads to reduced monthly interest costs.

  • Continue to reduce general and administrative expenses by focusing on efficiencies and cost reduction.

    • General and administrative expenses to the end of June 2018, excluding one-time costs associated with the Salt Flat disposition, are 34% lower than 2017.

Summary of Quarterly Results











Q2/2018

Q1/2018

Q4/2017

Q3/2017

Q2/2017

Q1/2017

Q4/2016

Q3/2016

($000's except for boe/d and

per share amounts)









Sales volumes – boe/d

2,262

2,974

3,804

3,749

3,966

3,767

3,803

4,085










Revenue, net of royalties

10,228

12,461

14,725

12,459

14,167

14,218

13,891

12,854


per boe

49.69

46.57

42.08

36.12

39.25

41.95

39.72

34.20










Operating, transportation and

marketing expenses

4,206

5,109

6,864

6,301

5,885

7,165

6,799

6,564


per boe

20.43

19.10

19.61

18.27

16.31

21.14

19.44

17.46










Field netback

6,022

7,352

7,861

6,158

8,282

7,053

7,092

6,290


per boe

29.26

27.47

22.47

17.85

22.94

20.81

20.28

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