American Eagle Energy Corporation (NYSE MKT: AMZG) (“American Eagle” or the “Company”) announces an operations update and production guidance for the Company’s operated well development in its Spyglass Project area in northwestern Divide County, North Dakota, and details for the third quarter 2014 earnings release and conference call.
Well Development Activity
Since its last operations update on September 24, 2014, the Company has continued to drill and complete successful wells in the central and western portion of its Spyglass operating area. The operated wells listed below have produced an average of 30 days or more unless otherwise noted:
| 30-Day IP Rate |
Lateral Length | Approximate | Infill Number | |||||||
| Well | Formation | BOEPD(1) | Feet | DSU(2) Acres | in DSU(2) | |||||
| Eli 8-1E- 163-101 (5 & 6) |
Bakken | 405 | 10,052 | 1,280 | 4th well in DSU, 2nd Bakken | |||||
| George 3-1- 163-102 (1 & 12) (4-well pad) |
Three Forks | 380 | 9,533 | 1,280 | 1st well in DSU, 1st Three Forks | |||||
| Iver 3-1- 163-102 (1 & 12) (4-well pad) |
Bakken | 295 | 9,543 | 1,280 | 2nd well in DSU, 1st Bakken | |||||
| Massive State 3-1N- 164-102 (25 & 36) (4-well pad) |
Three Forks | 322 | 6,149 | 800 | 1st well in DSU, 1st Three Forks | |||||
| Crestone State 3-1N- 164-102 (25 & 36) (4-well pad) |
Three Forks | 250 | 5,997 | 800 | 2nd well in DSU, 2nd Three Forks | |||||
| Skjermo 2-14- 163-102 (14 & 23)(3) |
Three Forks | 411 | 9,688 | 1,280 | 1st well in DSU, 1st Three Forks | |||||
| Donald 15-33S- 163-102 (4 & 9)(4) |
Three Forks | 320 | 10,064 | 1,280 | 1st well in DSU, 1st Three Forks | |||||
| (Farm-Out) |
(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, using 30 days unless otherwise noted.
(2) Drill spacing unit (“DSU”)
(3) Based on first 29 days of production.
(4) Based on first 20 days of production.
The Eli 8-1E (Bakken long lateral) well is located in the Stanley spacing unit. The Eli 8-1E was the first well in the field that was completed using a full slickwater stimulation. The production results of the well have continued to remain strong, with a relatively flat production curve. The 60-day average production for the Eli 8-1 well was over 400 BOEPD, compared to the first 30-day average production of 405 BOEPD.
The Company’s first 4-well pad started production during September. The wells have been performing at or above the projected type curve for such wells, with production ranging from 380 BOEPD for the George 3-1 (Three Forks long lateral) well to 250 BOEPD for the Crestone State 3-1N (Three Forks short lateral) well. The costs for each individual well located on the 4-well pad ranged from approximately $5.5 million to approximately $6.1 million, with an average well cost of approximately $5.8 million. Recent well development costs, including the 4-well pad, have averaged approximately $6.1 million. The Company currently intends to focus most of its 2015 development on additional 2-well and 4-well pads which it expects will improve drilling efficiency, reduce development costs and improve return on capital.
The Skjermo 2-14 (Three Forks long lateral) well, a southern extension to the western Spyglass area that started production at the end of September, is performing very well with an average of 411 BOEPD in the first 30 days. The Donald 15-33S (Three Forks long lateral) well is the last of six wells to be developed under the Company’s Farm-Out program. The Donald 15-33S 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 has produced an average of 320 BOEPD during the first 20 days of production. Both of these wells reflect the improvements from the continued refinement of the Company’s hybrid stimulation design.
Operated Well Development Guidance
The Rick 13-31 (Three Forks short lateral) well with an 85% working interest was stimulated earlier in October and start producing oil yesterday. Based on the positive initial production rates of the Eli 8-1E well, American Eagle currently intends to continue to apply full slickwater stimulations for the Byron 4-4 (Bakken long lateral) and Shelley Lynn 4-4N (Bakken short lateral) wells that are on a 2-well pad located between the Eli 8-1E and Christianson Brothers 15-33 (Bakken short lateral) well, which has produced approximately 115,000 barrels of oil equivalents to date. The 2-well pad has an average working interest of 96%, representing 1.9 net wells and is scheduled to be completed within the next several weeks. The Shelly 3-2N (Three Forks short lateral) well, which was drilled and completed during the first half of the year with a 97% average working interest, is scheduled to be recompleted during the fourth quarter of 2014. The Company currently has a rig drilling the Huffman (Three Forks long lateral) well with a 94% working interest. The Huffman 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. In addition to these operated wells, American Eagle has participated in four wells operated by others in its Spyglass area that represent 0.4 net wells and are anticipated to contribute to fourth quarter production.
Production Volume Guidance
By the end of September 2014, following the addition of production from the 4-well pad, the Company was able to achieve its 2014 year end goal to produce over 3,000 BOEPD. Although the initial production from the 4-well pad allowed American Eagle to achieve its 3,000 BOEPD goal in late September, the Company estimates that average production for October will be approximately 2,700 to 2,800 BOEPD. American Eagle is maintaining its estimate that the exit rate for 2014 should range between 2,700 to over 3,000 BOEPD, depending upon timing of well completions scheduled for the fourth quarter of 2014. The Company anticipates the wells noted above will be completed before the end of the year with approximately 4 gross (3.7 net) operated wells added to production before the end of 2014.
Third Quarter 2014 Earnings Release and Conference Call
American Eagle plans to announce its third quarter 2014 financial and operational results on Wednesday, November 5, 2014, after the close of trading on the NYSE MKT. The Company will host a conference call on Thursday, November 6, 2014 at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time) to discuss financial and operational results for the quarter.
| American Eagle Energy Corporation 3Q 2014 Financial and Operational Results Conference Call | ||
| Date: | Thursday, November 6, 2014 | |
| Time: | 10:00 a.m. Eastern Time | |
| 9:00 a.m. Central Time | ||
| 8:00 a.m. Mountain Time | ||
| 7:00 a.m. Pacific Time | ||
| Webcast: | Live and rebroadcast over the Internet at American Eagle website |
|
| Website: | www.americaneagleenergy.com | |
| Telephone Dial-In: |
877-407-9171 (toll-free) and 201-493-6757 (international) |
|
| Telephone Replay: | Available through Thursday, November 13, 2014 | |
| 877-660-6853 (toll-free) and 201-612-7415 (international) |
||
| Passcode: 13572777 | ||
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 ir@amzgcorp.com. Company filings with the Securities and Exchange Commission can be obtained free of charge at the SEC’s website at www.sec.gov.
