Eagle Energy Inc. Announces Third Quarter 2016 Results

CALGARY, ALBERTA--(Marketwired - Nov. 3, 2016) - (TSX:EGL): Eagle Energy Inc. ("Eagle") is pleased to report its financial and operating results for the third quarter ended September 30, 2016.

"Eagle remains on track to post 2016 results at the upper end of our production guidance range, the lower end of our current operating cost guidance range, which was already reduced once in May, and as planned for our capital spend," said Richard Clark, Chief Executive Officer.

Mr. Clark added, "During the third quarter of 2016, with Dixonville operatorship in our hands effective June 1^st and operatorship of our remaining Twining properties on August 1^st, we completed all of our planned field work, brought on previously shut-in production and realized improved operational efficiencies."

"We forecast our 2016 year-end net debt to reduce to $59 million. This will afford Eagle over $10 million of headroom under our existing $70 million credit facility, which was just reaffirmed in early November, and will result in 84% being utilized at the end of 2016."

"Over the past two years, Eagle has posted many accomplishments to ensure its survival through this challenging cycle. We sold our unconventional Permian property at the top of the market and redeployed our capital into long life, low decline and low abandonment cost conventional oil assets. We have secured operatorship of 95% of our total corporate production. Over the course of 2016, we expect to have paid down our net debt by 8%, grown our year-over-year 2016 average production by 13% and reduced our year-over-year operating costs by 18%, all during a time when few have thrived. We have made significant strides in identifying low risk development growth opportunities which position Eagle for future growth. We look forward to the release of our 2017 capital and operating budget in early December," said Mr. Clark.

Eagle's unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2016 and related management's discussion and analysis have been filed with the securities regulators and are available online under Eagle's issuer profile on SEDAR 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 the sections titled "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 September 30, 2016

• Achieved quarterly production of 4,085 barrels of oil equivalent per day ("boe/d") and expects 2016 full year average production to be at the upper end of its stated guidance range.
• Reduced per boe operating costs (inclusive of transportation) by 10% from the prior year comparative quarter and 18% year-over-year, and expects 2016 monthly operating costs to be at the lower end of the current stated guidance range, a range which was already reduced in May 2016.
• Assumed operatorship of the Twining properties on August 1, 2016, thereby allowing Eagle to complete field work to optimize production and increase efficiencies on these properties. 
• Further to Eagle's assumption of operatorship of the Dixonville property in June, performed pipeline work that added approximately 275 boe/d of production gross to the field from ten previously shut-in wells.
• Generated quarterly funds flow from operations of $4.6 million leading towards expected 2016 year-end net debt being reduced to $59 million and expected resulting headroom of $11 million on its credit facility. Eagle's $70 million credit facility was reaffirmed upon finalizing its mid-year borrowing base review on November 3, 2016.

2016 Outlook

This outlook section is intended to provide shareholders with information about Eagle's expectations for capital expenditures, production and operating costs for 2016. Readers are cautioned that the information may not be appropriate for any other purpose. This information constitutes forward-looking information. Readers should note the assumptions, risks and discussions under "Note about Forward-Looking Statements" at the end of this news release.

Eagle's 2016 capital budget, average production and operating cost guidance remains unchanged from what Eagle previously announced and is as follows:

Eagle's Expected Funds Flow from Operations and Corporate Payout Ratio

For 2016, Eagle expects to be at the upper end of its stated average production guidance range and the lower end of its monthly operating cost guidance range. In addition, the reduction in Eagle's monthly dividend to $0.005 (half a cent) per share, beginning with the June 2016 dividend, combined with updated commodity price and foreign exchange rate assumptions results in a change in Eagle's expected 2016 funds flow from operations and corporate payout ratio from that disclosed on August 4, 2016 as follows:

The following tables show the sensitivity of Eagle's expected 2016 funds flow from operations, corporate payout ratio and debt to trailing funds flow from operations ratio to changes in commodity prices and production:

Summary of Quarterly Results