LITTLETON, Colo., Sept. 27, 2012 /PRNewswire/ -- American Eagle Energy Corporation (OTCQX: AMZG; "American Eagle" or the "Company") is pleased to provide an update on its oil and gas reserves and additional well results for its Spyglass Project in Divide County, North Dakota.
American Eagle commissioned a third-party consulting firm to perform a mid-year reserve update for the Spyglass Project in order to assess the impact of the high level of field development work in the area during the first half of 2012. A total of five company-operated wells with an average working interest of 36% have been put on production thus far in 2012. The Company has also participated in thirteen outside-operated wells with an average working interest of 7% during the first eight months of 2012. All of these wells have been successfully completed for production with average initial production rates typically ranging from 450 to 600 barrels of oil per day. This drilling has confirmed an additional 17,000 gross acres in the Spyglass project as productive.
The 2012 development work has resulted in an approximate tenfold increase in company net reserves to a total proved developed reserve of 1,126,000 barrels of oil and 514,000 MCF of gas. These estimated proved developed reserves represent a discounted present value at 10% (PV10) of approximately $39 million. Proved undeveloped reserves associated with the program have been estimated at 2,813,000 barrels of oil and 1,382,000 MCF of gas with PV10 value of approximately $71 million net to American Eagle. Thus, total proved reserves in the Spyglass project as of September 1, 2012 are 3,939,000 barrels oil and 1,896,000 MCF gas with a PV10 value of approximately $110 million. Additional net reserves to the Company in the Probable and Possible categories total approximately 1,253,000 barrels of oil and 627,000 MCF of gas with an estimated PV10 value of approaching $26 million.
American Eagle continues to execute its 2012 drilling program with the drilling and casing of its first Middle Bakken well in the area at the Silas 3-2N. The drilling rig was then skidded on that location and is currently drilling the vertical section of the Haagensen 3-2 well, which is the first infill Three Forks Formation well and located between the Cody 15-11 and Coplan 1-3 producers. The Silas 3-2N and Haagenson 3-2 wells are scheduled to be fracture stimulated and put on production in late October.
American Eagle has contracted a second drilling rig for a minimum four-well program designed to help accelerate development of the Three Forks reserves in the project. The Megan 14-12 well, which represents the first infill location in the Christianson 15-12 spacing unit, was spud this week. The two drilling rigs will enable the Company to drill and complete six more wells by year end, which would bring the total number of operated, producers up to 12 wells by the start of 2013, and allow American Eagle to meet or exceed its previously announced 2012 exit rate target of 1000 BOPD net to the Company.
The Anton 3-4 and Elizabeth 3-4N wells, drilled from a common drilling pad, were completed in early September. Both wells are completed in the Three Forks Formation and extended the proved productive edges of the field to the north and west. The Anton 3-4 was drilled in a 1280 acre spacing unit with a 9382 ft. lateral section and stimulated with a 30-stage fracture treatment. The well was flowed back for approximately twelve days for clean up at an average rate of 427 BOPD, 664 BWPD and 298 MCFPD. The Elizabeth 3-4N was drilled in an 800 acre spacing unit adjacent to the Canadian border with a 5950 ft. lateral section. The Elizabeth 3-4N was completed with a unique 30-stage completion designed to cost effectively place the fracture treatments more closely together. It flowed back on clean-up for approximately eleven days at an average rate of 434 BOPD, 991 BWPD and 315 MCFPD. Both wells were shut in and are presently being cleaned out in preparation of being put on production.
Brad Colby, American Eagle's President stated, "We are extremely pleased with the success of the Three Forks development program in 2012. This work has laid a solid production foundation for the company. We look forward over the next year to continuing to build on this success with further infill drilling, as well as broadening our focus to include development of the Middle Bakken zone and further expanding the productive limits of the project on our acreage position to the west".
About American Eagle Energy Corporation:
American Eagle Energy Corporation is an oil and gas company engaged in the exploration of petroleum and natural gas. The Company was incorporated in Nevada on July 25, 2003 for the purpose of acquiring, exploring, and developing natural resource properties located in North America. The Company specializes in exploiting unconventional resource plays within the Bakken and Three Forks formations. Prior to December 1, 2011, the Company operated under the name Eternal Energy Corp. The Company changed its name to American Eagle Energy Corporation in December 2011 upon the completion of its acquisition of American Eagle Energy Inc., another oil and gas company engaged in a similar business with which the Company shared certain properties and prospects.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release contains statements that are forward-looking, such as statements relating to the future anticipated direction of the industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth, potential contracts, and/or aspects of litigation. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of American Eagle Energy Corporation.
These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, and domestic and global economic conditions. Persons are encouraged to read American Eagle Energy Corporation's Annual Report on Form 10-K for the year ended December 31, 2011, and Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2012, all as filed with the Securities and Exchange Commission for meaningful cautionary language in respect of forward-looking statements in this press release. Interested persons are able to obtain free copies of filings containing information about the Company at the SEC's internet site (http://www.sec.gov). American Eagle Energy Corporation does not assume any obligation to update any of these forward-looking statements.
SOURCE American Eagle Energy Corporation