American Eagle Energy Reports Results for Second Quarter 2013

DENVER, Aug. 19, 2013 /PRNewswire/ -- American Eagle Energy Corporation (OTCQX: AMZG) (the "Company" or "American Eagle"), a Williston Basin focused E&P company, announces record oil production and record earnings for the second quarter ended June 30, 2013. The Company filed its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission today.

Second Quarter 2013 Highlights

  • American Eagle reports record quarterly oil production of 117,164 barrels of oil equivalent (BOE), or an average of 1,288 barrels of oil equivalent per day (BOEPD). Second quarter production was up 32% from 87,472 BOE (972 BOEPD) in the previous quarter ended March 31, 2013 and up 412% from 22,883 BOE (251 BOEPD) year-over-year for the quarter ended June 30, 2012;
  • Record quarterly oil sales of $10.4 million (100% of which is attributable to the sale of crude oil), up 36% from $7.6 million in the first quarter ended March 31, 2013;
  • Record Adjusted EBITDA* of $6.4 million or $0.12 per share (basic and diluted) for the three months ended June 30, 2013, up 31% from $4.9 million in the first quarter ended March 31, 2013; and
  • Record Adjusted Income* of $2.5 million or $0.05 per share (basic and diluted) for the three months ended June 30, 2013, up 28% from $1.9 million in the first quarter ended March 31, 2013.

* Non-GAAP financial measure. Please see Adjusted EBITDA and Adjusted Income (Loss) descriptions and tables later in this earnings release for a reconciliation of these measures to their nearest comparable GAAP measure.

Second Quarter 2013 Financial and Operational Results

For the quarter ended June 30, 2013, the Company had oil sales of $10.4 million, which represented an increase of 36% from $7.6 million in oil sales for the first quarter ended March 31, 2013 and an increase of 513% from $1.7 million for the second quarter ended June 30, 2012.  This increase in revenue is due primarily to production from 19 gross (6.0 net) operated wells in the Spyglass Project area producing in the Three Forks and Bakken formations as of June 30, 2013, compared to production from 13 gross (3.3 net) wells and 3 gross (0.4 net) operated wells as of March 31, 2013 and June 30, 2012, respectively. Oil represented 100% of revenue and production during the second quarter 2013. Due to strong well results in northwestern Divide County, North Dakota, infrastructure is being built to collect gas production, with an expectation that the Company will be able to recognize gas sales during the second half of 2014. American Eagle continues to add operated wells in its Spyglass Project area and expects total production to grow as its operated wells come on line.

Adjusted EBITDA for second quarter 2013 was $6.4 million, up 31% from $4.9 million for the first quarter ended March 31, 2013 and up over 1,900% from $0.3 million for the second quarter ended June 30, 2012. The increase in Adjusted EBITDA from the most recent quarter was driven mostly by higher revenues from increased production which was up 32% quarter-over-quarter and improved realized pricing. On a year-over-year basis, the higher production and revenue also helped to leverage operating expenses as general and administrative expenses stayed relatively flat. Production expenses or lease operating expense for the quarter ended June 30, 2013 were higher than normal due to significant road and location repairs as a result of extreme winter weather conditions and higher than normal spring rainfall. We added 6 gross operated wells during the quarter ended June 30, 2013. Typically, lease operating expenses associated with newly completed wells are higher in the first few months of production, during which time the wells' operating activities and characteristics are stabilizing. Adjusted EBITDA per BOE for the quarter ended June 30, 2013 was $54.99, compared to $56.13 per BOE for the first quarter ended March 31, 2013 and $13.84 per BOE for the second quarter ended June 30, 2012.

 



Three Months Ended



Jun. 30,


Mar. 31,


Dec. 31,


Sep. 30,


Jun. 30,



2013


2013


2012


2012


2012

Oil Sales ($000s)


$10,370


$7,629


$4,923


$2,875


$1,691












Net Production:











Crude Oil (Barrels)


117,001


87,440


64,886


33,359


22,698

Crude Oil Mix


100%


100%


100%


100%


99%

Natural Gas and Other Liquids (Mcf)


980


187


548


646


1,112












Total Net Production (BOE)


117,164


87,471


64,977


33,467


22,883

Quarter-Over-Quarter Increase


34%


35%


94%


46%


71%












Average Daily Production (BOEPD)


1,288


972


706


364


251

Quarter-Over-Quarter Increase


32%


38%


94%


45%


71%












Average Sales Prices:











Crude Oil Per Barrel


$88.60


$87.23


$75.83


$86.13


$74.30

Natural Gas and Other Liquids Per Mcf


$4.40


$5.69


$3.60


$3.05


$3.82

Realized Price Per BOE


$88.51


$87.21


$75.76


$85.91


$73.88












Average Per BOE:











Production Expenses


$15.37


$9.96


$7.98


$8.11


$20.73

Production Taxes


$9.84


$8.89


$12.19


$15.44


$9.64

G&A Expenses, Excluding Shared-Based Compensation

$8.31


$12.23


$18.10


$24.30


$29.67

Total


$33.51


$31.08


$38.27


$47.85


$60.04












Adjusted EBITDA per BOE


$54.99


$56.13


$37.49


$38.07


$13.84

 

Well Development Activity

During the second quarter 2013, American Eagle added 6 operated wells to production in its Spyglass Project area in northwestern Divided County, North Dakota, in which the Company owns an average working interest of 45%. The Company currently has 4 operated wells with an average working interest of 44% that have been drilled and are awaiting completion. An additional operated well has been drilled and is awaiting completion. This well is the first well of our Carry Agreement with our Joint Venture Partner ("JV Partner") in which our JV Partner has agreed to pay 100% of the Company's working interest share of well development costs for up to 5 Bakken wells that will be operated by American Eagle, with American Eagle initially receiving 50% of the Company's net revenue interest in the wells' production over the first two years or until JV Partner has recouped 112% of development costs on a per-well basis, after which 100% of the Company's well bore interests on a per-well basis revert back to American Eagle.

Liquidity and Shares Outstanding

As of June 30, 2013, American Eagle had approximately $17.1 million in cash and $15.4 million total debt outstanding. On August 9, 2013, the Company completed the sale of 5,000,000 shares of its common stock directly to an investor pursuant to a Common Stock Purchase Agreement we entered into with the investor at a price of $2.00 per share. Following the offering, the Company has 55,068,346 shares of common stock outstanding.

American Eagle has recently obtained debt financing from Morgan Stanley Capital Group with a senior secured reserve based credit facility with a maximum potential commitment of up to $200 million. Initially, $68 million is committed and available for funding. American Eagle plans to draw the full $68 million available to retire the Macquarie Bank Limited swap facility, which it entered into at the end of last year, for approximately $18 million and use the remaining proceeds for working capital, well development, acreage acquisitions, and for other general corporate purposes. American Eagle believes that its cash on hand, cash flow from operations, proceeds from its recently completed share issuance, proceeds from its new credit facility and additional availability under the credit facility will adequately fund its two-rig drilling program.

June 1, 2013 Estimated Proved Reserves

American Eagle's estimated proved reserves at June 1, 2013 were 6.5 million barrels of oil equivalent ("MMBoe") with an associated PV-10 value of approximately $170.4 million, which represents a 48% increase in PV-10 value over its estimated proved reserves at December 31, 2012, adjusted to reflect Spyglass Project area only. Reserves for each period were prepared by a recognized, independent, third-party reserve engineering firm.

SEC Pricing Estimated Proved Reserves as of June 1, 2013

 


Crude Oil (Bbls)

Natural Gas (Mcf)

Total (Boe)

Pre-Tax PV-10 Value

PDP Properties

3,052,400

1,717,900

3,338,717

$     103,549,400

PUD Properties

2,932,500

1,080,000

3,112,500

$     66,862,100

 

Total Estimated

  Proved Properties

5,984,900

2,797,900

6,451,217

$    170,411,500



(1)

The table above values oil and natural gas reserve quantities and related discounted future net cash flows as of June 1, 2013 assuming average constant realized prices of $90.15 per Bbl of oil and $3.50 per Mcf for natural gas. The average natural gas price reflects the value of processed natural gas sales and natural gas liquids.

(2)

Boe are computed based on a conversion ratio of one Boe for each barrel of oil and one Boe for every 6,000 cubic feet (6 Mcf) of natural gas.

The table above assumes prices and costs discounted using an annual discount rate of 10% without future escalation, without giving effect to non-property related expenses such as general and administrative expenses, debt service and depreciation, depletion and amortization. The "PV-10" values of the Company's estimated proved reserves presented in the foregoing table may be considered a non-GAAP financial measure as defined by the SEC. As of June 1, 2013, the PV-10 value for the Company's estimated proved reserves was equal to the standardized measure of discounted future net cash flows.

Uncertainties are inherent in estimating quantities of proved reserves, including many risk factors beyond the Company's control. Reserve engineering is a subjective process of estimating subsurface accumulations of oil and natural gas that cannot be measured in an exact manner. As a result, estimates of proved reserves may vary depending upon the engineer valuing the reserves. Further, the Company's actual realized price for its oil and natural gas is not likely to average the pricing parameters used to calculate its proved reserves. As such, the oil and natural gas quantities and the value of those commodities ultimately recovered from the Company's properties will vary from reserve estimates.

Non-GAAP Financial Measures

Adjusted EBITDA

In addition to reporting net income (loss) as defined under GAAP, American Eagle also presents net earnings before interest expense, interest income, dividend income, income taxes, depreciation, depletion, and amortization, impairment of oil and gas properties, unrealized gain (loss) from mark-to-market on derivatives and non-cash expenses relating to share-based payments recognized under ASC Topic 718 ("Adjusted EBITDA"), which is a non-GAAP performance measure. Adjusted EBITDA consists of net earnings after adjustment for those items described in the table below. Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements, such as net income (loss) (its most directly comparable GAAP measure), and the calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, American Eagle believes the measure is useful in evaluating its fundamental core operating performance. The Company also believes that Adjusted EBITDA is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. American Eagle's management uses Adjusted EBITDA to manage its business, including in preparing its annual operating budget and financial projections. Management does not view Adjusted EBITDA in isolation and also uses other measurements, such as net income (loss) and revenues to measure operating performance. The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:

 



Three Months Ended



June 30,


March 31,


December 31,


September 30,


June 30,



2013


2013


2012


2012


2012












Net income (loss)


$2,637,484


$355,347


($9,679,580)


$892,194


($147,153)

Interest income


(1,472)


(3,156)


(1,566)


(1,898)


(1,468)

Dividend income


(16,982)


(17,240)


(17,499)


(17,425)


(11,449)

Unrealized loss (gain) on derivatives


(186,754)


27,507


122,651


-


-

Interest expense


347,853


373,109


-


3


521

Income tax expense (benefit)


1,192,691


1,092,092


(594,081)


(386,160)


17,860

Depletion, depreciation and amortization


2,183,322


1,320,154


1,713,556


579,434


270,400

Stock-based compensation expense


287,172


237,348


260,922


207,790


188,096

Impairment of oil and gas properties


-


1,525,027


10,631,345


-


-

Adjusted EBITDA


$6,443,314


$4,910,188


$2,435,748


$1,273,938


$316,807

 

Adjusted Income (Loss)

In addition to reporting net income (loss) as defined under GAAP, American Eagle also presents net earnings before the impairment of oil and gas properties and the effect of unrealized gain (loss) from mark-to-market on derivatives ("adjusted income (loss)"), which is a non-GAAP performance measure. Adjusted income (loss) consists of net earnings after adjustment for those items described in the table below. Adjusted income (loss) does not represent, and should not be considered an alternative to GAAP measurements, such as net income (loss), and our calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, American Eagle believes the measure is useful in evaluating its fundamental core operating performance. The Company also believes that adjusted income (loss) is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. American Eagle's management uses adjusted income (loss) to manage its business, including in preparing its annual operating budget and financial projections. Management does not view adjusted income (loss) in isolation and also uses other measurements, such as net income (loss) and revenues to measure operating performance. The following table provides a reconciliation of net income (loss), to adjusted income (loss) for the periods presented:

 



Three Months Ended



June 30,


March 31,


December 31,


September 30,


June 30,



2013


2013


2012


2012


2012












Net income (loss)


$2,637,484


$355,347


($9,679,580)


$892,194


($147,153)

Unrealized loss (gain) on derivatives


(186,754)


27,507


122,651


-


-

Impairment of oil and gas properties


-


1,525,027


10,631,345


-


-

Adjusted Income (Loss)


$2,450,730


$1,907,881


$1,074,416


$892,194


($147,153)

 

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 and Montana, targeting the Bakken and Three Forks shale oil formations. The Company is based in Denver, CO. More information about American Eagle Energy 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 internet site at www.sec.gov.

SAFE HARBOR

This press release may contain forward-looking statements regarding future events and the Company's future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").  All statements other than statements of historical facts included in this press release regarding the Company's financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements.  When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes.  Items contemplating or making assumptions about, actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements. 

Forward-looking statements involve inherent risks and uncertainties and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following: general economic or industry conditions, nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies, or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company's operations, products, services, and prices. 

The Company has based these forward-looking statements on its current expectations and assumptions about future events.  While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control. The Company does not assume any obligations to update any of these forward-looking statements.


AMERICAN EAGLE ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)
















For the Three‑Month Period 


For the Six-Month Period



Ended June 30, 


Ended June 30,



2013


2012


2013


2012

Oil and gas sales


$

10,369,993


$

1,690,673


$

17,998,700


$

2,916,252














Operating expenses:













  Oil and gas production costs 



2,953,522



694,954



4,602,056



1,101,510

  General and administrative 



1,260,329



867,008



2,567,662



2,045,700

  Depreciation, amortization and depletion expense 



2,183,322



270,400



3,503,476



567,197

  Impairment of oil and gas properties, subject to amortization 



-



-



1,525,027



-














    Total operating expenses 



6,397,173



1,832,362



12,198,221



3,714,407














Total operating income (loss) 



3,972,820



(141,689)



5,800,479



(798,155)














Interest income 



1,472



1,468



4,628



4,871

Dividend income 



16,982



11,449



34,222



28,730

Interest expense 



(347,853)



(521)



(720,962)



(703)

Unrealized gain on derivatives 



186,754



-



159,247



-














Income (loss) before taxes 



3,830,175



(129,293)



5,277,614



(765,257)














Income tax benefit (expense) 



(1,192,691)



(17,860)



(2,284,783)



259,769














Net income (loss) 


$

2,637,484


$

(147,153)


$

2,992,831


$

(505,488)














Net income (loss) per common share:













  Basic 


$

0.05


$

(0.00)


$

0.06


$

(0.01)

  Diluted 


$

0.05


$

(0.00)


$

0.06


$

(0.01)














Weighted average number of shares outstanding ‑













  Basic 



50,068,346



45,842,782



49,979,948



45,741,054

  Diluted 



51,968,872



45,842,782



51,778,242



45,741,054

INVESTOR RELATIONS CONTACT:

Marty Beskow
Vice President of Capital Markets and Strategy
American Eagle Energy Corporation
303-798-5235
ir@amzgcorp.com
www.americaneagleenergy.com

Brad Holmes
EnergyIR
713-654-4009
B_holmes@att.net

SOURCE American Eagle Energy Corporation



RELATED LINKS
http://www.americaneagleenergy.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.