BILLINGS, Mont., Oct. 3, 2011 /PRNewswire/ -- American Eagle Energy Inc. (OTCBB:AMZG; "American Eagle" or the "Company") wishes to provide an operations update on the Company's Spyglass project in North Dakota. The Company's proposed merger with Eternal Energy Corp. is progressing, subject to completing standard regulatory and administrative processes.
Activity in American Eagle's Spyglass Project, a Bakken and Three Forks play in Divide County, North Dakota, increased significantly during the third quarter following a number of weather-related delays in the second quarter.
The second closing of the previously announced sale of half of the respective working interests in the Spyglass Project by American Eagle and its proposed merger partner Eternal Energy to a third party occurred on August 5, 2011. The second closing involved the sale of an undivided 50% interest in approximately 760 acres for approximately $642,000 that was divided equally between American Eagle and Eternal Energy.
American Eagle participated in eight non-operated wells in the project area operated by SM Energy, Samson Resources Company and Crescent Point Energy during the third quarter. Three wells that were pending completion in the Three Forks Formation were stimulated and put on production at average initial flowing rates (14 days) of 514 bopd, 574 bopd and 644 bopd with joint working interests of 3.87%, 0.34% and 4.38%, respectively. The other five wells, two Bakken and three Three Forks, were drilled and are pending completion. Joint working interests in all these wells ranged from approximately 1% to over 6%. Three more outside operated wells are scheduled to be drilled by yearend with American Eagle – Eternal Energy joint working interests ranging from 6.5% to 16%. Based on this projected drilling schedule and similar production results, the companies could show a joint 2011 exit rate of approximately 240 bopd net from the non-operated Spyglass properties.American Eagle and Eternal Energy have secured a drilling rig and expect to begin drilling joint company-operated wells in the Spyglass Project in November, 2011. Efforts to permit three Bakken and four Three Forks wells are underway, such that the first two wells should be drilled before the end of 2011. Joint working interests in these six wells range from 19% to more than 60%. Including land packages purchased in the second quarter of 2011, along with ongoing leasing efforts, total acreage jointly controlled in the project area is approximately 14,700 net acres.