DENVER, Dec. 7, 2011 /PRNewswire/ -- American Eagle Energy Inc. (OTCBB: AMZG; "American Eagle") and Eternal Energy Corp. (OTCBB: EERG; "Eternal Energy") are pleased to announce that American Eagle and Eternal Energy, along with their working interest partner, Passport Energy LTD ("Passport", TSX: PPO), have successfully completed the first development well in the field, Hardy S HZ 1A4-16-4B4-9-4-21W2 (the "Hardy 4-16" well).
The Hardy 4-16 well was put on production in September, following a 28-stage fracture treatment in the 4,500 ft lateral section, well clean-out and various earlier logistical and weather delays. After an initial clean-up period, the Hardy 4-16 well averaged approximately 165 BOPD during the last ten days of September with an average oil cut of approximately 30%. The well shows a very high, stable fluid level, which is indicative of higher production potential. After recently installing upgraded production equipment, the well has been returned to production at oil rates ranging from 120 to 140 BOPD and oil cuts from 30% to 35%. American Eagle and Eternal Energy will be monitoring the production behavior and expect to be gradually increasing the pumping rates to optimize production over the next few weeks with the goal of returning the Hardy 4-16 well to its initial production levels.
American Eagle and Eternal Energy are also pleased to announce that they have received license approval for the next proposed horizontal well, to be located approximately one mile northwest of the Hardy 4-16 well. Current plans are to drill this well during the next three months, subject to rig availability. This will be the second earning well to be drilled under the farmout agreement with Passport, pursuant to which Passport will pay 38.5% of the well costs to earn a 25% working interest in the well and surrounding leases. The remaining working interest will be shared equally by American Eagle and Eternal Energy, the operator for the well. An application to drill an additional well, to be located approximately one mile southwest of the Hardy 4-16 well, has been submitted and is pending approval.
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