American Eagle Energy Increases Spyglass Interests

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
47MM
Description

To acquire 9,300 net acres in Spyglass Project in the Williston Basin with current production of 600 BOE/d.

Denver-based American Eagle Energy Corp. (OTCBB: AMZG) has entered into an agreement with a joint venture partner that increases the company's net acreage and share of production on wells that it currently operates, as well as interests in future wells that it plans to develop as the operator in its Spyglass Project area in the Williston Basin in northwestern Divide County, N.D.

Highlights include:

  • For cash consideration of $47 million, American Eagle agrees to acquire from the JV partner approximately 9,300 net acres in Spyglass with current production of approximately 600 barrels of oil equivalent (BOE) per day; and
  • American Eagle has an option through March 2014 to acquire from the JV partner an additional 9,300 net acres in Spyglass that currently produces approximately 600 BOE.

During second quarter of 2013, American Eagle reported sales production that averaged approximately 1,300 BOE per day. The company has operating control of 14 contiguous drilling spacing units (DSUs) in a proved area within its Spyglass Project with an average working interest of approximately 40%. American Eagle has interests in a total of approximately 15,900 net acres in Spyglass with operable control of approximately 39 DSUs. Upon the closing of the first property purchase transaction, the company estimates that its average net production for second quarter 2013 on a pro forma basis would be approximately 1,900 BOE per day, with an average working interest of approximately 52% on its 14 proved DSUs and a total of approximately 25,100 net acres in Spyglass. Should American Eagle exercise the option to purchase the second property, the company estimates that its average net production for second quarter 2013 on a pro forma basis would be approximately 2,500 BOE per day, with an average working interest of approximately 63% on its 14 proved DSUs and a total of approximately 34,400 net acres in Spyglass.