SOURCE: American Eagle Energy Corporation

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March 31, 2014 07:00 ET

American Eagle Energy Announces Closing of Acquisition and Purchase of Additional Acreage in Spyglass

DENVER, CO--(Marketwired - March 31, 2014) - American Eagle Energy Corporation (NYSE MKT: AMZG) ("American Eagle" or the "Company") has closed the second part of the previously announced acquisition in its Spyglass area in the Williston Basin and has recently purchased additional acreage in its Spyglass area. As of March 31, 2014, the Company holds approximately 45,600 net acres in its Spyglass area with an average working interest of approximately 68%.

Closed Acquisition from JV Partner

On March 27, 2014, American Eagle closed the second part of the previously announced acquisition in its Spyglass area in the Williston Basin in northwestern Divide County, North Dakota. For a gross purchase price of $47 million, or $45.75 million in cash after adjusting for positive purchase price adjustments, the Company acquired approximately 8,244 net acres in Spyglass with production of approximately 450 barrels of oil equivalent per day ("BOEPD") with proved reserves of approximately 2.3 million barrels of equivalent ("BOE") and Pre-Tax PV-10 of approximately $55 million based on Company and Ryder Scott estimates. The acquisition increased American Eagle working interests from approximately 44% to 55% in its total Spyglass area and from approximately 51% to 60% in its proved area of Spyglass.

The Company financed the acquisition with a portion of the proceeds from its recent offering of 12,650,000 shares of common stock with net proceeds of approximately $78 million that closed on March 24, 2014.

Additional Acreage Acquisitions in Spyglass

American Eagle purchased an additional 7,764 net acres for total purchase price of approximately $11.3 million. The majority of these acquisitions closed late last week and certain on the ground leasing acreage was acquired earlier in the first quarter ended March 31, 2014.

The Company estimates, based on assumptions and estimates from its 2013 year-end reserve report, the acquisition of the additional 7,764 net acres represents approximately $20 million of potential Pre-Tax PV-10 proved reserves ("1P") and approximately $27 million of potential Pre-Tax PV-10 probable reserves ("2P") for a total of $47 million Pre-Tax PV-10 of 1P + 2P reserves. The majority of the purchased acreage is undeveloped acreage in American Eagle's western portion of Spyglass with approximately 14 BOEPD of existing operated production. The additional acreage acquisitions increase American Eagle's average working interest in its total Spyglass area to approximately 68% and its average working interest in its proved area of Spyglass to approximately 67%.

The Company financed the additional acreage acquisitions with a portion of the proceeds from its recent common stock offering. A portion of the estimated use of proceeds was designated for general corporate purposes including working capital and additional leasehold acquisitions. The additional acreage acquisitions were within the designated budget.

Management Comments

Brad Colby, President and CEO of American Eagle, said, "The acquisitions are a testament to our confidence in the Spyglass area and the abilities of our land team to identify and quickly close transactions at attractive prices. Over the last several months, we have significantly increased the working interests in our Spyglass area and believe this will provide tremendous upside potential to shareholders as we develop wells and capture more of the attractive well economics in Spyglass."

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, targeting the Bakken and Three Forks shale oil formations. The Company is based in Denver, CO. More information about American Eagle 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 website 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," "possible," "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 amount we may invest, the location, and the scale of the drilling projects in which we intend to participate; our beliefs with respect to the potential value of drilling projects; our beliefs with regard to the impact of environmental and other regulations on our business; our beliefs with respect to the strengths of our business model; our assumptions, beliefs, and expectations with respect to future market conditions; our plans for future capital expenditures; and our capital needs, the adequacy of our capital resources, and potential sources of capital.

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.

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