American Eagle Energy Corporation ("American Eagle" or the "Company") is pleased to provide an operations update on its Spyglass Bakken and Three Forks Project in North Dakota.
The Company has continued development of the project with a single rig during the second quarter. A total of 20 operated wells are currently on production making a gross rate of 3800 BOPD (barrels of oil per day) which equates to approximately 1050 BOPD net to American Eagle. In addition, the Company is making around 600 BOPD net from non?operated wells in the project area, yielding total net production to the Company of approximately 1650 BOPD.
Four additional operated wells have been drilled, cased and are awaiting completion, which is scheduled for the beginning of August. Two key completions during the second quarter included the Myrtle 2?1 which is the first long lateral well completed in the Middle Bakken Formation is in its third month of production and has averaged 270 BOPD, 182 BWPD (barrels of water per day), and 133 MCFPD (thousand cubic feet per day of gas) with a 60% oil cut for the month of July. This result is consistent with the previous Company?operated, Middle Bakken well, the Christianson Bros 15?33N, which was put on production in February, 2013 and is still producing at 238 BOPD, 144 BWPD and 114 MCFPD, with a62% oil cut over the same period in July. The significance of these two completions is the confirmation of economic reserves in the Middle Bakken Formation for which we essentially had not credited any value in our previous reserve evaluations. The second well is the Hagberg 2?1N which is a short lateral in
the Three Forks Formation drilled in the northeastern most portion of the Company's operated acreage.
The well was stimulated and immediately put on pump in mid?May and averaged 336 BOPD, 440 BWPD,
and 133 MCFPD for the first seven days of production during the cleanup period, which is consistent performance with other Three Forks wells in the project area. Another milestone of note is the Christianson 15?12, American Eagle's first operated Three Forks well, completed its first year of production in May 2013 with cumulative oil produced of 92,600 BO and showed average production rate for the month of May 2013 of 247 BOPD, 145 BWPD and 161 MCFPD, with a 63% oil cut.
American Eagle has made significant strides in developing infrastructure in the field. The Company began delivering produced gas to a third?party processing system during the second quarter and currently has approximately 75% of its produced gas connected to the system. Initial revenues from gas sales should be credited in July. Work on the produced water disposal system was completed and initial injection began in May. After all the connections are complete during the third quarter, the Company projects that disposal costs will be reduced by approximately 40%.
Mr. Brad Colby, President of American Eagle, said, "These results strongly support our initial and ongoing interpretations of the Spyglass Project Area as a "sweet spot" of overlapping reservoirs in the Middle Bakken and Three Forks intervals. The multiple reservoir targets, lower drilling and completion costs and strong production results of the Spyglass Project have been the foundation of American Eagle's remarkable growth in the past year. The opportunity for continued growth is great with the Company actively working to strengthen our position in the area and continuing the progress in developing the infrastructure in the field which will further enhance returns to our stockholders."
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