American Eagle Energy Corp. (OTCQX:AMZG) has provided 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 3,800 BOPD (barrels of oil per day), which equates to approximately 1,050 BOPD net to American Eagle. In addition, American Eagle is making around 600 BOPD net from non-operated wells in the project area, yielding total net production to the company of approximately 1,650 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 a 62% 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 the company essentially had not credited any value in its 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.
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."