Until oil prices recover, American Eagle suspends 2015 plans

By Emily Aasand | December 31, 2014

American Eagle Energy may be situated in a Divide County, North Dakota, sweetspot, but the Denver-based exploration and production company has chosen to suspend its 2015 drilling schedule due to low crude prices. The company recently released its operations and guidance update, explaining that after drilling a well in November, the company has released the drilling rig and will complete two unstimulated wells before it halts drilling and completion activity for 2015 until oil prices recover.

During the fourth quarter of 2014, American Eagle added three gross new operated wells and two gross operated wells that were recompleted to production. The Rick 13-31 well was stimulated earlier in mid-October and began producing oil in late October. During the first 30 days of production, the Rick well produced an average of approximately 267 barrels of oil equivalent per day (boepd), according to the company. Along with the Rick 13-13 well, the company also provided updates on two other wells in the area that achieved IP rates of 400 boped and 312 boepd for the first 30 days.

The company announced a reduction in its average production for its 2014 fourth quarter totals from between 2,700 to 3,000 boepd to 2,600 to 2,700 boepd, due to the anticipated completion of two wells now scheduled for the first quarter of 2015 rather than fourth quarter of 2014.

Remedial completions to complete problems with faulty sleeves were performed during the fourth quarter of 2014 on the two wells set to come online in the first quarter of 2015,, the company said. American Eagle added that reperforating and restimulation operations were successfully conducted on both wells and they have been cleaned out and put on pump but no meaningful production data is available.

American Eagle Energy has also hedged all of its crude oil positions for December 2014 through December 2015, a move that produced $13 million. Proceeds from the hedges will be used to improve the company’s liquidity position.

The Divide County acreage targeted by American Eagle Energy requires shorter lateral lentghs due to shallower reservoir depths and less costs to complete, according to the company. The company was not connected to an electrical grid as of October 2014.

The company had previously expected to invest roughly $122 million into its Williston Basin acreage in 2015.