Hardy Bakken Project
The Hardy Bakken Project is located in the Saskatchewan portion of the Williston Basin and is one of American Eagle's two core property holdings, along with the Company's Spyglass Project, which underpin the Company's current production base. These two properties represent most of the near term rate and reserve growth potential for American Eagle. Management is very familiar with this field, having made the original Hardy Bakken discovery in 2008. Since that time, American Eagle has acquired approximately 5280 gross/4300 net acres and all rights to the original discovery well, which the Company put back on production since its acquisition.
The American Eagle 4-16 horizontal Bakken well was drilled in May 2011, confirming the Hardy Bakken Pool discovery. The 4-16 well was put on production in August 2011 at an initial 30 day average rate of approximately 150 barrels of oil per day and continues to produce approximately 110 barrels of oil per day. American Eagle owns a 75% working interest in this well.
The American Eagle 14-17 horizontal well was drilled in January 2012. The 14-17 well encountered oil shows comparable to the other two wells in the field. It is currently waiting on completion, which is currently scheduled for March 2012. American Eagle owns an 85% working interest in this well.
The attached map illustrates a fully developed drilling program based, on four horizontal wells per section (the industry standard in Canada) and showing the potential for an additional 31 undrilled horizontal wells in which American Eagle would have an average working interest of about 82%. American Eagle has already licensed the 14-5 location and is in the process of licensing multiple additional well locations to be drilled in 2012, including the 16-17 and 4-16 (north) locations, shown on the attached map. A fully developed drilling program at Hardy has the potential to add approximately 3,800,000 net barrels of oil equivalent to the American Eagle reserve base.
Development drilling at Hardy has exceptional upside due to its low geological and mechanical risk, lower drilling costs, favorable royalty regime, higher Saskatchewan oil prices and high working interest.