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 November 5, 2014 - 4:05 PM EST
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American Eagle Energy Announces Operations Update and Reports Results for Third Quarter 2014

DENVER, CO--(Marketwired - November 05, 2014) - American Eagle Energy Corporation (NYSE MKT: AMZG) ("American Eagle" or the "Company"), announces an operational update and discussion of its financial results for the third quarter ended September 30, 2014. The Company intends to file its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission prior to November 14, 2014.

Highlights

  • American Eagle added 8 gross (6.3 net) operated wells to production during the quarter;
  • Production of 201,774 barrels of oil equivalent ("BOE"), or an average of 2,193 BOEPD;
    • year-over-year increase of 62% from the 1,362 BOEPD (125,343 BOE)
    • sequential quarterly increase of 9% from 2,006 BOEPD (182,522 BOE)
  • Third quarter 2014 oil and gas sales of $17.1 million;
    • a year-over-year increase of 47%
    • a sequential quarterly increase of 4%
  • Adjusted EBITDA* of $9.1 million;
  • Adjusted Cash Flow* of $5.3 million;
  • Adjusted Net Earnings* of $0.9 million or $0.03 per diluted share; and
  • Liquidity of $83.8 million as of September 30, 2014 consisting of $48.8 million in cash and $35 million of availability under the revolving credit facility.

* Non-GAAP financial measure. Please see Adjusted EBITDA, Adjusted Cash Flow and Adjusted Net Earnings descriptions and tables later in this earnings release for a reconciliation of these measures to their nearest comparable GAAP measure.

Third Quarter 2014 Financial and Operational Results

For the quarter ended September 30, 2014, the Company reports oil and gas sales of $17.1 million, which represents an increase of 47% over the third quarter ended September 30, 2013 and an increase of 4% from the second quarter ended June 30, 2014. This increase in sales, on both an annual and sequential quarterly basis, is primarily due to an increase in production, as 51 gross (30.3 net) operated wells were producing in the Bakken and Three Forks formations at the end of third quarter 2014, compared to production from 25 gross (7.8 net) operated wells at the end of September 30, 2013 and 43 gross (24.0 net) operated wells as of June 30, 2014. During the third quarter 2014, oil production represented 98% of total oil and gas sales revenue and 98% of total production.

American Eagle's third quarter 2014 realized oil price per barrel prior to the effect of hedges was negatively impacted by lower crude oil prices for West Texas Intermediate ("WTI"). The Company has an agreement in place that locks in a $10.75 discount to WTI for the Company's 2014 operated oil production to stabilize realized crude oil prices against the risk of volatile pricing differentials. The agreement locks in a $10.00 discount to WTI for the Company's 2015 operated oil production. American Eagle's third quarter 2014 realized oil price per barrel after the effect of hedges of $81.86 per barrel was negatively impacted by realized hedge prices that were lower than the benchmark prices for WTI over the same time period.

Adjusted EBITDA for third quarter 2014 was $9.1 million, representing an increase of 26% from $7.2 million reported for the third quarter ended September 30, 2013 and a decrease of 6% from $9.6 million reported for the second quarter ended June 30, 2014. Relative to the third quarter ending September 30, 2013, the increase in Adjusted EBITDA is primarily due to higher oil and gas production sales volume and operating leverage realization in general and administrative ("G&A") expenses (excluding stock-based compensation) on a BOE basis. However, the improvement in Adjusted EBITDA was partially offset by lower realized oil prices before, and after, including the negative effect of hedges realized during the quarter and higher lease operating expenses. Similarly, in comparison to the quarter ending June 30, 2014, the 6% decrease in Adjusted EBITDA is due primarily to lower realized oil prices before, and after, including the negative effect of hedges realized during the quarter and higher G&A and lease operating expenses, which was partially offset by higher oil production sales volume.

Lease Operating Expense ("LOE") for the quarter ended September 30, 2014 was $18.20 per BOE, which was similar to the previous quarter but higher than the same period last year due to a continuation of higher than normal costs for site and road maintenance expenses and workover expenses. Higher production levels helped to reduce per-unit G&A expenses year-over-year, but were not enough to offset the higher sequential costs, as G&A, excluding stock-based compensation, was $8.25 per BOE during the third quarter 2014 compared to $12.04 per BOE for the prior year and $6.67 per BOE for the prior quarter. Adjusted EBITDA per BOE for the quarter ended September 30, 2014 was $44.92, as compared to $57.43 per BOE for the third quarter ended September 30, 2013 and $52.69 per BOE for the second quarter ended June 30, 2014.

    
    Three Months Ended  
    Sep. 30,    Jun. 30,    Mar. 31,    Dec. 31,    Sep. 30,  
    2014    2014    2014    2013    2013  
Crude Oil Revenues ($000s)   $16,939    $16,225    $12,267    $13,272    $11,585  
Natural Gas Revenues ($000s)   $31    $106    $72    $114    $26  
Natural Gas Liquids Revenues ($000s)   $121    $132    $206    $115    $28  
                                
Net Production:                               
Crude Oil (Barrels)    197,740     175,509     140,841     164,923     123,343  
Crude Oil Mix    98 %   96 %   95 %   95 %   98 %
Natural Gas (Mcf)    1,968     16,977     11,370     20,055     6,333  
Natural Gas Liquids (Barrels)    3,706     4,183     5,312     4,563     944  
                                
Total Net Production (BOE)    201,774     182,522     148,048     172,829     125,343  
Quarter-Over-Quarter Increase    11 %   23 %   (14 )%   38 %   7 %
                                
Average Daily Production (BOEPD)    2,193     2,006     1,645     1,879     1,362  
Quarter-Over-Quarter Increase    9 %   22 %   (12 )%   38 %   6 %
                                
Average Sales Prices:                               
Crude Oil Per Barrel   $85.66    $92.45    $87.10    $80.48    $93.92  
Effect of Settled Oil Derivatives Per Barrel    ($3.80 )   ($2.60 )  $0.82    $4.16    $0.94  
Crude Oil Net of Settled Derivatives Per Barrel   $81.86    $89.85    $87.92    $84.64    $94.86  
Natural Gas Per Mcf   $15.52    $6.25    $6.37    $5.67    $4.09  
Natural Gas Liquids Per Barrel   $32.85    $31.44    $38.83    $25.27    $29.67  
Realized Price Per BOE   $80.98    $87.69    $85.52    $82.10    $93.78  
                                
Average Per BOE:                               
Lease Operating Expenses   $18.20    $18.15    $15.36    $13.59    $14.09  
Production Taxes   $9.66    $10.34    $9.32    $9.28    $10.28  
G&A Expenses, Excluding Stock-Based Compensation   $8.25    $6.67    $10.56    $15.07    $12.04  
Total   $36.11    $35.16    $35.24    $37.94    $36.41  
                                
Adjusted EBITDA per BOE   $44.92    $52.69    $50.43    $44.24    $57.43  
                     
                     

Operated Well Development

The Rick 13-31 (Three Forks short-lateral) well with an 85% working interest was stimulated earlier in October and began producing oil in late October. Following the positive initial production rates of the Eli 8-1E well, American Eagle intends to use slickwater stimulations for the Byron 4-4 (Bakken long-lateral) and Shelley Lynn 4-4N (Bakken short-lateral) wells, which are on a 2-well pad located between the Eli 8-1E and Christianson Bros 15-33 (Bakken short lateral) well. Both wells have been very strong Bakken producers. The Byron 4-4 and the Shelley Lynn 4-4N wells have an average working interest of 96%, representing 1.9 net wells, and are scheduled to be stimulated in November. The Company has nearly completed the drilling of the Huffman 15-34S (Three Forks long-lateral) well with a 94% working interest. The Huffman 15-34S well is located between the Bryce 3-2 (Three Forks long-lateral) well that produced approximately 400 BOEPD during the first 30 days, and the Donald 15-33S (Three forks long-lateral) well that produced approximately 320 BOEPD during the first 20 days. The Company anticipates that all of these wells will be completed and on production before the end of the year. In addition, remedial completions will be performed during the fourth quarter of 2014 on the Shelly 3-2N (Three Forks short-lateral, 97% WI) and the La Plata State 2-16 (Three Forks long lateral, 39% WI) wells, both of which were drilled and completed during the first half of the year. American Eagle estimates that it will add 4 gross (3.7 net) operated wells to production before the end of 2014 or possibly 6 gross (5.0 net) if the Shelly 3-2N and La Plata State 2-16 are completed and producing before the end of the year.

Production Volume Guidance

The Company is maintaining its guidance that it will exit 2014 with production ranging between 2,700 BOEPD to over 3,000 BOEPD. American Eagle's average production for October 2014 was approximately 2,700 to 2,800 BOEPD. The Company is comfortable with consensus production estimates for the fourth quarter of 2014.

Commodity Hedges

The Company's existing crude oil hedges average $90.40 per barrel, with hedged volumes averaging 1,600 barrels of oil per day for fourth quarter 2014. For the first half of 2015, the Company's existing crude oil hedges average $89.72 per barrel with hedged volumes averaging 1,200 barrels of oil per day. The Company's existing crude oil hedges average $89.21 per barrel with hedged volumes averaging 800 barrels of oil per day for the second half of 2015.

Liquidity and Shares Outstanding

As of September 30, 2014, American Eagle had approximately $48.8 million in cash, $175 million total debt and 30.4 million shares of common stock outstanding. The Company also has a revolving credit facility with $60 million of borrowing base, based on its June 30, 2014 mid-year reserve report, with $35 million committed and available from SunTrust. The credit facility remains undrawn. SunTrust and the Company are not currently pursuing syndication of the remaining portion of the initial borrowing base.

The Company ended the third quarter of 2014 with approximately $5.3 million of negative working capital, when classifying marketable securities as current assets and excluding commodity derivatives from current assets and liabilities. Given that the Company has no long-term contracts on its rigs, American Eagle can be flexible with its development program to take into account potentially volatile crude oil price and match development to be in-line with cash flow.

Operated Well Development Guidance

During the third quarter, the Company was in the process of swapping out one of its two rigs for a newer rig. American Eagle has elected not to bring back the second rig. Based on the wells drilled to date, including the Huffman 15-34S, the Company believes it will hit its production guidance for 2014. Given the current volatility of crude oil prices and the onset of winter, American Eagle is planning to lay down the rig that is currently drilling and bringing back a newer rig that would be available in 2015. This would allow the Company to manage its capital spending plan to be within cash flow in the near term and not build up an inventory of wells awaiting completion during the winter. American Eagle intends to resume drilling before the end of first quarter 2015. If the rig were to continue drilling for the remainder of 2015, the capital spending budget for 2015 would be approximately $60 million to develop approximately 10 net wells. At that pace of development, the Company would be able to grow production as 2015 progresses, with an estimated average production rate of over 3,000 BOEPD. The Company could accelerate development further if warranted based on crude oil prices and market conditions. Alternatively, if crude oil prices remain at low levels or weaken further, American Eagle could choose to develop wells within free cash flow. Assuming crude oil prices remain at current levels, the Company estimates is would be able to maintain production rates near current levels for most of 2015 while managing capital spending to be within cash flow.

Third Quarter 2014 Earnings Release and Conference Call

The Company will host a conference call on Thursday, November 6, 2014 at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time) to discuss financial and operational results for the quarter.

American Eagle Energy Corporation 3Q 2014 Financial and Operational Results Conference Call
Date:   Thursday, November 6, 2014
Time:   10:00 a.m. Eastern Time
  9:00 a.m. Central Time
  8:00 a.m. Mountain Time
  7:00 a.m. Pacific Time
Webcast:   Live and rebroadcast over the Internet at American Eagle website
Website:   www.americaneagleenergy.com
Telephone Dial-In:   877-407-9171 (toll-free) and 201-493-6757 (international)
 
Telephone Replay:   Available through Thursday, November 13, 2014
  877-660-6853 (toll-free) and 201-612-7415 (international)
  Passcode: 13572777

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.

AMERICAN EAGLE ENERGY CORPORATION  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(UNAUDITED)  
(In Thousands, except for Per Share Data)  
               
     September 30,     December 31,  
     2014     2013  
Current assets:              
 Cash  $ 48,784    $ 31,850  
 Trade receivables    17,785      17,920  
 Income tax receivable    25      -  
 Prepaid expenses    38      68  
 Current derivative asset    466      211  
  Total current assets    67,098      50,049  
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $445 and $322, respectively    252      174  
Oil and gas properties, full-cost method – subject to amortization, net of accumulated depletion of $26,271 and $12,849, respectively    293,685      155,145  
Oil and gas properties, full-cost method – not subject to amortization    2,487      2,487  
Marketable securities    1,162      1,050  
Noncurrent derivative asset    155      -  
Other assets    7,894      7,503  
Total assets  $ 372,733    $ 216,408  
         
Current liabilities:              
 Accounts payable and accrued liabilities  $ 73,099    $ 41,841  
 Derivative liability    3      276  
 Current portion of notes payable    -      3,000  
  Total current liabilities    73,102        
Asset retirement obligation    1,352      1,060  
Noncurrent portion of notes payable           105,000  
Bonds payable, net of discount of $1,615 and $0, respectively    173,385      -  
Noncurrent derivative liability    -      750  
Deferred taxes    -      5,386  
Total liabilities    247,839      157,313  
Stockholders' equity:              
 Common stock, $.001 par value, 48,611 shares authorized, 30,437 and 17,712 shares outstanding    30      18  
 Additional paid-in capital    146,888      67,198  
 Accumulated other comprehensive income (loss)    (243 )    (6 )
 Accumulated deficit    (21,781 )    (8,115 )
Total stockholders' equity    124,894      59,095  
Total liabilities and stockholders' equity  $ 372,733    $ 216,408  
               
 
 
AMERICAN EAGLE ENERGY CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(UNAUDITED)  
(In Thousands, except for Per Share Data)  
   
   For the Three-Month Period      For the Nine-Month Period  
   Ended September 30,      Ended September 30,  
   2014     2013      2014     2013  
Oil and gas sales  $ 17,091   $ 11,639    $ 46,099   $ 29,638  
Operating expenses:                          
 Oil and gas production costs    5,621     3,055      14,475     7,657  
 General and administrative    2,110     1,812      5,790     4,380  
 Depletion, depreciation and amortization    6,154     2,524      15,497     5,915  
 Impairment of oil and gas properties, subject to amortization    -     -      -     1,525  
  Total operating expenses    13,885     7,391      35,762     19,477  
Total operating income    3,206     4,248      10,337     10,161  
Interest and dividend income    28     19      56     57  
Interest expense    (4,163 )   (1,316 )    (10,628 )   (2,149 )
Loss on early extinguishment of debt    (11,894 )   (3,714 )    (11,894 )   (3,714 )
Loss on sale of oil & gas properties    (12 )   -      (12 )   -  
Gains (losses) on settlement of derivatives    (7,113 )   115      (7,455 )   115  
Change in fair value of derivatives    8,641     (934 )    618     (775 )
  Total other income (expense)    (14,513 )   (5,830 )    (29,315 )   (6,466 )
Income (loss) before taxes    (11,307 )   (1,582 )    (18,978 )   3,695  
Income tax expense (benefit)    (2,569 )   (646 )    (5,311 )   1,639  
Net income (loss)  $ (8,738 ) $ (936 )  $ (13,667 ) $ 2,056  
                           
Net income (loss) per common share:                          
 Basic  $ (0.29 ) $ (0.07 )  $ (0.52 ) $ 0.16  
 Diluted  $ (0.29 ) $ (0.07 )  $ (0.52 ) $ 0.16  
                           
Weighted average number of shares outstanding -                          
 Basic    30,448     13,224      26,524     12,741  
 Diluted    30,448     13,224      26,524     13,225  
                  
                  
AMERICAN EAGLE ENERGY CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF 
COMPREHENSIVE INCOME (LOSS) 
(UNAUDITED) 
(In Thousands) 
   
    For the Three-Month Period     For the Nine-Month Period      
   Ended September 30,      Ended September 30,      
    2014     2013     2014     2013  
Net income (loss)  $ (8,738 )  $ (936 )  $ (13,667 )  $ 2,056  
                             
Other comprehensive income (loss), net of tax:                            
Unrealized foreign exchange gains (losses)    (3 )    2      (126 )    15  
Unrealized gains (losses) on securities    (96 )    27      (111 )    (6 )
Total other comprehensive income (loss), net of tax    (99 )    29      (237 )    9  
                             
Comprehensive income (loss)  $ (8,837 )  $ (907 )  $ (13,904 )  $ 2,065  
                 
AMERICAN EAGLE ENERGY CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  
(UNAUDITED)  
(In Thousands)  
              
   For the nine-month periods  
   ended September 30,  
     2014     2013  
Cash flows provided by operating activities:             
Net income (loss)  $ (13,667 ) $ 2,056  
 Adjustments to reconcile net income (loss) to net cash provided by operating activities:             
  Non-cash transactions:             
   Stock-based compensation    1,344     827  
   Depletion, depreciation and amortization    15,497     5,915  
   Accretion of discount on asset retirement obligation    60     36  
   Amortization of deferred financing costs    1,158     274  
   Amortization of debt discount    32     -  
   Provision for deferred income tax expense (benefit)    (5,325 )   1,662  
   Loss on early extinguishment of debt    11,894     3,714  
   Impairment of oil and gas properties    -     1,525  
   Change in fair value of derivatives    (1,432 )   653  
   Foreign currency transaction gains    -     2  
 Changes in operating assets and liabilities:             
   Prepaid expense    30     (2 )
   Trade receivables    (6,271 )   (3,032 )
   Income taxes receivable    (25 )   (33 )
   Accounts payable and accrued liabilities    17,292     11,654  
Net cash provided by operating activities    20,587     25,251  
Cash flows used for investing activities:             
 Additions to oil and gas properties    (135,234 )   (80,432 )
 Proceeds from sale of oil and gas properties    1,824     -  
 Additions to equipment and leasehold improvements    (201 )   (15 )
 Purchases of marketable securities    (222 )   -  
 Decrease in amounts due to Carry Agreement partner    -     (4,957 )
Net cash used for investing activities    (133,833 )   (85,404 )
Cash flows provided by financing activities:             
 Proceeds from issuance of stock    78,298     13,877  
 Proceeds from issuance of notes payable    -     68,000  
 Proceeds from issuance of bonds    167,257     -  
 Payment of other deferred financing costs    (1,882 )   (651 )
 Repayment of long-term debt    (113,465 )   (21,131 )
Net cash provided by financing activities    130,208     60,095  
Effect of exchange rate changes on cash    (28 )   38  
Net change in cash    16,934     (20 )
Cash - beginning of period    31,850     19,058  
Cash - end of period  $ 48,784   $ 19,038  

Non-GAAP Financial Measures

Adjusted EBITDA

In addition to reporting net income (loss) as defined under GAAP, American Eagle also presents net earnings before interest income, dividend income, interest expense, income taxes, depletion, depreciation, and amortization, non-cash expenses related to stock-based compensation, impairment of oil and gas properties, loss on early extinguishment of debt, and change in value of derivatives recognized under ASC Topic 718 ("Adjusted EBITDA"), which is a non-GAAP performance measure. Adjusted EBITDA consists of net earnings after adjustment for those items described in the table below. Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements, such as net income (loss) (its most directly comparable GAAP measure), and the calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, American Eagle believes the measure is useful in evaluating its fundamental core operating performance. The Company also believes that Adjusted EBITDA is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. American Eagle's management uses Adjusted EBITDA to manage its business, including in preparing its annual operating budget and financial projections. Management does not view Adjusted EBITDA in isolation and also uses other measurements, such as net income (loss) and revenues to measure operating performance. The following table provides a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented (in thousands):

    Three Months Ended  
    September 30,    June 30,    March 31,    December 31,    September
30,
 
    2014    2014    2014    2013    2013  
                           
Net income (loss)   ($8,738 )  ($3,900 )  ($1,028 )  ($462 )  ($936 )
Less: Interest and dividend income   (28 )  (12 )  (16 )  (23 )  (19 )
                           
Add: Interest expense   4,163    3,251    3,215    3,207    1,316  
Add: Income tax expense (benefit)   (2,569 )  (2,103 )  (638 )  130    (646 )
Add: Depletion, depreciation and amortization   6,154    5,707    3,636    4,158    2,524  
Add: Stock-based compensation   445    445    454    375    303  
Add: Accretion of asset retirement obligations   9    30    22    14    8  
Add: Impairment of oil and gas properties   -    -    -    206    -  
Add: Loss on sale of oil and gas properties   12    -    -    -    -  
Add: Loss on early extinguishment of debt   (11,894   -    -    -    3,714  
Add: One-time loss on settlement of derivatives   6,362    -    -    -    -  
Add: Change in value of derivatives   (8,641 )  6,200    1,823    40    934  
Adjusted EBITDA   $9,063    $9,618    $7,468    $7,645    $7,198  

Adjusted Cash Flow

In addition to reporting net income (loss) as defined under GAAP, American Eagle also presents cash flow after paying interest expense ("Adjusted Cash Flow"), which is a non-GAAP performance measure. Adjusted Cash Flow consists of Adjusted EBITDA after adjustment for those items described in the table below. Adjusted EBITDA does not represent, and should not be considered an alternative to GAAP measurements, such as net income (loss) (its most directly comparable GAAP measure), and the calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, American Eagle believes the measure is useful in evaluating its fundamental core operating performance. The Company also believes that Adjusted Cash Flow is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. American Eagle's management uses Adjusted Cash Flow to manage its business, including in preparing its annual operating budget and financial projections. Management does not view Adjusted Cash Flow in isolation and also uses other measurements, such as net income (loss) and revenues to measure operating performance. The following table provides a reconciliation of Adjusted EBITDA to Adjusted Cash Flow for the periods presented (in thousands, except for per share data):

    Three Months Ended  
    September 30,    June 30,    March 31,    December 31,    September 30,  
    2014    2014    2013    2013    2013  
                                
Adjusted EBITDA (1)   $9,063    $9,618    $7,468    $7,645    $7,198  
Less: Interest expense    (4,163 )   (3,251 )   (3,215 )   (3,207 )   (1,316 )
Add: Amortization of deferred financing costs and bond discount (non-cash)    426     384     327     327     162  
Adjusted Cash Flow   $5,326    $6,751    $4,580    $4,745    $6,044  
                                
(1) See previous table for reconciliation of net income (loss) to Adjusted EBITDA.              

Adjusted Net Earnings

In addition to reporting net income (loss) as defined under GAAP, American Eagle also presents net earnings before the impairment of oil and gas properties, loss on early extinguishment of debt, and non-cash expenses related to the change in fair value of derivatives ("adjusted net earnings"), which is a non-GAAP performance measure. Adjusted net earnings consists of net earnings after adjustment for those items described in the table below. Adjusted net earnings does not represent, and should not be considered an alternative to GAAP measurements, such as net income (loss), and the calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating the items described below, American Eagle believes the measure is useful in evaluating its fundamental core operating performance. The Company also believes that adjusted net earnings is useful to investors because similar measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies in similar industries. American Eagle's management uses adjusted net earnings to manage its business, including in preparing its annual operating budget and financial projections. Management does not view adjusted net earnings in isolation and also uses other measurements, such as net income (loss) and revenues to measure operating performance. The following table provides a reconciliation of net income (loss), to adjusted net earnings for the periods presented:

    Three Months Ended  
    September 30,    June 30,    March 31,    December 31,    September 30,  
    2014    2014    2014    2013    2013  
                           
Net income (loss)   ($8,738 )  ($3,900 )  ($1,028 )  ($462 )  ($936 )
Add: Impairment of oil and gas properties   -    -    -    206    -  
Add: Loss on early extinguishment of debt   11,894    -    -    -    3,714  
Add: One-time loss on settlement of derivatives   6,362                      
Add: Loss on sale of oil and gas properties   12    -    -    -    -  
Add: Change in fair value of derivatives   (8,641 )  6,200    1,823    40    934  
Adjusted Net Earnings / (Loss)   $889    $2,300    $795    ($216 )  $3,712  
                           
Adjusted Net Earnings (Loss) per share - basic   $0.03    $0.08    $0.04    ($0.02 )  $0.28  
Adjusted Net Earnings (Loss) per share - diluted   $0.03    $0.07    $0.04    ($0.01 )  $0.27  
                           
Weighted average shares - basic   30,448    30,436    18,557    13,962    13,224  
Weighted average shares - diluted   30,922    31,018    19,205    14,598    13,733  
                
                

CORPORATE CONTACT:

Marty Beskow, CFA
Vice President of Capital Markets and Strategy
American Eagle Energy Corporation
720-330-8378
ir@amzgcorp.com
www.americaneagleenergy.com


Source: Marketwired (Canada) (November 5, 2014 - 4:05 PM EST)

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