Eagle Energy Inc. Announces 2018 Annual Results and Reserves Information

Date : 03/22/2019 @ 1:38AM
Source : PR Newswire (Canada)
Stock : Eagle Energy Inc (EGL)
Quote : 0.03  0.005 (20.00%) @ 7:56PM

Eagle Energy Inc. Announces 2018 Annual Results and Reserves Information

Eagle Energy (TSX:EGL)
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CALGARY, March 21, 2019 /CNW/ - (TSX: EGL): Eagle Energy Inc. ("Eagle") today reports its financial and operating results and its reserves information for the year ended December 31, 2018.  

When reflecting on 2018, Wayne Wisniewski, President and Chief Executive Officer, stated, "Eagle continues to execute its previously announced plan to reduce debt and corporate costs. Our 2018 full year administrative expenses, excluding one-time costs associated with the Salt Flat and Twining dispositions, are 11% lower than our 2017 levels.  We have undertaken cost cutting initiatives including reducing our staff headcount by 27% over the year and reducing our number of contractors by five.  Overall, we estimate our 2019 full year administrative expenses to be 28% lower than 2018 levels. In addition, when compared to 2017 year-end, we have reduced our term loan at year end by 48%."

Mr. Wisniewski continued, "We continue to work with our financial advisors to investigate, evaluate and consider possible asset sales and restructuring alternatives.  Given the improvement in commodity prices since the end of 2018 and an upcoming sale of our Texas overriding royalty interests, we have decided to forego entering into another forbearance agreement with our lender at this time to replace the one that expired January 31, 2019.  We feel this affords us the maximum flexibility in managing our business and avoids incurring additional fees and conditions associated with a forbearance agreement."

Eagle's reserves data and other oil and gas information is included in its Annual Information Form dated March 21, 2019 for the year ended December 31, 2018 ("AIF").  Eagle's audited consolidated annual financial statements, management's discussion and analysis and AIF have been filed with the securities regulators and are available online under Eagle's issuer profile on SEDAR at www.sedar.com and on Eagle's website at www.EagleEnergy.com.

This news release contains non-IFRS financial measures and statements that are forward-looking.  Investors should read the sections titled "Non-IFRS Financial Measures" and "Note about Forward-Looking Statements" near the end of this news release.  Figures within this news release are presented in Canadian dollars unless otherwise indicated.

2018 Year in Review

Eagle achieved the following results in 2018:

  • A 23% increase in year-over-year field netback, to $25.83 per boe.

  • A 48% reduction in year-end debt (from $US 58.2 million to $US 30.4 million).

  • An 11% reduction in administrative expenses, excluding one-time costs associated with property dispositions.

  • Undertook cost cutting initiatives that are estimated to reduce 2019 administrative expenses (excluding any one-time costs that may be associated with future asset dispositions) to $6.3 million, or $2.5 million below 2018.

  • Posted reserve replacement ratios of 363% and 75% on a proved plus probable and proved basis, respectively.

Asset Sales, Debt Reduction and Ongoing Measures to address a Going Concern Uncertainty

  • On February 8, 2018, Eagle sold its oil and gas interests in Salt Flat, located in Caldwell County, Texas for approximately $34.4 million cash and used the net proceeds from the sale to reduce its term loan by 34% (from $US 58.2 million to $US 38.5 million) and to further fund its drilling program in North Texas.

  • On August 28, 2018, Eagle sold its oil and gas interests in the Twining area of Alberta, Canada for approximately $13.3 million cash and used the net proceeds from the sale to reduce its term loan by an additional 14% (from $US 38.5 million to $US 30.4 million) and to further fund its drilling program in North Texas.

At December 31, 2018, the following circumstances cause material uncertainties that may cast significant doubt regarding Eagle's ability to continue as a going concern:

  • Eagle had a working capital deficiency of $40.0 million.

  • Eagle's estimate of future cash flows from operating activities over the next twelve months is not sufficient to repay the loan principal, which is classified as a current liability.

  • Eagle was in default of one of its four financial covenants under the four-year secured term loan from its U.S.-based lender (the "Loan Agreement"). Violation of any financial covenant constitutes an immediate event of default under the Loan Agreement. As a result, Eagle's debt has been reclassified from a non-current to a current liability.

  • Lower WTI oil prices during the fourth quarter of 2018 relative to the third quarter, combined with unprecedented wide oil price differentials in Alberta, led to lower fourth quarter 2018 funds flow. This caused Eagle to be in default of one of its cash flow related financial covenants, the Consolidated Fixed Charge Coverage Ratio.

  • There is no assurance that Eagle will not be in violation of one or more financial covenants in future quarters.

Eagle has undertaken several cost-cutting measures to reduce administrative and operating expenses, such as reducing its staff headcount by 27% over the year, reducing its number of contractors by five, negotiating better pricing with contractors and listing its Calgary office space for sublease. 

In December 2018, as a result of falling WTI prices and high Canadian oil differentials, Eagle implemented a selective well shut-in program in Canada to maximize cash flow and was able to remain cash flow positive at the field level for the fourth quarter of 2018. 

For 2019, as WTI strengthens and the Canadian oil differentials narrow, Eagle has restored production levels to increase field level cash flow.  Eagle continues to evaluate exposure to market risks from fluctuations in commodity prices and has entered into risk management contracts to reduce commodity price risks. 

Eagle currently has curtailed all capital spending for 2019 and continues to work with its financial advisors to investigate, evaluate and consider possible asset sales and restructuring alternatives.

Eagle's ability to meet its ongoing financial liabilities, including liabilities relating to its loan agreement, and to continue as a going concern, is dependent upon the ongoing support from its lender and its ability to fund the repayment of its debt by generating positive cash flows from operations, securing funding from additional debt or equity financing, disposing of assets or making other arrangements.  There is no certainty that such initiatives will be successful.

Since 2018 year end, Eagle has undertaken the following: 

  • On March 6, 2019, Eagle signed a purchase and sale agreement to sell 100% of certain minor overriding royalty interests in Texas (the "ORRI Sale") for estimated proceeds of $US 1.7 million, subject to customary closing adjustments. Closing is expected to occur on March 29, 2019 and will improve Eagle's capacity to fund its outstanding obligations.

  • On March 12, 2019, Eagle entered into a fixed price financial swap on 450 barrels of oil per day for the period of April 1 to September 30, 2019 at a WTI price of $US 57.81 per barrel in order to mitigate the risk that fluctuating commodity prices have on generating positive cash flows from operations.

  • On March 15, 2019, the lender finalized its semi-annual borrowing base redetermination, based on December 31, 2018 reserves, and the borrowing base was set at $US 30.6 million (which adequately covers the current outstanding debt balance of $US 30.4 million).

  • On March 18, 2019, Eagle and its lender entered into a Limited Consent and Seventh Amendment to the Loan Agreement (the "Consent") under which the lender consented to the ORRI Sale and made certain amendments to the Loan Agreement. One of the amendments excludes 2018 consolidated financial statements from constituting an event of default due to them having a going concern note.

  • As previously announced, the limited forbearance agreement between Eagle and its lender expired on January 31, 2019. Eagle was in violation of one of its four financial covenants at December 31, 2018 year end, which constitutes an event of default under the Loan Agreement. Eagle has continued to work diligently and constructively with its lender since the expiration of the forbearance agreement.

  • Given the improvement in commodity prices since the end of 2018, Eagle's ongoing work with its financial advisors in investigating, evaluating and considering possible asset sales and restructuring alternatives, and its recently signed ORRI Sale, Eagle has made the decision to forego entering into another forbearance agreement with its lender at this time. Eagle feels this affords it the maximum flexibility to manage its business and avoids incurring additional fees and conditions associated with a forbearance agreement.

  • Under the Consent, the lender has not waived, and has expressly retained, all of its rights and remedies to which it is entitled under the Loan Agreement as a result of the event of default described above. Notwithstanding the default, the lender has not, as of the date hereof, exercised any of its available remedies, but there can be no assurance that it will not do so in the future.

2018 Year-end Reserves Information

An independent evaluation of Eagle's U.S. reserves was conducted by Netherland, Sewell & Associates, Inc. and of Eagle's Canadian reserves by McDaniel & Associates Consultants Ltd.  These reserves evaluation reports are effective December 31, 2018 and were prepared in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.  Details regarding Eagle's reserves and oil and gas assets are set forth in Eagle's AIF.

2018 Year-End Reserves Report – Overview (based on Company Gross reserves)

  • Property divestitures on both sides of the border (Salt Flat assets in Texas and Twining assets in Alberta) were the primary focus, resulting in a year-over-year reduction in debt of 48%.

  • Achieved year-end proved plus probable reserves of 16 million boe (60% total proved, 50% proved developed producing).

  • Crude oil comprises 97% of proved developed producing reserves.

  • Posted reserve replacement ratios of 363% and 75% on a proved plus probable and proved basis, respectively.(1) (3)

  • Increased the reserve life indices to 27.1 years and 16.5 years on a proved plus probable and proved basis, respectively.(2) (3)

Notes:


(1)

Reserve replacement ratio is calculated by dividing company gross reserve additions by working interest production for the year, which, in 2018, is based on average working interest production of 1,622 boe per day ("boe/d") after the sale of Salt Flat and Twining (2017 - 3,598 boe/d).  This metric expresses the amount of reserves added to a company's reserve base during the year as compared to the amount of oil and gas produced.  It shows whether a company is increasing reserves or depleting them.



(2)

Reserve life index is calculated by dividing company gross reserves by working interest production for the year, which, in 2018, is based on average working interest production of 1,622 boe/d after the sale of Salt Flat and Twining (2017 - 3,598 boe/d).  This metric expresses how long a company's reserves will last at the current production rate with no additions to reserves.



(3)

Eagle cautions readers that the reserve replacement ratio and reserve life index are metrics that do not have any standardized meaning and may not be comparable to similar metrics presented by other issuers.

 

The following tables summarize the independent reserves estimates and values of Eagle's reserves as at December 31, 2018.  Totals may not add due to rounding.

Summary of Reserves



Canadian Operations

Company Gross(1)

Reserves Categories

Crude Oil

Natural Gas
Liquids

Natural Gas

Total Oil
Equivalent 2017

Total Oil
Equivalent 2016


(Mbbls)

(Mbbls)

(MMcf)

(Mboe)

(Mboe)

Proved






Developed producing

6,354

21

961

6,536

7,643

Developed non-producing

-

-

-

-

156

Undeveloped

-

-

-

-

2,793

Total proved

6,354

21

961

6,536

10,593

Total probable

2,243

7

272

2,296

4,463

Total proved plus probable

8,598

28

1,234

8,831

15,055








 



US Operations

Company Gross(1)

Reserves Categories

Crude Oil

Natural Gas
Liquids

Natural Gas

Total Oil
Equivalent 2017

Total Oil
Equivalent 2016


(Mbbls)

(Mbbls)

(MMcf)

(Mboe)

(Mboe)

Proved






Developed producing

1,337

41

351

1,436

3,145

Developed non-producing

223

16

140

262

344

Undeveloped

1,130

166

1,426

1,533

1,759

Total proved

2,689

223

1,917

3,231

5,248

Total probable

3,002

403

3,465

3,983

2,892

Total proved plus probable

5,690

627

5,382

7,214

8,140








 



Total Company Operations

Company Gross(1)

Reserves Categories

Crude Oil

Natural Gas
Liquids

Natural Gas

Total Oil
Equivalent 2017

Total Oil
Equivalent 2016


(Mbbls)

(Mbbls)

(MMcf)

(Mboe)

(Mboe)

Proved






Developed producing

7,691

62

1,312

7,972

10,789

Developed non-producing

223

16

140

262

500

Undeveloped

1,130

166

1,426

1,533

4,552

Total proved

9,043

245

2,878

9,767

15,841

Total probable

5,245

410

3,737

6,278

7,355

Total proved plus probable

14,288

655

6,615

16,045

23,196








Note:

(1)

Company gross reserves are Eagle's total working interest share before the deduction of any royalties and exclude Eagle's royalty interests.

 

Summary of Net Present Value of Future Net Revenue of Reserves




Canadian Operations


Net Present Value of Future Net Revenue

Before Income Taxes Discounted at (%/year)(1)

Reserves Category


0%

5%

10%

15%

20%

$CA


($000's)

($000's)

($000's)

($000's)

($000's)

Proved







Developed producing


181,393

103,242

68,994

51,090

40,409

Developed non-producing


-

-

-

-

-

Undeveloped


-

-

-

-

-

Total proved


181,393

103,242

68,994

51,090

40,409

Total probable


82,627

23,723

9,945

5,407

3,441

Total proved plus probable


264,021

126,965

78,939

56,496

43,850









 




US Operations


Net Present Value of Future Net Revenue

Before Income Taxes Discounted at (%/year)(1)

Reserves Category


0%

5%

10%

15%

20%

$US


($000's)

($000's)

($000's)

($000's)

($000's)

Proved







Developed producing


48,521

32,461

24,627

20,067

17,090

Developed non-producing


9,847

5,222

3,717

3,001

2,545

Undeveloped


25,656

17,641

15,527

9,071

6,634

Total proved


84,024

55,325

40,871

32,138

26,270

Total probable


113,807

68,892

46,372

33,354

25,115

Total proved plus probable


197,831

124,217

87,242

65,492

51,385








 




Total Company Operations


Net Present Value of Future Net Revenue

Before Income Taxes Discounted at (%/year)(1)(2)

Reserves Category


0%

5%

10%

15%

20%

$CA


($000's)

($000's)

($000's)

($000's)

($000's)

Proved







Developed producing


242,117

144,064

100,095

76,523

62,137

Developed non-producing


12,248

6,520

4,652

3,761

3,193

Undeveloped


31,687

21,765

15,433

11,154

8,138

Total proved


286,052

172,349

120,180

91,438

73,468

Total probable


223,686

109,183

67,516

46,849

34,670

Total proved plus probable


509,738

281,532

187,696

138,287

108,138










Notes:

(1)

It should not be assumed that the net present values of estimated future net revenue shown above are representative of the fair market value of the reserves.  There is no assurance that the underlying price and costs assumptions will be attained and variances could be material.  The recovery and estimates of reserves provided in this news release are estimates only and there is no guarantee that the estimated reserves will be recovered.  Actual reserves may be greater than or less than the estimates provided.



(2)

To calculate the Total Company Operations, the amounts for the U.S. operations have been converted into Canadian dollars using the following foreign exchange rates:  2019 - $CA 1.00 equal to $US 0.757; 2020 - $CA 1.00 equal to $US 0.782; 2021- $CA 1.00 equal to $US 0.797; 2022 - $CA 1.00 equal to $US 0.803; 2023 - $CA 1.00 equal to $US 0.807, 2023 and thereafter - $CA 1.00 equal to $US 0.808 (as per the average of the exchange rate for the forecast prices of McDaniel & Associates Consultants Ltd., GLJ Petroleum Consultants Ltd. and Sproule Associated Limited as of January 1, 2019.)

 

Selected Annual Information

The following table shows selected information for Eagle's fiscal years ended December 31, 2018, December 31, 2017 and December 31, 2016.



Years ended December 31

2018

2017

2016

($000's except per share amounts and production)




Sales volumes – boe/d

2,258

3,821

3,972





Revenue, net of royalties

37,296

55,569

48,993

Field netback

21,285

29,354

23,437





Funds flow from operations

6,334

12,695

15,798

per share – basic and diluted

0.14

0.30

0.38





(Loss) earnings

(25,470)

(17,349)

9,559

per share – basic and diluted

(0.58)

(0.40)

0.23





Current assets

7,751

13,869

9,302

Current liabilities

45,395

13,715

74,595





Total assets

136,674

207,314

218,036

Total non-current liabilities

16,658

94,312

26,202

Shareholders' equity

74,621

99,287

117,239





Dividends declared

-

425

3,821

per issued share

0.00

0.01

0.09





Shares issued

44,244

43,302

42,452

 

Summary of Quarterly Results




Q4/2018

Q3/2018

Q2/2018

Q1/2018

Q4/2017

Q3/2017

Q2/2017

Q1/2017

($000's except for boe/d and
per share amounts)









Sales volumes – boe/d

1,852

1,958

2,262

2,974

3,804

3,749

3,966

3,767










Revenue, net of royalties

5,577

9,010

10,228

12,461

14,725

12,459

14,167

14,218

per boe

32.73

50.01

49.69

46.57

42.08

36.12

39.25

41.95










Operating, transportation and marketing expenses

2,730

3,946

4,206

5,109

6,864

6,301

5,885

7,165

per boe

16.02

21.91

20.43

19.10

19.61

18.27

16.31

21.14










Field netback(1)

2,847

5,064

6,022

7,352

7,861

6,158

8,282

7,053

per boe

16.71

28.10

29.26

27.47

22.47

17.85

22.94

20.81










Funds flow from operations

1,062

1,622(2)

1,932

1,718(3)

3,488

3,346

4,272

1,589

per boe

6.23

9.00

9.39

6.42

9.98

9.70

11.84

4.69

per share – basic

0.02

0.04

0.04

0.04

0.08

0.08

0.10

0.04

per share – diluted

0.02

0.04

0.04

0.04

0.08

0.07

0.10

0.04










(Loss) earnings

(5,922)

(1,887)

(15,093)

(2,568)

(14,293)

(4,711)

675

1,303

per share – basic

(0.13)

(0.04)

(0.34)

(0.06)

(0.34)

(0.11)

0.02

0.03

per share - diluted

(0.13)

(0.04)

(0.34)

(0.06)

(0.34)

(0.11)

0.02

0.03










Cash dividends declared

-

-

-

-

-

-

-

425

per issued share

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.01










Current assets

7,751

13,270

10,920

14,941

13,869

11,122

11,847

18,819

Current liabilities

43,395

9,686

5,762

7,528

13,715

8,042

6,599

11,474

Total assets

136,674

141,264

159,935

174,877

207,314

213,867

222,155

233,951

Total non-current liabilities

16,658

51,886

62,427

70,870

94,312

92,367

97,086

104,359

Shareholders' equity

74,621

79,692

81,709

96,479

99,287

113,458

118,470

118,118

Shares issued

44,244

44,244

43,750

43,750

43,302

43,302

42,857

42,857


Notes:

(1)

Field netback is a Non-IFRS financial measure.  See "Advisories – Non-IFRS Financial Measures".

(2)

Includes one-time disposition costs of $0.7 million relating to the Twining disposition.

(3)

Includes one-time disposition costs of $3.4 million relating to the Salt Flat disposition

 

During the fourth quarter of 2018, sales volumes decreased 5% when compared to the third quarter.  Production from the North Texas properties increased by 176 boe/d due to the third well of the 2018 drilling program starting production.  Production from the Canadian properties decreased by 282 boe/d primarily due to the disposition of the Twining properties at the end of August, as well as the selective well shut in process that was initiated in Dixonville in response to the low commodity price environment.

During the fourth quarter of 2018, field netback decreased 44% when compared to the third quarter due to lower production and a 35% decrease in realized prices net of royalties, which was consistent with the WTI price decrease and the dramatically wider price differentials on Canadian oil.  When compared to the third quarter, the negative effect on field netback of lower prices was partially offset by a 31% decrease in operating, transportation and marketing expenses in the fourth quarter, as Eagle raised production from one well in North Texas and initiated a selective well shut in program in Dixonville.

For the Dixonville properties in Canada, the realized price in the fourth quarter of 2018 was $26.74 per boe as compared to $52.86 per boe in the fourth quarter of 2017. This 49% quarter-over-quarter realized price decrease occurred despite an 8% WTI price increase, and was due to wider Canadian oil price differentials.  For the full year of 2018, the realized price averaged $55.39 per boe as compared to $48.61 per boe for the prior year. The wider Canadian oil price differentials held this year-over-year realized price increase to only 14% versus a 31% increase in the WTI price.

During the latter part of the fourth quarter, an unprecedented widening in oil price differentials caused a significant decrease in field netbacks in the Dixonville area.  The differential between $CA WTI and Eagle's received price was $58.86 per barrel in December, resulting in a December realized oil price of $4.60 per barrel.  As a result of the low pricing in December, Eagle proactively initiated a selective well shut-in program, which reduced workover expenditures.  This, in turn, lowered production, but resulted in Dixonville being cash flow positive at a field level during the fourth quarter of 2018.

Funds flow from operations decreased 35% from the third quarter of 2018.  This was primarily due to 44% lower fourth quarter field netbacks being partially offset by a realized risk management gain of $1.3 million in the fourth quarter.

(Loss) earnings on a quarterly basis often do not move directionally or by the same amounts as funds flow from operations.  This is due to items of a non-cash nature that factor into the calculation of (loss) earnings, and those that are required to be fair valued at each quarter end.  Fourth quarter 2018 funds flow from operations decreased by 35% from the third quarter of 2018, yet the fourth quarter net income was 214% less than the third quarter of 2018 primarily as a result of a $5.3 million impairment expense realized in the fourth quarter relating to Dixonville. 

Current assets decreased quarter-over-quarter due to a lower December revenue forming part of the December accounts receivable balance at year end, while September revenue, which formed part of the September accounts receivable balance, was higher due to stronger September oil prices.

Current liabilities increased in the fourth quarter when compared to the third quarter due to the reclassification of Eagle's debt from a non-current liability to a current liability. 

Advisories

Non-IFRS Financial Measures

Statements throughout this news release make reference to the terms "field netback" which is a non-IFRS financial measures that does not have a standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. 

"Field netback" is calculated by subtracting royalties, operating expenses, and transportation and marketing expenses from revenues.  This method of calculating field netback is in accordance with the standards set out in the Canadian Oil and Gas Evaluation Handbook maintained by the Society of Petroleum Evaluation Engineers (Calgary Chapter).  Management believes that field netback provides useful information to investors and management because such a measure reflects the quality of production and the level of profitability.

Note about Forward-Looking Statements

Certain of the statements made and information contained in this news release are forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") within the meaning of Canadian securities laws.  All statements other than statements of historic fact are forward-looking statements.  Eagle cautions investors that important factors could cause Eagle's actual results to differ materially from those projected, or set out, in any forward-looking statements included in this news release.

In particular, and without limitation, this news release contains forward-looking statements pertaining to the following:

  • Eagle's expectations regarding its ability to meet its financial liabilities, including liabilities relating to the Loan Agreement, and to continue as a going concern being dependent upon the ongoing support from its lender and its ability to fund the repayment of its debt by generating positive cash flows from operations, securing funding from additional debt or equity financing, disposing of assets or making other arrangements;
  • Eagle's intentions to reduce debt and corporate costs, including interest costs;
  • Eagle's expectations regarding its general and administrative expenses in 2019;
  • Eagle's estimated volumes and values of reserves;
  • Eagle's expectations regarding capital expenditures in 2019;
  • Future development costs associated with reserves;
  • Eagle's hedging program and contracts;
  • Anticipated crude oil, natural gas liquids and natural gas pricing and production weighting;
  • Eagle's expectation that its future cash flows from operating activities over the next twelve months is not sufficient to repay the loan principal;and
  • Eagle's expectations regarding possible asset sales and restructuring alternatives and the closing of the ORRI sale.

With respect to forward-looking statements contained in this news release, assumptions have been made regarding, among other things:

  • future crude oil, NGL and natural gas prices, differentials and weighting;
  • future foreign exchange and interest rates;
  • future production levels;
  • future capital expenditures and the ability of Eagle to obtain financing on acceptable terms;
  • future production estimates, which are based on the proposed drilling program with a success rate that, in turn, is based upon historical drilling success and an evaluation of the particular wells to be drilled, among other things;
  • projected operating costs, which are estimated based on historical information and anticipated changes in the cost of equipment and services, among other things; and
  • ongoing support of Eagle by its lender.

Eagle's actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below and those in the AIF:

  • the exercise by Eagle's lender of its rights and remedies under the Loan Agreement as a result of Eagle not being in compliance with all of the covenants under the Loan Agreement;
  • volatility of prices and differentials for crude oil, NGLs and natural gas;
  • commodity supply and demand;
  • fluctuations in foreign exchange and interest rates;
  • inherent risks and changes in costs associated with the development of petroleum properties;
  • ultimate recoverability of reserves;
  • timing, results and costs of drilling and production activities;
  • availability and terms of financing and capital; and
  • new regulations and legislation that apply to the operations of Eagle and its subsidiaries.

Additional risks and uncertainties affecting Eagle are contained in the AIF under the heading "Risk Factors".

As a result of these risks, actual performance and financial results in 2019 may differ materially from any projections of future performance or results expressed or implied by these forward‐looking statements.  Eagle's production rates, operating and general and administrative costs, field netbacks, drilling program, capital budget, reserves and potential transactions are subject to change in light of ongoing results, prevailing economic circumstances, obtaining regulatory approvals, commodity prices, exchange rates, financing terms, and industry conditions and regulations.  Statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, and that the resources and reserves described can be profitably produced in the future.  New factors emerge from time to time, and it is not possible for management to predict all of these factors or to assess, in advance, the impact of each such factor on Eagle's business, or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur.  Although management believes that the expectations conveyed by the forward-looking statements are reasonable based on information available to it on the date the forward-looking statements were made, there can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized.  Actual results will differ, and the difference may be material and adverse to Eagle and its shareholders.  These statements speak only as of the date of this news release and may not be appropriate for other purposes.  Eagle does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise.

Note Regarding Barrel of Oil Equivalency

This news release contains disclosure expressed as "boe" or "boe/d".  All oil and natural gas equivalency volumes have been derived using the conversion ratio of six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of oil.  Equivalency measures may be misleading, particularly if used in isolation.  A conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.  In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion ratio of 6 Mcf:1 bbl would be misleading as an indication of value.

About Eagle Energy Inc.

Eagle is an oil and gas corporation with shares listed for trading on the Toronto Stock Exchange under the symbol "EGL".

All material information about Eagle may be found on its website at www.EagleEnergy.com or under Eagle's issuer profile at www.sedar.com.

SOURCE Eagle Energy Inc.

Copyright 2019 Canada NewsWire

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