Current Report Filing (8-k)
March 28 2014 - 6:02AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 27, 2014
AMERICAN
EAGLE ENERGY CORPORATION
(Exact name of registrant as specified in
its charter)
Nevada |
000-50906 |
20-0237026 |
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS Employer
Identification No.) |
2549 W. Main Street, Suite 202, Littleton, CO 80120 |
(Address of principal executive offices) (Zip Code) |
|
Registrant’s telephone number, including
area code: (303) 798-5235
|
(Former name or former address, if changed since last report) |
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
SECTION 2 – FINANCIAL INFORMATION
Item 2.01 Completion of Acquisition or Disposition of Assets.
Purchase, Sale and Option Agreement
On March 27, 2014, we closed (the “Closing”)
the purchase option in favor of us (the “Purchase Option”) under the PSO Agreement (as defined below). For $47 million
($45,750,000 after adjusting for positive purchase price adjustments) in cash paid by us to our joint venture partner (our “JV
Partner”) at the Closing, we acquired additional working interests and net revenue interests from our JV Partner in our existing
acreage and wells in the Spyglass and West Spyglass areas of Divide County, North Dakota (which we now refer to as our “Spyglass
Area”) (the “Second Acquisition”).
The Second Acquisition increased our net
operated acreage by 8,244 net acres and added approximately 450 barrels of oil equivalent per day (“BOEPD”) as of the
June 1, 2013 effective date of the Second Acquisition. It also increased our Spyglass Area operated average working interest from
approximately 44% to 55% in our total Spyglass Area and from approximately 51% to 60% in our proved area of Spyglass.
The Second Acquisition was consummated pursuant
to the Purchase, Sale and Option Agreement dated August 12, 2013 (the “Initial PSO Agreement”) between our JV Partner
and us, which we amended on September 30, 2013 (the “First Amendment”), amended again on October 2, 2013 (the “Second
Amendment”), and subsequently amended a third time on March 27, 2014 in connection with the Closing (the “Third Amendment,”
and, collectively with the Initial PSO Agreement, the First Amendment, and the Second Amendment, the “PSO Agreement”).
In October 2013, we closed the first portion of the acquisition under the PSO Agreement, pursuant to which, for $47 million ($45
million at close after adjusting for positive purchase price adjustments), we purchased approximately 9,700 net acres in our Spyglass
Area with production of approximately 750 BOEPD as of the June 1, 2013 effective date (the “First Acquisition”).
In connection with the Closing and
pursuant to the Third Amendment, our JV Partner and we entered into a new Joint Operating Agreement that fully amends and
replaces the previously existing joint operating agreements between us for the primary purposes of (i) reducing the area of
mutual interest (the “AMI”) to limit it to the producing spacing units and (ii) extending the AMI for two years. Also
effective upon the Closing, our obligations under an earlier Carry Agreement between our JV Partner and us have been
completely satisfied.
For more detail regarding the materials
terms of the PSO Agreement, the First Acquisition, the Purchase Option, the interests that are subject to the Purchase Option (including
financial information with respect to such interests), and the Carry Agreement and the Farm-Out Agreement that we entered into
with our JV Partner in connection with the PSO Agreement, see (i) our Current Report on Form 8-K/A filed with the Securities and
Exchange Commission on December 16, 2013 and (ii) our Current Report on Form 8-K filed with the Securities and Exchange Commission
on March 10, 2014.
Additional Acquisition in the Original West Spyglass Area
On March 27, 2014, for approximately $7.5
million paid by us to our JV Partner on such date, we purchased from our JV Partner approximately 5,000 net acres located in the
original West Spyglass area of Divide County, North Dakota. The acquisition included all of our JV Partner’s leasehold, mutual
interests, lease and title records, contractual and beneficial rights, together with any and all similar rights and interests appurtenant
thereto, with an effective date as of March 1, 2014.
In connection with this acquisition, our
JV Partner and we agreed to amend the terms of the Farm-Out Agreement, dated August 12, 2013, between us (i) to change the location
of the sixth well covered thereunder, (ii) to provide that we shall farmout 50% of our working interest to our JV Partner on identical
terms as stated in such Farm-Out Agreement, and (iii) to provide that we shall pay our remaining 50% working interest in the drilling
of the sixth farm-out well. We also agreed to reimburse our JV Partner for certain costs incurred by it pertaining to the Shelly
3-2N-163-102 well.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 27, 2014 |
AMERICAN EAGLE ENERGY CORPORATION |
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By: |
/S/ Bradley Colby |
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Bradley Colby |
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President and Chief Executive Officer |
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