American Eagle Energy has entered into a Purchase Agreement with Knapp for the purchase of an approximate 726 net acre leasehold position owned by Knapp, located in Roosevelt County, Montana. Subject to title due diligence, to be completed by April 15, 2011, the purchase transaction is expected to close on May 1, 2011. The Benrude Prospect is a development drilling opportunity in the Nisku Formation located updip from two structurally lower producers. The Company plans to shoot a 3D seismic survey this summer to define the prospect area fully and guide the initial well location. Drilling of the vertical development well is expected to be initiated in the third quarter of 2011.
The acquisition of this low-risk, high-potential, conventional Nisku Formation prospect provides a valuable addition to American Eagle's portfolio of projects," stated Richard Findley, the Company's President and Chief Executive Officer. "The ability to develop this light oil prospect quickly with limited capital exposure and the potential for immediate, positive cash flow make it a good fit with our ongoing large Bakken resource plays that we are pursuing in the Williston and Alberta Basins."
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