Eagle Energy Trust announced that its 2011 drilling program in the Salt Flat Field is nearly completed. Of the 21 horizontal oil wells and six salt water disposal wells that Eagle had in its 2011 drilling program, Eagle only has one salt water disposal well left to be drilled. Eagle has also received from the regulatory authorities all of the required salt water disposal licenses in order for Eagle to produce from all of its horizontal oil wells.
Over the past week, Eagle put 13 horizontal oil wells on production. Normally, when new wells in the Salt Flat Field are brought on, there is a brief period of time for the wells to "clean up" before they reach their full productive potential. These 13 wells, which have only been producing for a few days, have added an average of approximately 800 barrels of oil per day (net) to Eagle, bringing current total working interest production over the past six days to an average of approximately 1,600 barrels of oil per day. Eagle anticipates that the performance of these new wells will increase over time as the well bores clean up.
Eagle also expects to put another three horizontal wells on production during October and the remaining five horizontal wells during November. Eagle's working interest in all of the wells drilled in its 2011 program is 80%.
As stated earlier, delays in obtaining salt water disposal permits have affected management's ability to put horizontal wells on production throughout 2011. These delays will reduce Eagle's projected average annual production rate, as actual production is behind by approximately one financial quarter from management's previous projection for the same period.
Eagle is therefore revising its previously stated guidance of projected working interest average production for 2011 from 1,900 barrels of oil per day to 1,400 barrels of oil per day. Eagle expects its 2011 exit production rate to be approximately 2,400 barrels of oil per day, which represents an 800% increase in its working interest production rate from the 300 barrels of oil per day that existed on the effective date of Eagle's acquisition of its interest in the Salt Flat Field on June 1, 2010.
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