American Eagle provided an update on the Company's Glacier Project in NW Montana. The Company and its two partners, FX Energy and Big Sky Operating, this week completed drilling and casing a horizontal sidetrack from the group's previously drilled vertical test, the FX American Eagle Big Sky 14-29, in Toole County, Montana. Good oil and gas shows were noted throughout the drilling of the horizontal section. The approximate 4100 ft lateral section targeted the Bakken Formation and was cased with a 4 1/2" liner equipped with 26 stimulation sleeves. A multi-stage fracture stimulation is currently slated for November.
The group is permitting the second earning well in the previously announced farmout deal and is expected to spud the vertical evaluation well approximately 5 miles southwest of the FX American Eagle Big Sky 14-29 well in late October. Well evaluation plans include coring key sections of the Bakken Source System and logging the prospective interval. Further drilling and completion operations will be conducted based on the evaluation results and would likely include targeting the most prospective of the multiple pay zones with a horizontal sidetrack from the vertical test well.
American Eagle is working with it partners to determine the next drilling location to advance the Bakken project in the Southwest Cut Bank Sand Unit. The SWCBSU 81-3 was a vertical deepening of an existing well designed to cost effectively evaluate the various prospective zones within the Bakken Source System. The SWCBSU 81-3 strat test well confirmed the presence of oil in the target zones following a small stimulation of multiple zones in the well. Further drilling plans being evaluated will likely include a vertical pilot well with a horizontal lateral in the vicinity of the 81-3 and targeting one of the multiple oil-bearing zones before yearend 2011.
The Company is expected to complete an acquisition in October, subject to final due diligence, of an additional 2044 net acres for approximately $400,000 from a private company. The acreage is strategically located in the area closely offsetting several Bakken producers operated by Newfield Production and Rosetta Resources in Glacier County, MT. American Eagle will conduct further assessment of the area with the objective of initiating drilling in 2012.
Richard Findley, the Company's Chief Executive Officer stated, "American Eagle's management and technical team, in conjunction with its partners, have done an outstanding job in validating our geologic play concept to date. Although we and the rest of industry have more work to do to confirm the regional economic productivity of the play, we are greatly encouraged by the results we have seen. Confirming oil in the Cut Bank field area on the west flank of the Kevin Dome and documenting strong oil shows in the horizontal leg of the 14-29 well on the central portion of the dome further confirms the potential of the Bakken/Three Forks on American Eagle's leasehold. We look forward to significantly advancing the project evaluation on both our Basin and Dome acreage, as well as the newly acquired block adjacent to the Newfield and Rosetta indicated discoveries. We remain on target to position American Eagle as a major participant in this exciting and rapidly evolving play."
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