American Eagle Energy Corporation announced its results for the fourth quarter ended December 31, 2014. The company reports oil and gas sales of $14.5 million.
Article continues below
This represents an increase of 7% over Q4 ended December 31, 2013 and a decrease of 15% from the third quarter ended September 30, 2014. The increase in year-over-year sales was driven by higher production as 54 gross (32.2 net) operated wells were producing in the Bakken and Three Forks formations at the end of fourth quarter 2014, compared to production from 28 gross (13.7 net) operated wells at the end of December 31, 2013.
This was partially offset by lower realized oil prices. The decrease in sales on a sequential basis was driven by lower realized oil prices, that were partially offset by higher production from the three gross (1.9 net) operated wells added to production during the quarter. During the fourth quarter 2014, oil production represented 99% of total oil and gas sales revenue and 99% of total production.
American Eagle's fourth quarter 2014 realized oil price per barrel prior to the effect of hedges was negatively impacted by lower crude oil prices for West Texas Intermediate (WTI).
The company has an agreement in place that locked in a $10.75 discount to WTI for the company's 2014 operated oil production to stabilize realized crude oil prices against the risk of volatile pricing differentials. The agreement locks in a $10 discount to WTI for the company's 2015 operated oil production.
American Eagle's fourth quarter 2014 realized oil price per barrel prior to the effect of hedges of $60.97 was lower than the realized oil price of $80.48 during the fourth quarter 2013 and lower than the realized oil price of $85.66 during the third quarter 2014.
The effect of settled hedges in the normal course of business during the fourth quarter of 2014 added approximately $11.06 per barrel for a realized oil price of $72.03 per barrel, which was lower than previous quarters.
Adjusted EBITDA for fourth quarter 2014 was $7.9 million, which represented an increase of 3% from $7.6 million reported for the fourth quarter ended December 31, 2013 and a decrease of 13% from $9.1 million reported for the third quarter ended September 30, 2014.
Relative to the fourth quarter ending December 31, 2013, the increase in Adjusted EBITDA was primarily due to higher oil production sales volumes and lower general and administrative (G&A) expenses, partially offset by lower realized oil prices and higher lease operating expense (LOE).
Similarly, in comparison to the quarter ending September 30, 2014, the 13% decrease in Adjusted EBITDA was due primarily to lower realized oil prices and higher LOE, which was partially offset by higher oil production sales volume and lower G&A expense.
LOE for the quarter ended December 31, 2014 was $25.00 per BOE, which was significantly elevated from previous periods due to year-end adjustments and utilization of higher cost submersible pumps.
Higher production levels helped to reduce per-unit G&A expenses compared to previous periods, as G&A, excluding stock-based compensation, was $6.70 per BOE during the fourth quarter 2014 compared to $15.07 per BOE for the prior year and $8.25 per BOE for the prior quarter.
Adjusted EBITDA per BOE for the quarter ended December 31, 2014 was $33.13, as compared to $44.24 for the prior year and $44.92 for the prior quarter. ■