"For 2012, with the increase in Eagle's proved reserves, we see this evolution being followed in both of our fields. As previously announced, the early part of Eagle's 2012 drilling program in the Luling area did not meet expectations due to mud displacement issues during well completion. However, once these issues were addressed, wells drilled in the latter part of 2012 performed at forecast levels. Internal technical work by Eagle staff confirms the ultimate potential of the Luling pool. We expect that success in the 2013 drilling program in Luling will meet expectations and replace 2012 reserve adjustments."
"Our Midland drilling program delivered results as expected in 2012 and reserves in the Midland area remained consistent with prior bookings."
Eagle's average production for the months of January and February 2013 was 2,888 boe/d, which is consistent with Eagle's previously published guidance. Mr. Clark stated, "Eagle is on target to add additional production with the start of its 2013 capital program, beginning in April with five planned wells in Midland, followed by six planned wells in Luling beginning in June. As promised, we continue to lower our operating costs, as evidenced by our estimated fourth quarter operating costs of approximately $13.70 per boe (including estimated transportation costs of $2.00 per boe)."
100% of Eagle's Production is in Texas
All of Eagle's production is located in the State of Texas. 88% of Eagle's revenue comes from light oil production. Eagle recently renewed its oil marketing arrangement, increasing its overall realized weighted oil price to approximately $US 2.67 above WTI (excluding estimated transportation costs of $2.00 per boe). By comparison, over the past few months, producers of Canadian light and heavy oil have experienced record reductions to their wellhead prices by as much as $15 to $40 per barrel, respectively, to the price of WTI. Having all of its production in the United States gives Eagle a significant pricing advantage over producers of Canadian domestic oil.
Note Regarding Forward-Looking Statements
Certain of the statements made and information contained in this press release are forward-looking statements and forward looking information (collectively referred to as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historic fact are forward-looking statements. Statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future.
Forward-looking statements include those pertaining to the estimated volumes and value of Eagle's proved and probable reserves, forecasted 2013 average production level, Eagle's 2013 drilling and capital program, Eagle's reserve life index, and future commodity prices. These forward-looking statements are based on management's current beliefs as well as assumptions made by, and information currently available to, management, including the accuracy of the estimates of Eagle's reserves volumes, future commodity prices and costs assumptions, estimated future production levels, the ability to obtain equipment in a timely manner to carry out proposed drilling and development activities and the ability to market oil, natural gas and natural gas liquids successfully. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
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