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A table showing the sensitivity of Eagle's 2013 funds flow to changes in production and commodity prices is set out below under the heading "2013 Sensitivities".
Calculations and commentary regarding the sustainability of Eagle's distributions
The following table sets out Eagle's 2013 updated guidance with respect to its projected payout ratios, debt to trailing cashflow, and percentage to be drawn on its credit facility at the end of 2013.
------------------------------------------- ------------------------------------------- Updated 2013 Previous Guidance 2013 Guidance Notes----------------------------------------------------------------------------Payout Ratios (as a percentage of funds flow) Basic Payout Ratio (i.e., Distribution at $1.05/unit) 71% 77% (1) Plus: Capital Expenditures 57% 59% (2) Equals: Corporate Payout Ratio 128% 136% (3) Adjusted Payout Ratio (i.e., Distribution - DRIP proceeds + Capital Expenditures) 83% 85% (4)Financial Strength Debt to trailing cashflow 0.88x 0.78x (5) % Drawn on existing credit facility at end of period 66% 66% (6)--------------------------------------------------------------------------------------------------------------------------------------------------------Notes:(1) Eagle calculates its basic payout ratio as follows: Unitholder Distributions = Basic Payout Ratio-------------------------------------------------- Funds flow from OperationsA table showing the sensitivity of Eagle's basic payout ratio to productionand pricing is set out below under the heading "2013 Sensitivities".(2) Capital expenditures generally exclude corporate and property acquisitions because these are evaluated separately on their own merits. The initial acquisition capital of $US 8.5 million relating to the Acquisition has therefore been excluded from this percentage.(3) Eagle calculates its corporate payout ratio as follows: Capital Expenditures + Unitholder Distributions = Corporate Payout Ratio-------------------------------------------------- Funds flow from OperationsA table showing the sensitivity of Eagle's corporate payout ratio toproduction and pricing is set out below under the heading "2013Sensitivities".(4) Assumes 65% unitholder participation in Eagle's Premium Drip™ and distribution reinvestment programs is unchanged throughout 2013. As is the case with any manner of equity funding, Eagle weighs the benefits from this method of financing and will make adjustments as deemed prudent.(5) Increased due to the $US 8.5 million Acquisition being financed by bank debt.(6) Effective April 22, 2013, the borrowing base under the credit facility was increased to $US 61.0 million.
2013 Sensitivities
The following tables show the sensitivity of Eagle's funds flow, corporate payout ratio and basic payout ratio to changes in commodity price and production.
Sensitivity of Funds Flow ($ millions) to Commodity Price and Production
------------------------------------ ------------------------------------ 2013 (Apr - Dec) Average WTI $US 80.00 $US 90.00 $US 100.00----------------------------------------------------------------------------2013 Average Working Interest Production (boe/d) 2,900 40.7 42.0 44.1 3,100 44.1 45.0 48.1 3,300 47.4 49.4 52.2--------------------------------------------------------------------------------------------------------------------------------------------------------
