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ETERNAL ENERGY CORP
Symbol U : EERG
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Eternal Energy Corp. Announces Corporate Updates

2011-07-28 18:54 ET - News Release

LITTLETON, Colo., July 28, 2011 /PRNewswire/ -- Eternal Energy Corp. (OTCBB: EERG) ("Eternal Energy" or the "Company") is pleased to announce the following updates regarding the Company's current projects.  

Proposed Merger with American Eagle Energy Inc.

The Company's proposed merger with American Eagle Energy Inc. ("American Eagle") continues to progress, subject to the completion of remaining, standard regulatory and administrative processes.  Earlier today, Eternal Energy filed its latest response to inquiries received from the US Securities and Exchange Commission regarding the S-4 Registration Statement.  The Company's management is hopeful that the SEC review process is near its end.  While the timing of the ultimate completion of the merger transaction cannot be definitively predicted, the Company's management is hopeful that the merger will close sometime during August 2011.  

Hardy Property, Saskatchewan, Canada

As announced on June 8th, the Company completed the initial drilling of the Hardy 4-16 well in May 2011.  Completion of the well included a 29-stage fracture stimulation of the Bakken horizontal well that placed a total of 429,000 pounds of sand and 6,400 barrels of fluid in the 1370 meter lateral section.  The well is currently being evaluated and is projected to be placed on pump during the first week of August.  Potential locations for additional wells within the Hardy Property are being considered as part of the Company's 2011 drilling program, pending the outcome of the Hardy 4-16 well testing.  The Hardy 4-16 well is located approximately one-half mile west of Eternal Energy's current Hardy 7-9 producing well (owned equally with its proposed merger partner, American Eagle Energy Inc.).  The Hardy 7-9 well continues to produce approximately 40 barrels of oil per day.  

Spyglass Prospect, Divide County, ND

The Spyglass Project is a Bakken and Three Forks play in northern Divide County, North Dakota.  On May 26, 2011, the Company, along with its proposed merger partner, American Eagle, each sold half of their respective working interests in the Spyglass Prospect to a third party.  The transaction netted approximately $7.165 million divided equally between Eternal Energy and American Eagle.  A second closing is now scheduled for August 2, 2011, and relates to the potential sale of an undivided 50% interest in approximately 800 additional net acres.  Estimated sales proceeds are expected to total approximately $700,000.  The Company also expects to close on the sale of an undivided 50% interest in 227 net acres related to the original transaction in return for an additional $200,000 of proceeds.  The proceeds from both of these subsequent closings will be divided equally between Eternal Energy and American Eagle.

As announced on May 31, 2011, the Company had previously granted preferential sale rights to an additional 269 net acres located within the Spyglass Prospect to another entity.  The other entity declined to exercise its preferential sale rights, thereby freeing up Eternal Energy to sell an undivided 50% interest in the acreage to the current buyer.  The Company anticipates receiving proceeds of approximately $235,000 from the sale of this acreage.  The transaction is expected to close August 2, 2011.

Eternal Energy and American Eagle have jointly requested regulatory approval for six, 1,280-acre spacing units in an area within the Spyglass Prospect in which they expect to operate.  Well permitting for two company-operated horizontal wells to be located within these spacing units has begun, with the intention of drilling the wells in late 2011.  

Eternal Energy and American Eagle have participated in the drilling of three outside-operated wells in the second quarter of 2011 that are pending completion.  One of these wells, fracture stimulated in mid-July, is the second offsetting Three Forks well to yield average flowing rates above 500 BOPD.  The other two wells are expected to be fracture stimulated in August 2011.  The companies have elected to participate in 4 additional wells, with working interests ranging from 4.19% to 7.03%, operated by Crescent Point Energy Corp., SM Energy Company, and Samson Resources Company.  The four additional wells are expected to be drilled in the current quarter.  

"We are thrilled to announce yet another successful step forward in our drilling program for the Hardy Property," stated Brad Colby, the Company's Chief Executive Officer and President.  "In addition, continued, successful drilling that offsets our acreage by various operators serves to de-risk and prove the economic viability of the Spyglass Prospect."

Pebble Beach Prospect, Divide County, ND

The Company is also actively engaged in other exploration and development activities being conducted within the Bakken formation in Divide County, North Dakota.  At present, the Company has elected to participate in 17 wells, at varying working interest levels.  The following table summarizes the current status of these wells:




Well Name



Operator

EERG

Working

Interest

Actual or

Anticipated

Spud Date


Current

Status

Aarestad 4-34H-160N-97W

North Plains Energy, LLC

0.63%

November 1, 2010

Producing approximately 60 BOPD

Aarestad 1-16-160N-100W

North Plains Energy, LLC

2.51%

August 15, 2011

Waiting to spud

Nielsen 1-12H-160N-97W

Continental Resources, Inc.

0.38%

December 21, 2010

Tested at approximately 600 BOPD.  Shut in due to weather

Gerhardsen 1-10H-160N-97W

Continental Resources, Inc.

1.91%

January 12, 2011

Flowing approximately 250 BOPD

Denali 13-21-163N-98W

Samson Resources Company

0.04%

December 23, 2010

Waiting to be fractured

Yukon 12-1-163N-98W

Samson Resources Company

1.25%

February 28, 2011

Waiting to be fractured

Blazer 2-11-163N-98W

Samson Resources Company

0.94%

February 12, 2011

Waiting to be fractured

Mustang 7-6-163N-98W

Samson Resources Company

0.31%

April 25, 2011

Waiting to be fractured

Wolter 1-28H-163N-100W

SM Energy Company

1.30%

November 27, 2010

Pumping approximately 500 BOPD

Wolter 13-9H-163N-100W

SM Energy Company

7.03%

June 26, 2011

Drilling

Riede 4-14H-163N-100W

SM Energy Company

0.33%

January 30, 2011

Waiting to be fractured

Torgeson 1-15H-163N-100W

SM Energy Company

2.81%

March 6, 2011

Waiting to be fractured

Bagley 4-30H-163N-100W

SM Energy Company

4.69%

April 3, 2011

Flowing approximately 500 BOPD

Legaard 4-25H-163N-101W

SM Energy Company

5.23%

July 19, 2011

Drilling

Reistad 1-1-162N-102W

Murex Petroleum Corporation

3.25%

February 28, 2011

Waiting on completion

CPEC Lancaster 2-1-162N-101W

Crescent Point Energy

6.21%

July 1, 2011

Drilling

CPEC Ridgeway 25-36-163N-101W

Crescent Point Energy

1.88%

August 15, 2011

Waiting to spud




About Eternal Energy Corp.:

Eternal Energy Corp. is an oil and gas company engaged in the exploration of petroleum and natural gas.  The company was incorporated in Nevada on July 25, 2003 to engage in the acquisition, exploration, and development of natural resource properties.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements.  Certain information included in this press release contains statements that are forward-looking, such as statements relating to the future anticipated direction of the Company, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth, potential contracts, and/or aspects of litigation.  Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of, Eternal Energy Corp.  These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, and domestic and global economic conditions.  Persons are encouraged to read our Annual Report on Form 10-K for the year ended December 31, 2010, our Quarterly Report on Form 10-Q for the three-month period ended March 31, 2011, and our other documents subsequently filed with the Securities and Exchange Commission for meaningful cautionary language in respect of forward-looking statements in this press release.  Interested persons are able to obtain free copies of filings containing information about the Company at the SEC's internet site (http://www.sec.gov). The Company assumes no obligation to update any of these forward-looking statements.

SOURCE Eternal Energy Corp.

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