2011-04-27-2011-04-12

To merge, creating entity with Bakken & Three Forks assets in MT, ND, SK & AB.

American Eagle Energy Inc., Billings, Mont., (OTCBB: AMZG) and Littleton, Colo.-based Eternal Energy Corp. (OTCBB: EERG) plan to merge through a reverse-split transaction.

American Eagle stockholders will own 80% of the company, and Eternal stockholders 20%.

Eternal has formed a subsidiary into which American Eagle will merge, with Eternal as the surviving entity.

"The signing of the merger agreement is the next step in consolidating American Eagle's and Eternal Energy's interests in several low-risk Bakken properties in Saskatchewan and North Dakota and a large, highly prospective acreage position in the Montana portion of the rapidly emerging Alberta Bakken play," says Richard Findley, American Eagle president and chief executive.

"The combined strength of our two management teams and their long-standing experience in these oil-rich regions should provide significant depth on which our combined company can draw as we move forward in executing our post-merger plans," Findley adds.

"Having taken this next major step in our corporate development, Eternal Energy is increasingly excited about the opportunity to merge its low-risk Bakken and Three Forks prospects in North Dakota (the Spyglass prospect) and in Saskatchewan (the Hardy project) with the significant acreage positions that American Eagle has acquired in the Alberta Bakken play and its other prospect inventory," notes Brad Colby, Eternal CEO. "We expect that our combined assets and management teams will significantly increase stockholder value for all of our current stockholders."