2011-05-31-2011-05-09

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
MM
Description

Entered JV to explore 75,000 acres in Alberta Bakken in MT.

American Eagle Energy Inc., Billings, Mont., (OTCBB: AMZG) and its partner Big Sky Operating LLC have entered a joint participation agreement with FX Energy Inc. to explore approximately 75,000 acres in the Alberta Bakken in northwestern Montana.

FX Energy's 10,000-acre field in the Southwest Cut Bank Sand Unit will be included in the joint exploration program and the company will own a one-third interest in the overall project.

The three companies have established an area of mutual interestin the Bakken play area and agreed to pool their leasehold positions and equalize their respective working interests in the play.

"We are pleased to have executed our agreement with FX Energy and Big Sky Operating, as it will allow us to broaden our acreage position into areas that our team has identified as highly prospective. We believe that being able to leverage the capabilities of FX Energy's drilling subsidiary will enable us to move our evaluation program ahead in a timely manner," says American Eagle chief executive Richard Findley. "The collective abilities of the three companies should allow us to execute our Bakken exploitation strategy on this play more efficiently."

FX Energy operates approximately 10,000 acres in the Southwest Cut Bank Sand unit and will contribute the deep rights on that acreage to the venture. The unit is approximately eight miles southeast of the Newfield 1-11H, a horizontal Bakken producer. This acreage, along with additional leases acquired by Big Sky, will increase the total acreage controlled by the group to approximately 75,000 acres. FX Energy will also provide further value to the group through the contribution of multiple existing wellbores that can be used to facilitate evaluation of the play in the area.

Initial evaluation and testing is expected to begin in the second quarter of 2011 and may involve drilling up to three vertical evaluation wells and at least one horizontal test well in 2011.

The companies have signed the participation and joint operating agreements and expect to close and equalize the investment interests before June 30, 2011.