American Eagle Energy financials delayed in light of payment deferral

By Caroline Salls

Pittsburgh, March 16 – American Eagle Energy Corp. needs more time to finalize the financial statements for its 10-K for the year ended Dec. 31, according to a 12b-25 late filing notification filed Monday with the Securities and Exchange Commission.

American Eagle said it expects to file the 10-K by March 31.

The company announced on March 2 that it was continuing to assess its near-term and mid-term liquidity and was exploring options to strengthen its balance sheet.

As previously reported, the company also announced that it would utilize a 30-day grace period to determine whether to make the semiannual interest payment due on its 11% secured bonds issued in August 2014.

As a result of its deferral of the decision on the interest payment, American Eagle said it must revise portions of the internal, draft disclosures in the “Management’s Discussion and Analysis” of the annual report.

In addition, the company said its independent registered public accounting firm must conclude its audit of the financial statements in light of the interest payment deferral.

According to the filing, significant changes are expected in the operating results for the last fiscal year.

Specifically, American Eagle said revenues from the sale of oil, natural gas and liquids increased by roughly 40% for the year ended Dec. 31 compared to the previous year as a result of increased production by volume of barrels of oil equivalent, partially offset by a decline in oil prices after considering the effects of settled derivatives.

In connection with increased production, the company said its depletion, depreciation and amortization expense increased between the fiscal years.

Also, American Eagle said its gross capitalized costs related to amortizable oil and gas properties before any year-end impairment adjustments increased by 100%, and the company was required to write-down the value of its oil and gas properties by $79.4 million as a result of falling oil prices.

The company said it also recognized increased interest expense for the year ended Dec. 31 related to a Morgan Stanley Capital Group, Inc. credit facility it repaid in August 2014 and the bonds issued in August 2014.

American Eagle is a Denver-based independent oil and gas acquisition, exploration and development company.

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