Eagle Energy Inc EGRGF

Sept 27th/17 Update

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Operations and Cost Reduction Initiatives Update

Wayne Wisniewski, Eagle’s Chief Executive Officer, stated, “Eagle’s first horizontal well in our North Texas asset has been successfully drilled.  Approximately 4,100 feet was drilled laterally and while still early days, sand quality appeared as good, or better than expected along the lateral length.  With the frack services market especially tight for companies our size, I am pleased we were able to schedule a frack with a reputable pressure pumping company for the mid-to-late October timeframe.  Once fracking operations are complete, we intend to test the well immediately.”

Mr. Wisniewski continued, “Further to our announcement on August 10, 2017, Eagle continues to make strides in reducing general and administrative costs.  We negotiated a new Houston office lease which will take effect in early 2018.  At this new location, Eagle will reduce its floor space by 20%, reduce its 2018 annual rent by 60%, or $US 170,000, and realize average annual savings of 30% when compared to the terms of our current office lease.”

Summary of the Loan Agreement Amendment

The following summarizes the amendment to the loan agreement between Eagle and its lender (the “Loan Agreement”):

• Financial covenants - Of the four financial covenants in the Loan Agreement, the Consolidated Current Ratio, the Asset Coverage Ratio and the Consolidated Leverage Ratio remain unchanged.  The covenant threshold for the Consolidated Fixed Charge Ratio has been eased by 10%, commencing with the quarter ending September 30, 2017 (as indicated in italics below):
  
  Consolidated Fixed Charge Ratio 
  
  As at the end of each fiscal quarter, Eagle is to maintain a Consolidated Fixed Charge Ratio of not less than 2.25 to 1.00 (prior to this amendment, the ratio for September 30, 2017 and subsequent quarters was 2.50 to 1.00).
   

• Additional Deemed Term Loan Draw - As consideration for the amendment, Eagle is deemed to have drawn an additional $US 718,750 on the term loan, bringing the total principal balance of the term loan outstanding under the Loan Agreement to $US 58,218,750 (prior to this amendment, the balance outstanding was $US 57,500,000.) 

Read more at https://www.stockhouse.com/news/press-releases/2017/09/29/eagle-energy-inc-announces-north-texas-drilling-update-cost-reductions-and#Vg1JhdZCET0fp7ZH.99