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Friday, 08/14/2015 10:46:12 PM

Friday, August 14, 2015 10:46:12 PM

Post# of 509
10-Q, AMERICAN EAGLE ENERGY CORP 08/10/2015

During the past five years, we have engaged in exploration and production
activities in the northern United States, as well as southeastern Saskatchewan,
Canada. In July 2014, we sold all of our net revenue and working interests in
our Canadian oil and gas properties. As of June 30, 2015, we are engaged in
exploration and production activities in the northwest portion of Divide
County, North Dakota, where we target the extraction of oil and natural gas
reserves from the Three Forks and Middle Bakken formations. Through the end of
2014, we aggressively pursued the development of our Spyglass Area, to which
virtually all of our capital has been or is being deployed. Our Spyglass Area
generated 100% and 98% of our revenue for the six-month periods ended June 30,
2015 and 2014, and represents 100% of our estimated remaining proved reserves
as of June 30, 2015.

In addition to our existing wells, we own undeveloped acreage interests located
in Sheridan, Daniels, and Richland Counties, Montana. We currently do not plan
to devote capital to any of these areas over the next twelve months.

Bankruptcy Proceedings

On May 8, 2015 (the "Petition Date"), we filed voluntary petitions in the
United States Court for the District of Colorado seeking relief under the
provisions of Chapter 11 of Title 11 of the U.S. Bankruptcy Code for our parent
Company, American Eagle Energy Corporation, and for our wholly-owned, first
tier subsidiary, AMZG, Inc. The purpose of filing for bankruptcy protection
under Chapter 11 is to provide us with the additional time necessary to develop
and implement a plan of reorganization aimed at improving our capital
structure. Our bankruptcy cases are being jointly administered by the 10th
District of the U.S. Bankruptcy Court and have been have been assigned case
numbers 15-15073-HRT and 15-15074-HRT, respectively.

As a result of filing our voluntary petition for reorganization relief, our
creditors are prohibited from taking action to obtain possession of our assets,
from creating, perfecting, or enforcing any lien against our property, or from
collecting any monies from us relating to any pre-petition debts. 30,448,714 shares of common stock issued and outstanding at August 10, 2014.


As of June 30, 2015, the Company's liabilities exceed its assets by
approximately $95.7 million. In addition, the Company is in default under the
terms of the Indenture related to its outstanding Bonds, as a result of paying
only a portion of the interest that was due on the Bonds as of March 31, 2015,
as well as the failure to meet or maintain a number of financial ratios
required by the Bond Indenture.

The sharp decline in oil prices that occurred during the latter part of 2014,
and the continued depressed pricing, has materially reduced the revenues that
were generated from the sale of the Company's oil and gas production volumes
during that period, which, in turn, negatively affected the Company's year-end
working capital balance. The potential for future oil prices to remain at their
current price levels for an extended period of time raises substantial doubt
regarding the Company's ability to continue as a going concern. For purposes of
this discussion, the term "substantial doubt" refers to concerns that a company
may not be able to meet its obligations when they come due.

...While operating as a debtor-in-possession under Chapter 11 of the Bankruptcy
Code, the Company may sell or otherwise dispose of or liquidate assets or
settle liabilities, subject to the approval of the Bankruptcy Court, or
otherwise as permitted in the ordinary course of business.

Notice of Suspended Trading and Delisting from Stock Exchange

On May 11, 2015, the Company received notice from the NYSE MKT LLC (the "NYSE
MKT") that the NYSE MKT had suspended the Company's common stock from trading
immediately and determined to commence proceedings to delist the Company's
common stock. Prior to being delisted, the Company's common stock traded on the
NYSE MKT under the trading symbol "AMZG."

On May 12, 2015, the Company's common stock commenced trading over-the-counter
on the OTC Markets Group Inc.'s OTC Pink(R) marketplace, under the trading
symbol "AMZGQ".


Section 363 Asset Sale

On July 23, 2015, the Bankruptcy Court approved the order authorizing the entry
into the Stalking Horse Purchase Agreement, approved the bidding and auction
procedures in connection with the sale of the assets, and established the sale
hearing date, which is currently scheduled for September 10, 2015. Upon the
entry by the Bankruptcy Court of such order, the parties contemporaneously
entered into the Stalking Horse Purchase Agreement. With the assistance of our
financial advisors, we will solicit additional qualified bids for these assets,
consistent with the bidding and auction procedures approved by the Bankruptcy
Court. A qualified bid is one that is not less than $250,000 in excess of the
$70 million stalking horse bid. The deadline for submitting qualifying bids is
September 2, 2015.


http://www.americaneagleenergy.com/

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