American Eagle Energy Inc. (AMZG) company history: the story so far

History

American Eagle Energy hired help to find oil and gas assets, sold large stakes in North Dakota prospects, then merged into Eternal Energy in December 2011.

2010: Looking for assets

By January 2010 American Eagle Energy Inc. was based in Billings, Montana, and was looking to acquire oil and gas assets. It signed a consulting agreement with Synergy Resources LLC, effective December 21, 2009, to help find them. As payment, it issued 10,000,000 restricted shares on January 13, 2010. Of these, 4,500,000 were held in escrow and would be released only as Synergy hit performance milestones. The issue diluted existing shareholders. The company had 37,540,000 shares on issue at the end of 2010. The record for the rest of 2010 is quiet.

2011: Merger and the Spyglass sales

On February 22, 2011 the company signed a non-binding letter of intent to merge into a subsidiary of Eternal Energy Corp. Its stockholders were to own 80% of the result and Eternal's holders 20%. A definitive merger agreement followed on April 8, with the same split.

Meanwhile the company and Eternal jointly agreed on May 19 to sell 50% of their interests in the Spyglass Prospect in Divide County, North Dakota, to an unnamed buyer. The first deal covered about 8,188 net acres for $7,165,000, split equally, and closed on May 31. A second deal was set to close July 26, but the filing and the press release gave different sizes for it (about 548 net acres for $479,500, versus about 1,096 for $959,000). Completion was not confirmed in the filings. Eternal stayed operator.

On November 18 the two companies agreed to sell 75% of their interests in up to about 10,521 net acres of the West Spyglass Prospect, in North Dakota and Montana. The first closing on December 14 paid $10.9 million, about $5.45 million of it to the company. Another $1 million, split equally, was expected in early spring 2012.

The merger closed on December 20, 2011. The company became a wholly-owned subsidiary of Eternal, which renamed itself American Eagle Energy Corporation. Each company share became 3.641 Eternal shares, 164,023,288 in all. A 1-for-4.5 reverse split then left about 45,560,000 shares, with former company holders owning about 80%. The company suspended its duty to file reports with the SEC, so its own filings were expected to stop.

Written from the 8 story beats below (2010 to 20 Dec 2011), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

shares on issue market cap (log scale)

201143.4m shares · US$8.7m market cap

20 Dec
American Eagle Energy Inc. suspended its duty to file periodic reports with the SEC.
listing compliance notice
43.4m shUS$8.7m
20 Dec
The merger with Eternal Energy closed on December 20, 2011, with the company surviving as a wholly-owned subsidiary of Eternal, which renamed itself American Eagle Energy Corporation. Each company share converted into 3.641 Eternal shares (164,023,288 issued) before a 1-for-4.5 reverse split, leaving about 45,560,000 shares outstanding, with former company holders owning about 80% and legacy Eternal holders about 20%. Options converted at the same ratio, the company intends to file Form 15 to suspend its own reporting, and Richard Findley became Chairman of the combined company.
business combination
43.4m shUS$8.7m
16 Dec
A separate sale agreement signed November 18, 2011 has the company and Eternal selling 75% of their interests in up to about 10,521 net acres of the West Spyglass Prospect (western Divide County, North Dakota and eastern Sheridan County, Montana) to an unnamed buyer, initially estimated at about $13.8 million. The first closing on December 14 paid $10.9 million split equally (about $5.45 million to the company), with $1 million more, split equally, expected in early spring; the sellers keep 25% and remain operator. This adds to the earlier 50% Spyglass sale.
material agreement
43.4m shUS$8.7m
31 May
This amendment re-reports the May 19, 2011 Spyglass sale to an unnamed buyer, and the attached May 31 press release says the first closing (50% of about 8,188 net acres, $7.165 million split equally with Eternal) occurred that day. It also changes the second agreement: the filing text now says about 548 net acres for $479,500 (closing scheduled July 26, 2011), while the press release still describes about 1,096 net acres for about $959,000, so the two documents do not agree on the second deal's size. The press release says the buyer is a subsidiary of a public company with a market cap above $10 billion, up to 714 more net acres may be sold, and further closings depend on title confirmation.
material agreement
37.5m shUS$13.9m
26 May
On May 19, 2011 the company and Eternal Energy jointly agreed to sell 50% of their interests in the Spyglass Prospect in Divide County, North Dakota to an unnamed buyer, under two purchase agreements. The first covers about 8,188 net acres for $7,165,000, split equally between the two sellers, closing scheduled for May 26, 2011; the second covers about 1,096 net acres for $959,000, closing scheduled for July 26, 2011. Eternal will keep managing exploration and operations under a joint operating agreement.
material agreement
37.5m shUS$14.3m
12 Apr
On April 8, 2011 the company signed the definitive merger agreement with Eternal Energy Corp. and its subsidiary Eternal Sub Corp., following the February letter of intent. Terms stay at 80% for its stockholders and 20% for Eternal's; closing needs registration of the new shares and approval by its stockholders, and is expected in early summer.
material agreement
37.5m shUS$13.5m
23 Feb
On February 22, 2011 the company signed a non-binding letter of intent to merge into a subsidiary of Eternal Energy Corp., which would be the surviving company. Its stockholders would own 80% and Eternal's 20%, with a reverse split and a senior-exchange listing application expected after closing; closing needs due diligence, a definitive agreement, a fairness opinion for Eternal, share registration and board and stockholder approvals.
business combination
37.5m shUS$6.0m

2010

14 Jan
The company, now based in Billings, Montana, signed a consulting agreement with Synergy Resources LLC (effective December 21, 2009) to help identify and acquire oil and gas assets. It issued 10,000,000 restricted shares on January 13, 2010, with 4,500,000 held in escrow and released on performance milestones, which dilutes existing shareholders.
capital raising announcement