American Eagle Energy Corp.
) has announced the pricing of its $175 million aggregate principal
amount of 11% senior notes due 2019 at a price of 99.059% of par.
The closing of the offering is expected to occur on Aug 27, 2014,
subject to certain customary conditions. Further, the company is
looking to establish a senior secured revolving credit facility
with a maximum borrowing capacity of $60 million, either in
conjunction with the notes offering or soon after.
The energy explorer plans to use the net proceeds from this
offering to refinance its current credit facility, to pay fees and
expenses related to the offering and the credit facility, plus
general corporate purposes.
American Eagle Energy is an independent exploration and production
company engaged in the acquisition, finding and development of oil
and gas properties. The company's operations are concentrated
primarily in the high return Williston Basin, consisting of the
Bakken and Three Forks formations in North Dakota and Montana. In
particular, American Eagle Energy has done a stellar job at raising
production and adding acreage, led by a high quality and
experienced management team.
However, as is the case with other independent exploration and
production companies, American Eagle Energy's results are directly
exposed to oil and gas prices, which are inherently volatile and
subject to complex market forces. Realized prices could differ
significantly from our estimates, thereby affecting the company's
revenues, earnings and cash flow.
As a result, American Eagle Energy currently retains a Zacks Rank
#4 (Sell), implying that it is expected to underperform the broader
U.S. equity market over the next one to three months.
However, some better-ranked domestic upstream energy stocks include
RSP Permian Inc. (
), Cheniere Energy Inc. (
) and Clayton Williams Energy Inc. (
). All the firms hold a Zacks Rank #1 (Strong Buy).
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