UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2014~~2015.

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-50906

AMERICAN EAGLE ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Nevada	20-0237026
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2549 West Main Street, Suite 202, Littleton, Colorado	80120
(Address of principal executive offices)	(Zip Code)

(303) 798-5235

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):

Large accelerated filer o Accelerated filer ox Non-accelerated filer o Smaller reporting company xo

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

30,448,714 shares of common stock issued and outstanding at ~~October~~May 317, 2014.

INDEX

A Note About Forward Looking Statements	2
PART I - FINANCIAL INFORMATION
Item 1 – Condensed Consolidated Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 (Unaudited)	5
Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014 (Unaudited)	5
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three-Month and Nine-Month Periods Ended September 30, 2014 and 2013 (Unaudited)	6
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three-Month Periods Ended March 31, 2015 and 2014 (Unaudited)	6
Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2014 and 2013 (Unaudited)	8
Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2015 and 2014 (Unaudited)	8
Notes to the Condensed Consolidated Financial Statements (Unaudited)	9
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	2218
Item 4 – Controls and Procedures	3528
PART II – OTHER INFORMATION
Item 6 – Exhibits	3629
Signatures	4134

A Note About Forward Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations. These statements may be identified by their use of words like “plans,” “expect,” “aim,” “believe,” “projects,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” and other expressions that indicate future events and trends. All statements that address expectations or projections about the future, including statements about our business strategy, expenditures, and financial results, are forward-looking statements. We believe that the expectations reflected in such forward-looking statements are accurate. However, we cannot assure the reader that such expectations will occur.

Actual results could differ materially from those in the forward-looking statements due to a number of uncertainties including, but not limited to, those discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations. Factors that could cause future results to differ from these expectations include general economic conditions; further changes in our business direction or strategy; competitive factors; market uncertainties; and an inability to attract, develop, or retain consulting or managerial agents or independent contractors. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements. The reader should not unduly rely on these forward-looking statements, which speak only as of the date of this Quarterly Report. Except as required by law, we are not obligated to release publicly any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this report or to reflect the occurrence of unanticipated events.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

American Eagle Energy Corporation

Condensed Consolidated Financial Statements

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014

American Eagle Energy Corporation

Index to the Condensed Consolidated Financial Statements

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014

Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 (Unaudited)	5
Condensed Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014 (Unaudited)	5
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three-Month and Nine-Month Periods Ended September 30, 2014 and 2013 (Unaudited)	6
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three-Month Periods Ended March 31, 2015 and 2014 (Unaudited)	6
Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2014 and 2013 (Unaudited)	8
Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2015 and 2014 (Unaudited)	8
Notes to the Condensed Consolidated Financial Statements (Unaudited)	9

American Eagle Energy Corporation

Condensed Consolidated Balance Sheets - (Unaudited)

(In Thousands, except for Per Share Data)

	September 30,			December 31,
	March 31,			December 31,
	2014			2013
	2015			2014
Current assets:
Cash	$	4820,~~784~~156		$	3125,~~850~~888
Trade receivables		178,~~785~~918			179,~~920~~466
Income tax receivable		25-			-25
Prepaid expenses		38368			68128
Derivative asset		466			211
Total current assets		29,442			35,507
Total current assets		67,098			50,049
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $530 and $490, respectively		174			210
Equipment and leasehold improvements, net of accumulated depreciation and amortization of $445 and $322, respectively		252			174
Oil and gas properties, full-cost method – subject to amortization, net of accumulated depletion of $40,855 and $35,332, respectively		174,994			226,918
Oil and gas properties, full-cost method – subject to amortization, net of accumulated depletion of $26,271 and $12,849, respectively		293,685			155,145
Marketable securities		741			756
Oil and gas properties, full-cost method – not subject to amortization		2,487			2,487
Other assets		6,531			7,543
Marketable securities		1,162			1,050
Total assets	$	211,882		$	270,934
Noncurrent derivative asset		155			-
Other assets		7,894			7,503
Total assets	$	372,733		$	216,408
Current liabilities:
Accounts payable and accrued liabilities	$	7340,~~099~~310		$	4149,~~841~~065
Derivative liability		3			276
Bonds payable, net of discount of $1,451 and $1,532, respectively (Note 9)		173,549			173,467
Current portion of notes payable		-			3,000
Total current liabilities		213,859			222,532
Total current liabilities		73,102			45,117
Asset retirement obligation		1,358			1,428
Asset retirement obligation		1,352			1,060
Total liabilities		215,217			223,960
Noncurrent portion of notes payable					105,000
Stockholders’ equity (deficit):
Bonds payable, net of discount of $1,615 and $0, respectively		173,385			-
Common stock, $.001 par value, 48,611 shares authorized and 30,449 shares outstanding		30			30
Noncurrent derivative liability		-			750
Additional paid-in capital		147,639			147,275
Deferred taxes		-			5,386
Accumulated deficit		(151,004	)		(100,331	)
Total liabilities		247,839			157,313
Total stockholders’ equity		(3,335	)		46,974
Stockholders’ equity:
Total liabilities and stockholders’ equity	$	211,882		$	270,934
Common stock, $.001 par value, 48,611 shares authorized, 30,449 and 17,712 shares outstanding		30			18
Additional paid-in capital		146,888			67,198
Accumulated other comprehensive income (loss)		(243	)		(6	)
Accumulated deficit		(21,781	)		(8,115	)
Total stockholders’ equity		124,894			59,095
Total liabilities and stockholders’ equity	$	372,733		$	216,408

The accompanying notes are an integral part of the condensed consolidated financial statements.

American Eagle Energy Corporation

Condensed Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss) - (Unaudited)

(In Thousands, except for Per Share Data)

	For the Three-Month Period						For the Nine-Month Period
	For the Three-Month Periods
	Ended September 30,						Ended September 30,
	Ended March 31,
	2014			2013			2014			2013
	2015			2014
Oil and gas sales	$	17,091		$	11,639		$	46,099		$	29,638
Oil and gas revenues	$	6,874		$	12,545
Operating expenses:
Oil and gas production costs		53,~~621~~574			3,~~055~~653			~~14,475~~			~~7,657~~
General and administrative		2,110			1,812			5,790			4,380
General and administrative expenses		2,357			2,017
Depletion, depreciation and amortization		65,~~154~~562			23,~~524~~636			~~15,497~~			~~5,915~~
Impairment of oil and gas properties, subject to amortization		-			-			-			1,525
Impairment of oil and gas properties		40,028			-
Total operating expenses		1351,~~885~~521			79,~~391~~306			~~35,762~~			~~19,477~~
Total operating income		3,206			4,248			10,337			10,161
Total operating income (loss)		(44,647	)		3,239
Interest and dividend income		28			19			56			57
Other income (expense)
Interest expense		(4,163	)		(1,316	)		(10,628	)		(2,149	)
Interest and dividend income		-			17
Loss on early extinguishment of debt		(11,894	)		(3,714	)		(11,894	)		(3,714	)
Interest expense		(5,992	)		(3,215	)
Loss on sale of oil & gas properties		(12	)		-			(12	)		-
Realized gains on derivatives		-			116
Gains (losses) on settlement of derivatives		(7,113	)		115			(7,455	)		115
Change in fair value of derivatives		-			(1,823	)
Change in fair value of derivatives		8,641			(934	)		618			(775	)
Change in fair value of marketable securities		(15	)		-
Total other income (expense)		(146,~~513~~007	)		(54,~~830~~905	)		~~(29,315~~	)		~~(6,466~~	)
Income (loss) before taxes		(11,307	)		(1,582	)		(18,978	)		3,695
Loss before taxes		(50,654	)		(1,666	)
Income tax expense (benefit)		~~(2,569~~19	)		(~~646~~638	)		~~(5,311~~	)		~~1,639~~
Net income (loss)	$	(8,738	)	$	(936	)	$	(13,667	)	$	2,056
Net loss	$	(50,673	)	$	(1,028	)
Net income (loss) per common share:
Net loss per common share:
Basic	$	(01.2966	)	$	(0.0706	)	$	~~(0.52~~	)	$	~~0.16~~
Diluted	$	(01.2966	)	$	(0.0706	)	$	~~(0.52~~	)	$	~~0.16~~
Weighted average number of shares outstanding -
Weighted average number of shares outstanding:
Basic		30,~~448~~449			1318,~~224~~557			~~26,524~~			~~12,741~~
Diluted		30,~~448~~449			1318,~~224~~557			~~26,524~~			~~13,225~~

The accompanying notes are an integral part of the condensed consolidated financial statements.

American Eagle Energy Corporation

Condensed Consolidated Statements of Operations and Comprehensive ~~Income (~~Loss) - (Unaudited)

(In Thousands, except for Per Share Data)

	For the Three-Month Period						For the Nine-Month Period
	For the Three-Month Periods
	Ended September 30,						Ended September 30,
	Ended March 31,
	2014			2013			2014			2013
	2015			2014
Net income (loss)	$	(8,738	)	$	(936	)	$	(13,667	)	$	2,056
Net loss	$	(50,673	)	$	(1,028	)
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss):
Unrealized foreign exchange gains (losses)		(10	)		2			(126	)		15
Unrealized losses on securities, net of tax		-			(43	)
Unrealized gains (losses) on securities		(283	)		27			(111	)		(6	)
Foreign currency translation adjustments		-			156
Total other comprehensive income (loss), net of tax		(293	)		29			(237	)		9
Comprehensive loss		(50,673	)		(915	)
Comprehensive income (loss)	$	(9,031	)	$	(907	)	$	(13,904	)	$	2,065

The accompanying notes are an integral part of the condensed consolidated financial statements.

American Eagle Energy Corporation

Condensed Consolidated Statements of Cash Flows – (Unaudited)

(In Thousands)

	For the nine-month periods
	For the three-month periods
	ended September 30,
	ended March 31,
	2014			2013
	2015			2014
Cash flows provided by operating activities:
Cash flows provided by (used in) operating activities:
Net income (loss)	$	(13,667	)	$	2,056
Net loss	$	(50,673	)	$	(1,028	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Non-cash transactions:
Stock-based compensation		~~1,344~~364			~~827~~454
Depletion, depreciation and amortization		155,~~497~~562			53,~~915~~636
Accretion of discount on asset retirement obligation		6015			3622
Amortization of deferred financing costs		1,~~158~~097			~~274~~380
Amortization of debt discount		32			-
Amortization of bond discount		82			-
Provision for deferred income tax expense (benefit)		(5,325	)		1,662
Provision for deferred income tax benefit		-			(631	)
Loss on early extinguishment of debt		11,894			3,714
Impairment of oil and gas properties		40,028			-
Impairment of oil and gas properties		-			1,525
Change in fair value of derivatives		-			1,823
Change in fair value of derivatives		(1,432	)		653
Change in fair value of marketable securities		15			-
Foreign currency transaction gains		-			2
Changes in operating assets and liabilities:
Prepaid expense		30			(2	)
Income taxes receivable		25			(25	)
Trade receivables		(61,~~271~~698	)		(34,~~032~~375	)
Income taxes receivable		(25	)		(33	)
Prepaid expense		(240	)		(146	)
Accounts payable and accrued liabilities		171,~~292~~250			11(1,~~654~~476	)
Net cash provided by operating activities		20,587			25,251
Net cash provided by (used in) operating activities		(4,173	)		7,384
Cash flows used for investing activities:
Cash flows used in investing activities:
Additions to oil and gas properties		(~~135~~10,~~234~~958	)		(8067,~~432~~350	)
Proceeds from sale of oil and gas properties		19,~~824~~488			-
Additions to equipment and leasehold improvements		(~~201~~4	)		(1582	)
Purchases of marketable securities		~~(222~~-	)		-(9	)
Decrease in amounts due to Carry Agreement partner		-			(4,957	)
Net cash used in investing activities		(1,474	)		(67,441	)
Net cash used for investing activities		(133,833	)		(85,404	)
Cash flows provided by (used in) financing activities:
Cash flows provided by financing activities:
Proceeds from issuance of stock		-			78,299
Proceeds from issuance of stock		78,298			13,877
Payment of deferred restructuring costs		(85	)		-
Proceeds from issuance of notes payable		-			68,000
Net cash provided by (used in) financing activities		(85	)		78,299
Proceeds from issuance of bonds		167,257			-
Effect of exchange rate changes on cash		-			(11	)
Payment of other deferred financing costs		(1,882	)		(651	)
Net change in cash		(5,732	)		18,231
Repayment of long-term debt		(113,465	)		(21,131	)
Cash - beginning of period		25,888			31,850
Net cash provided by financing activities		130,208			60,095
Cash - end of period	$	20,156		$	50,081
Effect of exchange rate changes on cash		(28	)		38
Net change in cash		16,934			(20	)
Cash - beginning of period		31,850			19,058
Cash - end of period	$	48,784		$	19,038
Supplemental non-cash disclosure;
Direct financing of prepayment and other penalties	$	5,465		$	-

The accompanying notes are an integral part of the condensed consolidated financial statements.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

Description of Business

American Eagle Energy Corporation (the “Company”) was incorporated in the state of Nevada in March 2003 under the name Golden Hope Resources Corp. In July 2005, the Company changed its name to Eternal Energy Corp. In December 2011, the Company changed its name to American Eagle Energy Corporation, in connection with its acquisition of, and merger with, American Eagle Energy Inc.

The Company engages in the acquisition, exploration and development of oil and gas properties, and is primarily focused on extracting proved oil reserves from those properties. As of ~~September~~March 3031, ~~2014~~2015, the Company had entered into participation agreements related to oil and gas exploration and development ~~projects~~ projects in the Spyglass Area, located in Divide County, North Dakota, and Sheridan County, Montana. In addition, the Company owns ~~working~~ working interests in mineral leases located in Richland, Roosevelt and Toole Counties in Montana.

Summary of Significant Accounting Policies

Interim Financial Information

The unaudited condensed consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles for interim financial statements in accordance with Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair presentation have been included. Operating results for the three-month ~~and nine-month~~ periods ended ~~September~~March 3031, 2015 and 2014 are not necessarily indicative of results that may be expected for the year ended December 31, ~~2014~~2015. The condensed, consolidated ~~financial~~ financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, ~~2013~~2014. ~~The December 31, 2013 condensed consolidated balance sheet was derived from audited financial statements.~~

The December 31, 2014 condensed consolidated balance sheet was derived from audited financial statements. The auditor’s opinion that accompanied the December 31, 2014 consolidated financial statements contained an explanatory paragraph regarding the Company’s ability to continue as a going concern.

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, AMZG, Inc., EERG Energy ULC (Canadian) and AEE Canada Inc. (Canadian). All material intercompany accounts, transactions and profits have been eliminated.

Going Concern

As of March 31, 2015, the Company has a working capital deficit of approximately $184.4 million, which includes the classification of the Company’s Bonds as current liabilities (See Note 9). 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.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~ 2015 and December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

~~Certain~~The ~~reclassifications~~sharp ~~have~~decline in ~~been~~oil ~~made~~prices tothat ~~prior~~occurred during the latter part of 2014, and the continued depressed pricing, has materially reduced the revenues ~~year~~that ~~balances~~were togenerated ~~conform~~from tothe sale of the ~~current~~Company’s ~~year~~oil and gas production volumes during that period, which, in turn, negatively affected the Company’s ~~presentation~~year-end working capital balance. ~~Such~~The ~~reclassifications~~potential ~~had~~for nofuture ~~effect~~oil onprices 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. ~~net~~For ~~income~~purposes ~~for~~of this discussion, the ~~prior~~term ~~period~~“substantial doubt” refers to concerns that a company may not be able to meet its obligations when they come due.

3Should the prevailing oil prices as of March 31, 2015 remain in effect for an extended period of time, it is likely that the Company would need to pursue some form of asset sale, debt restructuring or capital raising effort in order to fund its operations and to service its existing debt during the next twelve months. ~~Marketable~~The ~~Securities~~Company’s management is actively developing plans to improve its working capital position and/or ~~Fair~~to ~~Value~~reduce its future debt service costs, through the aforementioned means, in order to remain a going concern for the foreseeable future. If the Company is unable to restructure its Bonds, obtain additional debt or equity financing or achieve adequate proceeds from the sale of ~~Financial~~assets, ~~Instruments~~the Company may file a voluntary petition for reorganization relief under Chapter 11 of the Bankruptcy Code in order to provide additional time to identify an appropriate solution to its financial situation and to implement a plan of reorganization aimed at improving its capital structure.

~~The Company’s marketable securities that are considered “available-for-sale~~4.” AsMarketable ofSecurities ~~September 30, 2014~~ and ~~December~~Fair ~~31,~~Value ~~2013, the Company’s marketable securities consisted~~ of ~~the~~Financial ~~following (in thousands):~~Instruments

			Gains in		Losses in
			Accumulated		Accumulated
	Estimated		Other		Other
	Fair		Comprehensive		Comprehensive
	Value		Income		Income
September 30, 2014
Noncurrent assets:
Common stocks	$	1,162	$	22	$	(107	)
December 31, 2013
Noncurrent assets:
Common stocks	$	1,050	$	100	$	(75	)

Available-for-sale marketable securities at March 31, 2015 and December 31, 2014 consisted of the following (in thousands):

The fair value of all securities is determined by quoted market prices. There were no sales of marketable securities during the three-month or nine-month periods ended September 30, 2014.

Gains in

Losses in

Accumulated

Estimated

Other

Fair

Comprehensive

Value

Income

March 31, 2015

Noncurrent assets:

Common stocks

741

December 31, 2014

Noncurrent assets:

Common stocks

756

The fair value of substantially all securities is determined by quoted market prices. There were no sales of marketable securities during the three-month periods ended March 31, 2015 and 2014.

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. Hierarchy Levels 1, 2 or 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Hierarchy Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability. Hierarchy Level 3 inputs are inputs that are not observable in the market.

The fair value of the Company’s financial instruments, measured on a recurring basis at ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014, were as follows (in thousands):

September 30, 2014	Level 1		Level 2			Level 3		Total
Marketable securities	$	1,162	$	-		$	-	$	1,162
Current derivative asset		-		466			-		466
Noncurrent derivative asset		-		155			-		155
Current derivative liability		-		(3	)		-		(3	)

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

December 31, 2013	Level 1		Level 2			Level 3		Total
March 31, 2015	Level 1		Level 2			Level 3		Total
Marketable securities	$	~~1,050~~741	$	-		$	-	$	~~1,050~~741
Current derivative asset		-		211			-		211
Current derivative liability		-		(276	)		-		(276	)
Noncurrent derivative liability		-		(750	)		-		(750	)

4. Purchases and Sale of Property Interests

December 31, 2014		Level 1				Level 2				Level 3				Total
Marketable securities		$	756			$	-			$	-			$	756

~~In January 2013, the Company purchased additional net revenue and working interests in several key, non-operated spacing units within the Spyglass Area from SM Energy Company~~5. ~~The purchase~~Oil ~~price~~& ~~totaled~~Gas ~~approximately $3.9 million in cash, which was paid at closing.~~Properties

InPurchase October 2013, the Company purchased additional net revenue and working interests in proved producing and proved undeveloped properties located within the Spyglass Area from a certain working interest partner. The transaction closed on October 2, 2013 with an effective date of ~~June~~Oil ~~1, 2013. The gross purchase price for the acquired interests totaled $47.0 million. The net purchase prices, after taking into consideration revenues~~ and ~~operating expenses~~Gas associated with the acquired interests from the period June 1, 2013 through the closing date, totaled approximately $41.4 million. To finance the acquisition, the Company sold shares of its common stock, through two public offerings (See Note 13), and borrowed an additional $40 million under its existing Credit Facility (the “MSCG Credit Facility”) with Morgan Stanley Capital Group, Inc. (“MSCG”) (See Note 8). The agreement contained the option to purchase additional net revenue and working interests in the same producing and proved undeveloped properties at a later date.Properties

In March 2014, the Company exercised its option to purchase ~~the~~ additional net revenue and working interests in proved producing and proved undeveloped properties located within ~~the~~ the Spyglass Area from ~~the~~a ~~same~~certain working interest partner. The transaction closed on March 26, 2014 with an effective date of June 1, 2013. The gross purchase price for the acquired interests totaled $47.0 million. The net purchase price, isafter ~~subject~~taking tointo ~~adjustments~~consideration ~~for~~ revenues, and operating expenses ~~and capital expenditures~~ associated with the acquired interests from the period June 1, 2013 through the closing date, totaled approximately $41.4 million. The acquisition of the additional net revenue and working interests was funded with proceeds received from a March 2014 public offering, as discussed in Note 13).

Supplemental Pro Forma Information (Unaudited)

The Company’s condensed consolidated ~~statements~~ statement of income for the three-month ~~and~~period ~~nine-month periods~~ ended ~~September~~March 3031, ~~2014~~2015 ~~include~~includes revenues and oil and gas operating expenses related to the net revenue and working interests acquired via the exercise of the purchase option,. ~~for~~Had the ~~period~~purchase ~~April~~of these additional net revenue and working interests occurred on January 1, 2014, the Company’s consolidated financial ~~through~~statements ~~September~~for 30the three-month period ended March 31, 2014. would have been as follows (in thousands):

Pro forma revenues	$	15,719

Pro forma net income (loss)	$	(381	)

Pro forma income (loss) per share - basic	$	(0.01	)

Pro forma income (loss) per share – diluted	$	(0.01	)

Also in March 2014, the Company acquired certain undeveloped acreage from the same working interest partner at a price of approximately $7.5 million.

Sales of Oil and Gas Properties

In January 2015, the Company sold its net revenue and working interests in certain non-operated wells to SM Energy. Cash proceeds received from the sale totaled approximately $9.5 million.

Impairment of Oil and Gas Properties

Pursuant to full cost accounting rules, and as a result of the sharp decline in oil prices during the fourth quarter of 2014 and the first quarter of 2015, the Company recognized impairment expenses related to its oil and gas properties, subject to amortization, of approximately $40.0 million during the three-month period ended March 31, 2015. Impairment of oil and gas properties represents a non-cash charge against the Company’s earnings. Because SEC rules require proved oil and gas reserves to be valued using an unweighted arithmetic average of oil and gas prices on the first day of each month for the preceding twelve-month period, and because forecasted oil prices for 2015 may be lower than what was experienced during 2014, it is likely that we will recognize additional impairments during 2015 that will be material to our financial results.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

~~Had~~6. ~~the~~Carry purchase of these additional net revenue and working interests occurred on January 1, 2013, the Company’s consolidated financial statements for the nine-month periods ended September 30, 2014 and 2013 would have been as follows (in thousands):Agreement

	2014			2013
Pro forma revenues	$	49,273		$	49,998
Pro forma net income (loss)	$	(11,926	)	$	5,770
Pro forma income (loss) per share - basic	$	(0.40	)	$	0.23
Pro forma income (loss) per share – diluted	$	(0.40	)	$	0.22

In August 2013, the Company entered into a Carry agreement (the “Carry Agreement”) with the a third-party working interest partner (the “Carry Agreement Partner”), pursuant to which (i) that Carry Agreement Partner agreed to fund 100% of the Company’s working interest share of the drilling and completion costs of up to five new oil and gas wells to be located within the Spyglass Area, up to 120% of the original AFE amount, and (ii) the Company agreed to convey, for a limited duration, 50% of its revenue interest in the pre-payout revenues of each carried well and 50% of its working interest in the pre-payout operating costs of each carried well, to the Carry Agreement Partner. In the event that the gross drilling and completion cost of a carried well exceeds 120% of the AFE amount, the Company and the Carry Agreement Partner will share in the excess costs based on the working interests stipulated in the Carry Agreement.

~~The~~Pursuant ~~acquisition~~to the terms of the ~~working~~Carry ~~interests~~Agreement, ~~could not~~50% ~~have~~of ~~been~~the ~~completed~~Company’s ~~without~~net anrevenue ~~initial~~interest ~~acquisition~~in each well will be conveyed to the Carry Agreement Partner for a period of ~~related~~two years or until such a time when the working ~~interests~~interest ~~that~~partner ~~occurred~~has inrecouped ~~October~~112% ~~2013.~~of ~~Accordingly~~the carried drilling and completion costs of the well, whichever occurs sooner. In the event that the Carry Agreement Partner has not recouped 112% of the carried drilling and ~~pro~~completion ~~forma~~costs ~~effect~~by the end of the ~~initial~~second ~~acquisition~~year of ~~working~~production, ~~interests~~the Company has ~~also~~agreed ~~been~~to ~~included~~make cash payments to the Carry Agreement Partner in the ~~pro~~amount ~~forma~~of ~~information~~the ~~presented above~~shortfall. Once ~~for~~the Carry Agreement Partner has recouped 112% of the ~~nine-month~~carried ~~period~~drilling ~~ended~~and ~~September~~completion costs 30of a well, ~~2013~~the conveyed working interest and net revenue interest will revert to the Company.

~~Also~~As inof March ~~2014~~31, ~~the~~2015, ~~Company~~all ~~acquired~~five ~~certain~~of ~~undeveloped~~the wells to be ~~acreage~~drilled ~~from~~pursuant to the ~~same~~Carry ~~working~~Agreement ~~interest~~have ~~partner~~been atcompleted. aTo ~~price~~date, ofthe Company has received approximately $719.52 million of funding under the Carry Agreement. This amount is net of cumulative revenues and oil and gas operating costs associated with the carried wells, which were conveyed to the Carry Agreement Partner pursuant to the terms of the Carry Agreement. As noted above, the Carry Agreement Partner is entitled to receive a 12% return on the amount of capitalized drilling and completion costs that it has funded on the Company’s behalf.

InAs ~~July~~of ~~2014~~March 31, 2015, the ~~Company~~cost ~~sold 100%~~ of ~~its~~drilling ~~net~~and ~~revenue~~completing ~~and~~one ~~working~~of ~~interests~~the infive ~~its~~wells ~~Hardy~~exceeded ~~Property~~the to120% ~~its~~of ~~working~~AFE ~~interest~~cost ~~partner~~threshold. ~~Prior~~Accordingly, to the ~~sale,~~Company ~~the~~has ~~Hardy~~recorded ~~Property~~its ~~represented 100%~~portion of ~~the~~excess ~~Canadian~~drilling and ~~cost~~completion ~~center~~costs ~~for~~associated ~~the~~with ~~Company’s~~this ~~full-cost~~well, ~~pool.~~totaling ~~Cash~~approximately ~~proceeds~~$2.8 ~~received~~million ~~from~~as ~~the~~of ~~sale~~March ~~approximated~~31, $12015.~~8 million,~~ ~~which~~None ~~resulted~~of inthe afive ~~loss~~wells covered onby the ~~sale~~Second Carry Agreement has achieved payout as of ~~approximately~~March ~~$12~~31,~~000~~ 2015.

57. ~~Carry~~Farm-Out Agreement

OnIn ~~April~~August 162013, ~~2012,~~ the Company entered into a ~~Carry~~Farm-Out Agreement ~~with~~(the ~~a third~~“Farm-~~party~~Out ~~working~~Agreement”) ~~interest~~with ~~partner (~~the “same Carry Agreement Partner”), ~~pursuant~~ pursuant to which (i) ~~the~~that Carry Agreement Partner agreed to fund 100% of the Company’s working interest share of the drilling ~~and~~ and completion costs of up to six new oil and gas wells to be located within ~~our~~the original Spyglass ~~Area,~~and upWest toSpyglass ~~120%~~sections of the Spyglass ~~original~~Property ~~AFE amount,~~ and (ii) the Company ~~agreed~~will to convey, for a ~~limited~~period ~~duration~~of time, a100% ~~portion~~ of its net revenue interest in the pre-payout revenues of each ~~carried~~ farm-out well and a100% ~~portion~~ of its working interest in the pre-payout operating costs of each ~~carried~~farm-out well, to the Carry Agreement ~~Partner.~~ InPartner, ~~the~~until ~~event~~such ~~that~~a time when the ~~gross~~Carry Agreement Partner has recouped 112% of the drilling and completion ~~cost~~costs ofassociated awith each ~~carried~~ well. Once ~~exceeds~~the ~~120~~Carry Agreement Partner has recouped 112% of the ~~AFE~~drilling ~~amount,~~and ~~the~~completion ~~Company~~costs ~~and~~of a well, the Carry Agreement Partner ~~would~~will ~~share~~convey in30% of the ~~excess~~Company’s ~~costs~~original ~~based~~working onand ~~the~~net ~~working~~revenue interests ~~stipulated~~ in ~~the~~each ~~Carry~~farm-out ~~Agreement.~~well back to the Company.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

~~Pursuant~~As ~~to the terms~~ of ~~the~~March ~~Carry Agreement~~31, ~~the portion of the Company’s net revenue interest in each well to be conveyed to the Carry Agreement Partner followed a graduated scale~~2015, ~~whereby~~all ~~50%~~six of the ~~Company’s~~wells ~~net revenue and working interests are assigned~~drilled pursuant to the ~~Carry~~Farm-Out Agreement ~~Partner during the first year of the well’s production or until the carried costs, plus the 12% return,~~ have been ~~achieved, whichever occurs first~~completed. InNone ~~the event that the Carry Agreement Partner had not recouped all~~ of the ~~carried~~six ~~costs plus~~wells ~~the~~covered ~~12% return~~ by the ~~end~~Farm-Out of the first year of production, the assignment of the Company’s net revenue and working interests in the well would increase from 50% to 75% for the second year of production or until the carried costs, plus the 12% return, had been achieved, whichever occurs first. In the event that the Carry Agreement ~~Partner~~has had not recouped all of the carried costs, plus the 12% return, by the end of the second year of production, the assignment of the Company’s net revenue and working interests in the well would increase to 100% until the carried costs, plus the 12% return, had been achieved. ~~Once~~ payout ~~has occurred~~ ~~(112%~~as of ~~the~~March ~~costs on a well-by-well basis)~~31, ~~the respective working interests in the revenues from each carried well would revert to the original working interests in each such well~~2015.

~~Effective July 15, 2012, the Company amended the Carry Agreement with the third-party to include an additional four oil and gas wells~~8. Credit Facility

AsIn ~~discussed~~August ~~in Note 4~~2013, the Company ~~acquired~~entered ~~net revenue~~into ~~and~~a ~~working~~$200 ~~interests~~million credit ~~associated~~facility with ~~certain~~Morgan ~~properties,~~Stanley inCapital ~~March~~Group ~~2014~~(the “Credit Facility”), ~~including~~which ~~100%~~was comprised of a $68 million initial term loan (the ~~net~~“Initial ~~revenue~~Term ~~and~~Loan”), a $40 million term loan to be used to fund certain working interest purchases ~~interests~~(the ~~that~~“Spyglass ~~had~~Tranche ~~been~~A ~~conveyed~~Loan”) and an uncommitted term loan of up to $92 million (the ~~Carry~~“Tranche ~~Agreement~~B ~~Partner~~Loan”). The Credit Facility was collateralized by, ~~which~~among ~~effectively~~other ~~terminated~~things, the ~~Carry~~Company’s ~~Agreement~~oil and gas properties and future oil and gas sales derived from such properties.

In ~~August~~July ~~2013~~2014, the Company ~~entered~~borrowed ~~into a second~~approximately ~~carry~~$2.2 ~~agreement~~million ~~(the~~in ~~“Second~~connection ~~Carry Agreement”)~~ with the ~~Carry~~amendment ~~Agreement Partner, pursuant to which (i) that Carry Agreement Partner agreed to fund 100%~~ of ~~the~~certain ~~Company’s~~financial ~~working~~covenants ~~interest~~contained ~~share~~in of the ~~drilling and completion costs of up to five new oil and gas wells to be located within the Spyglass Area, up to 120% of the~~ original ~~AFE~~Credit ~~amount,~~Facility and (ii) the Company agreed to convey, for a limited duration, 50% of its revenue interest in the pre-payout revenues of each carried well and 50% of its working interest in the pre-payout operating costs of each carried well, to the Carry Agreement Partneragreement. In the event that the gross drilling and completion cost of a carried well exceeds 120% of the AFE amount, the Company and the Carry Agreement Partner will share in the excess costs based on the working interests stipulated in the Carry Agreement.

Pursuant to the terms of the Second Carry Agreement, 50% of the Company’s net revenue interest in each well will be conveyed to the Carry Agreement Partner for a period of two years or until such a time when the working interest partner has recouped 112% of the carried drilling and completion costs of the well, whichever occurs sooner. In ~~the~~August ~~event that the Carry Agreement Partner has not recouped 112% of the carried drilling and completion costs by the end of the second year of production~~2014, the Company ~~has~~repaid ~~agreed~~all toamounts ~~make cash payments to the Carry Agreement~~then-outstanding ~~Partner~~under in the ~~amount~~Credit ofFacility ~~the~~with ~~shortfall. Once~~funds ~~the~~received ~~Carry~~from ~~Agreement Partner has recouped 112% of~~ the ~~carried~~issuance ~~drilling and completion costs~~ of acertain ~~well,~~bonds ~~the~~(see ~~conveyed~~Note ~~working interest and net revenue interest will revert to the Company~~9).

AsThe ofCredit ~~September~~Facility ~~30,~~had ~~2014,~~a ~~all~~ five-year ofterm ~~the~~and ~~wells to~~carried bea ~~drilled~~variable ~~pursuant~~interest torate ~~the~~ranging ~~Second~~from ~~Carry Agreement have been completed. To date, the Company has received~~ approximately ~~$15~~5.25% ~~million of~~to ~~funding under the Second Carry Agreement~~10. ~~As of September 30, 2014, the cost of drilling and completing one of the five wells exceeded the 120~~5%. ofInterest ~~AFE~~expense ~~cost~~related ~~threshold.~~to ~~Accordingly,~~ the ~~Company~~Credit ~~has~~Facility ~~recorded~~totaled ~~its portion of excess drilling and completion costs associated with this well, totaling~~ approximately $~~399,000 as of September 30, 2014~~2.8 ~~None~~million offor the ~~five~~three-month ~~wells~~period ~~covered~~ended byMarch ~~the Second Carry Agreement has achieved payout as of September 30~~31, 2014.

The Company incurred investment banking fees and closing costs totaling approximately $7.8 million in connection with the negotiation and closing of the Credit Facility. The Company capitalized these items as deferred financing costs, and began amortizing these costs over the life of the Credit Facility using the effective interest method. The amortization of deferred financing costs is included as a component of the Company’s interest expense for the period. The Company amortized approximately $380,000 of deferred financing costs related to the Credit Facility during the three-month period ended March 31, 2014.

Bonds Payable

In August 2014, the Company issued a series of 11% secured bonds (the “Bonds”) through a Rule 144A / Regulation S private offering. The Bonds mature on September 1, 2019 and have an aggregate gross value of $175 million. The Bonds were issued at a discount (99.059%), resulting in a discount of approximately $1.6 million. Net proceeds received from the issuance of the Bonds approximated $167.3 million, net of the bond discount, investment banking fees and closing costs. A portion of the net proceeds received from the issuance of the Bonds was used to repay in full the then-outstanding balance of the Credit Facility (see Note 8). The Company is amortizing the bond discount over the life of the bonds using the effective interest method. Amortization of the Bond discount totaled approximately $83,000 for the three-month period ended March 31, 2015.

The Bonds bear interest at a rate of 11% annually. Interest on the Bonds is payable in arrears each March 1^st and September 1^st. Interest expense related to the Bonds totaled approximately $4.8 million for the three-month period ended March 31, 2015.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

6On March 1, 2015, the Company elected to defer the payment of approximately $9.8 ~~Farm~~million of interest due on the bonds. The terms of the Bond Indenture provide for a 30-~~Out~~day ~~Agreement~~grace period, during which the interest payment can be paid without triggering an event of default. The Company did not pay the interest due on the Bonds prior to the expiration of the 30-day grace period. As a result, the Company is in default under the terms of the Bond Indenture as of March 31, 2015.

InOn ~~August~~April ~~2013~~2, 2015, the Company entered into a ~~Farm-Out~~Forbearance Agreement with four holders (the “~~Farm-Out~~Ad ~~Agreement~~Hoc Group”) ~~with~~who ~~the~~collectively ~~Carry~~own ~~Agreement~~or ~~Partner,~~manage ~~pursuant~~in toexcess ~~which~~of ~~(i)~~50% ~~that~~of ~~Carry~~the ~~Agreement~~par ~~Partner~~value of ~~agreed~~the Bonds. Pursuant to ~~fund~~the ~~100%~~terms of the Forbearance Agreement, the Company’s ~~working~~paid ~~interest~~$4.0 ~~share~~million of the ~~drilling~~interest ~~and~~that ~~completion~~was ~~costs~~due ofon upthe Bonds toas ~~six~~of ~~new~~March ~~oil~~1, ~~and gas~~2015. ~~wells~~The toterms beof ~~located within~~ the ~~original~~Forbearance ~~Spyglass~~Agreement ~~and~~prevent ~~West~~the ~~Spyglass~~holders ~~sections~~ of the ~~Spyglass Area~~Bonds ~~and~~from ~~(ii)~~exercising ~~the~~their ~~Company~~right ~~agreed~~ to ~~convey,~~call the Bonds for a period of ~~time,~~45 ~~100%~~days of(the ~~its~~“Forbearance ~~net~~Period”). ~~revenue~~Unless ~~interest~~amended, in the ~~pre-payout~~Forbearance ~~revenues~~Period ofwill ~~each farm-out well and 100%~~expire ofon ~~its~~May ~~working~~15, ~~interest~~2015. inGiven the ~~pre-payout~~existence ~~operating~~of ~~costs~~an event of ~~each~~default ~~farm-out~~as ~~well,~~of to the ~~Carry~~date ~~Agreement~~of ~~Partner,~~these ~~until~~financial ~~such~~statements, aand ~~time when~~ the ~~Carry~~uncertainty ~~Agreement~~with respect ~~Partner~~to ~~has~~whether ~~recouped 112% of~~ the ~~drilling~~Company ~~and~~will ~~completion~~be ~~costs~~able ~~associated~~to ~~with~~pay ~~each well. Once~~ the ~~Carry~~ ~~Agreement~~remaining ~~Partner~~interest ~~has~~due ~~recouped~~on ~~112% of~~ the ~~drilling~~Bonds ~~and~~prior ~~completion~~to ~~costs~~expiration of athe ~~well~~Forbearance Period, the ~~Carry~~Company ~~Agreement~~has ~~Partner~~classified ~~will~~the ~~convey 30%~~Bonds ofas ~~the~~a ~~Company’s~~current ~~original~~liability ~~working~~on ~~and~~its ~~net~~balance ~~revenue~~sheets ~~interests~~as inof ~~each~~March ~~farm-out~~31, ~~well~~2015 ~~back~~and toDecember ~~the Company~~31, 2014.

AsThe ofCompany ~~September~~incurred ~~30,~~investment ~~2014,~~banking ~~all~~fees and closing costs totaling approximately $7.2 million in connection with the issuance of the ~~six~~Bonds. ~~wells~~The ~~drilled~~Company has capitalized these ~~pursuant~~items toas deferred financing costs, and is amortizing these costs over the ~~Farm-Out~~life ~~Agreement~~of ~~have~~the ~~been~~Bonds ~~completed~~using the effective interest method. The ~~None~~amortization of ~~the~~deferred ~~six~~financing ~~wells~~costs ~~covered~~is byincluded as a component of the ~~Farm-Out~~Company’s ~~Agreement~~interest ~~has~~expense ~~achieved~~for ~~payout~~the period. asThe Company amortized deferred financing costs related to the Bonds of ~~September~~approximately 30$369,000 ~~2014~~for the three-month period ended March 31, 2015.

7The Bond Indenture contains customary affirmative and negative covenants for financial instruments of this nature, including limitations on the Company with respect to dividends, distributions and additional future borrowings. ~~Swap~~The ~~Facility~~Company was not in compliance with all covenants required by the Bond Indenture as of March 31, 2015. The Bonds are secured by a second priority lien on virtually all of the Company’s assets.

OnThe ~~December~~Bonds ~~28,~~traded ~~2012,~~on the ~~Company~~open ~~entered~~market ~~into~~at a significant ~~prepaid~~discount ~~Swap~~during ~~Facility~~the ~~with~~first ~~Macquarie~~quarter ~~Bank~~of ~~Limited~~2015. ~~(“MBL”)~~On March 18, ~~pursuant~~2015, tothe ~~which~~date ~~MBL~~of ~~agreed~~the tolast ~~advance~~recorded uppublic totrade ~~$18~~of ~~million,~~the bonds during the ofthree-month ~~which~~period ended March 31, 2015, Bonds with an aggregate par value of $161.0 million ~~was~~were ~~received~~traded at ~~closing~~a discounted price of $0.32 ~~The~~on ~~remaining~~the dollar, which suggests that the aggregate fair market value of the Bonds outstanding as of March 31, 2015 might be approximately $256.0 million. ~~was~~The ~~received~~actual intrade ~~January~~price ~~2013~~represents a Hierarchy Level 1 input for the purpose of estimating fair market value.

~~Funds~~10. ~~received~~Senior ~~under~~Secured ~~the~~Revolving ~~Swap~~Credit Facility were accounted for as debt and were scheduled to be repaid through a series of monthly payments from the sale of approximately 212,000 barrels of oil over the five-year period from January 2013 to December 2017, with a final balloon payment of $2 million, due in February 2018.

~~The~~In ~~annual~~August ~~interest~~2014, ~~rate~~the ~~associated~~Company ~~with~~entered ~~the~~into ~~Swap~~a Senior Secured Credit Facility ~~approximated~~(the 7“Senior Credit Facility”) with SunTrust Robinson Humphrey, Inc.~~4%.~~ ~~The~~(“SunTrust”), which ~~Company~~provided ~~recognized~~for ~~interest~~the ~~expense~~initial ~~related~~availability of up to $35 million of borrowing capacity. The borrowing capacity of the ~~Swap~~Senior Credit Facility ~~totaling~~was ~~approximately~~to ~~$183,000~~ be periodically evaluated and ~~$903~~adjusted based on,~~000~~ ~~for~~among other things, the ~~three-month~~discounted value of the Company’s oil and ~~nine-month~~gas ~~periods~~reserves. ~~ended~~Given ~~September~~falling 30oil prices throughout the fourth quarter of 2014, ~~2013~~SunTrust elected to perform a borrowing capacity redetermination as of December 31, ~~respectively~~2014, at which time the borrowing capacity was reduced to zero. The Senior Credit Facility was terminated on March 31, 2015 at SunTrust’s request. At no time did the Company borrow funds under the Senior Credit Facility.

The Company incurred investment banking fees and closing costs totaling approximately $780,000 in connection with the negotiation and closing of the MBL Swap Facility. The Company capitalized these items as deferred financing costs, and began amortizing the deferred financing costs over the life of the Swap Facility. The Company recognized approximately $38,000 and $151,000 of amortization expense related to the deferred financing costs for the three-month and nine-month periods ended September 30, 2013, respectively. The amortization of deferred loan costs is included as an additional component of interest expense for the respective periods.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

OnThe ~~August~~Company ~~19,~~incurred ~~2013,~~investment ~~the~~banking ~~Company~~fees ~~repaid~~and closing costs totaling approximately $779,000 in ~~full~~connection with the ~~outstanding~~ ~~balance~~establishment ~~under~~of the ~~Swap~~Senior Credit Facility. ~~using~~The ~~proceeds~~Company ~~received~~capitalized these ~~from~~items ~~its~~as ~~Credit~~deferred ~~Facility~~financing ~~with~~costs, ~~MSCG~~and ~~(see~~began ~~Note~~amortizing ~~8).~~these ~~The~~costs ~~total payoff~~over ~~amount~~the ~~was~~life ~~approximately~~of ~~$18~~the ~~million,~~Senior ~~which~~Credit ~~included~~Facility ~~100%~~using ofa method that approximates the ~~then~~effective ~~outstanding~~interest ~~principal~~method. ~~balance,~~The ~~the~~amortization ~~settlement~~of deferred financing costs is included as a component of ~~all~~the ~~outstanding~~Company’s ~~swap~~interest ~~agreements,~~expense ~~and~~for ~~certain~~the ~~prepayment penalties~~period. The Company ~~recognized~~amortized aapproximately ~~loss~~$39,000 onof ~~the~~deferred ~~early~~financing ~~extinguishment~~costs ~~of debt~~related ofto ~~approximately~~the ~~$3.7~~Bonds ~~million,~~during ~~which~~the ~~includes~~three-month ~~prepayment~~period ~~penalties~~ended March 31, 2015. Upon the termination of ~~related~~the ~~price~~Senior ~~swap~~Credit ~~agreements~~Facility ~~and~~on March 31, 2015, the ~~write~~Company wrote-off of the remaining, unamortized deferred financing costs associated with the ~~Swap~~Senior Credit Facility, which totaled approximately $689,000.

8The Senior Credit Facility contained customary affirmative and negative covenants for borrowings of this type, including limitations on the Company with respect to transactions with affiliates, hedging agreements, dividends and distributions, operations in respect of the property that secures its collective obligations under the Senior Credit Facility, indebtedness, investments, and changes in business. ~~MSCG~~The Senior Credit Facility also contained a number of financial covenants, including the maintaining of a current ratio of no less than 1.0 and a ratio of total debt to EBITDAX of no more than 4.0. The Company was not in compliance with these covenants prior to the termination of the Senior Credit Facility on March 31, 2015 or for the period ended March 31, 2015.

In August 2013, the Company entered into the $200 million MSCG Credit Facility, which was comprised of a $68 million initial term loan (the “Initial Term Loan”), a $40 million term loan to be used to fund certain working interest purchases (the “Spyglass Tranche A Loan”) and an uncommitted term loan of up to $92 million (the “Tranche B Loan”). The MSCG Credit Facility was collateralized by, among other things, the Company’s oil and gas properties and future oil and gas sales derived from such properties.

Net proceeds from borrowings under the Initial Term Loan totaling approximately $67.3 million were used: (i) to repay amounts outstanding under the Swap Facility, thus fully extinguishing the Swap Facility, (ii) to reduce the Company’s payables, (iii) to develop its Spyglass Area in North Dakota to increase production of hydrocarbons, (iv) to acquire new oil and gas properties within the Spyglass Area and (v) to fund general corporate purposes that are usual and customary in the oil and gas exploration and production business.

Proceeds from borrowings under the Spyglass Tranche A Loan totaling approximately $40 million were used to purchase additional net revenue and working interests in the Spyglass Area (See Note 4).

The MSCG Credit Facility had a five-year term and carried a variable interest rate ranging from approximately 5.5% to 10.5%. The variable interest rate was based primarily on the ratio of the Company’s proved developed reserves to its debt for a given period. Interest expense related to the Initial Term Loan totaled approximately $833,000 for the three-month and nine-month periods ended September 30, 2013. Interest expense related to the Initial Term Loan and Spyglass Tranche A Loan totaled approximately $1.9 million and $7.6 million for the three-month and nine-month periods ended September 30, 2014, respectively.

The Company incurred investment banking fees and closing costs totaling approximately $7.8 million in connection with the negotiation and closing of the Initial Term Loan and Spyglass Tranche A Loan. The Company capitalized these items as deferred financing costs, and began amortizing these costs over the life of the MSCG Credit Facility using the effective interest method. The amortization of deferred financing costs is included as a component of the Company’s interest expense for the period. The Company amortized approximately $123,000 and $245,000 of deferred financing costs related to the MSCG Credit Facility during the three-month periods ended September 30, 2014 and 2013, respectively, and approximately $1.0 million and $123,000 during the nine-month periods ended September 30, 2014 and 2013, respectively.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements

As of September 30, 2014 and December 31, 2013 and

For the Three-Month and Nine-Month Periods Ended September 30, 2014 and 2013

The MSCG Credit Facility contained customary affirmative and negative covenants for borrowings of this type, including limitations on the Company with respect to transactions with affiliates, hedging agreements, dividends and distributions, operations in respect of the property that secures its collective obligations under the MSCG Credit Facility, liens and encumbrances in respect of the property that secures the Company’s collective obligations under the MSCG Credit Facility, subsidiaries and divestitures, indebtedness, investments, and changes in business. The MSCG Credit Agreement also contained a number of financial covenants, including the maintaining of an adjusted minimum working capital ratio of 1.0.

In July 2014, the Company borrowed approximately $2.2 million in connection with the amendment of certain financial covenants contained in the original MSCG Credit Facility agreement.

In August 2014, the Company repaid all amounts then-outstanding under the MSCG Credit Agreement with funds received from the issuance of certain bonds (see Note 9) and, in doing so, recognized a loss on the early extinguishment of debt totaling approximately $11.9 million. The loss on the early extinguishment of debt included, the covenant amendment fee of approximately $2.2 million, a prepayment penalty of approximately $3.3 million and the write-off of unamortized deferred financing costs of approximately $6.4 million.

9. Bonds Payable

In August 2014, the Company issued a series of 11% secured bonds (the “Bonds”) through a Rule 144A / Regulation S private offering. The Bonds mature on September 1, 2019 and have an aggregate gross value of $175 million. The Bonds were issued at a discount (99.059%), resulting in a discount of approximately $1.6 million. Net proceeds received from the issuance of the Bonds approximated $167.3 million, net of the bond discount, investment banking fees and closing costs. A portion of the net proceeds received from the issuance of the Bonds was used to repay in full the then-outstanding balance of the MSCG Credit Facility (see Note 8). The Company is amortizing the bond discount over the life of the bonds using the effective interest method. Amortization of the Bond discount totaled approximately $32,000 for the three-month and nine-month periods ended September 30, 2014. Interest on the Bonds is payable in arrears each March 1st and September 1st.

The Company incurred investment banking fees and closing costs totaling approximately $7.1 million in connection with the issuance of the Bonds. The Company has capitalized these items as deferred financing costs, and is amortizing these costs over the life of the Bonds using the effective interest method. The amortization of deferred financing costs is included as a component of the Company’s interest expense for the period. The Company amortized approximately $137,000 of deferred financing costs related to the Bonds during the three-month and nine-month periods ended September 30, 2014.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements

As of September 30, 2014 and December 31, 2013 and

For the Three-Month and Nine-Month Periods Ended September 30, 2014 and 2013

The Bond Indenture contains customary affirmative and negative covenants for financial instruments of this nature, including limitations on the Company with respect to dividends, distributions and additional future borrowings. The Company is in compliance with all covenants required by the Bond Indenture as of September 30, 2014. The Bonds are secured by a second priority lien on virtually all of the Company’s assets.

10. Senior Secured Revolving Credit Facility

Also in August 2014, the Company entered into a Senior Secured Credit Facility (the “Senior Credit Facility”) with SunTrust Robinson Humphrey, Inc., which provides for the initial availability of up to $35 million of borrowing capacity. In the event that the Company achieves certain milestones or maintain certain financial ratios, the borrowing capacity of the Senior Credit Facility may be increased to $60 million in the future. As of September 30, 2014, the Company has not borrowed any funds under the Senior Credit Facility.

When outstanding, amounts drawn under the Senior Credit Facility are subject to variable annual interest rates ranging from LIBOR plus 1.75% to LIBOR plus 3.75%, depending on the nature of the borrowing and the balance outstanding under the Senior Credit Facility at the time the funds are drawn. The terms of the Senior Credit Facility also call for the payment of unused commitment fees relative to amounts that are available, but not drawn, under the Senior Credit Facility. Unused commitment fees are included as a component of the Company’s interest expense for the period. The Company recognized approximately $13,000 of unused commitment fees related to the Senior Credit Facility for the three-month and nine-month periods ended September 30, 2014.

The Company incurred investment banking fees and closing costs totaling approximately $834,000 in connection with the establishment of the Senior Credit Facility. The Company has capitalized these items as deferred financing costs, and is amortizing these costs over the life of the Senior Credit Facility using a method that approximates the effective interest method. The amortization of deferred financing costs is included as a component of the Company’s interest expense for the period. The Company amortized approximately $13,000 of deferred financing costs related to the Bonds during the three-month and nine-month periods ended September 30, 2014.

The Senior Credit Facility contains customary affirmative and negative covenants for borrowings of this type, including limitations on the Company with respect to transactions with affiliates, hedging agreements, dividends and distributions, operations in respect of the property that secures its collective obligations under the Senior Credit Facility, indebtedness, investments, and changes in business. The Senior Credit Facility also contained a number of financial covenants, including the maintaining of an adjusted minimum working capital ratio of 1.0 and a fixed cost coverage ratio of at least 4.0. The Company is compliance with all covenants required by the Senior Credit Facility as of September 30, 2014.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements

As of September 30, 2014 and December 31, 2013 and

For the Three-Month and Nine-Month Periods Ended September 30, 2014 and 2013

11.

Price Swap Derivatives

As a condition of ~~closing for~~ the ~~Swap~~Credit Facility (see Note 78), the Company ~~entered~~was ~~into~~required ~~various commodity derivative contracts~~ to ~~mitigate~~enter ~~the~~into ~~effects~~commodity ofprice ~~potential~~swap ~~downward~~agreements ~~pricing on~~covering ~~the~~up ~~Company’s~~to ~~oil~~85% ~~and~~of ~~gas~~its ~~revenues.~~projected ~~The~~five-year ~~contracts~~future ~~included~~production on ~~floating~~its ~~vs.~~proved, ~~fixed~~developed, ~~price~~producing ~~swaps for the Company’s produced oil~~properties. The Company did not designate the price swap agreements as hedges. Accordingly, management elected not to apply hedge accounting to these derivatives but, instead, recognized the changes in the fair value of the price swap agreements in its statement of operations in the period ~~for~~in which such unrealized changes ~~occurred~~in fair value occur. The Company recognized ~~realized~~unrealized ~~gains~~losses on the price swaps associated with the ~~price~~Credit ~~swap agreements~~Facility ~~totaling~~of approximately $~~116,000~~1.8 million for the three-month ~~and~~period ~~nine-month periods~~ ended ~~September~~March 3031, ~~2013~~2014. ~~These~~The price ~~swaps~~ swap agreements were ~~closed~~fully settled in August ~~2013,~~2014 ~~concurrent~~in conjunction with the full -repayment of the then-outstanding balance of the ~~Swap~~Credit Facility (see Note 8).

As a condition of the MSCG Credit Facility (see Note 8), the Company was required to enter into commodity price swap agreements covering up to 85% of its projected five-year future production on its proved, developed, producing properties. The Company did not designate the price swap agreements as hedges. Accordingly, management elected not to apply hedge accounting to these derivatives but, instead, recognized the changes in the fair value of the price swap agreements in its statement of operations in the period in which such unrealized changes in fair value occur. The Company recognized unrealized losses on the price swaps associated with the MSCG Credit Facility of approximately $775,000 for the three-month and nine-month periods ended September 30, 2013, respectively. The price swap agreements were fully settled in August 2014 in conjunction with the full-repayment of the then-outstanding balance of the MSCG Credit Facility (see Note 8). The Company recognized realized losses on the settlement of the price swaps associated with the MSCG Credit Facility totaling approximately $7.1 million and $7.5 million for the three-month and nine-month periods ended September 30, 2014, respectively, and unrealized gains on the price swaps totaling approximately $8.0 million and $0 for the three-month and nine-month periods ended September 30, 2014, respectively.

In September 2014, the Company entered into new commodity price swap agreements. The Company recognized unrealized gains on the new price swaps of approximately $618,000 for the three-month and nine-month periods ended September 30, 2014.

The Company’s outstanding price swap agreements had the following net fair market values as of June 30, 2014 and December 31, 2013 (in thousands):

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements

As of September 30, 2014 and December 31, 2013 and

For the Three-Month and Nine-Month Periods Ended September 30, 2014 and 2013

	September 30,			December 31,
	2014			2013
Current derivative asset	$	466		$	211
Noncurrent derivative asset		155			-
Current derivative liability		(3	)		(276	)
Noncurrent derivative liability		-			(750	)
Net derivative asset (liability)	$	618		$	(815	)

12.

Asset Retirement Obligation

The Company has recorded ~~estimated~~ asset retirement obligations, which ~~for~~represent the discounted future plugging and abandonment ofcosts for operated and non-operated wells located within its Spyglass Property. As of ~~September 30~~March 31, ~~2014~~2015 and December 31, ~~2013~~2014, the consolidated discounted value of the Company’s asset retirement obligations ~~obligation~~was ~~approximated~~approximately $1.4 million ~~and $1~~.1 ~~million, respectively.~~ The projected plugging dates for wells in which the Company owns a working interest ranges from December 31, 2015 to ~~September 30,~~December ~~2035~~2034. The Company recognized amortization expense associated with the accretion of its asset retirement agreements totaling approximately $54,000 and $36,000 for the nine-month periods ended September 30, 2014 and 2013, respectively.

13.

Equity Transactions

Reverse Split

In March 2014, the Company completed a 1-for-4 reverse split of its common stock. ~~Pursuant to accounting guidelines, all historical share and per-share data contained in these financial statements have been restated to reflect the reverse split for all periods presented.~~

~~Private~~Public ~~Placement~~Offering

In January 2013, the Company sold 1,000,000 shares of its common stock in a private placement at a price of $4.00 per share. Proceeds from the sale totaled $4.0 million.

Public Offerings

In August 2013, the Company sold 1,250,000 shares of its common stock in a public offering at a price of $8.00 per share. Proceeds from the sale totaled approximately $9.9 million, net of investment banking fees.

In October 2013, the Company sold 3,941,449 shares of its common stock at a price of $6.80 per share in two public offerings. The sales were completed pursuant to the then-current shelf registration, which was filed in August 2013. Proceeds from the sales, net of expenses, broker fees and commissions, totaled approximately $25.0 million.

In March 2014, the Company sold 12,650,000 shares of its common stock in a public offering at a price of $6.60 per share. The sale of stock was completed pursuant to the Company’s December 2013 shelf registration. Proceeds from the sale, net of expenses, broker fees and commissions, totaled approximately $78.3 million.

1915

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of ~~September~~March 3031, ~~2014~~2015 and ~~December~~ December 31, ~~2013~~2014 and

For the Three-Month ~~and Nine-Month~~ Periods Ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014

Stock Options

During the year ended December 31, 2013, the Company granted 440,000 stock options to members of its Board of Directors, employees and certain key third-party consultants. The options have exercise prices ranging from $5.84 to $9.28 per share. Each of the stock options granted has a five-year life and vest 50% on the one-year anniversary of the grant date, with the remaining 50% vesting on the second-year anniversary date.

The assumptions used in the Black-Scholes Option Pricing Model for the stock options granted during the 2013 were as follows:

Risk-free interest rate		0.23 to 0.35%
Expected volatility of common stock		62% to 84%
Dividend yield		$0.00
Expected life of options		5 years

During the nine-month period ended September 30, 2014, the Company granted 37,500 stock options to certain employees. The options have exercise prices ranging from $6.18 to $7.05 per share. Each of the stock options granted has a five-year life and vest 50% on the one-year anniversary of the grant date, with the remaining 50% vesting on the second-year anniversary date.

The assumptions used in the Black-Scholes Option Pricing Model for the stock options granted during the 2014 were as follows:

Risk-free interest rate		0.43 to 0.48%
Expected volatility of common stock		59% to 61%
Dividend yield		$0.00
Expected life of options		5 years

The options outstanding as of September 30, 2014 and December 31, 2013 have an intrinsic value of $2.67 and $4.12 per share and an aggregate intrinsic value of approximately $5.2 million and $7.9 million respectively.

Shares Reserved for Future Issuance

As of ~~September 30~~March 31, 2015 ~~2014~~ and December 31, ~~2012~~2014, the Company had reserved 1,~~941~~991,150 ~~and 1,926,775~~ shares, ~~respectively,~~ for future issuance upon exercise of outstanding options.

20The Company recognized stock-based compensation expense associated with its outstanding stock options of approximately $364,000 and $454,000 for the three-month periods ended March 31, 2015 and 2014, respectively.

American Eagle Energy Corporation

Notes to the Condensed Consolidated Financial Statements

As of September 30, 2014 and December 31, 2013 and

For the Three-Month and Nine-Month Periods Ended September 30, 2014 and 2013

14.

Earnings Per Share

The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three-month ~~and nine-month~~ periods ended ~~September 30~~March 31, ~~2014~~2015 and ~~2013~~ 2014 (in thousands, except for per share data):

	Three Months						Nine Months Ended
	2015			2014
	Ended September 30,						Ended September 30,
Net loss	$	(50,673	)	$	(1,028	)
	2014			2013			2014			2013
Weighted average number of common shares outstanding		30,449			18,556
Net income (loss)	$	(8,738	)	$	(936	)	$	(13,667	)	$	2,056
Incremental shares from the assumed exercise of dilutive stock options		-			-
Weighted average number of common shares outstanding		30,448			13,224			26,524			12,741
Diluted common shares outstanding		30,449			18,556
Incremental shares from the assumed exercise of dilutive stock options		-			-			-			484
Net loss per share - basic	$	(1.66	)	$	(0.06	)
Diluted common shares outstanding		30,448			13,224			26,524			13,225
Net loss per share - diluted	$	(1.66	)	$	(0.06	)
Earnings (loss) per share – basic	$	(0.29	)	$	(0.07	)	$	(0.52	)	$	0.16
Earnings (loss) per share – diluted	$	(0.29	)	$	(0.07	)	$	(0.52	)	$	0.16

~~For~~Because ~~periods in which~~ the Company recognized ~~recognizes~~ a net loss for the three-month periods ended March 31, 2015 and 2014, the calculation of diluted loss per share is the same as the calculation of basis loss per share, as the effect of including any incremental shares from the assumed exercise of dilutive stock options would be anti-dilutive. The number of anti-dilutive shares that have been excluded from the calculation of diluted loss per share for the three month-periods ended ~~September~~March 3031, ~~2014~~2015 and ~~2013, and the nine-month period ended September 30,~~ 2014, is approximately ~~474,000,~~12.4 ~~297,000~~million and ~~579~~648,000 ~~shares~~, respectively.

15.

Related Party Transactions

The Company is under contract through February 2016 to sell 100% of its oil, gas and liquids production to Power Energy Partners LP (“Power Energy”) at prevailing market rates. As of ~~September~~March 3031, ~~2014~~2015, Power Energy holds 2,250,000 shares of ~~our~~the Company’s common stock.

The Company’s ~~routinely~~Chairman ~~obtains~~and ~~legal~~its ~~services~~Chief ~~from~~Operating aOfficer ~~firm~~each ~~for~~owns ~~whom~~overriding ~~one~~royalty interests in certain of ~~its~~the ~~directors~~Company’s ~~serves~~operated aswells. aThe ~~principal~~overriding royalty interests were obtained prior the Company’s acquisition of AEE, Inc. ~~Fees~~in December 2011. Aggregate royalties paid ~~this~~to ~~firm~~these ~~approximated~~individuals totaled approximately $5284,000 and $24335,000 for the ~~nine~~three-month periods ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014, respectively.

The Company receives monthly geological consulting services from Synergy Energy Resources LLC (“Synergy”). One of the Company’s current directors and one current officer own material ownership interests in Synergy. The Company terminated its consulting agreement with Synergy on June 30, 2014. The Company incurred $84,000 and $126,000 of consulting expenses from Synergy during the nine-month periods ending September 30, 2014 and 2013, respectively.16

~~The~~American ~~Company’s~~Eagle ~~Chairman~~Energy and its Chief Operating Officer each owns overriding royalty interests in certain of the Company’s operated wells. The overriding royalty interests were obtained prior the Company’s acquisition of AEE, Inc. in December 2011. Aggregate royalties paid to these individuals totaled approximately $648,000 and $802,000 for the nine-month periods ended September 30, 2014 and 2013, respectively.Corporation

21Notes to the Condensed Consolidated Financial Statements (Unaudited)

As of March 31, 2015 and December 31, 2014 and

For the Three-Month Periods Ended March 31, 2015 and 2014

16.

Subsequent Event

As discussed in Note 9, the Company entered into a Forbearance Agreement with four Bond holders, who collectively own or manage in excess of 50% of the par value of the Bonds. On April 2, 2015, pursuant to the terms of the Forbearance Agreement, the Company paid $4.0 million of the interest that was due on the Bonds as of March 1, 2015.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING PRESENTATION OF OUR MANAGEMENT'S DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED ELSEWHERE IN THIS REPORT.

A Note About Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on current management'’s expectations. These statements may be identified by their use of words like “plans,” “expect,” “aim,” “believe,” “projects,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could,” and other expressions that indicate future events and trends. All statements that address expectations or projections about the future, including statements about our business strategy, expenditures, and financial results are forward-looking statements. We believe that the expectations reflected in such forward-looking statements are accurate. However, we cannot assure the reader that such expectations will occur.

Actual results could differ materially from those in the forward-looking statements due to a number of uncertainties, including, but not limited to, those discussed in this section. Factors that could cause future results to differ from these expectations include general economic conditions, ~~further~~such as further changes in our business direction or strategy, competitive factors, ~~oil~~ and ~~gas exploration uncertainties, and~~ an inability to attract, develop, or retain technical, consulting, or managerial agents or independent contractors, as well as economic conditions specific to the oil and gas industry, such as the availability of drilling rigs and crews, uncertainty with respect to future oil and gas prices and potential government regulation over drilling and completion techniques. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements. The reader should not unduly rely on these forward-looking statements, which speak only as of the date of this Quarterly Report, except as required by law; we are not obligated to release publicly any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report or to reflect the occurrence of unanticipated events.

Industry Outlook

The petroleum industry is highly competitive and subject to significant volatility due to numerous market forces. Crude oil and natural gas prices are affected by market fundamentals such as weather, inventory levels, competing fuel prices, overall demand, and the availability of supply.

22Oil prices cannot be predicted with any certainty and have significantly affected profitability and returns for upstream producers. Historically, West Texas Intermediate (“WTI”) crude oil prices have averaged approximately $90.46 per barrel over the past five years, per the U.S. Energy Information Administration. However, during that time, WTI oil prices have experienced wide fluctuations in prices, ranging from a high of $113.39 per barrel in May 2011 to a low of $43.39 per barrel in March 2015, with the median price of $93.47 per barrel. The daily WTI oil prices averaged approximately $48.49 and $98.68 for the three-month periods ended March 31, 2015 and 2014, respectively. Oil prices fell dramatically during the fourth quarter of 2014 and continued to be depressed throughout the first quarter of 2015, primarily as a result of oversupply and global economic pressures from middle-eastern oil producing countries.

~~Oil~~While ~~prices~~local ~~cannot~~supply/demand befundamentals ~~predicted with any~~are ~~certainty~~a ~~and~~decisive ~~have~~factor ~~significantly~~affecting ~~affected~~domestic ~~profitability~~natural ~~and~~gas ~~returns~~prices ~~for~~over ~~upstream~~the ~~producers.~~long ~~Historically~~term, ~~West~~day-to-day ~~Texas Intermediate (“WTI”) crude oil~~ prices ~~have~~may ~~averaged~~be ~~approximately~~more ~~$91.70~~volatile ~~per~~in ~~barrel over~~ the ~~past five years, per the U.S. Energy~~futures ~~Information~~markets ~~Administration.~~and ~~However~~other exchanges, ~~during~~making ~~that~~it ~~time,~~difficult ~~WTI~~to ~~oil~~forecast prices ~~have~~with ~~experienced~~any ~~wide~~degree ~~fluctuations~~of inconfidence. ~~prices~~In addition, ~~ranging~~prolonged ~~from~~declines ~~$64.78~~in ~~per~~oil ~~barrel~~and togas ~~$113.39~~prices ~~per~~may ~~barrel,~~ultimately ~~with~~result in the ~~median~~additional ~~price~~impairment of ~~$93.35~~our ~~per~~oil ~~barrel.~~and ~~The~~gas ~~daily~~properties, ~~WTI~~cause ~~oil~~the ~~prices~~operation ~~averaged approximately~~of ~~$99.97~~certain oil and ~~$98.15~~gas ~~for~~wells ~~the~~to ~~nine-month~~become ~~periods~~uneconomic ~~ended~~and ~~September~~adversely ~~30,~~impact ~~2014~~our ~~and 2013, respectively~~liquidity.

While local supply/demand fundamentals are a decisive factor affecting domestic natural gas prices over the long term, day-to-day prices may be more volatile in the futures markets and other exchanges, making it difficult to forecast prices with any degree of confidence. In addition, prolonged declines in oil and gas prices may ultimately result in the impairment of our oil and gas properties or cause the operation of certain oil and gas wells to become uneconomic.18

Company Overview

The address of our principal executive office is 2549 W. Main Street, Suite 202, Littleton, Colorado, 80120. Our telephone number is 303-798-5235. Our current operations consist of 2419 full-time employees.

~~Since~~As of November 20, 2013, our common stock has been listed on the NYSE MKT LLC under the symbol “AMZG.” Prior to that, it was quoted on the OTC Bulletin Board and the OTC Markets Group Inc.’s OTCQX tier under the symbol “AMZG”.

Our Company was incorporated in the State of Nevada under the name “Golden Hope Resources Corp.” on July 25, 2003. Weand ~~are~~is engaged in the acquisition, exploration, and development of natural resource properties ~~and~~of ~~are primarily focused on extracting proved oil reserves from those properties~~merit. On November 7, 2005, we filed documents with the Nevada Secretary of State to change our name to “Eternal Energy Corp.” by way of a merger with our wholly-owned subsidiary, Eternal Energy Corp., which was formed solely to facilitate the name change. In December 2011, we again filed documents with the Nevada Secretary of state ~~State~~ to change our name to “American Eagle Energy Corporation”, in conjunction with our acquisition of, and merger with, American Eagle Energy Inc.

During the past five years, we have engaged in exploration and production activities in both 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 ~~September~~March 3031, ~~2014~~2015, we ~~are~~ are engaged in exploration and production activities in the northwest portion of Divide County, North Dakota, where we target the ~~extraction~~ extraction of oil and natural gas reserves from the Three Forks and Middle Bakken formations. We ~~are~~have aggressively ~~pursuing~~pursued the ~~development~~ development of our Spyglass Area, to which virtually all of our capital has been or is being deployed. Our Spyglass Area generated 99100% and 98% of our revenue for the ~~nine~~three-month ~~period~~periods ended ~~September~~March 3031, 2015 and 2014, and represents 100% of our estimated remaining proved reserves as of ~~September~~ 30March 31, ~~2014~~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.

Oil & Gas Wells

We are primarily focused on drilling and completing wells located within our Spyglass Area, located in northwestern Divide County, North Dakota. As of ~~September~~March 3031, ~~2014~~2015, ~~51 gross (30.3 net) of our operated Spyglass wells were producing, in which~~ we ~~own working interests ranging from approximately 5% to 100%, with an average~~ ~~working~~had ~~interest~~drilled ofand ~~approximately~~completed ~~60%.~~54 ~~At September 30, 2014, there were 36~~ gross (2332.2 net) operated wells ~~producing~~in ~~from~~our ~~the Three~~Spyglass ~~Forks~~Property, ~~formation~~all ~~and~~of 15which ~~gross~~were ~~(7.1 net) operated wells~~ producing, ~~from~~and ~~the~~were ~~Middle Bakken formation. During~~ in the ~~nine-month~~process ~~period ended~~of ~~September~~completing ~~30,~~two ~~2014,~~additional wewells. ~~added~~An 23additional 2 gross (131.09 net) ~~operated~~ wells tohave ~~production~~been indrilled ~~our~~and ~~Spyglass~~are ~~Area.~~awaiting ~~In addition, we added 3~~completion.~~7 net operated wells to production as a result of acquiring additional working interests in our existing operated wells.~~

We ~~have~~own ~~elected~~working interests in our operated wells ranging from approximately 5% to ~~participate~~100%, aswith aan ~~non-operating~~average working interest ~~partner~~ inof ~~the~~approximately ~~drilling~~60%. ofOf 85the producing wells, 39 gross (425.20 net) operated wells ~~within~~were producing from the ~~Spyglass~~Three ~~Area,~~Forks offormation ~~which~~and 8115 gross (47.2 net) operated wells were producing from asthe ~~of September~~Middle ~~30,~~Bakken ~~2014~~formation. ~~Our~~We ~~working~~did ~~interest~~not ~~ownership~~add inany ~~these non-~~operated wells ~~ranges from less than 1%~~ to ~~approximately~~production ~~28%,~~during ~~with an~~the ~~average~~three-month ~~working~~period ~~interest~~ended ofMarch ~~approximately 5%~~31, 2015.

~~The~~Historically, ~~following~~we ~~table~~have ~~summarizes~~elected ~~our~~to ~~Spyglass~~participate as a non-operating working interest partner in the drilling of 81 gross (4.2 net) wells within the Spyglass Area, ~~well~~all ~~activity~~of ~~for~~which were producing as of December 31, 2014. In January 2015, we sold our net revenue and working interests in 25 gross (0.7 net) non-operated wells to SM Energy. Our working interest ownership in the ~~three~~remaining non-~~month~~operated ~~period~~wells ~~ended~~ranges ~~September~~from 30less than 1% to approximately 28%, ~~2014:~~with an average working interest of approximately 6%.

			Non-		Total
	Operated		Operated		Spyglass
Gross Wells
Wells producing at beginning of period		43		77		120
Wells added to production during the period		8		4		12
Wells producing at end of period		51		81		132
Net Wells
Wells producing at beginning of period		24.0		3.7		27.7
Wells added to production during the period		6.3		0.5		6.8
Wells producing at end of period		30.3		4.2		34.5

~~Our~~The ~~capital~~following ~~expenditures~~table ~~related~~summarizes toour ~~well development totaled~~Spyglass ~~approximately~~Area ~~$94.2~~well ~~million~~activity for the ~~nine~~three-month period ended ~~September~~March 3031, 2014. The cost of drilling and completing successful wells is dependent on a number of factors including, among other things, the vertical depth of the well, the lateral length of the well, the geological zone targeted for development, the methods used to complete the wells and the weather conditions at the time the wells are drilled and completed. In general, our costs of drilling wells that we operate decreased during 2014 as a result of more efficient drilling operations, which decreased the average number of days it takes for us to reach total depth on our wells.2015:

During the nine-month period ended September 30, 2014, we spent approximately $61.3 million to acquire additional working and net revenue interests in existing producing wells, as well as to expand our overall acreage position in areas containing proved oil and gas reserves. Of this amount, approximately $54.8 million was spent to acquire additional working and net revenue interests from one of our working interest partners. The acquisition of the additional working and net revenue interests was funded from proceeds received from a public offering of our common stock in March 2014.

			Non-			Total
	Operated		Operated			Spyglass
Gross Wells
Wells producing at beginning of period		54		81			135
Wells added to production during the period		-		-			-
Wells disposed of during the period		-		(25	)		(25	)
Wells producing at end of period		54		56			110

Net Wells
Wells producing at beginning of period		32.2		4.2			36.4
Wells added to production during the period		-		-			-
Wells disposed of during the period		-		(0.7	)		(0.7	)
Wells producing at end of period		32.2		3.5			35.7

24Our capital expenditures related to exploration and well development totaled approximately $3.0 for the three-month period ended March 31, 2015. The cost of drilling and completing a successful well is dependent on a number of factors, including, among other things, the vertical depth of the well, the lateral length of the well, the geological zone targeted for development, the methods used to complete the well and the weather conditions at the time the well is drilled and completed. In general, our costs of drilling wells that we operate has decreased over time as a result of more efficient drilling operations, which decreased the average number of days it takes for us to reach total depth on our wells.

Oil and Gas Reserves

AsWe ofestimate ~~June~~that ~~30, 2014, the date of~~ our ~~most recent reserve report, our estimated~~ proved ~~oil~~developed oil and gas reserves ~~consisted~~as of March 31, 2015 were approximately 155.46 million barrels of oil equivalent (“BOE”). ~~The~~Based on SEC pricing guidelines, which utilize a non-weighted average of the average monthly oil and gas prices for the preceding twelve-month period, the estimated pre-tax ~~present~~ value of our proved oil and gas reserves, discounted at an annual rate of 10% (“PV10”) was approximately $135.6 million as of March 31, ~~was~~2015, compared to approximately $~~366~~178.5 million as of ~~June~~December 3031, 2014. The decrease is primarily due to the significant decline in oil prices from the first quarter of 2014 to the first quarter of 2015. The average oil and gas prices used to estimate our proved oil and gas reserves as of March 31, 2015 were $78.48 and $3.45, respectively, compared to $82.36 and $5.08, respectively, as of December 31, 2014.

The sharp decline in oil prices significantly impacted both the reserve volume and PV10 value of our proved, undeveloped properties, as lower prices negatively affect the economic viability of drilling future wells. Based on SEC pricing guidelines, the PV10 value of our proved undeveloped reserves fell from approximately $49.5 million as of December 31, 2014 to approximately $39.4 million at March 31, 2015. The decrease in the our proved undeveloped reserves from December 31, 2014 to March 31, 2015 is primarily due to uncertainty regarding whether or not we will have sufficient capital to support our current development plan. Historically, we have utilized carry agreements and farm-out agreements to accelerate the drilling of operated wells. The PV10 value of our proved undeveloped reserves as of March 31, 2015 and December 31, 2014 has been determined based on the assumption that we will continue to utilize such arrangements in the future in order to continue our planned drilling activities. Accordingly, as of both dates, we have reduced our net revenue and working interests in the future wells that comprise our proved undeveloped reserves by 50% in consideration of the anticipated terms of such arrangements.

Overall, our total proved reserves volumes decreased from approximately 10.9 MBOE at December 31, 2014 to approximately 9.8 MBOE at March 31, 2015, primarily as a result of the current period production and the sale of our net revenue and working interests in certain non-operated wells during the period. The PV10 value of our total proved oil and gas reserves decreased from approximately $228.0 million at December 31, 2014 to approximately $175.0 million at March 31, 2015, primarily as a result of the aforementioned decline in oil prices.

PV10 is a standard, non-GAAP measure that is used within the oil and gas industry to value an entity’s proved oil and gas reserves, based on estimated future cash flows.

Operating Results

For the purpose of furthering the reader’s understanding of the results of our operations, we have elected to present certain non-GAAP financial measures that are commonly used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies, to analyze the results of our operations for the three-month ~~and nine-month~~ periods ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014. Specific non-GAAP financial measures presented include Adjusted Net Earnings, Adjusted Net Earnings per Share, Adjusted EBITDA and Adjusted Cash Flow from Operations. A description of each non-GAAP financial measure presented is provided below.

We define Adjusted Net Earnings as net income excluding any loss from the impairment of oil and gas properties and changes in the fair value of our outstanding commodity derivatives. We believe that this financial measure is meaningful because it excludes the effects of non-cash items that are primarily based on predicted future commodity prices, over which management has no control.

Adjusted Net Earnings per Share is calculated by dividing Adjusted Net Earnings by the weighted average shares of our common stock that were outstanding for the period. GAAP requires the use of basic weighted average shares outstanding for the period to calculate both basic and diluted net loss per share for periods in which an entity recognizes a net loss, as the use of the diluted weighted average shares outstanding for the period would have an anti-dilutive effect. In the event that, for a given period, we recognize a net loss (GAAP basis), but Adjusted Net Earnings (non-GAAP basis), we also present Adjusted Net Earnings Per Share (non-GAAP basis) on both a basic and diluted basis using the appropriate weighted average shares outstanding figure as the denominator.

We define Adjusted EBITDA as net income before depletion, depreciation and amortization, impairment of oil and natural gas properties, asset retirement obligation accretion expense, gain (loss) on derivative activities, net cash receipts (payments) on settled derivative instruments, premiums (paid) received on options that settled during the period, interest expense, and income tax expense.

Management believes Adjusted EBITDA is useful because it allows management to evaluate our operating performance more effectively and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures, and the methods by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) as determined in accordance with GAAP or as an indicator of our operating performance or liquidity.

Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which is a component of Adjusted EBITDA. The Adjusted EBITDA presented below may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in the our various agreements, including the agreements governing the Senior Credit Facility. We have included a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, below.

We believe that Adjusted Cash Flow from Operations is a meaningful financial measure because it excludes the majority of non-cash charges from EBITDA, yet includes the portion of interest expense that paid in cash, thus providing a measurement of our ability to service our debt.21

~~The~~We ~~following~~believe ~~table~~that ~~summarizes~~Adjusted ~~our~~Cash ~~consolidated~~Flow from ~~revenue,~~Operations ~~production~~is ~~data,~~a ~~and~~meaningful ~~operating~~financial ~~expenses~~measure ~~for~~because it excludes the ~~three-month~~majority ~~and~~of ~~nine~~non-~~month~~cash ~~periods~~charges ~~ended~~from ~~September~~EBITDA, 30yet includes the portion of interest expense that is paid in cash, ~~2014~~thus ~~and~~providing ~~2013:~~a measurement of our ability to service our debt.

	For the three-month period					For the nine-month period
	ended September 30,					ended September 30,
	2014			2013		2014			2013
Revenues (in thousands):
Oil sales	$	16,939		$	11,585	$	45,431		$	29,579
Gas sales		31			26		209			31
Liquids sales		121			28		459			28
Total revenues	$	17,091		$	11,639	$	46,099		$	29,638
Volumes:
Oil (barrels)		197,740			123,343		514,090			327,783
Gas (mcf)		1,968			6,333		30,315			7,501
Liquids (barrels)		3,706			944		13,202			944
Total barrels of oil equivalent (“BOE”)		201,774			125,343		532,345			329,977
Average daily sales volumes (BOE)		2,193			1,362		1,950			1,209
Average sales prices:
Oil sales (per barrel)	$	85.66		$	93.92	$	88.37		$	90.24
Effect of settled derivatives (per barrel)		(3.80	)		0.94		(2.38	)		0.35
Oil sales, net of settled derivatives (per barrel)		81.86			94.86		85.99			90.59
Gas sales (per mcf)		15.52			4.09		6.90			4.17
Liquids sales (per barrel)		32.85			29.67		34.80			29.67
Oil equivalent sales (per BOE)		80.98			93.78		84.29			89.69
Operating expenses (in thousands):
Lease operating expenses	$	3,671		$	1,766	$	9,258		$	4,371
Production taxes		1,950			1,289		5,217			3,286
Total oil and gas operating expenses		5,621			3,055		14,475			7,657
General and administrative expenses, excluding stock-based compensation		1,665			1,509		4,446			3,553
Stock-based compensation (non-cash)		445			303		1,344			827
Depletion, depreciation and amortization		6,154			2,524		15,497			5,915
Impairment of oil and gas properties		-			-		-			1,525
Total operating expenses	$	13,885		$	7,391	$	35,762		$	19,477

The following table summarizes our consolidated revenue, production data, and operating expenses for the three-month periods ended March 31, 2015 and 2014:

	2015		2014
Sales (in thousands):
Oil sales	$	6,853	$	12,267
Gas sales		10		72
Liquids sales		11		206
Total sales	$	6,874	$	12,545

Volumes:
Oil sales (barrels)		173,591		140,841
Gas sales (mcf)		4,354		11,370
Liquids sales (barrels)		456		5,312
Total barrels of oil equivalent (“BOE”)		174,443		148,048

Average daily sales volumes (BOE)		1,942		1,645

Average sales price:
Oil sales (per barrel)	$	39.48	$	87.10
Effect of derivatives settled in the normal course of business (per barrel)		-		0.82
Oil sales, net of settled derivatives (per barrel)		39.48		87.92
Gas sales (per mcf)		2.19		6.37
Liquids sales (per barrel)		23.72		38.83
Oil equivalent sales per BOE	$	39.33	$	85.52

Operating expenses (in thousands):
Lease operating expenses (“LOE”)	$	2,780	$	2,274
Production taxes		794		1,379
Total oil and gas production expenses		3,574		3,653
General and administrative expenses, excluding stock-based compensation		1,993		1,563
Stock-based compensation (non-cash)		364		454
Depletion, depreciation and amortization (non-cash)		5,562		3,636
Impairment of oil and gas properties (non-cash)		40,028		-
Total operating expenses	$	51,521	$	9,306

	For the three-month period						For the nine-month period
	ended September 30,						ended September 30,
	2014			2013			2014			2013
Costs and expenses per BOE:
Lease operating expenses	$	18.20		$	14.09		$	17.39		$	13.25
Production taxes		9.66			10.28			9.80			9.95
Total oil and gas operating expenses		27.86			24.37			27.19			23.20
General and administrative expenses, excluding stock-based compensation		8.25			12.04			8.36			10.77
Stock-based compensation (non-cash)		2.21			2.42			2.52			2.51
Depletion, depreciation and amortization		30.50			20.14			29.11			17.93
Impairment of oil and gas properties		-			-			-			4.62
Total operating expenses	$	68.82		$	58.97		$	67.18		$	59.03
Adjusted net earnings (Non-GAAP) (in thousands):
Net income (loss)	$	(8,738	)	$	(936	)	$	(13,667	)	$	2,056
Add: Impairment of oil and gas properties		-			-			-			1,525
Add: Loss on sale of oil and gas properties		12			-			12			-
Add: One-time loss on settlement of derivatives		6,362			-			6,362			-
Add: Loss on early extinguishment of debt		11,894			3,714			11,894			3,714
Changes in fair value of derivatives		(8,641	)		934			(618	)		775
Adjusted net earnings	$	889		$	3,712		$	3,983		$	8,070
Adjusted net earnings per share (Non-GAAP):
Basic	$	0.03		$	0.28		$	0.15		$	0.63
Diluted	$	0.03		$	0.27		$	0.15		$	0.61
Weighted average number of shares outstanding (in thousands):
Basic		30,448			13,224			26,524			12,741
Diluted		30,922			13,733			27,103			13,225
Adjusted EBITDA (Non-GAAP) (in thousands):
Net income (loss)	$	(8,738	)	$	(936	)	$	(13,667	)	$	2,056
Less: Interest and dividend income		(28	)		(19	)		(56	)		(57	)
Add: Interest expense		4,163			1,316			10,628			2,149
Add: Income tax expense (benefit)		(2,569	)		(646	)		(5,311	)		1,639
Add: Depletion, depreciation and amortization (non-cash)		6,154			2,524			15,497			5,915
Add: Stock-based compensation (non-cash)		445			303			1,344			827
Add: Accretion of asset retirement obligations		9			8			60			36
Add: Impairment of oil and gas properties (non-cash)		-			-			-			1,525
Add: Loss on sale of oil & gas properties		12			-			12			-
Add: Loss on early extinguishment of debt		11,894			3,714			11,894			3,714
Add: One-time loss on settlement of derivatives		6,362			-			6,362			-
Changes in fair value of derivatives		(8,641	)		934			(618	)		775
Adjusted EBITDA	$	9,063		$	7,198		$	26,145		$	18,579
Adjusted cash flow from operations (Non-GAAP) (in thousands):
Adjusted EBITDA	$	9,063		$	7,198		$	26,145		$	18,579
Less: Interest expense		(4,163	)		(1,316	)		(10,628	)		(2,149	)
Add: Amortization of deferred financing costs and bond discount (non-cash)		426			162			1,190			274
Adjusted cash flow	$	5,326		$	6,044		$	16,707		$	16,704

	2015			2014
Operating expenses per BOE:
LOE	$	15.91		$	15.36
Production taxes		4.54			9.32
Total oil and gas production expenses		20.45			24.68
General and administrative expenses, excluding stock-based compensation		11.41			10.56
Stock-based compensation (non-cash)		2.08			3.07
Depletion, depreciation and amortization (non-cash)		31.82			24.56
Impairment of oil and gas properties (non-cash)		229.03			-
Total operating expenses per BOE	$	294.79		$	62.87

Adjusted earnings (Non-GAAP; in thousands):
Net income (loss)	$	(50,673	)	$	(1,028	)
Add: Impairment of oil and gas properties		40,028			-
Add: Change in fair value of marketable securities		15			-
Add: Change in fair values of derivatives		-			1,823
Adjusted earnings	$	(10,630	)	$	795

Adjusted earnings per share (Non-GAAP):
Basic	$	(0.35	)	$	0.04
Diluted	$	(0.35	)	$	0.04

Weighted average number of shares outstanding (in thousands):
Basic		30,449			18,557
Diluted		30,449			19,205

~~Results of Operations for the three-month period ended September 30, 2014 vs September 30, 2013~~23

In July 2014, we sold all of our Canadian net revenue and working interests. Accordingly, the following discussion focuses solely on the results of our US oil and gas activities for the three-month periods ended September 31, 2014 and 2013.

	2015			2014
Adjusted EBITDA (Non-GAAP; in thousands):
Net income (loss)	$	(50,673	)	$	(1,028	)
Less: Interest and dividend income		-			(16	)
Add: Interest expense		5,992			3,214
Add: Income tax expense (benefit)		(19	)		(638	)
Add: Depletion, depreciation and amortization (non-cash)		5,562			3,636
Add: Stock-based compensation (non-cash)		364			454
Add: Accretion of asset retirement obligations (non-cash)		15			22
Add: Impairment of oil and gas properties (non-cash)		40,028			-
Change in fair value of marketable securities		15			-
Change in fair value of derivatives		-			1,823
Adjusted EBITDA	$	1,284		$	7,445

Adjusted EBITDA per share (Non-GAAP):
Basic	$	0.04		$	0.40
Diluted	$	0.04		$	0.40

Adjusted cash flow from operations (Non-GAAP):
Adjusted EBITDA	$	1,284		$	7,445
Less: Interest expense		(5,992	)		(3,215	)
Add: Amortization of deferred financing costs (non-cash)		1,079			380
Add: Amortization of bond discount (non-cash)		83			-
Adjusted cash flow from operations	$	(3,546	)	$	4,610

~~Revenues~~Results ~~from the sale~~ of ~~oil,~~Operations ~~natural gas and liquids totaled approximately $17.1 million~~ for the three-month period ended ~~September 30, 2014, compared to approximately~~ ~~$11.6~~March ~~million for the three-month period ended September 30~~31, ~~2013,~~2015 anvs ~~increase~~March ~~of 47%. This increase was driven primarily by a 62% increase in production by volume~~31, which was partially offset by a 14% decline in oil prices, after considering the effects of settled hedges. Our wells continue to be primarily oil-producing wells, with 99% of total revenues for the three-month periods ended September 30, 2014 and 2013 resulting from oil sales. Our average daily production for the three-month period ended September 30, 2014, calculated on a barrel of oil equivalent basis, was 2,193 BOEPD, compared to 1,362 BOEPD for the corresponding period in 2013. Production volumes increased primarily due to the addition of 26 gross (22.5 net) operated wells and 10 gross (1.2 net) non-operated wells to production within the Williston Basin from October 1, 2013 through September 30, 2014. During the three-month period ended September 30, 2014, our average realized price per barrel of oil was $85.66 ($81.86 after considering the effects of settled derivatives) compared to an average realized price of $93.92 ($94.86, after considering the effects of settled derivatives) per barrel for the three-month period ended September 30, 2013.

~~Lease~~In ~~operating~~July ~~expenses~~2014, ~~totaled~~we ~~approximately $3.7~~sold ~~million~~all ~~for~~of ~~the~~our ~~three-month~~Canadian net ~~period~~revenue ~~ended~~and ~~September~~working 30interests, ~~2014~~resulting ~~compared~~in toa ~~approximately~~loss ~~$1.8~~on ~~million for~~ the ~~three-month~~sale ~~period ended~~of ~~September~~oil ~~30,~~and ~~2013.~~gas Onproperties aof ~~per-unit~~approximately ~~basis~~$12,000. ~~LOE~~Oil ~~increased~~and gas sales from ~~$14.09~~our ~~per~~Canadian ~~BOE~~properties accounted for ~~the~~less ~~three-month~~than ~~period~~1% ~~ended~~of ~~September~~our ~~30, 2013~~consolidated tooil ~~$18.20~~and ~~per~~gas ~~BOE~~sales for the ~~three-month~~year ~~period~~ ended ~~September 30~~December 31, 2014., ~~The~~and ~~increase~~less inthan ~~LOE~~3% ~~per BOE from 2013 to 2014 is primarily due to planned workover expenses related to some~~ of our ~~older~~consolidated ~~wells,~~oil asand ~~well~~gas assales ~~higher~~for ~~water~~the ~~transportation~~year ~~and~~ended ~~disposition~~December ~~costs~~31, 2013.

~~Production~~Revenues ~~taxes~~from the sale of oil, natural gas and liquids totaled approximately $26.0 9 million for the three-month period ended ~~September~~March 3031, ~~2014~~2015, compared to approximately $112.3 5 million for the three-month period ended ~~September~~March 3031, ~~2013~~2014, a decrease of 45%. ~~Production~~This ~~taxes~~decrease was driven primarily by an 8% increase in production by volume, aswhich was partially offset by a ~~percentage~~54% ofdecline ~~total~~in ~~revenues~~oil ~~were~~prices, ~~approximately~~after ~~11.4%~~considering ~~and~~the 11effects of settled derivatives.1 Our wells continue to be primarily oil-producing wells, with 99% of total revenues for the three-month periods ended ~~September~~March 3031, 2015 and 2014 ~~and~~resulting ~~2013,~~from ~~respectively~~oil sales. ~~The~~Our ~~statutory~~average daily production ~~tax~~for ~~rate~~the three-month period ended March 31, 2015, calculated on a barrel of oil equivalent basis, was 1,942 BOEPD, compared to 1,645 BOEPD for ~~our~~2014. ~~North~~Production ~~Dakota~~volumes increased primarily due to the addition of 19 gross (12.2 net) operated wells to production within the Williston Basin since April 1, 2014. For the isthree-month 11period ended March 31, 2015, our average realized price per barrel of oil was $39.5%48 compared to an average realized price of $87.10 ($87.92, after considering the effects of settled derivatives) per barrel for the three-month period ended March 31, 2014.

General and administrative expenses, excluding stock based compensation, totaled approximately $1.7 million million for the three-month period ended September 30, 2014, compared to approximately $1.5 million for the three-month period ended September 30, 2013. The increase is largely attributable to additional payroll, employee benefit expenses, and office-related expenses as the number of our employees grew from 19 as of September 30, 2013 to 24 as of September 30, 2014. Included in general and administrative expenses is stock-based compensation totaling approximately $445,000 and $303,000 for the three-month periods ended September 30, 2014 and 2013, respectively. Stock-based compensation is a non-cash charge to earnings.

28Lease operating expenses totaled approximately $2.8 million for the three-month period ended March 31, 2015 compared to approximately $2.3 million for the three-month period ended March 31, 2014. On a per-unit basis, LOE increased from $15.36 per BOE for the three-month period ended March 31, 2014 to $15.91 per BOE for the three-month period ended March 31, 2015.

~~Depletion,~~Production ~~depreciation~~taxes ~~and amortization expense~~ totaled approximately $~~6.2 million ($30.50 per BOE)~~ 794,000 for the three-month period ended ~~September~~March 3031, ~~2014~~2015, compared to approximately $21.54 million ~~($20.14 per BOE)~~ for the three-month period ended ~~September 30~~March 31, ~~2013~~2014. ~~Our~~Production ~~depletion expense is based on the capitalized costs related to oil and gas properties for which proved reserves have been assigned~~taxes, ~~plus~~as ~~the~~a ~~estimated~~percentage ~~future~~of ~~development~~total ~~costs necessary~~revenues towere ~~convert undeveloped proved reserves to proved producing reserves. Our gross capitalized costs related to amortizable oil and gas properties increased from~~ approximately ~~$108~~11.6% ~~million~~and ~~at September 30, 2013 to approximately $320~~11.0% ~~million~~for atthree-month ~~September 30,~~periods ~~2014. The increase in depletion expense was due primarily to the addition of 26 gross (22.5 net) operated wells to production~~ended ~~since~~March ~~October 1~~31, ~~2013.~~2015 ~~The~~and ~~increase in depletion expense per BOE is primarily due to the identification of new future drill sites~~2014, ~~for~~ ~~which proved, undeveloped reserves (and estimated future development costs) have been assigned~~respectively.

InGeneral ~~August~~and ~~2013,~~administrative ~~we entered into the $200~~expenses, ~~million~~excluding ~~MSCG~~stock ~~Credit~~based ~~Facility~~compensation, attotaled ~~which~~approximately ~~time we borrowed~~ $682.0 million. Wefor ~~used~~the athree-month ~~portion~~period ofended ~~these~~March ~~funds~~31, 2015, compared to ~~repay~~approximately in$1.6 ~~full~~million for the ~~then~~three-~~outstanding balance~~month ofperiod ~~our~~ended ~~prepaid~~March ~~Swap~~31, ~~Facility~~2014. ~~(the~~The ~~“MBL~~increase ~~Swap~~in ~~Facility”)~~general and ~~with~~administrative ~~Macquarie~~expenses ~~Bank~~is ~~Limited~~primarily ~~(“MBL”).~~due ~~In doing~~to ~~so,~~additional welegal ~~recognized~~and ainvestment ~~loss~~banking onfees ~~the~~incurred ~~early~~during ~~extinguishment of~~ the ~~MBL~~first quarter ~~debt~~ of ~~approximately~~2015 ~~$3.7~~related ~~million,~~to ~~which~~potential ~~consisted~~debt ofrestructuring ~~a prepayment~~activities. ~~penalty~~Included ~~and~~in ~~the~~general ~~write-off~~and ofadministrative ~~unamortized~~expenses ~~deferred~~is stock-based ~~financing~~compensation ~~costs.~~totaling Inapproximately ~~October 2013~~$364,000 weand ~~borrowed an additional~~ $40454,000 ~~million under~~for the ~~MSGC~~three-month ~~Credit~~period ~~Facility~~ended toMarch ~~acquire~~31, ~~certain~~2015 ~~working~~ and 2014, ~~net~~respectively. ~~revenue~~Stock-based ~~interests~~compensation inis ~~the~~a ~~Spyglass~~non-cash ~~Property~~charge ~~from~~to ~~one of our working interest partners~~earnings.

~~In August 2014~~Depletion, wedepreciation ~~issued~~and aamortization expense ~~series~~totaled ofapproximately ~~11% secured~~$5,562 ~~bonds~~million (~~the~~$31.82 ~~“Bonds”~~per BOE) ~~through~~for athe ~~Rule~~three-month ~~144A~~period /ended ~~Regulation~~March S31, ~~private offering. The Bonds mature on September 1~~2015, ~~2019 and~~compared ~~have~~to ~~an aggregate gross value of~~ approximately $~~175~~3.6 million ($24.56 ~~The~~per ~~Bonds~~BOE) ~~were~~for ~~issued~~the atthree-month aperiod ~~discount~~ended ~~(99.059%)~~March 31, ~~resulting~~2014. inOur andepletion ~~original~~expense ~~issuance discount~~is ofbased ~~approximately~~on ~~$1.6~~the ~~million.~~capitalized costs ~~Net~~related ~~proceeds~~to ~~received~~oil ~~from~~and ~~the~~gas ~~issuance~~properties offor ~~the~~which ~~Bonds~~proved ~~were~~reserves ~~approximately~~have ~~$167.3~~been ~~million~~assigned, ~~net~~ ofplus the ~~bond~~estimated ~~discount,~~future ~~investment~~development ~~banking fees and closing~~ costs. necessary Weto ~~also~~convert ~~incurred~~proved ~~legal~~undeveloped ~~and~~reserves ~~bond~~to ~~rating~~proved ~~fees~~producing ~~totaling approximately $1~~reserves.0 ~~million~~Our ingross ~~connection~~capitalized ~~with~~costs ~~the~~related ~~issuance~~to ofamortizable oil ~~the~~and ~~Bonds.~~gas Aproperties, ~~portion~~prior ofto ~~the~~any ~~net~~current ~~proceeds~~period ~~received~~impairment adjustments, increased from ~~the~~approximately ~~issuance~~$193.3 ofmillion ~~the~~at ~~Bonds~~March ~~was~~31, ~~used~~2014 to ~~repay~~approximately in$314 ~~full~~million ~~the~~at ~~then-outstanding~~March ~~balance~~31, of2015. ~~the~~The ~~MSCG~~increase ~~Credit~~in ~~Facility.~~depletion Inexpense ~~repaying~~was ~~the amounts~~ due ~~under~~primarily to the ~~MSCG~~addition of ~~Credit~~19 ~~Facility~~gross ~~prior~~(12.2 net) operated wells to ~~its~~production ~~scheduled~~since ~~maturity~~April 1, we2014 ~~recognized~~during athat ~~loss~~time, onand the ~~early~~increase ~~extinguishment~~in ofestimated ~~debt~~future ~~totaling approximately~~development ~~$11.9~~costs ~~million,~~for ~~which~~undeveloped ~~included~~wells ~~amendment~~that ~~and~~were ~~prepayment~~added ~~penalties~~to ~~totaling~~the ~~approximately~~Company’s ~~$5.5~~total ~~million~~proved ~~and~~reserves ~~the~~based ~~non-cash~~on ~~write-off of~~the ~~approximately~~addition ~~$6.4 million~~ of ~~unamortized~~these ~~deferred financing costs~~wells.

WeUnder ~~recognized~~full ~~interest~~cost ~~expense~~accounting ~~totaling approximately~~rules, ~~$4.2~~we ~~million~~were required ~~for~~to write-down the ~~three-month~~value ~~period~~of ~~ended~~our ~~September~~oil ~~30,~~and ~~2014~~gas ~~related~~properties, subject to ~~the~~amortization, ~~MSCG~~as ~~Credit~~of ~~Facility~~March 31, ~~prior~~2015 toby ~~repayment,~~approximately ~~and~~$40.0 ~~the Bonds~~million. ~~Interest~~The ~~expense~~impairment ~~for~~was ~~the~~largely ~~three-month~~due ~~period~~to ~~ended~~depressed ~~September~~oil 30prices, ~~2013~~which ~~related~~reduced to the ~~MBL~~average ~~Swap~~price ~~Facility~~used ~~and~~to value the ~~MSCG~~Company’s ~~Credit~~proved ~~Facility~~oil ~~totaled~~and ~~approximately~~gas ~~$1.3~~reserves ~~million.~~as ~~Included~~of inMarch ~~the~~31, ~~aggregate~~2015. ~~interest~~The impairment expense ~~figures~~represents ~~for~~a ~~the three~~non-~~month~~cash ~~periods~~charge against our earnings. Because ~~ended~~SEC ~~September~~rules ~~30,~~require ~~2014~~proved oil and ~~2013~~gas isreserves ~~the~~to ~~amortization~~be ofvalued ~~the~~using ~~original~~an ~~issuance~~unweighted ~~bond~~arithmetic ~~discount~~average of oil and ~~deferred~~gas ~~financing~~prices ~~costs,~~for ~~both~~the ofpreceding ~~which are non~~twelve-~~cash~~month ~~items.~~period, ~~The~~and ~~specific~~because ~~terms~~forecasted ofoil ~~the~~prices ~~Bonds~~for 2015 are ~~discussed~~projected into ~~the~~be ~~“Liquidity~~lower ~~and~~than ~~Capital~~what ~~Resources”~~was experienced during ~~section~~2014, ~~below~~it is likely that we will recognized additional impairments during 2015 that will be material to our financial results.

29In August 2014, we issued a series of 11% secured bonds (the “Bonds”) through a Rule 144A / Regulation S private offering. Net proceeds received from the issuance of the Bonds were approximately $167.3 million, net of the bond discount, investment banking fees and closing costs. We also incurred legal and bond rating fees totaling approximately $1.0 million in connection with the issuance of the Bonds. A portion of the net proceeds received from the issuance of the Bonds was used to repay in full the then-outstanding balance of the Credit Facility.

In connection with MSCG Credit Facility, we were required to enter into price swap agreements with MSGC covering up to 85% of the anticipated production from our estimated proved developed reserves over the remaining life of the MSCG Credit Facility. The purpose of price swap agreements is to limit our potential exposure to falling oil prices. Sustained oil prices above the pre-determined terms of our price-swap agreements result in realized and unrealized losses, while sustained oil prices below the pre-determined terms of our price swap agreements result in realized and unrealized gains. The price swap agreements are considered derivatives under generally accepted accounting principles. We recognized ~~losses~~interest onexpense ~~the normal settlement of monthly swap agreements~~ totaling approximately $~~751,000, and unrealized gains resulting from the change in fair value of unsettled price swaps totaling approximately$8~~3.02 million for the three-month period ended ~~September~~March 3031, 2014. Inrelated ~~addition, we were required~~ to ~~settle~~ the ~~remaining~~amounts ~~price~~then-outstanding ~~swaps~~under ~~with~~the ~~MSGC prior to their scheduled~~Credit ~~maturity,~~Facility. ~~which~~For ~~resulted~~the ~~in a one~~three-~~time~~month ~~loss~~period onended ~~the~~March ~~settlement~~31, of2015, ~~price~~we ~~swaps~~recognized of approximately $65.43 million. ~~We recognized gains on the normal settlement of prices swaps totaling approximately $115,000~~ and ~~unrealized losses totaling approximately~~ $~~934~~700,000 ~~resulting~~ ~~from the change in fair value~~ of ~~unsettled~~interest ~~price~~expense associated ~~swaps~~with ~~for~~our ~~the~~outstanding ~~three-month~~Bonds ~~period~~and ~~ended~~Senior ~~September~~Credit 30Facility, ~~2013~~respectively.

InIncluded ~~September~~in ~~2014,~~the weaggregate ~~entered~~interest ~~into~~expense figures ~~new~~for ~~swap agreements~~the ~~covering~~three-month ~~approximately~~periods ~~55%~~ended ofMarch ~~our~~31, ~~expected~~2015 ~~oil~~and ~~production~~2014 ~~through~~is ~~December~~amortization ~~2015.~~of Asdeferred afinancing ~~result~~costs of ~~falling~~approximately $1.1 ~~oil~~million ~~prices~~and $380, we000 ~~recognized~~respectively. ~~unrealized~~The ~~gains~~2015 ~~and~~interest aexpense ~~corresponding~~figure ~~net~~also ~~derivative~~includes ~~asset~~the ~~totaling~~amortization of the original Bond discount of approximately $~~618~~83,000. asThe amortization of ~~September~~the 30original issuance Bond discount and deferred financing costs are non-cash items. The specific terms of the Bonds are discussed in the “Liquidity and Capital Resources” section, ~~2014~~below.

We recognized an estimated income tax benefit of approximately $2.6 million for the three-month period ended September 30, 2014, compared to an income tax benefit of approximately $646,000 for the corresponding period in 2013. Our estimated tax benefit rates for the periods were 23% and 41%, respectively.25

~~Our~~In ~~basic~~connection ~~and~~with ~~diluted~~Credit ~~loss~~Facility, ~~per~~we ~~share~~were required ~~was~~to enter into price swap agreements with Morgan Stanley Capital Group, Inc. (“ MSCG”) covering up to 85% of $0the anticipated production from our estimated proved developed reserves over the remaining life of the MSCG Credit Facility.29 ~~for~~The purpose of price swap agreements was to limit our potential exposure to falling oil prices. Sustained oil prices above the ~~three~~pre-~~month~~determined terms ~~period~~of ~~ended~~our ~~September~~price-swap ~~30,~~agreements ~~2014~~resulted in realized and unrealized losses, ~~compared~~while tosustained $0oil prices below the pre-determined terms of our price swap agreements resulted in realized and unrealized gains.07 The price swap agreements were considered derivatives under generally accepted accounting principles. We recognized losses on the normal settlement of these monthly swap agreements totaling approximately $116,000 for the three-month period ended ~~September~~March 3031, ~~2013~~2014. The price swap agreements were fully settled in ~~Because~~August we2014 ~~recognized~~in aconnection ~~net~~with ~~loss~~the ~~for~~termination of the ~~current~~Credit ~~period,~~Facility. ~~diluted~~We ~~income~~recognized ~~per~~unrealized ~~share~~losses istotaling ~~calculated~~approximately ~~using~~$1.8 million resulting from the ~~basic~~change ~~weighted~~in ~~average number~~fair value of ~~weighted~~unsettled ~~shares~~price ~~outstanding~~swaps ~~for~~during the three-month period ended March 31, as2014. ~~the~~In September ~~effect~~2014, we entered into new swap agreements covering approximately 55% of ~~including~~our ~~potentially~~expected ~~dilutive~~oil ~~items~~production ~~would~~through beDecember 2015. ~~anti-dilutive~~This swap agreement was cancelled in the fourth quarter of 2014.

~~Our~~We ~~adjusted~~recognized ~~net~~an ~~earnings~~estimated ~~for~~income ~~the~~tax ~~three-month~~expense ~~period~~of ~~ended September 30, 2014 was approximately~~ $~~889~~19,000, ~~compared~~and to an ~~adjusted~~estimated ~~net~~income ~~earnings~~tax benefit of approximately $~~3.7~~638,000 ~~million~~ for the three-month ~~period~~periods ended ~~September~~March 3031, ~~2013.~~2015 ~~Adjusted~~and ~~net earnings is derived by adding back unrealized changes in fair~~2014, ~~value of commodity derivatives (non-cash) to net income or adjusting for other non-recurring gains or losses during the period~~respectively. ~~Adjusted net earnings is a non-GAAP financial measure.~~

Our ~~adjusted~~basic ~~EBITDA~~and ~~for~~diluted ~~the~~loss ~~three-month periods~~per ~~ended~~share ~~September 30, 2014 and 2013~~ was ~~approximately~~ $9.1.66 ~~million~~ and $70.206 ~~million,~~for ~~respectively.~~the ~~Adjusted~~three-month ~~EBITDA~~periods ~~represents net~~ended ~~earnings~~March ~~before interest income~~31, ~~dividend~~2015 ~~income, interest expense, income taxes, depletion, depreciation,~~ and ~~amortization~~2014, ~~non-cash~~ ~~expenses~~respectively. ~~related~~Because towe ~~stock-based~~recognized ~~compensation,~~net ~~impairment~~losses offor ~~oil and gas properties~~the periods, ~~loss~~diluted onincome ~~early~~per ~~extinguishment~~share ofis ~~debt, accretion~~calculated ofusing ~~asset~~the ~~retirement~~basic ~~obligations~~weighted ~~and~~average ~~changes~~number ~~in fair value~~ of ~~commodity~~weighted ~~derivatives~~shares ~~(non-cash),~~outstanding ~~and adjusted~~ for ~~other~~the ~~non-recurring~~period, ~~gains~~as orthe ~~losses~~effect ~~during~~of ~~the~~including ~~period.~~potentially ~~Adjusted~~dilutive ~~EBITDA~~items iswould abe ~~non~~anti-~~GAAP financial measure~~dilutive.

30Our adjusted loss for the three-month period ended March 31, 2015 was approximately $10.6 million, compared to an adjusted earnings of approximately $795,000 for the three-month period ended March 31, 2014. Adjusted earnings is derived by adding back unrealized changes in fair value of commodity derivatives (non-cash) to net income or adjusting for other non-recurring gains or losses during the period. Adjusted earnings is a non-GAAP financial measure.

~~Results~~Our ofadjusted ~~Operations~~EBITDA for the ~~nine~~three-month periods ~~period~~ ended ~~September~~ 30March 31, 2015 and 2014 vswas ~~September~~approximately 30$1.3 million and $7.4 million, ~~2013~~respectively. Adjusted EBITDA represents net earnings before interest income, dividend income, interest expense, income taxes, depletion, depreciation, and amortization, non-cash expenses related to stock-based compensation, impairment of oil and gas properties, loss on early extinguishment of debt, accretion of asset retirement obligations and changes in fair value of commodity derivatives (non-cash), and adjusted for other non-recurring gains or losses during the period. Adjusted EBITDA is a non-GAAP financial measure.

Revenues from the sale of oil, natural gas and liquids totaled approximately $46.1 million for the nine-month period ended September 30, 2014, compared to approximately $29.6 million for the nine-month period ended September 30, 2013, an increase of 56%. This increase was driven primarily by a 61% increase in production by volume, which was partially offset by a 5% decline in oil prices, after considering the effects of settled hedges. Our average daily production for the nine-month period ended September 30, 2014, calculated on a barrel of oil equivalent basis, was 1,950 BOEPD, compared to 1,209 BOEPD for the corresponding period in 2013. Production primarily increased due to the addition of 26 gross (22.5 net) operated wells and 10 gross (1.2 net) non-operated wells within the Williston Basin from October 1, 2013 through September 30, 2014.

During the nine-month period ended September 30, 2014, our average realized price per barrel of oil was $88.37 ($85.99 after considering the effects of settled derivatives) compared to an average realized price of $93.92 (94.86 after considering the effects of settled derivatives) for the nine-month period ended September, 2013.

Lease operating expenses totaled approximately $9.3 million ($17.39 per BOE) for the nine-month period ended September 30, 2014 compared to approximately $4.4 million ($13.25 per BOE) for the nine-month period ended September 30, 2013. The increase in lease operating expenses per BOE from 2013 to 2014 is primarily due to extreme winter weather conditions, which negatively affected our production during the first quarter of 2014 and excessive rains during the second quarter, which prevented trucks from accessing our well sites to retrieve oil and caused us to shut in a number of wells lengthy periods of time, thus resulting in lower production for the periods and higher lease operating expense on a per BOE basis.

Production taxes totaled approximately $5.2 million and $3.3 million for the nine-month periods ended September 30, 2014 and 2013, respectively, which represented 11.3% and 11.1% of gross revenues for the periods. The statutory production tax rate for our North Dakota wells is 11.5%.

General and administrative expenses, excluding stock-based compensation, totaled approximately $4.4 million for the nine-month period ended September 30, 2014, compared to approximately $3.6 million for the corresponding period in 2013. The increase is largely attributable to additional payroll, employee benefit expenses, and office-related expenses as the number of our employees grew from 19 as of October 1, 2013 to 24 as of September 30, 2014. We also incurred higher legal and accounting fees during the first quarter of 2014 in anticipation of equity financing and acquisitions. Our general and administrative expenses for the nine-month period ended September 30, 2014 and 2013 includes stock-based compensation totaling approximately $1.3 million and $827,000 for the nine-month periods ended September 30, 2014 and 2013, respectively. Stock-based compensation is a non-cash charge to earnings.

Depletion, depreciation and amortization expense totaled approximately $15.5 million ($29.11 per BOE) for the nine-month period ended September 30, 2014, compared to approximately $5.9 million ($17.93 per BOE) for the nine-month period ended September, 2013. Our gross capitalized costs related to amortizable oil and gas properties increased from approximately $108.6 million at September 30, 2013 to approximately $320.0 million at September 30, 2014. The increase in depletion expense was due primarily to the addition of 26 gross (22.5 net) operated wells to production since October 1, 2013. The increase in the depletion expense per BOE is primarily due to the identification of new future drill sites, for which proved, undeveloped reserves (and estimated future development costs) have been assigned.

Due to lower than anticipate production volumes from our Hardy Property wells and declining oil prices during the period, we were required to write-down the value of our Canadian oil and gas properties at March 31, 2013, pursuant to full-cost accounting rules. In doing so, we recognized an impairment expense of approximately $1.5 million related to our Canadian oil and gas properties during the nine-month period ended September 30, 2013. The impairment expense represented a non-cash charge against our earnings. We did not record any such impairment during the nine-month period ended September 30, 2014. As noted above, we sold all of our net revenue and working interests in our Canadian oil and gas properties in July 2014, for which we received cash proceeds of approximately $1.8 million. We recognized a $12,000 loss on the sale of the assets.

As noted above, we entered into the $200 million MSCG Credit Facility in August 2013, at which time we borrowed $68 million. We used a portion of these funds to repay in full the then-outstanding balance of the MBL Swap Facility. In doing so, we recognized a loss on the early extinguishment of the MBL debt of approximately $3.7 million, which consisted of a prepayment penalty and the write-off of unamortized deferred financing costs. In October 2013, we borrowed an additional $40 million under the MSGC Credit Facility to acquire certain working and net revenue interests in the Spyglass Property from one of our working interest partners.

As noted above, we issued secured Bonds having a face value of $175 million (approximately $173.4 million net of original issuance discount) through a Rule 144A / Regulation S private offering in August 2014. A portion of the proceeds received from the issuance of the Bonds was used to fully repay our then-outstanding balance under the MSCG Credit Facility. In repaying the amounts due under the MSCG Credit Facility prior to its scheduled maturity, we recognized a loss on the early extinguishment of debt totaling approximately $11.9 million, which included amendment and prepayment penalties totaling approximately $5.5 million and the non-cash write-off of approximately $6.4 million of unamortized deferred financing costs.

We recognized aggregate interest expense of totaling approximately $10.6 million for the nine-month period ended September 30, 2014 related to the MSGC Credit Facility and Bonds, which includes the amortization of deferred financing costs and amortization of the original bond discount. The amortization of deferred financing costs and the original issuance bond discount are non-cash items. Interest expense related to the MBL Swap Facility and the MSCG Credit Facility totaled approximately $2.1 million for the nine-month period ended September 30, 2013, including the amortization of deferred financing costs. The specific terms of our Bonds are discussed in the “Liquidity and Capital Resources” section, below.

We recognized losses on the normal monthly settlement of price swap agreements totaling approximately $1.1 million, and unrealized gains related to changes in the fair value of price swaps totaling approximately $8.0 million for the nine-month period ended September 30, 2014, in connection with price swap agreements entered into pursuant to our MSCG Credit Facility. In addition, as stated above, we were required to settle our outstanding price swaps with MSGC in August 2014, prior to their maturity, in connection with the early extinguishment of the MSCG Credit Facility. In doing so, we recognized a one-time loss of approximately $6.4 million. We also recognized realized gains totaling approximately $115,000 and unrealized losses related to changes in the fair value of price swaps of approximately $775,000 for the nine-month period ended September 30, 2013 in connection with price swaps agreements entered into pursuant to the MBL Swap Facility. The price swap agreements associated with the MBL Swap Facility were settled upon the full repayment of the MBL Swap Facility in August 2013.

We recognized an estimated income tax benefit of approximately $5.3 million for the nine-month period ended September 30, 2014, compared to income tax expense of approximately $1.6 million for the corresponding period in 2013. Our estimated effective tax benefit and tax expense rates for the periods were 28% and 44%, respectively.

Our basic and diluted loss per share was $0.52 for the nine-month period ended September 30, 2014, compared to basic and diluted income per share of $0.16 for the nine-month period ended September, 2013. Because we recognized a net loss for the current period, diluted income per share is calculated using the basic weighted average number of weighted shares outstanding for the period, as the effect of including potentially dilutive items would be anti-dilutive.

Our adjusted net earnings for the nine-month period ended September 30, 2014 and 2013 was approximately $4.0 million and $8.1 million, respectively. Adjusted net earnings is derived by adding back unrealized changes in fair value of commodity derivatives to net income or adjusting for other non-recurring gains or losses during the period. Adjusted net earnings is a non-GAAP financial measure.

Our adjusted EBITDA for the nine-month period ended September 30, 2014 and 2013 was approximately $26.1 million and $18.6 million, respectively. Adjusted EBITDA represents net earnings before interest income, dividend income, interest expense, income taxes, depletion, depreciation, and amortization, non-cash expenses related to stock-based compensation, impairment of oil and gas properties, loss on early extinguishment of debt, and unrealized changes in fair value of commodity derivatives, and adjusted for other non-recurring gains or losses during the period. Adjusted EBITDA is a non-GAAP financial measure.

Liquidity and Capital Resources

OnAs of March 2431, ~~2014~~2015, ~~we sold 12,650,000 shares of~~ our ~~common~~assets ~~stock in a transaction utilizing our shelf registration. Proceeds received from the sale of equity, net of expenses and broker fees and commissions,~~ totaled approximately $78211.39 million., Awhich ~~portion~~included, ofamong ~~the~~other ~~net~~items, ~~proceeds~~cash ~~from~~balances ~~the public offering were used to close the second half~~ of ~~our~~approximately ~~previously announced working interest acquisition~~$20.1 ~~The remaining funds will be used (i) to execute our 2014 drilling program~~million, ~~(ii)~~trade ~~to fund further development of wells within our Spyglass Area, (iii) to acquire additional~~receivables ~~working~~totaling ~~interests~~approximately in$8.9 ~~undeveloped~~million ~~properties,~~ and ~~(iv)~~marketable tosecurities ~~provide~~valued ~~working~~at ~~capital~~approximately ~~for operations~~$741,000.

InAs ~~August~~of March ~~2014~~31, 2015, we ~~issued~~had a working capital deficit of approximately $184.4 million, which reflects the ~~series~~classification of approximately ~~11%~~$173.5 ~~secured~~million of Bonds ~~through~~as acurrent ~~Rule~~liabilities. ~~144A~~The /sharp ~~Regulation~~decline Sin ~~private~~oil ~~offering.~~prices ~~The~~that ~~Bonds~~occurred ~~mature~~during onthe ~~September~~latter 1,part ~~2019~~of 2014, and the ~~have~~continued andepressed ~~aggregate gross~~pricing, ~~value~~has ofmaterially ~~$175~~reduced ~~million.~~the ~~The~~revenues ~~bonds~~that were ~~issued~~generated atfrom athe ~~discount~~sale ~~(99.059%)~~of our oil and gas production volumes during that period, ~~resulting~~which, in aturn, ~~discount~~negatively ofaffected ~~approximately~~our ~~$1.6~~current ~~million~~working capital balance. The potential for future oil ~~Net~~prices ~~proceeds~~to ~~received~~remain ~~from~~at ~~the~~their ~~issuance~~current price levels for an extended period of ~~the~~time ~~bonds~~raises ~~approximated~~substantial ~~$167~~doubt regarding our ability to continue as a going concern.3 ~~million~~Should the prevailing oil prices as of March 31, ~~net~~2015 remain in effect for an extended period of ~~the~~time, it ~~bond~~is ~~discount~~likely that we would need to pursue some form of asset sale, ~~investment~~debt ~~banking~~restructuring or capital raising effort in order to fund ~~fees~~our operations and ~~closing~~to ~~costs~~service our existing debt during the next twelve months. WeOur ~~also~~management ~~incurred~~is ~~legal~~actively developing plans to improve our working capital position and/or ~~bond~~to ~~rating~~reduce ~~fees~~its ~~totaling~~future ~~approximately~~debt ~~$1.0~~service ~~million~~costs, through the aforementioned means, in ~~connection~~order ~~with~~to ~~the~~remain ~~issuance~~a ofgoing concern for the ~~bonds~~foreseeable future. AIf ~~portion~~we ofare ~~the~~unable ~~net~~to ~~proceeds~~restructure ~~received~~our Bonds, obtain additional debt or equity financing or achieve adequate proceeds from the ~~issuance~~sale of ~~the~~assets, ~~Bonds~~we ~~was~~may ~~used~~file toa ~~repay~~voluntary inpetition ~~full~~for ~~the~~reorganization ~~then-outstanding~~relief under Chapter ~~balance~~11 of the ~~MSCG~~Bankruptcy ~~Credit~~Code ~~Facility.~~in ~~Interest~~order onto ~~the~~provide ~~Bonds~~us iswith ~~payable~~additional intime ~~arrears~~to ~~each~~identify ~~March~~an ~~1st~~appropriate solution to our financial situation and ~~September~~to ~~1st~~implement a plan of reorganization aimed at improving our capital structure.

The Bond Indenture contains customary affirmative and negative covenants for financial instruments of this nature, including limitations with respect to our ability to pay dividends, distributions and to secure additional future borrowings. The Bonds are secured by a second priority lien on virtually all of our assets.26

33As a result of falling oil prices, we generated approximately $4.2 million of negative cash flow from our operations for the three-month period ended March 31, 2015. This figure includes the non-cash accrual of approximately $4.8 million of interest associated with our Bonds.

~~Also~~Our ~~in August 2014~~Bonds, wewhich ~~entered~~mature ~~into~~on aSeptember ~~Senior~~1, ~~Credit~~2019, ~~Facility~~carry ~~(the~~an ~~“Senior~~annual ~~Credit~~interest ~~Facility”)~~rate ~~with~~of ~~SunTrust~~11% ~~Robinson~~and ~~Humphrey,~~are ~~Inc.,~~secured ~~which~~by ~~provides~~second ~~for~~lien ~~the~~positions ~~initial availability~~in ofsubstantially upall ~~to $35 million~~ of ~~borrowing~~our ~~capacity~~assets. InInterest related to the ~~event~~Bonds ~~that~~is wepayable ~~achieve~~in ~~certain~~arrears ~~milestones~~on orMarch ~~maintain~~1st ~~certain~~and ~~financial ratios,~~September ~~the~~1st ~~borrowing~~of ~~capacity~~each ofyear until the ~~Senior~~bonds ~~Credit~~mature. The ~~Facility~~Bond ~~may~~Indenture becontains ~~increased~~customary toaffirmative ~~$60~~and ~~million~~negative incovenants ~~the~~for ~~future.~~financial Asinstruments of ~~September~~this 30nature, including limitations ~~2014,~~with werespect ~~have~~to ~~not~~our ~~borrowed~~ability ~~any~~to ~~funds~~pay ~~under~~dividends, ~~the~~distributions ~~Senior~~and ~~Credit~~to ~~Facility~~secure additional future borrowings.

~~When~~We ~~outstanding,~~elected ~~amounts~~to ~~drawn~~defer ~~under~~ the ~~Senior~~ ~~Credit~~payment ~~Facility~~of ~~are~~approximately $9.8 ~~subject~~million toof ~~variable annual~~ interest ~~rates~~on ~~ranging~~our ~~from~~Bonds ~~LIBOR~~that ~~plus~~was ~~1.75%~~due toon ~~LIBOR~~March ~~3.75%~~2, ~~depending~~2015. ~~on the~~The ~~nature~~terms of the ~~borrowing~~Bond ~~and~~Indenture ~~the~~provide ~~balance~~for ~~outstanding~~a ~~under~~30-day ~~the~~cure period, ~~Senior~~during ~~Credit~~which ~~Facility at~~ the ~~time~~interest ~~the~~payment ~~funds~~could ~~are~~have ~~drawn.~~been ~~The~~made ~~terms of~~without the ~~Senior~~late ~~Credit~~payment ~~Facility~~constituting ~~also~~an ~~call~~event ~~for the payment~~ of ~~unused~~default. ~~commitment~~We ~~fees relative to amounts that are available, but not~~did ~~drawn,~~not ~~under~~pay the ~~Senior~~interest ~~Credit~~due ~~Facility.~~on ~~Unused~~the ~~commitment~~Bonds ~~fees~~prior ~~are~~to ~~included~~the asend ~~a component~~ of ~~our~~the ~~interest~~30-day ~~expense~~grace ~~for the~~ period.

~~The~~Because ~~Senior~~we ~~Credit~~did ~~Facility~~not ~~contains~~make ~~customary affirmative~~the ~~and~~required ~~negative~~interest payment ~~covenants for borrowings of this type, including limitations~~ on usour ~~with~~Bonds ~~respect~~prior to ~~transactions~~the ~~with~~expiration ~~affiliates, hedging agreements, dividends and distributions, operations in respect~~ of the ~~property~~30-day ~~that~~grace ~~secures its collective obligations under the Senior Credit Facility~~period, ~~indebtedness, investments,~~ and ~~changes~~pursuant into ~~business.~~generally ~~The~~accepted ~~Senior~~accounting ~~Credit Facility also contained~~principles, awe ~~number~~have ofclassified ~~financial covenants, including~~ the ~~maintaining~~Bonds ofas a current ~~ratio~~liability as of noMarch ~~less~~31, ~~than 1~~2015.0 ~~and~~The afailure ~~total~~to ~~debt~~pay tothe ~~EBITDAX~~full ~~ratio~~ amount of nointerest ~~less~~that was ~~than~~due ~~4.0.~~on ~~The~~the ~~current~~bonds ~~ratio,~~ as ~~defined~~of byMarch ~~the Senior Credit Facility~~31, ~~includes~~2015 ~~the~~constitutes ~~unused~~an ~~portion~~event of ~~the~~default ~~Senior~~under ~~Credit Facility~~the asterms ~~a component~~ of ~~current~~the ~~assets~~Bond Indenture.

AsOn ofApril ~~September 30~~2, ~~2014~~2015, ~~our~~we ~~assets~~entered ~~totaled~~into ~~$372.7~~a ~~million,~~Forbearance ~~which~~Agreement ~~includes,~~with ~~among~~an ~~other~~Ad ~~items,~~Hoc ~~cash~~Group ~~totaling~~that ~~approximately~~represents ~~$48~~four bondholders who collectively own or manage in excess of 50% of the par value of the Bonds.8 ~~million~~Also on April 2, ~~trade~~2015, ~~receivables~~pursuant ~~totaling~~to ~~approximately~~the terms of the Forbearance Agreement, we paid $174.80 million ~~and~~of ~~marketable~~the ~~securities~~interest ~~valued~~that atwas ~~approximately~~due $on the Bonds as of March 1, 2015.2 ~~million~~The Forbearance Agreement expires on the earliest to occur of (i) the occurrence of any Event of Default under subsections 6.01(10) ~~Our~~or ~~current~~6.01(11) ~~assets~~of ~~total~~the ~~approximately~~Indenture ~~$67~~or the commencement of an involuntary proceeding or filing of an involuntary petition against our subsidiary or us under any federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) May 15, 2015 or (iii) the occurrence of a forbearance default as defined by the Forbearance Agreement.1 ~~million~~During the forbearance period, (i) the Ad Hoc Group ~~compared~~has agreed to ~~current~~forbear ~~liabilities~~from exercising certain of ~~approximately~~their ~~$73.1~~default-related ~~million,~~rights ~~resulting~~and inremedies aagainst ~~working~~our ~~capital~~subsidiary ~~deficit~~and us and to negotiate and effectuate restructuring of ~~approximately~~our $6financial affairs and (ii) we have agreed, among other items, to provide the Ad Hoc Group with certain financial and related information on an on-going basis.0 ~~million~~We cannot provide any assurance as to the form of any such potential restructuring, or its timing, or whether we will be able to restructure our financial affairs in part or in full.

ItAlthough iswe ~~possible~~do ~~that~~not wehave ~~will~~any ~~seek~~current ~~additional~~plans ~~financing~~to do so, ~~sell~~it ~~certain~~is ofpossible ~~our~~that ~~oil~~we ~~and~~may ~~gas~~seek ~~properties,~~to borrow additional funds or to raise capital through the sale of additional shares of our common stock at any time in the future, in order to ~~eliminate~~fund ~~our~~future ~~working~~drilling ~~capital~~activities, ~~deficit~~to ~~and/~~develop our existing acreage further, or to ~~fund~~acquire ~~our~~acreage ~~future~~or ~~drilling~~interests ~~activities~~in other oil and gas properties.

Litigation

As of ~~September~~March 3031, ~~2014~~2015, we were not subject to any material known, pending or threatened ~~material~~ litigation.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

3427

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4. CONTROLS AND PROCEDURES

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Principal Accounting Officer, evaluated the effectiveness of ~~the~~ the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) ~~under~~ under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and the Principal Accounting Officer concluded that the Company’s internal controls over financial reporting were effective as of ~~September~~March 3031, ~~2014~~2015.

35During the quarter ended March 31, 2015, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not currently a party to any material legal proceedings.

ITEM IA. RISK FACTORS.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

There were no sales of unregistered equity securities during the quarter ended March 31, 2015.

There were no repurchases of our common stock during the quarter ended March 31, 2015. We do not currently have an announced repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

We continue to be in default under the terms of certain notes we sold in August 2014 (the “August Notes”) as disclosed in our Current Report on Form 8-K filed with the SEC on April 7, 2015. As of May 7, 2015, we are in default under the August Notes in the total amount of approximately $175 million. The interest due but unpaid as of such date was approximately $5.8 million.

ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS.

Exhibit Description of Exhibit

Exhibit		Description of Exhibit

2.1		Agreement and Plan of Merger among Eternal Energy Corp., Eternal Sub Corp. and American Eagle Energy Inc., dated April 8, 2011. (Incorporated by reference to Exhibit 2.1 of our Registration Statement on Form S-4 filed May 4, 2011.)
2.1(a)		First Amendment to Agreement and Plan of Merger among Eternal Energy Corp., Eternal Sub Corp. and American Eagle Energy Inc., dated September 28, 2011. (Incorporated by reference to Exhibit 2.1(a) of our Current Report on Form 8-K filed September 28, 2011.)
3(i).1		Articles of Incorporation filed with the Nevada Secretary of State on July 25, 2003. (Incorporated by reference to Exhibit 3.1 of our Form 10-SB filed August 18, 2004.)
3(i).2		Certificate of Change filed with the Nevada Secretary of State effective November 7, 2005. (Incorporated by reference to Exhibit 3(i).2 of our Current Report on Form 8-K filed November 9, 2005.)
3(i).3		Articles of Merger filed with the Nevada Secretary of State effective November 7, 2005. (Incorporated by reference to Exhibit 3(i).3 of our Current Report on Form 8-K filed November 9, 2005.)
3(i).4		Articles of Merger filed with the Nevada Secretary of State effective November 30, 2011. (Incorporated by reference to Exhibit 3(i).4 of our Current Report on Form 8-K filed December 20, 2011.)
3(i).5		Articles of Merger filed with the Nevada Secretary of State effective November 30, 2011. (Incorporated by reference to Exhibit 3(i).5 of our Current Report on Form 8-K filed December 20, 2011.)
3(i).6		Certificate of Change filed with the Nevada Secretary of State effective November 30, 2011. (Incorporated by reference to Exhibit 3(i).6 of our Current Report on Form 8-K filed December 20, 2011.)
3(i).7		Certificate of Change filed with the Nevada Secretary of State effective March 18, 2014. (Incorporated by reference to Exhibit 3(i).7 of our Current Report on Form 8-K filed on March 21, 2014.)
3(ii).1		Bylaws, adopted July 18, 2003. (Incorporated by reference to Exhibit 3.2 of our Form 10-SB filed August 18, 2004.)
3(ii).2		Amendment No. 1 to Bylaws, adopted November 4, 2005. (Incorporated by reference to Exhibit 3(ii) of our Current Report on Form 8-K filed November 9, 2005.)
3(ii).3		Amendment No. 2 to Bylaws, adopted February 22, 2011. (Incorporated by reference to Exhibit 3(ii).3 of our Current Report on Form 8-K filed February 23, 2011.)
4.1		American Eagle Energy Corporation 2012 Equity Incentive Plan. (Incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.2		Non-qualified Stock Option Agreement, dated as of October 30, 2009, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.2 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.3		Non-qualified Stock Option Agreement, dated as of October 30, 2009, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.3 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.4		Non-qualified Stock Option Agreement, dated as of October 30, 2009, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.4 of our Registration Statement on Form S-8 filed February 28, 2012.)

2.1	Agreement and Plan of Merger among Eternal Energy Corp., Eternal Sub Corp. and American Eagle Energy Inc., dated April 8, 2011. (Incorporated by reference to Exhibit 2.1 of our Registration Statement on Form S-4 filed May 4, 2011.)
2.1(a)	First Amendment to Agreement and Plan of Merger among Eternal Energy Corp., Eternal Sub Corp. and American Eagle Energy Inc., dated September 28, 2011. (Incorporated by reference to Exhibit 2.1(a) of our Current Report on Form 8-K filed September 28, 2011.)
3(i).1	Articles of Incorporation filed with the Nevada Secretary of State on July 25, 2003. (Incorporated by reference to Exhibit 3.1 of our Form 10-SB filed August 18, 2004.)
3(i).2	Certificate of Change filed with the Nevada Secretary of State effective November 7, 2005. (Incorporated by reference to Exhibit 3(i).2 of our Current Report on Form 8-K filed November 9, 2005.)
3(i).3	Articles of Merger filed with the Nevada Secretary of State effective November 7, 2005. (Incorporated by reference to Exhibit 3(i).3 of our Current Report on Form 8-K filed November 9, 2005.)
3(i).4	Articles of Merger filed with the Nevada Secretary of State effective November 30, 2011. (Incorporated by reference to Exhibit 3(i).4 of our Current Report on Form 8-K filed December 20, 2011.)
3(i).5	Articles of Merger filed with the Nevada Secretary of State effective November 30, 2011. (Incorporated by reference to Exhibit 3(i).5 of our Current Report on Form 8-K filed December 20, 2011.)
3(i).6	Certificate of Change filed with the Nevada Secretary of State effective November 30, 2011. (Incorporated by reference to Exhibit 3(i).6 of our Current Report on Form 8-K filed December 20, 2011.)
3(i).7	Certificate of Change filed with the Nevada Secretary of State effective March 18, 2014. (Incorporated by reference to Exhibit 3(i).7 of our Current Report on Form 8-K filed on March 21, 2014.)
3(ii).1	Bylaws, adopted July 18, 2003. (Incorporated by reference to Exhibit 3.2 of our Form 10-SB filed August 18, 2004.)
3(ii).2	Amendment No. 1 to Bylaws, adopted November 4, 2005. (Incorporated by reference to Exhibit 3(ii) of our Current Report on Form 8-K filed November 9, 2005.)
3(ii).3	Amendment No. 2 to Bylaws, adopted February 22, 2011. (Incorporated by reference to Exhibit 3(ii).3 of our Current Report on Form 8-K filed February 23, 2011.)
4.1	American Eagle Energy Corporation 2012 Equity Incentive Plan. (Incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.2	Non-qualified Stock Option Agreement, dated as of October 30, 2009, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.2 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.3	Non-qualified Stock Option Agreement, dated as of October 30, 2009, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.3 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.4	Non-qualified Stock Option Agreement, dated as of October 30, 2009, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.4 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.5	Non-qualified Stock Option Agreement, dated as of December 30, 2010, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.5 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.6	Non-qualified Stock Option Agreement, dated as of December 30, 2010, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 4.6 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.7	American Eagle Energy Corporation 2013 Equity Incentive Plan. (Incorporated by reference to Exhibit 4.7 of our Annual Report on Form 10-K filed March 28, 2014.)
4.8	Non-qualified Stock Option Agreement, dated as of December 30, 2010, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 4.8 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.9	Non-qualified Stock Option Agreement, dated as of December 28, 2011, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.9 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.10	Non-qualified Stock Option Agreement, dated as of December 28, 2011, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.10 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.11	Reserved for future use.
4.12	Non-qualified Stock Option Agreement, dated as of December 28, 2011, by and between the Registrant and Kirk Stingley. (Incorporated by reference to Exhibit 4.12 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.13	Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.13 of our Annual Report on Form 10-K filed March 28, 2014.)
4.14	Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 4.14 of our Annual Report on Form 10-K filed March 28, 2014.)

4.5		Non-qualified Stock Option Agreement, dated as of December 30, 2010, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.5 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.6		Non-qualified Stock Option Agreement, dated as of December 30, 2010, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 4.6 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.7		American Eagle Energy Corporation 2013 Equity Incentive Plan. (Incorporated by reference to Exhibit 4.7 of our Annual Report on Form 10-K filed March 28, 2014.)
4.8		Non-qualified Stock Option Agreement, dated as of December 30, 2010, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 4.8 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.9		Non-qualified Stock Option Agreement, dated as of December 28, 2011, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.9 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.10		Non-qualified Stock Option Agreement, dated as of December 28, 2011, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.10 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.11		Reserved for future use.
4.12		Non-qualified Stock Option Agreement, dated as of December 28, 2011, by and between the Registrant and Kirk Stingley. (Incorporated by reference to Exhibit 4.12 of our Registration Statement on Form S-8 filed February 28, 2012.)
4.13		Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.13 of our Annual Report on Form 10-K filed March 28, 2014.)
4.14		Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 4.14 of our Annual Report on Form 10-K filed March 28, 2014.)
4.15		Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Kirk A. Stingley. (Incorporated by reference to Exhibit 4.15 of our Annual Report on Form 10-K filed March 28, 2014.)
4.16		Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 4.16 of our Annual Report on Form 10-K filed March 28, 2014.)
4.17		Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.17 of our Annual Report on Form 10-K filed March 28, 2014.)
4.18		Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.18 of our Annual Report on Form 10-K filed March 28, 2014.)
4.19		Non-qualified Stock Option Agreement, dated as of February 21, 2012, by and between the Registrant and Andrew P. Calerich. (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed February 21, 2012.)
4.20		Non-qualified Stock Option Agreement, dated as of November 14, 2013, by and between the Registrant and James N. Whyte. (Incorporated by reference to Exhibit 4.20 of our Current Report on Form 8-K filed November 14, 2013.)
4.21		Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Andrew P. Calerich. (Incorporated by reference to Exhibit 4.21 of our Annual Report on Form 10-K filed March 28, 2014.)
4.22		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.22 of our Annual Report on Form 10-K filed March 28, 2014.)
4.23		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 4.23 of our Annual Report on Form 10-K filed March 28, 2014.)
4.24		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Kirk A. Stingley. (Incorporated by reference to Exhibit 4.24 of our Annual Report on Form 10-K filed March 28, 2014.)
4.25		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 4.25 of our Annual Report on Form 10-K filed March 28, 2014.)
4.26		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.26 of our Annual Report on Form 10-K filed March 28, 2014.)
4.27		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.27 of our Annual Report on Form 10-K filed March 28, 2014.)
4.28		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Andrew P. Calerich. (Incorporated by reference to Exhibit 4.28 of our Annual Report on Form 10-K filed March 28, 2014.)
4.29		Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and James N. Whyte. (Incorporated by reference to Exhibit 4.29 of our Annual Report on Form 10-K filed March 28, 2014.)
10.1		Agreement and Plan of Merger between Golden Hope Resources Corp. (renamed Eternal Energy Corp.) and Eternal Energy Corp., filed with the Nevada Secretary of State effective November 7, 2005. (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed November 9, 2005.)
10.2		Reserved for future use.
10.3		Purchase and Sale Agreement, dated June 18, 2010, between Eternal Energy Corp. and American Eagle Energy Inc. (Incorporated by reference to Exhibit 10.3 of our Quarterly Report on Form 10-Q filed August 16, 2010.)
10.4		Restricted Common Stock Purchase Agreement, dated January 4, 2013, by and between American Eagle Energy Corporation and Power Energy Holdings, LLC. (Incorporated by reference to Exhibit 10.4 of our Quarterly Report on Form 10-Q filed May 14, 2013.)
10.5		Common Stock Purchase Agreement, dated August 9, 2013, by and between American Eagle Energy Corporation and Power Energy Holdings, LLC. (Incorporated by reference to Exhibit 10.5 of our Quarterly Report on Form 10-Q filed August 19, 2013.)

4.15	Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Kirk A. Stingley. (Incorporated by reference to Exhibit 4.15 of our Annual Report on Form 10-K filed March 28, 2014.)
4.16	Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 4.16 of our Annual Report on Form 10-K filed March 28, 2014.)
4.17	Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.17 of our Annual Report on Form 10-K filed March 28, 2014.)
4.18	Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.18 of our Annual Report on Form 10-K filed March 28, 2014.)
4.19	Non-qualified Stock Option Agreement, dated as of February 21, 2012, by and between the Registrant and Andrew P. Calerich. (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed February 21, 2012.)
4.20	Non-qualified Stock Option Agreement, dated as of November 14, 2013, by and between the Registrant and James N. Whyte. (Incorporated by reference to Exhibit 4.20 of our Current Report on Form 8-K filed November 14, 2013.)
4.21	Non-qualified Stock Option Agreement, dated as of December 14, 2012, by and between the Registrant and Andrew P. Calerich. (Incorporated by reference to Exhibit 4.21 of our Annual Report on Form 10-K filed March 28, 2014.)
4.22	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 4.22 of our Annual Report on Form 10-K filed March 28, 2014.)
4.23	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 4.23 of our Annual Report on Form 10-K filed March 28, 2014.)
4.24	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Kirk A. Stingley. (Incorporated by reference to Exhibit 4.24 of our Annual Report on Form 10-K filed March 28, 2014.)
4.25	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 4.25 of our Annual Report on Form 10-K filed March 28, 2014.)
4.26	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Paul E. Rumler. (Incorporated by reference to Exhibit 4.26 of our Annual Report on Form 10-K filed March 28, 2014.)
4.27	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and John Anderson. (Incorporated by reference to Exhibit 4.27 of our Annual Report on Form 10-K filed March 28, 2014.)
4.28	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and Andrew P. Calerich. (Incorporated by reference to Exhibit 4.28 of our Annual Report on Form 10-K filed March 28, 2014.)
4.29	Non-qualified Stock Option Agreement, dated as of December 13, 2013, by and between the Registrant and James N. Whyte. (Incorporated by reference to Exhibit 4.29 of our Annual Report on Form 10-K filed March 28, 2014.)
10.1	Agreement and Plan of Merger between Golden Hope Resources Corp. (renamed Eternal Energy Corp.) and Eternal Energy Corp., filed with the Nevada Secretary of State effective November 7, 2005. (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed November 9, 2005.)
10.2	Reserved for future use.
10.3	Purchase and Sale Agreement, dated June 18, 2010, between Eternal Energy Corp. and American Eagle Energy Inc. (Incorporated by reference to Exhibit 10.3 of our Quarterly Report on Form 10-Q filed August 16, 2010.)
10.4	Restricted Common Stock Purchase Agreement, dated January 4, 2013, by and between American Eagle Energy Corporation and Power Energy Holdings, LLC. (Incorporated by reference to Exhibit 10.4 of our Quarterly Report on Form 10-Q filed May 14, 2013.)
10.5	Common Stock Purchase Agreement, dated August 9, 2013, by and between American Eagle Energy Corporation and Power Energy Holdings, LLC. (Incorporated by reference to Exhibit 10.5 of our Quarterly Report on Form 10-Q filed August 19, 2013.)
10.6	Purchase, Sale and Option Agreement, dated August 12, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6 of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.6a	First Amendment to Purchase, Sale and Option Agreement, dated September 30, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6a of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.6b	Second Amendment to Purchase, Sale and Option Agreement, dated October 2, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6b of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.6c	Notice of Exercise pursuant to the Purchase and Sale and Option Agreement, dated October 2, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6c of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.6d	Third Amendment to the Purchase, Sale and Option Agreement, dated March 27, 2014, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6d of our Annual Report on Form 10-K filed March 28, 2014.)
10.7	Underwriting Agreement, dated March 18, 2014, by and between American Eagle Energy Corporation and Johnson Rice & Company LLC. (Incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K, filed March 19, 2014.)
10.8	Purchase Agreement, dated October 2, 2013, by and between American Eagle Energy Corporation and Northland Securities, Inc. (Incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed on October 2, 2013.)

10.6		Purchase, Sale and Option Agreement, dated August 12, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6 of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.6a		First Amendment to Purchase, Sale and Option Agreement, dated September 30, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6a of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.6b		Second Amendment to Purchase, Sale and Option Agreement, dated October 2, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6b of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.6c		Notice of Exercise pursuant to the Purchase and Sale and Option Agreement, dated October 2, 2013, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.6c of our Quarterly Report on Form 10-Q filed November 14, 2013.)
10.7		Underwriting Agreement, dated March 18, 2014, by and between American Eagle Energy Corporation and Johnson Rice & Company LLC. (Incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K, filed March 19, 2014.)
10.8		Purchase Agreement, dated October 2, 2013, by and between American Eagle Energy Corporation and Northland Securities, Inc. (Incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed on October 2, 2013.)
10.9		Purchase Agreement, dated October 9, 2013, by and between American Eagle Energy Corporation and Northland Securities, Inc. (Incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed on October 10, 2013.)
10.10		Reserved for future use.
10.11		Amended and Restated Employment Agreement, effective May 1, 2013, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 10.11 of our Annual Report on Form 10-K filed March 28, 2014.)
10.12		Employment Agreement, effective May 1, 2013, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 10.12 of our Annual Report on Form 10-K filed March 28, 2014.)
10.13		Employment Agreement, effective May 1, 2013, by and between the Registrant and Kirk Stingley. (Incorporated by reference to Exhibit 10.13 of our Annual Report on Form 10-K filed March 28, 2014.)
10.14		Consulting Agreement, effective November 30, 2011, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 10.41 of our Annual Report on Form 10-K filed April 16, 2012.)
10.15		Reserved for future use.
10.16		Reserved for future use.
10.17		Carry Agreement, dated August 12, 2013, by and among American Eagle Energy Corporation, AMZG, Inc. and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.20 of our Quarterly Report on Form 10-Q filed August 19, 2013.)
10.18		Farm-Out Agreement, dated August 12, 2013, by and among American Eagle Energy Corporation, AMZG, Inc. and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.21 of our Quarterly Report on Form 10-Q, filed August 19, 2013.)
10.19		Letter Agreement, dated March 21, 2014, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.19 of our Annual Report on Form 10-K filed March 28, 2014.)
10.19a		Amendment and Addendum to Letter Agreement, dated March 27, 2014, by and among American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.19a of our Annual Report on Form 10-K filed March 28, 2014.)
10.20		Credit Agreement, dated August 19, 2013, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc., as administrative agent for such lenders. (Incorporated by reference to Exhibit 10.20 of our Form 8-K filed August 23, 2013.)
10.20a		First Amendment to the Credit Agreement, dated October 2, 2013, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.20a of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.20b		Second Amendment to the Credit Agreement, dated October 2, 2013, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.20b of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.20c		Third Amendment to the Credit Agreement, dated July 21, 2014, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.20c of our Quarterly Report on Form 10-Q filed August 4, 2014.)
10.21		Promissory Note, dated August 19, 2013, by American Eagle Energy Corporation, payable to the order of Morgan Stanley Capital Group Inc. in the principal amount of $200,000,000. (Incorporated by reference to Exhibit 10.21 of our Form 8-K filed August 23, 2013.)
10.22		Pledge and Security Agreement, dated as of August 19, 2013, by and among American Eagle Energy Corporation, AMZG, Inc., AEE Canada, Inc., EERG Energy ULC, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.22 of our Form 8-K filed August 23, 2013.)

10.9	Purchase Agreement, dated October 9, 2013, by and between American Eagle Energy Corporation and Northland Securities, Inc. (Incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed on October 10, 2013.)
10.10	Reserved for future use.
10.11	Amended and Restated Employment Agreement, effective May 1, 2013, by and between the Registrant and Bradley M. Colby. (Incorporated by reference to Exhibit 10.11 of our Annual Report on Form 10-K filed March 28, 2014.)
10.12	Employment Agreement, effective May 1, 2013, by and between the Registrant and Thomas G. Lantz. (Incorporated by reference to Exhibit 10.12 of our Annual Report on Form 10-K filed March 28, 2014.)
10.13	Employment Agreement, effective May 1, 2013, by and between the Registrant and Kirk Stingley. (Incorporated by reference to Exhibit 10.13 of our Annual Report on Form 10-K filed March 28, 2014.)
10.14	Consulting Agreement, effective November 30, 2011, by and between the Registrant and Richard Findley. (Incorporated by reference to Exhibit 10.41 of our Annual Report on Form 10-K filed April 16, 2012.)
10.15	Reserved for future use.
10.16	Reserved for future use.
10.17	Carry Agreement, dated August 12, 2013, by and among American Eagle Energy Corporation, AMZG, Inc. and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.20 of our Quarterly Report on Form 10-Q filed August 19, 2013.)
10.18	Farm-Out Agreement, dated August 12, 2013, by and among American Eagle Energy Corporation, AMZG, Inc. and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.21 of our Quarterly Report on Form 10-Q, filed August 19, 2013.)
10.19	Letter Agreement, dated March 21, 2014, by and between American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.19 of our Annual Report on Form 10-K filed March 28, 2014.)
10.19a	Amendment and Addendum to Letter Agreement, dated March 27, 2014, by and among American Eagle Energy Corporation and USG Properties Bakken I, LLC. (Incorporated by reference to Exhibit 10.19a of our Annual Report on Form 10-K filed March 28, 2014.)
10.20	Credit Agreement, dated August 19, 2013, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc., as administrative agent for such lenders. (Incorporated by reference to Exhibit 10.20 of our Form 8-K filed August 23, 2013.)
10.20a*	First Amendment to the Credit Agreement, dated October 2, 2013, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc.
10.20b*	Second Amendment to the Credit Agreement, dated October 2, 2013, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc.
10.20c	Third Amendment to the Credit Agreement, dated July 21, 2014, by and among American Eagle Energy Corporation, the lenders parties thereto, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.20c of our Quarterly Report on Form 10-Q filed August 4, 2014.)
10.21	Promissory Note, dated August 19, 2013, by American Eagle Energy Corporation, payable to the order of Morgan Stanley Capital Group Inc. in the principal amount of $200,000,000. (Incorporated by reference to Exhibit 10.21 of our Form 8-K filed August 23, 2013.)
10.22	Pledge and Security Agreement, dated as of August 19, 2013, by and among American Eagle Energy Corporation, AMZG, Inc., AEE Canada, Inc., EERG Energy ULC, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.22 of our Form 8-K filed August 23, 2013.)
10.23	Mortgage-Collateral Real Estate Mortgage, Deed of Trust, Indenture, Security Agreement, Fixture Filing, As-Extracted Collateral Filing, Financing Statement and Assignment of Production, dated as of August 19, 2013, by and among American Eagle Energy Corporation, AMZG, Inc., and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.23 of our Form 8-K filed August 23, 2013.)
10.24	Guaranty Agreement, dated as of August 19, 2013, by and among AMZG, Inc., AEE Canada Inc., EERG Energy ULC, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.24 of our Form 8-K filed August 23, 2013.)
10.25	Form of Warrant of American Eagle Energy Corporation. (Incorporated by reference to Exhibit 10.25 of our Form 8-K filed August 23, 2013.)
10.26	Reserved for future use.
10.27	Lease Agreement, dated January 1, 2009, by and between Eternal Energy Corp. and Oakley Ventures, LLC. (Incorporated by reference to Exhibit 10.27 of our Annual Report on Form 10-K filed March 23, 2010.)
10.27a	Lease Addendum, dated October 1, 2011, by and between Eternal Energy Corp. and Oakley Ventures, LLC, and Exhibit A thereto. (Incorporated by reference to Exhibit 10.27a of our Annual Report on Form 10-K filed April 16, 2012.)
10.27b	Lease Addendum, dated July 1, 2012, by and between American Eagle Energy Corporation and Oakley Ventures, LLC. (Incorporated by reference to Exhibit 10.27b of our Quarterly Report on Form 10-Q filed on August 20, 2012.)
10.27c	Lease Addendum, dated November 1, 2013, by and between American Eagle Energy Corporation and Oakley Ventures, LLC.
10.28*	Indenture, dated August 27, 2014, by and between American Eagle Energy Corporation and U.S. Bank National Association.

10.23		Mortgage-Collateral Real Estate Mortgage, Deed of Trust, Indenture, Security Agreement, Fixture Filing, As-Extracted Collateral Filing, Financing Statement and Assignment of Production, dated as of August 19, 2013, by and among American Eagle Energy Corporation, AMZG, Inc., and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.23 of our Form 8-K filed August 23, 2013.)
10.24		Guaranty Agreement, dated as of August 19, 2013, by and among AMZG, Inc., AEE Canada Inc., EERG Energy ULC, and Morgan Stanley Capital Group Inc. (Incorporated by reference to Exhibit 10.24 of our Form 8-K filed August 23, 2013.)
10.25		Form of Warrant of American Eagle Energy Corporation. (Incorporated by reference to Exhibit 10.25 of our Form 8-K filed August 23, 2013.)
10.26		Reserved for future use.
10.27		Lease Agreement, dated January 1, 2009, by and between Eternal Energy Corp. and Oakley Ventures, LLC. (Incorporated by reference to Exhibit 10.27 of our Annual Report on Form 10-K filed March 23, 2010.)
10.27a		Lease Addendum, dated October 1, 2011, by and between Eternal Energy Corp. and Oakley Ventures, LLC, and Exhibit A thereto. (Incorporated by reference to Exhibit 10.27a of our Annual Report on Form 10-K filed April 16, 2012.)
10.27b		Lease Addendum, dated July 1, 2012, by and between American Eagle Energy Corporation and Oakley Ventures, LLC. (Incorporated by reference to Exhibit 10.27b of our Quarterly Report on Form 10-Q filed on August 20, 2012.)
10.27c		Lease Addendum, dated November 1, 2013, by and between American Eagle Energy Corporation and Oakley Ventures, LLC. (Incorporated by reference to Exhibit 10.27c of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.28		Indenture, dated August 27, 2014, by and between American Eagle Energy Corporation and U.S. Bank National Association.
10.29		Purchase Agreement, dated August 13, 2014, by and between American Eagle Energy Corporation and GMP Securities L.P. (Incorporated by reference to Exhibit 10.29 of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.30		Registration Rights Agreement, dated August 27, 2014, by and among American Eagle Energy Corporation and GMP Securities L.P. (Incorporated by reference to Exhibit 10.30 of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.31		Credit Agreement, dated August 27, 2014, by and among American Eagle Energy Corporation, SunTrust Bank and SunTrust Robinson Humphrey, Inc. (Incorporated by reference to Exhibit 10.31 of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.32		Guarantee and Collateral Agreement, dated August 27, 2014, by and between American Eagle Energy Corporation, Grantors and SunTrust Bank. (Incorporated by reference to Exhibit 10.32 of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.33		Intercreditor Agreement, dated August 27, 2014, by and among American Eagle Energy Corporation, SunTrust Bank and U.S. Bank National Association. (Incorporated by reference to Exhibit 10.33 of our Quarterly Report on Form 10-Q filed November 6, 2014.)
10.34		Forbearance Agreement among the members of the ad hoc bondholders group and our subsidiary and us, dated April 2, 2015. (Incorporated by reference to Exhibit 10.34 of our Current Report on Form 8-K filed April 7, 2015.)
10.35		Reserved for future use.
10.36		Letter of Intent, dated February 22, 2011, by and between Eternal Energy Corp. and American Eagle Energy Inc. (Incorporated by reference to Exhibit 10.36 of our Annual Report on Form 10-K filed March 23, 2011.)
10.37		Engagement Letter for Professional Services, dated February 25, 2011, by and between Eternal Energy Corp. and C.K. Cooper & Company. (Incorporated by reference to Exhibit 10.37 of our Annual Report on Form 10-K filed March 23, 2011.)
10.38		Participation and Operating Agreement, dated April 15, 2011, by and among Eternal Energy Corp., AEE Canada Inc. and Passport Energy Inc. (Incorporated by reference to Exhibit 10.38 of our Registration Statement on Form S-4 filed May 4, 2011.)
10.38a		Amendment to the Participation and Operating Agreement, dated February 1, 2012, by and among Eerg Energy Ulc, Aee Canada Inc. and Passport Energy Inc. (Incorporated by reference to Exhibit 10.38a of our Annual Report on Form 10-K/A filed April 10, 2012.)
10.39^		Purchase and Sale Agreement, dated May 17, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.39 of our Amended Quarterly Report on Form 10-Q/A filed October 11, 2011.)
10.40^		Purchase and Sale Agreement, dated May 17, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.40 of our Amended Quarterly Report on Form 10-Q/A filed October 11, 2011.)
10.40a		First Amendment to Purchase and Sale Agreement, dated June 14, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.40a of our Quarterly Report on Form 10-Q filed August 18, 2011.)
10.40b		Second Amendment to Purchase and Sale Agreement, dated July 25, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.40b of our Quarterly Report on Form 10-Q filed August 18, 2011.)

10.29*	Purchase Agreement, dated August 13, 2014, by and between American Eagle Energy Corporation and GMP Securities L.P.
10.30*	Registration Rights Agreement, dated August 27, 2014, by and among American Eagle Energy Corporation and GMP Securities L.P.
10.31*	Credit Agreement, dated August 27, 2014, by and among American Eagle Energy Corporation, SunTrust Bank and SunTrust Robinson Humphrey, Inc.
10.32*	Guarantee and Collateral Agreement, dated August 27, 2014, by and between American Eagle Energy Corporation, Grantors and SunTrust Bank.
10.33*	Intercreditor Agreement, dated August 27, 2014, by and among American Eagle Energy Corporation, SunTrust Bank and U.S. Bank National Association.
10.34	Reserved for future use.
10.35	Reserved for future use.
10.36	Letter of Intent, dated February 22, 2011, by and between Eternal Energy Corp. and American Eagle Energy Inc. (Incorporated by reference to Exhibit 10.36 of our Annual Report on Form 10-K filed March 23, 2011.)
10.37	Engagement Letter for Professional Services, dated February 25, 2011, by and between Eternal Energy Corp. and C.K. Cooper & Company. (Incorporated by reference to Exhibit 10.37 of our Annual Report on Form 10-K filed March 23, 2011.)
10.38	Participation and Operating Agreement, dated April 15, 2011, by and among Eternal Energy Corp., AEE Canada Inc. and Passport Energy Inc. (Incorporated by reference to Exhibit 10.38 of our Registration Statement on Form S-4 filed May 4, 2011.)
10.38a	Amendment to the Participation and Operating Agreement, dated February 1, 2012, by and among Eerg Energy Ulc, Aee Canada Inc. and Passport Energy Inc. (Incorporated by reference to Exhibit 10.38a of our Annual Report on Form 10-K/A filed April 10, 2012.)
10.39^	Purchase and Sale Agreement, dated May 17, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.39 of our Amended Quarterly Report on Form 10-Q/A filed October 11, 2011.)
10.40^	Purchase and Sale Agreement, dated May 17, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.40 of our Amended Quarterly Report on Form 10-Q/A filed October 11, 2011.)
10.40a	First Amendment to Purchase and Sale Agreement, dated June 14, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.40a of our Quarterly Report on Form 10-Q filed August 18, 2011.)
10.40b	Second Amendment to Purchase and Sale Agreement, dated July 25, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.40b of our Quarterly Report on Form 10-Q filed August 18, 2011.)
10.41^	Purchase and Sale Agreement, dated November 15, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.38a of our Annual Report on Form 10-K/A filed April 10, 2012.)
10.42^	Carry Agreement, dated April 16, 2012, by and among American Eagle Energy Corporation, American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC, and Exhibit C thereto. (Incorporated by reference to Exhibit 10.42 of our Quarterly Report on Form 10-Q filed on August 20, 2012.
10.43	First Amendment to Carry Agreement, dated July 15, 2012, by and among American Eagle Energy Corporation, American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.43 of our Quarterly Report on Form 10-Q filed on August 20, 2012.)
10.44	ISDA Master Agreement, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.44 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.44a	Schedule to the 2002 ISDA Master Agreement, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.44a of our Annual Report on Form 10-K filed on April 16, 2013.)
10.45	Commodity Swap Transaction Confirmation, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.45 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.46	Security Agreement, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.46 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.47	Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment of Production and Revenue, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.47 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.48	Purchase and Sale Agreement, dated December 20, 2012, by and between USG Properties Bakken I, LLC and American Eagle Energy Corporation. (Incorporated by reference to Exhibit 10.48 of our Annual Report on Form 10-K filed on April 16, 2013.)

10.41^		Purchase and Sale Agreement, dated November 15, 2011, by and among Eternal Energy Corp., American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.38a of our Annual Report on Form 10-K/A filed April 10, 2012.)
10.42^		Carry Agreement, dated April 16, 2012, by and among American Eagle Energy Corporation, American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC, and Exhibit C thereto. (Incorporated by reference to Exhibit 10.42 of our Quarterly Report on Form 10-Q filed on August 20, 2012.
10.43		First Amendment to Carry Agreement, dated July 15, 2012, by and among American Eagle Energy Corporation, American Eagle Energy Inc., and NextEra Energy Gas Producing, LLC. (Incorporated by reference to Exhibit 10.43 of our Quarterly Report on Form 10-Q filed on August 20, 2012.)
10.44		ISDA Master Agreement, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.44 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.44a		Schedule to the 2002 ISDA Master Agreement, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.44a of our Annual Report on Form 10-K filed on April 16, 2013.)
10.45		Commodity Swap Transaction Confirmation, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.45 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.46		Security Agreement, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.46 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.47		Mortgage, Security Agreement, Fixture Filing, Financing Statement and Assignment of Production and Revenue, dated December 27, 2012, by and among American Eagle Energy Corporation, AMZG, Inc., and Macquarie Bank Limited. (Incorporated by reference to Exhibit 10.47 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.48		Purchase and Sale Agreement, dated December 20, 2012, by and between USG Properties Bakken I, LLC and American Eagle Energy Corporation. (Incorporated by reference to Exhibit 10.48 of our Annual Report on Form 10-K filed on April 16, 2013.)
10.49		Purchase and Sale Agreement, dated November 20, 2012, by and between SM Energy Company and American Eagle Energy Corporation. (Incorporated by reference to Exhibit 10.49 of our Annual Report on Form 10-K filed on April 16, 2013.)
21.1		List of Subsidiaries. (Incorporated by reference to Exhibit 21.1 of our Annual Report on Form 10-K filed March 31, 2015.)
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1		Letter from SunTrust Bank, as control agent, dated April 2, 2015. (Incorporated by reference to Exhibit 99.1 of our Current Report on Form 8-K filed April 7, 2015.)
99.2		Letter from SunTrust Bank, as administrative agent, dated April 2, 2015. (Incorporated by reference to Exhibit 99.2 of our Current Report on Form 8-K filed April 7, 2015.)

10.49		Purchase and Sale Agreement, dated November 20, 2012, by and between SM Energy Company and American Eagle Energy Corporation. (Incorporated by reference to Exhibit 10.49 of our Annual Report on Form 10-K filed on April 16, 2013.)
EXHIBIT 101.INS*		XBRL INSTANCE DOCUMENT
21.1		List of Subsidiaries. (Incorporated by reference to Exhibit 21.1 of our Annual Report on Form 10-K filed April 16, 2013.)
EXHIBIT 101.SCH*		XBRL TAXONOMY EXTENSION SCHEMA
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 101.CAL*		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 101.DEF*		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 101.LAB*		XBRL TAXONOMY EXTENSION LABEL LINKBASE
32.2*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 101.PRE*		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

Filed herewith.

Portions omitted pursuant to a request for confidential treatment.

4033

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

AMERICAN EAGLE ENERGY CORPORATION
(Registrant)
November 6, 2014	/s/ Bradley M. Colby
May 8, 2015	/s/ BRADLEY M. COLBY
	Bradley M. Colby
	President and Chief Executive Officer

4134

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