over a whisky, page-15

Like seriously this so exactly describes the 2300 acres we apparently offered to Terrace for $5mil its scary.

If the new JV is not on similar terms to this weve been dudded.



Highlights of the Acquisition

The Acquired Assets have a long reserve life and are expected to generate long term sustainable cash flow, which complements the strong near-term cash flow of Eagle's existing assets in the Salt Flat field, which assets are also located in Texas. Eagle and the seller have secured a drilling rig and completion services for these assets. Eagle expects this will ensure that the capital program will be executed as planned. Eagle anticipates increasing production in these assets by drilling at least ten wells per year.

The Acquisition has the following attributes:

•92.5% working interest in 3,175 gross (2,937 net) acres of lands.
•Working interest in 31 gross (28.4 net) producing wells and three gross (2.76 net) non-producing wells and one gross (0.92 net) salt water disposal well.
•The Acquired Assets will be 100% operated by Eagle following a short transition period from the current operator.
•Current working interest production of approximately 600 boe/d, which Eagle anticipates it will increase to approximately 1,000 boe/d by year end.
•For 2011, the field netback for the Acquired Assets was US$46.60 per boe.
•Estimated reserves of approximately 8.1 million boe proved and 10.2 million boe proved plus probable, as of March 31, 2012, based on an independent reserves evaluation report prepared by Netherland, Sewell and Associates Inc.
•The reserves are being acquired at US$14.00 per proved boe and US$11.09 per proved plus probable boe (before giving effect to future development costs).
•Oil and natural gas liquids represent approximately 88% of the total proved plus probable reserves with natural gas representing the remaining 12% (using a boe conversion ratio of six thousand cubic feet ("Mcf") to one barrel ("bbl")).
•Development inventory of approximately 90 locations - an eight year inventory at a planned pace of drilling ten to twelve wells per year.
•Long life reserves that typically have 70% of estimated recoverable hydrocarbons remaining after drilling cost payout.
•Reserve life index ("RLI") of 46.7 years, calculated on the basis of estimated proved plus probable reserves divided by current working interest production.
•Eagle has agreed to purchase the seller's remaining 7.5% working interest (the "Remaining Interest") in the properties within 12 months at fair market value. The terms of the Acquisition restrict the seller from, indirectly or directly, soliciting, negotiating or taking any other actions or steps in respect of a sale or possible sale of the Remaining Interest to any third party prior to April 30, 2013.
Anticipated Benefits and Upside Potential Associated With the Acquisition

•Creates a new operational area, located in the Permian Basin, which diversifies Eagle's portfolio of petroleum assets.
•Increases Eagle's portfolio of low risk drilling locations by 3.5 times, from 36 to 126 locations. The leases comprising the Acquired Assets are predominantly held by production, allowing Eagle to proceed at its own development pace.
•Improves Eagle's overall RLI by approximately 90% to 15.3 years.
•Increases the Trust's enterprise value by approximately 50%, while maintaining a low-leverage balance sheet (debt to cash flow ratio under 0.5:1).
•Enables Eagle to increase Eagle's borrowing base under its existing credit facility ("Credit Facility") to US$47 million from US$31 million.
•Is immediately accretive to the Trust's reserves per unit and net asset value per unit. Although slightly dilutive in the near term on a cash flow per unit and production per unit basis, distributions remain comfortably sustainable throughout 2012, at current cost and commodity price levels.
•The Acquisition will be accretive to cash flow per unit and production per unit when the estimated 2012 exit rate of approximately 1,000 boe/d is achieved, and becomes increasingly accretive as Eagle grows production.
Mr. Clark also said, "These properties consist of very long life oil reserves. This transaction shares many of the positive characteristics of Eagle's first acquisition. We will have a short and well defined transition period with the seller before taking over operatorship and will leverage the seller's expertise and contacts in this new area. Also, we have relatively minor near term drilling obligations after which we expect to hold all the land by production. This gives us a high degree of flexibility to vary the pace of drilling as costs and commodity prices may dictate, without being at risk of losing any of our acreage. As with the Salt Flat assets, we intend to execute a capital program prior to year end to increase production from these properties. We plan to double the current level of production from the Acquired Assets by the end of 2013 and, like the Salt Flat assets, we believe the Acquired Assets will be similarly capable of sustaining our 50% payout ratio. We anticipate that the Acquired Assets will ultimately generate sufficient cash flow to fund its share of the monthly distributions the Trust pays to its unitholders, as well as 100% of the capital investment necessary to replace normal production declines on the property while maintaining moderate growth in production."