Eagle Energy Trust Announces Closing of Sale of Permian Properties

CALGARY, ALBERTA--(Marketwired - Aug. 29, 2014) - Eagle Energy Trust (TSX:EGL.UN) (the "Trust" or "Eagle") is pleased to announce that its US operating subsidiary has closed the sale of its entire working interest in its oil and natural gas properties in the Permian Basin, located near Midland, Texas, to an undisclosed buyer for cash consideration of $US 140 million before closing adjustments (the "Disposition").

The Disposition means Eagle's go-forward corporate product mix moves from about 82% oil to 96% oil, which is expected to increase its average netback per barrel of oil equivalent. The $US 140 million sale proceeds (before transaction costs and closing adjustments) exceed the proved plus probable reserve value (discounted at 10%) of the Permian Basin properties in Eagle's independent December 31, 2013 reserves report by $US 42.7 million. Based on the Trust units currently outstanding, this excess equates approximately to $CA 1.34 per unit above Eagle's previously stated reserve value.

Eagle's working interest production as of July 1, 2014, excluding the Permian Basin assets, was approximately 1,940 barrels of oil equivalent per day. The Trust intends to use the net proceeds from the Disposition to fully retire its outstanding advances under its existing credit facility and expects to have approximately $US 55 million of cash remaining (before closing adjustments). In addition, Eagle's borrowing base after giving effect to the Disposition has been redetermined to $US 55 million, which also constitutes its semi-annual September 1, 2014 borrowing base. Eagle intends to re-deploy the capital to acquire other assets expeditiously with a view to significantly improve its sustainability and lower its payout ratio.

Note Regarding Forward-Looking Statements

Certain of the statements made and information contained in this news release are forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historic fact are forward-looking statements.

Forward‐looking statements include those pertaining to the following: the amount of the Disposition sale proceeds; the intended use of the sale proceeds including, but not limited to, the repayment in full of Eagle's outstanding advances under its existing credit facility; the estimated amount of cash that will remain (before closing adjustments) and the estimated amount that will be available on the borrowing base on its remaining assets after the Disposition is completed; the expected change after the Disposition is completed in Eagle's go-forward corporate product mix from about 82% oil to 96% oil, which is expected to increase its average netback per barrel of oil equivalent; and Eagle's expectations regarding the redeployment of the net proceeds from the Disposition, including for the acquisition of other assets that are expected to significantly improve Eagle's sustainability and lower its payout ratio.