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American Energy Development Corp. (AEDC) Offers Solid FY12 Results Driven By Production In Michigan, Details Substantial Acreage Acquisitions

American Energy Development, the rapidly emerging oil and gas E&P with some 30k acres of prime hydrocarbon territory in proven basins, both domestically here in Michigan (5,343 acres in the Dansville and White-tail Niagaran Reef prospects), as well as in the UK's underexplored onshore potential in Windsor (24,700 acres in the Weald Basin), offered financial results for FY12 (ended June 30) today, alongside a 10-K filing.

Chief among the highlights is the transitional Brown 2-12 well on the Dansville prospect, which took AEDC out of mere exploration and into production as it went online in December of last year, pumping some 1,110 bbls ($92.25 average) or more net through full production to mid-year with very little water cut. In addition to closing on the 24.7k-acre Windsor prospect, the company nailed down another big addition to their footprint in Michigan, with the completion of the lease acquisition on the 4k-acre White-tail prospect.

CEO of AEDC, Herold Ribsskog, clearly pleased by the over $89k in revenues generated, underscored the substantial acreage additions also secured during the last year, citing the White-tail prospect in particular as helping to really flesh out the company's strategic position in the proven Niagaran play. Given that the average Northern Michigan reef is usually a 50 to 400-acre wide, 200 to 7k-foot deep structure within the 12 to 15-mile wide oil bearing reef belt, AEDC's move to capture a larger strategic footprint in the roughly 2.5M-acre play is sound.

Ribsskog emphasized the established nature of the play, with its 110 or more fields representing reserves in excess of 1M bbls and asserted that the initial seismic survey data obtained from work done prior to the acquisition, offered a clear picture of five distinct reef prospects on new acreage. Ribsskog cited a planned 3D seismic study on the White-tail slated for 2013 and projected 2 to 3 drill sites being initially established as part of a larger program that should turn up the kind of rich, short-lead project stack which could spell some choice near term revenue for AEDC.

The plan for 2013 is to exit the year with multiple sites online and producing in conjunction with upgraded output from the Brown 2-12. Ribsskog assured investors that the company would continue to employ the latest methods for generating empirically validated analysis, like 3D seismic mapping, as AEDC progresses. Ribsskog expressed great confidence in this philosophy, that every project's economic feasibility is won or lost before the first production drill breaks ground, on the basis of superior information.

Indeed, knowledge is power and one of the driving forces behind AEDC's success thus far has been this firm commitment to utilizing the latest geological and geophysical technology to minimize shareholder risk. A serious desire for near-term revenue acid testing and a keen eye for building a diverse portfolio have reinforced the rest of the business model quite well. AEDC has a very solid stance from which to pursue yet more incrementally acquired acreage, to a great extent because of the company's rigorous due diligence attitude and emphasis on proven basins. There is tremendous upside potential in a rapidly emerging company like AEDC and these strong financials for the fiscal year go a long ways towards courting the kind of additional capital expenditure leeway needed to fully realize the obvious potential in Michigan, as well as the vast, less obvious potential in onshore UK hydrocarbons.

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