Eagle Energy Trust (EGL.UN-T C$11.30)
Patrick Bryden, CFA - 403-213-7750
(Scotia Capital Inc. - Canada)
2011 Financial Results Released; 2.0x Recycle Ratio on $50/boe Netback for 100% Oil Producer

Event
■ Eagle Energy Trust released its 2011 financial results.

Implications
■ Cash flow in line at $0.38/share on previously announced production volumes of 2,029 boe/d. Eagle's fourth quarter cash flow was mostly in line at $0.38/share, which is a strong finish to its first year of operations encountering its fair share of challenges.

■ Finding, development, and acquisition costs of $25.35/boe on a proved plus probable basis inclusive of future development capital also a solid result. Eagle's FD&A costs imply a 2.0x recycle ratio on the 100% light oil producer's $50/boe operating netback.

■ Strong sustainability anticipated in current oil environment. The company certainly has picked the right commodity for its structure, and offers investors solid sustainability in 2012 provided oil prices remain buoyant and the company's decline rate stays in check.

Recommendation
■ We maintain our target price of $11.50/unit and 2-Sector Perform rating.