Eternal Energy Corp. Announces Sale of Partial Interest in West Spyglass Prospect and Pebble Beach Prospect in North Dakota

LITTLETON, Colo., Dec. 1, 2011 /PRNewswire/ -- Eternal Energy Corp. (OTCBB: EERG) ("Eternal Energy" or the "Company") is pleased to announce today that the Company, along with its working interest partner and pending merger partner, American Eagle Energy Inc. ("American Eagle"), and a third party signed a Purchase and Sale Agreement for the sale by Eternal Energy and American Eagle of 75% of their respective working interests in the West Spyglass Prospect located in western Divide County, North Dakota and eastern Sheridan County, Montana.  Eternal Energy also announces today that is has agreed to sell 75% of its working interest in certain of its acreage in the Pebble Beach Prospect, which lies within the area of mutual interest of the West Spyglass Prospect.  The purchaser for both transactions is a wholly-owned subsidiary of a publicly traded company with a market cap in excess of $10 billion.

Gross proceeds to be received from the West Spyglass Prospect sale will be approximately $13.8 million, which will be divided equally between Eternal Energy and American Eagle.  Post-closing, the Company and American Eagle will collectively retain a 25% working interest in the West Spyglass Prospect acreage and will remain the operator on that acreage. 

Gross proceeds to be received from the Pebble Beach Prospect sale will approximate $1.9 million, all of which are to be received by Eternal Energy.  The number of net acres included in the Pebble Beach Prospect sale is 1,440.  Post-closing, the Company will retain a 25% working interest in the Pebble Beach Prospect acreage and will remain the operator on that acreage.

The West Spyglass Prospect and the Pebble Beach Prospect are Bakken and Three Forks plays.  Eternal Energy and American Eagle began jointly acquiring the 10,521 net acres in the West Spyglass Prospect in June 2011 with the intent of leveraging their existing leasehold and partnering with others to exploit the Bakken and Three Forks zones on highly prospective lands. 

"This transaction marks a significant milestone for our Company, along with the anticipated completion of our merger with American Eagle Energy," stated Brad Colby, the Company's President.  "The sale of partial interests in the West Spyglass Prospect and the Pebble Beach Prospect will significantly bolster our balance sheet and provide us with the near-term operating capital to aggressively implement our drilling program over the next year."  Mr. Colby continued,  "The timing of the closing of the transaction closely coincides with the anticipated spud date for the first well in our operated drilling program for the Spyglass and West Spyglass area."

The transactions are expected to close on or about December 14, 2011 and are subject to the completion of customary due diligence procedures.

About Eternal Energy Corp.:

Eternal Energy Corp. is an oil and gas company engaged in the exploration of petroleum and natural gas.  The company was incorporated in Nevada on July 25, 2003 to engage in the acquisition, exploration, and development of natural resource properties.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements.  Certain information included in this press release contains statements that are forward-looking, such as statements relating to the future anticipated direction of the Company, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth, potential contracts, and/or aspects of litigation.  Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future, and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of, Eternal Energy Corp.  These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, and domestic and global economic conditions.  Persons are encouraged to read our Annual Report on Form 10-K for the year ended December 31, 2010, our Quarterly Report on Form 10-Q for the nine-month period ended September 30, 2011, and our other documents subsequently filed with the Securities and Exchange Commission for meaningful cautionary language in respect of forward-looking statements in this press release.  Interested persons are able to obtain free copies of filings containing information about the Company at the SEC's internet site (http://www.sec.gov).  The Company assumes no obligation to update any of these forward-looking statements.