Abraxas Petroleum Announces Closing of Merger

SAN ANTONIO--(Business Wire)--
Abraxas Petroleum Corporation (NASDAQ:AXAS) ("Abraxas Petroleum") today
announced that it has closed the merger with Abraxas Energy Partners, L.P.
("Abraxas Energy").

A special meeting of Abraxas Petroleum stockholders was held on October 5, 2009
and the holders of a majority of the shares voting at the special meeting
approved the issuance of Abraxas Petroleum common stock to the holders of common
units of Abraxas Energy not held by a wholly-owned subsidiary of Abraxas
Petroleum in connection with the merger and further approved an increase in the
number of shares of Abraxas Petroleum common stock reserved for issuance under
its long-term equity incentive plan.

The unitholders of Abraxas Energy will receive 4.25 shares of Abraxas Petroleum
common stock for each common unit of Abraxas Energy. A total of 26.2 million
shares of Abraxas Petroleum common stock will be issued in connection with the
merger. The shares are subject to an initial 90-day lock-up period followed by a
multi-year staggered lock-up period.

Further in connection with the merger, Abraxas Petroleum amended and restated
its existing credit facility. The $310 million amended and restated credit
facility has an initial borrowing base of $145 million, of which approximately
$135 million was drawn at closing. In addition, the amended and restated credit
facility provided a $10 million term loan which was drawn at closing. Abraxas
Energy`s senior credit agreement and its subordinated credit agreement were
refinanced in conjunction with entering into the amended and restated credit
facility.

Société Générale acted as administrative agent and issuing lender, SG Americas
Securities, LLC acted as sole bookrunner and SG Americas Securities, LLC, Royal
Bank of Canada, ING Capital LLC, and The Royal Bank of Scotland plc acted as
co-lead arrangers for the amended and restated credit facility.

The securities issued in the merger have not been registered under the
Securities Act of 1933, as amended, or any state securities laws, and unless so
registered, the securities may not be offered or sold in the United States
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable state securities
laws.

This press release shall not constitute an offer to sell or the solicitation of
an offer to buy these securities, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of such state or jurisdiction.

Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas
exploitation and production company with operations across the Rocky Mountain,
Mid-Continent, Permian Basin and Gulf Coast regions of the United States.

Safe Harbor for forward-looking statements: Statements in this release looking
forward in time involve known and unknown risks and uncertainties, which may
cause Abraxas` actual results in future periods to be materially different from
any future performance suggested in this release. Such factors may include, but
may not be necessarily limited to, changes in the prices received by Abraxas for
its crude oil and natural gas. In addition, Abraxas` future crude oil and
natural gas production is highly dependent upon Abraxas` level of success in
acquiring or finding additional reserves. Further, Abraxas operates in an
industry sector where the value of securities is highly volatile and may be
influenced by economic and other factors beyond Abraxas` control. In the context
of forward-looking information provided for in this release, reference is made
to the discussion of risk factors detailed in Abraxas` filings with the
Securities and Exchange Commission during the past 12 months.

Abraxas Petroleum Corporation
Barbara M. Stuckey, 210-490-4788
Vice President - Corporate Finance
bstuckey@abraxaspetroleum.com
www.abraxaspetroleum.com

Copyright Business Wire 2009