Abraxas Provides Operational and Financial Update, Announces Upcoming Presentations

Mon Apr 8, 2013 4:40pm EDT

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SAN ANTONIO--(Business Wire)--
Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to provide the following
operational and financial update, announces upcoming presentations. 

Eagle Ford Shale

In McMullen County, the Gran Torino A 1H averaged 790 boepd (701 barrels of oil
per day, 532 mcf of natural gas per day) on a restricted choke over its first 30
days of production. The Gran Torino A 1H is currently flowing to sales at a rate
of 720 boepd (635 barrels of oil per day, 509 mcf of natural gas per day) on a
22/64" choke. The Mustang 3H continues to flow to sales at rates significantly
above the Company`s type curve. Additionally, the Company drilled, completed and
turned to sales the Mustang 3H for approximately $6.2 million. The Mustang 2H is
currently being completed with a 19 stage fracture stimulation. The Sting Ray A
1H, the Company`s first 7,500 foot lateral well, is currently drilling at a
depth of 15,005 feet. Abraxas owns an 18.75% working interest in the Gran Torino
A 1H, Mustang 3H, Mustang 2H and Sting Ray A 1H. 

Williston Basin

Drilling continues on the Company`s Lillibridge East PAD with the laterals
drilled and cased on the 3H and 4H. The Company is currently spudding the
lateral on the 2H, which will be followed by the 1H. Abraxas owns a working
interest of approximately 34% in the Lillibridge East PAD. The Ravin 2H averaged
421 boepd (333 barrels of oil per day, 526 mcf of natural gas per day) on a
22/64" choke over its first 30 days of production. The Ravin 3H is currently
shut in while the Company pulls the 4½" tie back string to install long term
production equipment. Thirty day rates are expected shortly. Before being shut
in, the well was producing at rates significantly above the Company`s type
curve. The completion of the Ravin 2H and 3H also had a positive impact on the
previously drilled offsetting Ravin 1H, which averaged 630 boepd (534 barrels of
oil per day, 577 mcf of natural gas per day) over its first seven days since
returning to production. The Ravin 1H previously produced approximately 150
boepd before being shut in during the Ravin 2H and 3H completions. Abraxas owns
a 49% working interest in the Ravin 1H, 2H and 3H. 

Permian Basin

The Company recently drilled and cased two shallow Yates wells, the Wilkes #1
and Wilkes #2, in Ward County, Texas. The Company is currently testing the Yates
C sand in the Wilkes #2 well, to be followed by the Yates B, Yates A and
Tensill. Abraxas owns a 100% working interest in both wells. 

Financial Update

Abraxas recently closed its Fourth Amended and Restated Credit Agreement with
the Company's bank group. The facility is governed by a $155 million borrowing
base, an increase of $5 million over the previous $150 million borrowing base.
Unless redetermined otherwise based on new reserve and production information
from the June 30, 2013 engineering report, the borrowing base would reduce to
$145 million on October 1, 2013. Management and the bank group anticipate the
facility will be redetermined in a timely manner post the Company providing its
June 30, 2013 reserve report. 

As part of the revised agreement, the Company entered into a more standard
covenant package resulting in the removal of the $7.5 million quarter end
liquidity covenant. The agreement was also adjusted to remove debt associated
with the Company`s wholly owned subsidiary, Raven Drilling, from all debt
calculations. Additionally, Abraxas is pleased to announce that the Company
added an incremental member to its bank facility during the redetermination
process, Mutual of Omaha. 

As part of the agreement, Abraxas entered into incremental hedge positions to
protect the Company`s cash flows. In an effort to better correlate hedge prices
to the Company`s realized prices in the Gulf Coast and Eagle Ford, which have
dislocated to a substantial premium to WTI, the Company added and restructured
several existing WTI hedges to Brent. The incremental hedges and restructured
positions can be found below:

 ADDITIONAL HEDGE    WTI                              Brent                    
 WTI                 BOPM             Price           BOPM        Price        
 CAL2013(1)                                           5,300       $    105.45  
 CAL2014                                              2,750       $    100.75  
 CAL2015                                              3,800       $    96.78   
 CAL2016             2,400            $    85.15                               
 CAL2017             15,000           $    84.18                               
 RESTRUCTURE         WTI                              Brent                    
                     BOPM             Price           BOPM        Price        
 CAL2013(1)          (10,000  )       $    92.58      10,000      $    104.76  
 CAL2014             (12,400  )       $    89.97      12,400      $    100.52  
 CAL2015             (11,200  )       $    87.95      11,200      $    97.13   

(1) 2013 hedges effective April - December 2013 

Upcoming Presentations

Cannaccord Genuity will be hosting Geoff King, Vice President and CFO of
Abraxas, on a non-deal road show in Boston and New York on April 10-11. An
updated presentation from this non-deal road show will be accessible on the
Company`s website. 

Bob Watson, President and CEO of Abraxas, will be presenting at IPAA OGIS in New
York on Monday, April 15, 2013 at 11:20 AM EDT. A webcast of this presentation
will be accessible on the Company`s website or by using the following link

Bob Watson, President and CEO of Abraxas, commented, "Abraxas continues to add
incremental, high rate oil wells to its production and reserve base well above
the Company`s original expectations. The Ravin 3H, Gran Torino A 1H and
especially the Mustang 2H provide further confirmation of the quality of
Abraxas` core acreage positions in the Bakken and Eagle Ford. Furthermore,
although the industry has noted the impact offsetting completions have had on
previously drilled wells in the Bakken, the high production rates Abraxas
witnessed on the offsetting Ravin 1H post the Ravin 2H and 3H completions were a
positive surprise. Additionally, we are pleased that our growing reserve base
and improved financial position continues to be acknowledged by our highly
supportive bank group as evidenced by another increase to our bank facility, the
removal of the quarter end liquidity covenant and the addition of an incremental
member to our bank group." 

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

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
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
Geoffrey King, 210-490-4788
Vice President - Chief Financial Officer

Copyright Business Wire 2013