Abraxas Provides Operational and Divestiture Update

Thu May 2, 2013 4:00pm EDT

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Abraxas Provides Operational and Divestiture Update

Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to provide the following operational and divestiture update.

Production

Production for the quarter ended March 31, 2013 averaged 4,216 boepd (2,107 barrels of oil per day, 10.5 mmcf of natural gas per day, 359 barrels of NGLs per day) an increase of approximately 2% over the fourth quarter of 2012. As previously reported, production for the month of January was substantially curtailed. Production for the month of March averaged 4,494 boepd (2,304 barrels of oil per day, 10.7 mmcf of natural gas per day, 403 barrels of NGLs per day).

Eagle Ford Shale

In McMullen County, the Mustang 3H averaged 1,184 boepd (1,070 barrels of oil per day, 684 mcf of natural gas per day) on a restricted choke over its first 30 days of production. The Mustang 2H was successfully completed with a 19 stage fracture stimulation and is currently flowing to sales at reasonable rates. The Sting Ray A 1H, the Company’s first 7,500 foot lateral well, has been drilled and cased to 17,554 feet. The well is scheduled to be completed with an approximately 28 stage completion in May. Abraxas is currently drilling its ninth well at WyCross, the Corvette A 1H, below 9,500 feet. Abraxas owns an 18.75% working interest in the Mustang 3H, Mustang 2H and Sting Ray A 1H and a 25% working interest in the Corvette A 1H.

Williston Basin

In McKenzie County, the Company recently drilled and cased the lateral of the Lillibridge 2H to 19,529 feet. Abraxas is currently spudding the lateral of the Lillibridge 1H. After drilling and casing the lateral of the 1H, all four wells will be simultaneously completed in June. Abraxas owns a working interest of approximately 34% in the Lillibridge East PAD. Also in McKenzie County, the Ravin 3H averaged 627 boepd (472 barrels of oil per day, 928 mcf of natural gas per day) on a restricted choke over its first 30 days of production. Abraxas owns a 49% working interest in the Ravin 3H.

Divestiture Update

Abraxas recently sold several non-core Permian Basin leases in Martin County, Texas for approximately $590,000. The properties sold produce approximately 10 boepd across 480 net acres. Abraxas will retain a 5% override on approximately 80 of the 480 acres sold.

The remainder of Abraxas’ Oklahoma assets are scheduled to be auctioned at the Oil and Gas Clearinghouse Auction on May 8, 2013. The assets to be sold produce an average 507 mcfe/day (506 mcf of natural gas per day and 0.11 barrels of oil per day). If successful, the asset sale, combined with the previous March Oil and Gas Clearinghouse Auction sale, will mark Abraxas’ complete exit from both Louisiana and Oklahoma.

Abraxas recently received and is evaluating offers on its non-operated Bakken assets. After further evaluation of the properties and the removal of several properties due to secondary prospectivity, the total package being offered now consists of approximately 13,618 net acres and the latest month’s production was approximately 343 boepd.

Bob Watson, President and CEO of Abraxas, commented, “Abraxas continues to rationalize the Company’s portfolio by divesting non-core assets and redeploying those proceeds into its higher returning operated and more productive assets in the Bakken and Eagle Ford. Consequently, our production volumes are responding as the quarter ended on a strong note with March production of 4,494 boepd. With a strong April now behind us, and the upcoming Sting Ray A 1H, Corvette A 1H and four Lillibridge well completions in the near future, we remain confident that this production momentum will continue.”

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
gking@abraxaspetroleum.com
www.abraxaspetroleum.com

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