March 15, 2010 / 10:15 PM / in 8 years

UPDATE 1-Abraxas divests non-core assets for $11.2 mln

* To use $10 mln to repay term loan

* Rest to be used to up budget, debt reduction

March 15 (Reuters) - Abraxas Petroleum Corp (AXAS.O) said it sold properties for about $11.2 million as part of its initiative to divest non-operated, non-core assets to generate cash to repay debt and boost its capital spending.

The oil and gas explorer and producer said it will use the first $10 million of the net proceeds from the divestitures to repay a term loan portion of its credit facility and allocate the remaining for further debt reduction and its capital program.

The divested properties produced about 142 barrels of oil equivalent per day (boepd), representing 3 percent of Abraxas’ daily net production, and had about 606 thousand boe of proved reserves, 2 percent of the company’s net proved reserves.

    Abraxas also said it identified an additional $20 to $30 million of similar non-core assets that it will attempt to divest on similar terms over the next several months. Shares of the San Antonio, Texas-based company closed at $2.08 Monday on Nasdaq. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Jarshad Kakkrakandy)

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