Abraxas Provides Operations, Production and Guidance Update

SAN ANTONIO--()--Abraxas Petroleum Corporation (“Abraxas” or the “Company”) (NASDAQ:AXAS) today provided the following operational, production and guidance update.

Eagle Ford

At Abraxas’ Jourdanton prospect in Atascosa County, Texas, the Company successfully completed the Ribeye 1H and Ribeye 2H with a combined 49 frac stages. After drill out, the wells will be placed on production and thirty day rates will be provided when available. Following the drilling of the Dutch 3H and Dutch 4H, Abraxas will mobilize the rig to the Cat Eye 1H, which represents the first well on the Company’s southern fault block. Abraxas owns a 100% working interest across the Jourdanton prospect.

At Abraxas’ Cave prospect, in McMullen County, Texas, the Dutch 1H averaged 786 boepd (669 barrels of oil per day, 700 mcf of natural gas per day) (1) over the well’s first 30 full days of production. The Company successfully mobilized the drilling rig to the Dutch 3H and Dutch 4H pad where it is currently drilling the Dutch 3H at 12,538 feet. Abraxas holds a 100% working interest in the Dutch 1H, 2H, 3H and 4H.

At Abraxas’ Dilworth East prospect, in McMullen County, Texas, the R. Henry 2H averaged 780 boepd (515 barrels of oil per day, 1,586 mcf of natural gas per day) (1) over the well’s first 30 full days of production. Abraxas holds a 100% working interest in the R. Henry 2H.

Williston Basin

At Abraxas’ North Fork prospect, in McKenzie County, North Dakota, the Company completed the Ravin 5H, 6H and 7H with a combined 99 frac stages. The Ravin 4H was completed with seven stages before encountering mechanical issues. As a precaution, the Company elected to pull the 4 ½ inch tie back string, polished bore receptacle and seal assembly before resuming the fracture stimulation of the well. It is anticipated the Company will resume the completion of the Ravin 4H and turn the well to sales by late September. The Ravin 5H, 6H and 7H, which will test 660 foot spacing in the Middle Bakken, are expected to begin flowback shortly. Abraxas recently set surface casing on the Stenehjem 2H, 3H and 4H. The Company also set intermediate casing on the Stenehjem 4H and is currently drilling the intermediate section of the Stenehjem 3H at 10,243 feet. The three wellbores will be 660 feet apart in their respective formations. Abraxas owns a working interest of approximately 51% and 73% in the Ravin West and Stenehjem wells, respectively.

Second Quarter 2014 Production

Production for the second quarter of 2014 averaged approximately 4,987 boepd (68.9% oil, 23.2% natural gas and 7.8% NGLs), 312 boepd above the midpoint of second quarter 2014 guidance of 4,600-4,750 boepd (65.0% oil, 28.0% natural gas and 7.0% NGLs).

Guidance Update

Abraxas is providing the following guidance for the third quarter and full year 2014.

 
3Q14E
Low   High
Production
Total (Boepd) 6,500 6,700
% Oil 72%
% NGL 7%
% Natural Gas 21%
 
Operating Costs
LOE ($/Boe) $13.00 $14.00
Production Tax (% Rev) 8.5% 9.0%
Cash G&A ($mm) $2.2 $2.4
 
CAPEX ($mm) $53.0 $58.0
 

Bob Watson, President and CEO of Abraxas, commented, “Our well performance continues to meaningfully surpass our expectations, which led to another significant production beat in the second quarter. This strong production trend continued into July with average production for the month estimated to be approximately 6,600 boepd. As this production is being dominated by performance from recently completed wells, we are taking a conservative approach to our decline assumptions. Thus, we are electing to leave our full year 2014 guidance of 5,800-6,000 boepd with an exit rate of 8,000 boepd unchanged.”

(1) The production rates for each well do not include the impact of natural gas liquids and shrinkage at the processing plant and include flared gas.

Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, 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.

Contacts

Abraxas Petroleum Corporation
Geoffrey King, 210-490-4788
Vice President – Chief Financial Officer
gking@abraxaspetroleum.com
www.abraxaspetroleum.com

Contacts

Abraxas Petroleum Corporation
Geoffrey King, 210-490-4788
Vice President – Chief Financial Officer
gking@abraxaspetroleum.com
www.abraxaspetroleum.com