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Abraxas Reports Third Quarter 2011 Results

Stocks in this article: AXAS

Operational Update

Rocky Mountain – North Dakota / Montana

  • In various counties in North Dakota and Montana, during the third quarter five gross (0.21 net) non-operated horizontal wells, targeting the Bakken or Three Forks formation, came on-line. An additional two gross (0.05 net) non-operated horizontal wells are either waiting on a drilling rig or being completed. Since January 2010, Abraxas has elected to participate in 19 gross (1.00 net) non-operated wells in the Bakken / Three Forks play.
  • In McKenzie County, North Dakota, two gross (0.11 net) non-operated horizontal wells targeting the Mission Canyon have been drilled, completed and production facilities should be completed within the next few weeks. Early production testing of each of these wells yielded flow rates in excess of 1,000 barrels of oil per day.
  • In Williams County, North Dakota, one gross (0.02 net) non-operated well targeting the Lodgepole recently came on-line.
  • The drilling rig that was purchased in July continues to undergo refurbishment and it is currently anticipated that it will begin drilling on the first multi-well pad site in McKenzie County, North Dakota in the fourth quarter.

Rocky Mountain - Wyoming

  • In Niobrara County, Wyoming, the Prairie Falcon 3H was drilled to a total measured depth of 12,120 feet, including a 4,185 foot lateral, and is currently being completed with a 15-stage fracture stimulation. In Campbell County, Wyoming, a horizontal well targeting the Turner formation is planned to be drilled in the fourth quarter of 2011 or first quarter of 2012, subject to timing of rig availability. Abraxas owns a 100% working interest in each of these wells.

South Texas – Eagle Ford

  • At September 30, 2011, Abraxas owned a 41% equity interest in Blue Eagle, a joint venture between Abraxas and Rock Oil Company, LLC.
  • In Atascosa County, Texas, the Grass Farms 1H was drilled to a total measured depth of 13,150 feet, including a 5,400 foot lateral. The well was recently completed with an 18-stage fracture stimulation and is currently recovering frac fluid as the oil cut continues to increase. The well is being produced on a restricted choke to avoid formation damage and to minimize gas production. Blue Eagle owns a 100% working interest in this well.
  • Blue Eagle anticipates drilling one horizontal well on its recently acquired leasehold (2,487 net acres) in northern McMullen County in the fourth quarter.

West Texas

  • In Nolan County, Texas, the Spires 126 3H was recently drilled to a total measured depth of 9,300 feet, including a 2,000 foot lateral, and completed open hole and un-stimulated. The well recently came on-line and has produced an average of 180 barrels of oil equivalent (80% oil or liquids) during its first 10 days on production. Abraxas owns a 100% working interest in this well.
  • In Coke County, Texas, the Sadie A #2 was recently drilled to a total vertical depth of 6,425 feet and is currently being completed. This well targeted the Canyon Sands and Abraxas owns a 100% working interest in this well.

Canada - Pekisko

  • In Alberta, Canada, the Twining 6-11 and the Twining 6-12 were recently completed and placed on production. A third well, the Twining 15-18, is currently drilling below 7,500 feet towards a total measured depth of 9,800 feet, including a 3,600 foot lateral. Canadian Abraxas owns a 100% working interest in each of these wells which have targeted the Pekisko formation.

Comments

“During the 3rd quarter, we increased production 5% over the 2nd quarter, including our equity interest in Blue Eagle, and 10%, excluding it. We also increased revenue 29% year over year in the 3 rd quarter as oil prices increased as well as our percentage of oil and natural gas liquids. We are quite pleased with the production growth and we anticipate similar growth for the foreseeable future. Our pad development drilling in the Williston Basin should be underway shortly and we look forward to all of the positives that will come from that program,” commented Bob Watson, Abraxas’ President and CEO.

Conference Call

Abraxas invites you to participate in a conference call on Thursday, November 10, 2011, at 10:00 a.m. CT (11:00 a.m. ET) to discuss the contents of this release and respond to questions. Please dial 1.888.680.0865, passcode 28715362, 10 minutes before the scheduled start time, if you would like to participate in the call. The conference call will also be webcast live on the Internet and can be accessed directly on the Company’s website at www.abraxaspetroleum.com under Investor Relations. In addition to the audio webcast replay, a transcript of the conference call will be posted on the Investor Relations section of the Company’s website approximately 24 hours after the conclusion of the call and will be accessible for at least 60 days.

Abraxas Petroleum Corporation is a San Antonio based oil and 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.

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