“2011 was an eventful year for us. We embarked on a new endeavor to own and operate our own 2000 hp drilling rig in the Williston Basin. The rig has been completely refurbished, winterized and equipped with a top drive and walking system, as well as many other new components. The rig is currently being trucked to North Dakota, and after assembly, it will begin drilling pad development wells in McKenzie County where we have all of the infrastructure, including a semi-permanent man camp for our rig employees, in place and ready to go. We, as are all heavy load transporters, are having to deal with some road detours due to the frost melt but so far we haven’t encountered anything insurmountable. Production in the 4 th quarter was negatively impacted from reduced gas production as a number of our dry gas wells were subjected to shut-ins and curtailments due to pipeline and gas plant capacity issues. We determined that spending capital to access alternative delivery points did not make sense in the current gas price environment. We did not make our exit rate guidance due to various delays in getting wells on production, which is becoming standard in our industry in both the U.S. and Canada; nonetheless, the Canadian pipeline construction is almost complete and two new wells in the Eagle Ford and a well in the Turner formation (Wyoming) are currently cleaning up or have recently come on-line. Therefore, we have a good chance of achieving our exit rate guidance, just delayed by a few months. During 2012, all of our activity will be focused on oil and liquids-rich projects as we continue to increase our percentage of oil & NGLs to take advantage of the commodity price arbitrage between oil and natural gas. In addition, we will continue to high-grade our diverse portfolio of assets. Since the Blue Eagle joint venture (Eagle Ford Shale Play, South Texas) has experienced great success since its formation 18 months ago, we will be exploring strategic alternatives this year for this property as well as for an acreage block in the Wolfbone play in Reeves County, Texas and potentially our interest in the Pekisko play in Alberta, Canada,” commented Bob Watson, Abraxas’ President and CEO.
Abraxas invites you to participate in a conference call on Thursday, March 15, 2012, at 2:00 p.m. CT (3:00 p.m. ET) to discuss the contents of this release and respond to questions. Please dial 1.866.713.8310, passcode 40561271, 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 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.
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