Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to announce the signing of a definitive agreement to sell the majority of the Company’s non-operated Bakken properties and provide a financial update.
Non-Operated Bakken Definitive Agreement
Abraxas signed an agreement to sell the majority of the Company’s non-operated Bakken properties to Natural Resource Partners L.P. (NYSE:NRP) for $35.3 million plus the assumption of an estimated $8.1 million in AFEs from 22 wells that are producing, have recently been drilled or completed or Abraxas has elected to participate. The sale is subject to customary closing conditions and purchase price adjustments and reflects an effective date of March 1, 2013. The asset consists of approximately 13,500 net Bakken acres. Closing is scheduled for the third quarter of 2013. E-Spectrum Advisors LLC acted as divestiture agent for Abraxas on the sale.
Inclusive of the non-operated Bakken sale, Abraxas has divested approximately 502 boepd for gross proceeds of $47.3 million
since the beginning of 2013. These asset sales have also removed approximately $10 million of budgeted CAPEX commitments for Abraxas. It is Abraxas’ intention to use the proceeds from these sales to pay down the Company’s bank line before being ultimately redeployed to accelerate growth in the Company’s core areas. Taking these asset sales into effect, Abraxas now projects production of 4,550-4,700 boepd for 2013.
Bob Watson, President and CEO of Abraxas commented, “This is obviously a transformational day for Abraxas as we significantly reduce our leverage while simultaneously shifting our focus to a core operated portfolio. Heading forward we will continue to rationalize our asset base to focus on our core operated properties primarily in the Bakken and Eagle Ford. Moreover, the removal of the non-operated Bakken assets from our portfolio will provide the Company with a much more predictable production growth profile and CAPEX schedule. We look forward to updating the market shortly as we evaluate opportunities to accelerate growth in our core operated areas.”