Abraxas Provides Operational Update

Abraxas Petroleum Corporation (NASDAQ:AXAS) today provided an operational update.

Rocky Mountain – North Dakota
  • In McKenzie County, North Dakota, one gross (0.03 net) non-operated well recently came on-line at rates in excess of 1,500 barrels of oil equivalent per day. Additionally, in various counties in North Dakota, we have elected to participate in five gross (0.52 net) non-operated wells targeting the Bakken and/or Three Forks formations that have yet to spud.
  • The refurbishment of the drilling rig that we purchased is almost complete and it should begin drilling the first multi-well pad site in McKenzie County, North Dakota within thirty days.

Rocky Mountain – Wyoming
  • In Niobrara County, Wyoming, the Prairie Falcon 3H was recently drilled to a total measured depth of 12,120 feet, including a 4,185 foot lateral, and completed with a 15-stage fracture stimulation in the Niobrara formation. The well has a substantial amount of load water to recover; nonetheless, the well is producing between 30 – 150 barrels of oil per day as the well stabilizes while the load water is being recovered. The well has recently been placed on artificial lift to accelerate the recovery of the load water.
  • In Campbell County, Wyoming, the Hedgehog State 16-2H, a horizontal well targeting the Turner formation, is expected to spud later this month. 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, and completed with an 18-stage fracture stimulation. The well has been on production for approximately 75 days and has produced 7,300 barrels of oil while recovering load water. The well will be put on artificial lift in the near future to enhance fluid production.
  • In McMullen County, Texas, the Cobra 1H is currently drilling below 5,000 feet towards a total measured depth of 14,800 feet, including a 4,700 foot lateral. It is anticipated that the well will be completed with a 15-stage fracture stimulation. Blue Eagle owns a 100% working interest in each of these wells.

West Texas
  • The wells recently drilled and completed in Nolan and Coke Counties, Texas are producing as expected and continued development is planned throughout 2012.

Canada – Pekisko
  • In Alberta, Canada, the Swalwell 15-18 and 2-7 were each recently drilled to total measured depths of 10,100 feet and 9,200 feet, respectively, including 2,500 - 3,600 foot laterals, and completion operations are underway. One well was acid stimulated last weekend and three additional wells await stimulation as a shortage of acid in Canada has delayed completions. Canadian Abraxas owns a 100% working interest in each of these wells which have targeted the Pekisko formation. Drilling of the last planned well in the Pekisko program will be delayed until the current completion operations are finished.

Comments

“While the refurbishment of the drilling rig has taken longer than expected, all is well, and we should be drilling on our first multi-well pad site in North Dakota within a month. We have approximately 25,000 barrels of water left to recover from the Prairie Falcon 3H but we are encouraged by the amount of oil that we have produced to date. The Grass Farms 1H continues to flow and we expect higher rates once it is placed on artificial lift,” commented Bob Watson, Abraxas’ President and CEO.

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.

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 its oil and gas. In addition, Abraxas’ future oil and gas production is highly dependent upon Abraxas’ level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry 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 in this release, reference is made to the discussion of risk factors detailed in Abraxas’ filings with the Securities and Exchange Commission (“SEC”) during the past 12 months.

Copyright Business Wire 2010

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