Operational Update

Rocky Mountain – North Dakota / Montana
  • In the Bakken / Three Forks play in the Williston Basin, during the fourth quarter of 2011, 1 gross (<1% net) non-operated well came on-line and 2 gross (0.3 net) wells are currently drilling or awaiting completion. Additionally, we have recently elected to participate in 6 gross (0.6 net) wells that have yet to spud.
  • The refurbishment of the Company owned drilling rig has been completed and the rig is currently on its way to McKenzie County, North Dakota to begin drilling its first multi-well pad site.

Rocky Mountain – Wyoming
  • In Campbell County, Wyoming, the Hedgehog State 16-2H, a horizontal well targeting the Turner formation, was recently completed with a 17-stage fracture stimulation. The well is currently flowing back with encouraging initial results. Abraxas owns a 100% working interest in this well.

South Texas – Eagle Ford
  • At December 31, 2011, Abraxas owned a 34.7% equity interest in Blue Eagle, a joint venture between Abraxas and Rock Oil Company, LLC.
  • In McMullen County, Texas, the Cobra 1H, a horizontal well targeting the Eagle Ford Shale, was recently completed with a 15-stage fracture stimulation. The well is currently flowing back at very promising rates. Blue Eagle owns a 100% working interest in this well.

Canada – Pekisko
  • In Alberta, Canada, the pipeline hook-up for three wells is underway and should be completed within the next few weeks. Two wells continue to await stimulation; however, the completions have been delayed as the availability of acid for the stimulations is in short supply. Canadian Abraxas owns a 100% working interest in each of these wells which have targeted the Pekisko formation.

Commodity Hedges

The Company’s gas hedges were recently monetized for $12.4 million and additional NYMEX-based fixed price oil hedges were entered into at prices above $100 per barrel for the remainder of 2012 through 2014.

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