Abraxas Petroleum Corporation (NASDAQ:AXAS) today provided an operational update. Rocky Mountain – North Dakota The refurbishment of the Company owned drilling rig has been completed and is currently rigging up in McKenzie County, North Dakota where it is scheduled to spud its first well, the Ravin 26-35 3H, a middle Bakken horizontal well, later this week. Abraxas owns an approximate 59% working interest in this well, as well as in the Ravin 26-35 2H, which will be drilled concurrently from the same 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. While flowing back frac fluid, production from the well was as high as 340 Bopd and 6.9 MMcfpd of high BTU gas on a 20/64-inch choke. The well is currently shut-in until it is connected to a nearby pipeline with access to a processing plant which should occur within the next several weeks. Including the NGL content of the gas, the current realized price of the combined gas and NGL stream is in excess of $5.00 per Mcf. Abraxas owns a 100% working interest in this well. South Texas – Eagle Ford Abraxas currently owns an approximate 34.7% equity interest in the Blue Eagle joint venture between Abraxas and Rock Oil Company, LLC. In McMullen County, Texas, the Cobra 1H, a horizontal well that is part of the Blue Eagle joint venture, was recently completed in the Eagle Ford with a 15-stage fracture stimulation. For the past 25 days, the well has averaged 800 Bopd and 480 Mcfpd while recovering load fluid. The well is currently flowing on a 22/64-inch choke at approximately 1,050 Bopd and 700 Mcfpd . Blue Eagle owns a 100% working interest in this well and has retained Strategic Energy Advisors, LLC to assist in the sale of Blue Eagle’s Eagle Ford holdings. Canada – Pekisko In Alberta, Canada, the pipeline hook-up for three wells is complete and tested. Production recently commenced from one well and is expected to commence within a matter of days on the other two wells. Two of the wells still await stimulation as the completions have been delayed until after Spring break-up. Canadian Abraxas owns a 100% working interest in each of these wells which targeted the Pekisko formation.
Comments“After many unforeseen delays, many of which were beyond our control, the drilling rig is in North Dakota and will be turning to the right very soon. With respect to our recently drilled wells in some of our other plays, we are quite pleased with the early production rates. The Hedgehog well is probably one of the best in the Crossbow area, and the Cobra well is quite impressive, and its production rates can challenge any other well in the vicinity. We look forward to getting all of the Pekisko wells on-line and stimulated so we can establish and announce stabilized rates. With these new wells now or soon to be on-line, our 2011 exit rate production guidance will be exceeded – just a little late,” commented Bob Watson, Abraxas’ President and CEO. 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. 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 crude oil and natural gas. In addition, Abraxas’ future crude oil and natural gas production is highly dependent upon Abraxas’ level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry sector 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 for in this release, reference is made to the discussion of risk factors detailed in Abraxas’ filings with the Securities and Exchange Commission during the past 12 months.