Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to provide the following operational, divestiture and guidance update. Eagle Ford As previously announced, at Abraxas’ Jourdanton prospect in Atascosa County, Texas, the Blue Eyes 1H averaged 405 boepd (383 barrels of oil per day, 134 mcf of natural gas per day) (1) over the well’s first 30 full days of production flowing naturally. Subsequent to this initial 30 day period, the well was placed on submersible pump. Over the following thirty days on submersible pump, the well averaged 527 boepd (494 barrels of oil per day, 194 mcf of natural gas per day) (1). Total acreage at Jourdanton now consists of approximately 6,150 net acres. Also at Jourdanton, Abraxas recently drilled the Snake Eyes 1H to a total depth of 12,668 feet and the well is scheduled to be fracture stimulated with a 19 stage completion later this week. Abraxas is currently drilling the Spanish Eyes 1H at a depth of 7,108 feet and the well is scheduled to be fracture stimulated at the end of March. Next, the company will spud its fourth well at Jourdanton, the Eagle Eyes 1H. Abraxas owns a 100% working interest across the Jourdanton prospect. At Abraxas’ Cave prospect, in McMullen County, Texas, the company recently completed the Dutch 2H with a 36 stage stimulation. The well has been flowing to sales at very encouraging rates and a thirty day rate will be provided when available. Abraxas holds a 100% working interest in the Dutch 2H. At Abraxas’ Dilworth East prospect, in McMullen County, Texas, the company plans to complete the R. Henry 2H with a 19 stage fracture stimulation in April. Abraxas holds a 100% working interest in the R. Henry 2H. Williston Basin In McKenzie County, North Dakota, the Jore 1H, 2H and 4H are now scheduled to be fracture stimulated in early April. With the recent downspacing success reported by other operators in the Williston Basin, Abraxas elected to change its original plans on the Ravin West pad from two Middle Bakken and two Three Forks wells to four Middle Bakken wells 660 feet apart. Raven Rig #1 has successfully drilled and cased the surface on these four Middle Bakken tests, the Ravin 4H, Ravin 5H, Ravin 6H and Ravin 7H. Next, the company will drill the intermediate sections of all four wells. Abraxas owns a working interest of approximately 76% and 51% in the Jore and Ravin West pads, respectively.
Divestiture UpdateAbraxas recently closed and/or signed a Purchase and Sale Agreement on several non-core Permian Basin and Gulf Coast properties for combined proceeds of $2.6 million. The assets sold produced a combined 56 boepd (83% natural gas) of production. Guidance Update At Abraxas’ March 2014 board meeting, the Board of Directors approved an increase to Abraxas’ 2014 CAPEX budget to $125.0 million. The increase in 2014 CAPEX will go directly to drilling two incremental wells and acquiring additional leasehold in the Eagle Ford. In connection with this increase in CAPEX and compensating for recent asset sales, Abraxas is raising the company’s 2014 production guidance from 4,900-5,100 boepd to 5,200-5,300 boepd. Abraxas is also providing the following additional guidance for the first quarter and full year 2014.
|% Natural Gas||30%||27%|
|Production Tax (% Rev)||9.0%||9.5%||9.0%||9.5%|
|Cash G&A ($mm) (3)||$2.3||$2.5||$11.5||$12.0|
(1) The production rates for each well do not include the impact of natural gas liquids and shrinkage at the processing plant and include flared gas.(2) Excluding building mortgage and rig loan which are secured by the building and rig, respectively. Using definition of EBITDA per bank loan agreement (excludes rig EBITDA). Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, 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.