PermianIn Ward County, Texas, Abraxas successfully drilled the Caprito 99-101H to a total depth of 15,665 feet. The completion of the Caprito 99-101H has been delayed due to completion issues on a third party's well, which has delayed the arrival of the frac fleet. Abraxas has been advised by the third party frac company that the rig up date for Abraxas' planned 25 stage completion of the Caprito 99-101H is now November 9 th. Abraxas owns a 100% working interest in the Caprito 99-101H. Production Update Production for the third quarter of 2016 averaged 5,955 boepd (3,629 barrels of oil per day, 8,321 mcf of natural gas per day, 939 barrels of NGLs per day). Production for the months of September and October, 2016 are estimated to have averaged 8,157 boepd and 8,086 boepd, respectively. Borrowing Base Abraxas' Borrowing Base was recently redetermined to $115 million. This Borrowing Base is fully conforming and represents a $5 million reduction from the Company's previously fully conforming Borrowing Base of $120 million, and compensates for all announced asset sales to date. Abraxas exited the quarter ended September 30, 2016 $90 million drawn on this line of credit. As mentioned above, asset sale proceeds from the anticipated Hudgins Ranch and Brooks Draw sales will be used to further reduce borrowings on this line. In connection with the redetermination, Abraxas layered on additional crude oil swaps consisting of 1200 bopd in 2019 at $54.54/bbl. Abraxas hedging schedule is as follows:
|Oil Swaps (bbls/day)||2500||2401||1796||1200|
|NYMEX WTI (1)||$43.25||$54.53||$47.48||$54.54|
For 2017, Abraxas anticipates drilling expenditures to approximate cash flow. The current capital expenditure budget plans for drilling and completing eight gross, five net wells in the Bakken. Also in the Bakken, Abraxas anticipates drilling an additional three gross, two net wells that will be completed in 2018. At Jourdanton, Abraxas anticipates drilling two gross, net wells targeting the Austin Chalk. In the Permian, Abraxas anticipates drilling two gross, net wells targeting the Wolfcamp. Abraxas forecasts this will lead to 7,200 boepd or approximately 16% growth at the midpoint of guidance. Importantly, Abraxas expects a material decrease in LOE due to the divestiture of several higher cost properties and continued cost control. As evidence of this anticipated improvement, LOE expenses averaged $5.49/boe for the month of September, 2016. The 2017 capital expenditure budget is subject to change depending upon a number of factors, including the availability of drilling equipment and personnel, economic and industry conditions at the time of drilling, prevailing and anticipated prices for oil and gas, the availability of sufficient capital resources for drilling prospects, our financial results, the availability of leases on reasonable terms and our ability to obtain permits for drilling locations.
|% Natural Gas||23%||22%|
|Production Tax (% Rev)||9.0%||11.0%||9.0%||11.0%|
|Cash G&A ($mm)||$8.0||$12.5||$9.0||$11.0|
|2017E Net CAPEX|
"We continue to execute on our divestiture plan as evidenced by the partial sale of our Powder River Basin assets. We continue to market the remainder of our assets in the Powder River Basin and will update the market as to their status when appropriate."We now enter 2017 with higher margin and more productive asset base than we entered 2016 due to our operational execution and divestiture of lower margin assets. This will enable us to increase our capital expenditures by approximately 71% year over year with spending approximating forecasted cash flow. Importantly, we expect volumes to grow approximately 16% at the midpoint of guidance. Our solid leverage metrics and liquidity position on our revised line further enable us to accelerate growth when appropriate. We look forward to updating the market shortly on additional results from our active drilling program." (1) The 30-day average rates represent the highest 30 days of production and do not include the impact of natural gas liquids and shrinkage at the processing plant and include flared gas. Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountains, Permian Basin and South Texas in the United States. 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.