Abraxas Provides Operations, Guidance and Acquisition Update; Announces Upcoming Presentations
September 15 2014 - 4:14PM
Business Wire
Abraxas Petroleum Corporation (“Abraxas” or the “Company”)
(NASDAQ:AXAS) today provided the following operations, guidance and
acquisition update; announces upcoming presentations.
Williston Basin
At Abraxas’ North Fork prospect, in McKenzie County, North
Dakota, the Ravin 5H, 6H and 7H, which are testing 660 foot spacing
in the Middle Bakken, are flowing back at very encouraging rates.
Henceforth, Abraxas will provide average per well rates across a
group of pad drilled wells in the same formation (Middle Bakken or
Three Forks), opposed to providing individual well results in the
Bakken. As an example, the Ravin 5H, 6H and 7H have been on
production an average of 27 days and on average produced 1,269
boepd (1,015 barrels of oil per day, 1,526 mcf of natural gas per
day) (1) per well over that period. The Ravin 4H, which was
impacted by a mechanical issue, has been remediated and is
scheduled to be fracture stimulated in late September. In the
Stenehjem unit, Abraxas recently set production casing in the
lateral of the 2H, is currently drilling the lateral section of the
Stenehjem 3H at 16,289 feet MD and will drill the lateral of the 4H
immediately thereafter. After full title review, Abraxas owns a
working interest of approximately 53% (up from 51%) and 73% in the
Ravin and Stenehjem wells, respectively.
Eagle Ford
At Abraxas’ Jourdanton prospect in Atascosa County, Texas, the
Ribeye 1H was recently placed on pump and is producing to sales at
reasonable rates. The Ribeye 2H was recently placed on pump and is
producing to sales at encouraging rates. 30 day rates will be
provided when available. Abraxas owns a 100% working interest
across the Jourdanton prospect.
At Abraxas’ Cave prospect, in McMullen County, Texas, the
Company successfully drilled and cased the Dutch 3H. The Company
recently reached TD on Dutch 4H at 19,078 feet MD. The two wells
are scheduled to be fracture stimulated in late September. Abraxas
holds a 100% working interest in the Dutch 3H and 4H.
At Abraxas’ Dilworth East prospect, in McMullen County, Texas,
the Company recently leased 500 incremental net acres. The prospect
now consists of a combined 940 net contiguous acres and can
accommodate up to ten 5,000 foot laterals.
Upcoming Presentations
Geoff King, Vice President and CFO of Abraxas, will be
presenting at the Imperial Capital Global Opportunities Conference
at 8:30 AM ET on Thursday, September 18, 2014.
Bob Watson, President and CEO of Abraxas, will be presenting at
IPAA OGIS San Francisco at 2:20 PM PT on Monday, September 22,
2014. A live webcast of the presentation will be available on the
Abraxas website.
Guidance Update
Abraxas production for the third quarter 2014 to date surpassed
initial expectations on the back of strong well performance. Also,
lease operating expenses (“LOE”) for the third quarter 2014 to date
have been below original expectations. Therefore, Abraxas is
raising the Company’s third quarter 2014 production guidance and
lowering third quarter 2014 LOE guidance to the following:
Original 3Q14E
Revised 3Q14E Low
High Low
High Production Total (Boepd) 6,500
6,700 6,900 7,000 % Oil 72% 72% % NGL 7% 7% % Natural Gas 21% 21%
Operating Costs LOE ($/Boe) $13.00 $14.00 $12.00
$13.00 Production Tax (% Rev) 8.5% 9.0% 8.5% 9.0% Cash G&A
($mm) (3) $2.2 $2.4 $2.2
$2.4
Bob Watson, President and CEO of Abraxas, commented, “Although
it is still quite early, the rates on our first Middle Bakken
downspacing test are very encouraging. If successful, this will add
an incremental 22 Middle Bakken locations to our inventory. We are
currently drilling our first Three Forks downspacing test in the
Stenehjem 2H and 4H, which, with success, will increase our
inventory further.”
“The Ribeye wells were completed differently and tested several
concepts including 330 foot spacing, the effect of fracing near
small faults and the benefit of pad drilling efficiencies. We plan
to continue to intensely study these recent results and modify our
drilling and completion techniques as necessary to lessen the
variability of well performance.”
“We remain focused on adding leasehold in targeted areas of the
Eagle Ford and Bakken. The recent acquisition of leasehold in the
Eagle Ford is the first example of this strategy coming to
fruition. We will continue to evaluate opportunities to expand our
acreage positions while keeping a keen eye on upfront leasehold
costs to ensure we generate strong full cycle rates of return on
each project.”
“Production for the third quarter of 2014 meaningfully surpassed
our initial expectations. Obviously, this has positive implications
on our 2014 full year guidance and forecasted exit rate. We plan to
revisit both those estimates and update the street following the
end of the third quarter and completion of several high impact
wells in the next month.”
(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.
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.
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial
Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com
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