Abraxas Announces 2014 Year End Reserves Grew 37% over 2013 to 42.4 MMBoe; Provides First Quarter 2015 Guidance
February 23 2015 - 4:10PM
Business Wire
Abraxas Petroleum Corporation (“Abraxas” or the “Company”)
(NASDAQ:AXAS) today announced 2014 year end reserves grew 37% over
2013 to 42.4 MMBoe, and also provided first quarter 2015
guidance.
December 31, 2014 Reserves
As of December 31, 2014, Abraxas’ proved oil and natural gas
reserves consisted of approximately 42.4 MMBoe, a net increase of
11.4 MMBoe, or approximately 37%, over 2013 year end reserves of
31.0 MMBoe. The majority of the reserve additions came from the
Bakken where the Company benefited from an upward revision in the
type curve and successful downspacing tests in the Middle Bakken
and Three Forks. The additional undeveloped locations on the
Southern Fault Block at Jourdanton remain unbooked. December 31,
2014 reserves consisted of approximately 29.4 million barrels of
oil, 3.7 million barrels of NGLs and 55.9 billion cubic feet of
natural gas. Proved developed producing reserves grew 34% year over
year to 17.4 MMBoe and comprised 41% of proved reserves as of
December 31, 2014. The present value, using a 10% discount rate, of
future net cash flows before income taxes of Abraxas’ proved
reserves was approximately $637.4 million, using 2014 average
prices of $4.35/mcf of natural gas and $95.28/bbl of oil. The
independent reserve engineering firm DeGolyer and MacNaughton
prepared a complete engineering analysis on 98.2% of Abraxas’
proved reserves on a Boe basis.
The following table outlines changes in Abraxas’ proved reserves
from December 31, 2013 (inclusive of Canadian reserves, production
and asset sales):
Oil
Natural
Gas
NGL
Total
(MMbbl)
(Bcf)
(MMbbl)
(MMBoe)
Proved Reserves December 31, 2013
20.9 48.1
2.0 31.0 Additions 7.8 6.9 0.9 9.8 Purchases 0.0 0.0
0.0 0.0 Revisions 2.7 7.4 1.0 4.9 Sales (0.6) (3.6) (0.0) (1.0)
Production
(1.4)
(2.9)
(0.2)
(2.1)
Proved Reserves December 31, 2014
29.4 55.9
3.7 42.4
Fourth Quarter 2014 Production
Production for the fourth quarter of 2014 averaged approximately
6,785 boepd (4,560 barrels of oil per day, 9,027 mcf of natural gas
per day, 720 barrels of NGLs per day). Production for 2014 averaged
approximately 5,720 boepd (3,820 barrels of oil per day, 7,944 mcf
of natural gas per day, 568 barrels of NGLs per day). 2014
production numbers exclude Canadian production, which is now
classified as discountinued operations. This change in
classification removed 67 boepd (32 barrels of oil per day, 128 mcf
of natural gas per day, 3 barrels of NGLs per day) from 2014
production numbers. Abraxas production for the final two weeks of
December averaged approximately 8,000 Boepd with the productive
capacity of the Company estimated to be in excess of 8,500 Boepd.
The delta between actual production volumes and the productive
capacity was due to third-party gas processing constraints in the
Bakken, well downtime in the Eagle Ford, Bakken and Permian.
2014 CAPEX
For the year ended December 31, 2014, Abraxas’ capital
expenditures totaled approximately $192.8 million.
1Q15 and 2015 Guidance
Abraxas is providing the following 1Q15 guidance and is
reiterating the Company’s Full Year 2015 guidance. First quarter
guidance was negatively impacted by continued downtime, flaring and
shut-ins primarily in the Williston and Permian basins.
1Q15E
2015E
Low
High
Low
High
Production Total (Boepd) 6,600 6,800 7,200 7,300 % Oil
67%
69%
% NGL
9%
9%
% Natural Gas
24%
22%
Operating Costs LOE ($/Boe) $10.00 $12.00 $10.00 $12.00
Production Tax (% Rev) 8.5% 9.0% 8.5% 9.0% Cash G&A ($mm) (2)
$2.3 $2.5 $11.5 $12.5
CAPEX
$10.0
$53.8
Bob Watson, President and CEO of Abraxas, commented, “Despite
significant commodity price volatility in 2014, Abraxas put
together another year of impressive production and reserve growth.
Statistically, Abraxas posted F&D costs of $13.09/boe(1),
adjusted F&D costs including future development costs of
$19.48/boe(2) and reserve replacement of 710%(3).”
“Following the violent collapse in commodity prices, Abraxas
swiftly curtailed the Company’s capital plan in December 2014.
Absent a sustained recovery in commodity prices, Abraxas may elect
to further curtail spending by delaying completions until service
costs and commodity prices justify sufficient returns on capital.
Despite the slowdown in drilling activity, we are not sitting idle
as we continue to evaluate opportunities to add to our production
and reserve base primarily in the Bakken and Eagle Ford. In
evaluating every opportunity, Abraxas maintains its intense focus
on preserving the Company’s pristine balance sheet and abundant
liquidity. Moreover, each opportunity must be accretive and earn a
suitable full cycle rate of return.”
(1)
F&D calculated as follows. $192.8
million of 2014 CAPEX / 14.7 MMBoe of reserve additions. 14.7 MMBoe
of reserve additions = 9.8 MMBoe of additions + 4.9 MMBoe of
revisions.
(2)
Adjusted F&D including future
development costs calculated as follows. ($192.8 million of 2014
CAPEX + $94.3 million of increased future development costs) / 14.7
MMBoe of reserve additions. $94.3 million of future development
costs = $557.8 million (2014) - $463.5 million (2013). 14.7 MMBoe
of reserve additions = 9.8 MMBoe of additions + 4.9 MMBoe of
revisions.
(3)
Reserve replacement calculated as follows.
14.7 MMBoe of reserve additions / 2.1 MMBoe of production. 14.7
MMBoe of reserve additions = 9.8 MMBoe of additions + 4.9 MMBoe of
revisions.
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.
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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