Abraxas Provides Divestiture, Hedging and Operational Update
September 20 2016 - 4:15PM
Business Wire
Abraxas Petroleum Corporation (“Abraxas” or the “Company”)
(NASDAQ:AXAS) today provided the following divestiture, hedging and
operational update.
Divestiture Update
In Abraxas’ Gulf Coast region, the Company recently signed a
definitive agreement and closed on the sale the Company’s Portilla
field and associated surface acreage for net proceeds of
approximately $13 million. The assets sold produced approximately
145 boepd (127 barrels of oil per day, 112 mcf of natural gas per
day) on average during the month of June, 2016. The effective date
of this transaction is June 1, 2016. Proceeds will be used to pay
down the Company’s credit facility to approximately $88
million.
In Pecos County, Texas, the Company recently signed a contract
to sell the Company’s 12,178 acre surface ranch and ½ of the
Company’s minerals on the property for gross proceeds of $6.7
million. The contract is currently in the 30-day option period.
Abraxas will retain the remaining ½ of the Company’s current
mineral interest. Abraxas expects this transaction to close in
November, 2016. Upon closing, proceeds from the sale will be used
to further reduce borrowings on the Company’s credit facility.
Hedging
Prior to the recent pullback in oil prices, Abraxas added
additional oil hedges in 2017 and 2018. Abraxas’ updated hedge
schedule is as follows:
Q3 2016
Q4 2016
2017
2018 Oil Swaps (bbls/day) 1948 2500 2401
1796
NYMEX WTI (1) $39.04 $43.25 $54.53 $47.48
(1) Straight line average price
Williston Basin
At Abraxas’ North Fork prospect, in McKenzie County, North
Dakota, the Stenehjem 10H-15H wells have been successfully fracture
stimulated and are currently flowing back at very encouraging
rates. Specifically, the six wells have been on for 17-32 days and
averaged 1,131 boepd (861 barrels of oil per day, 1,619 mcf of
natural gas per day)(1) over their first 15 days of production.
Abraxas owns a working interest of approximately 78% in Stenehjem
10H-15H.
Austin Chalk
At Abraxas’ Jourdanton prospect in Atascosa County, Texas, the
Bulls Eye 101H was successfully completed with a 31 stage fracture
stimulation. The well is currently in the very early stages of
flowback. Abraxas owns a 100% working interest in the Bulls Eye
101H.
Permian
In Ward County Texas, Abraxas is currently drilling the lateral
of the Caprito 99-101H at a depth below 12,000 feet toward an
objective of 15,600 feet. Abraxas plans to complete this well in
late October. Abraxas owns a 100% working interest in the Caprito
99-101H.
Upcoming Presentations
Bob Watson, President and CEO of Abraxas, will be presenting at
the Johnson Rice Energy Conference in New Orleans on Wednesday,
September 21, 2016 at 1:30 PM CT.
Mr. Watson and Geoff King, VP and CFO of Abraxas, will be
presenting at IPAA OGIS San Francisco on Monday, September 26, 2016
at 3:10 PM PT. A webcast of this presentation will be accessible on
the investor relations portion Company’s website at
www.abraxaspetroleum.com or by accessing the following link
http://www.investorcalendar.com/IC/CEPage.asp?ID=175280.
Mr. Watson commented, “Abraxas continues to rationalize the
Company’s portfolio with the ultimate goal of focusing the
Company’s asset base to the Permian, South Texas and Williston
Basin. Although the Portilla Field was a productive asset for us
over our 23 years of ownership, it no longer fits with our focus on
unconventional resources in these three key regions. We would like
to thank our employees in the region for their years of dedicated
service to Abraxas and wish them luck as the new operator continues
with the development of the asset.
“We are currently benefiting from significant flush production
driven by our six Bakken completions which is pushing our volumes
to over 8,000 boepd. Over the course of 2016, we have now sold
approximately 188 boepd of production across four asset sales for
proceeds of approximately $24.2 million(2). Although we are
currently producing above expectations despite these asset sales,
we are very early in the production histories of our recent
completions. Thus, we will revisit our yearly guidance when our
volumes stabilize.”
(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)
Inclusive of proceeds expected on sale of
Hudgins Ranch for $6.7 million.
Abraxas Petroleum Corporation is a San Antonio based crude oil
and natural gas exploration and production company with operations
in the Rocky Mountains, Permian Basin and South Texas.
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160920006446/en/
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial
Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com