Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to provide the following divestiture and financial update.
Nordheim Definitive Agreement
Abraxas today signed an agreement to sell the Company’s 25% working interest at the Nordheim Project in the Eagle Ford shale to a large institutional buyer for proceeds of $19.1mm. The sale is subject to customary closing conditions and purchase price adjustments and reflects an effective date of September 1, 2012. The asset consists of 544 net acres in DeWitt County, Texas and approximately 64 boepd (56% gas; 26% NGLs; 26% oil) of net production. Abraxas will retain the rights to its Edwards production, reserves and upside across both its Nordheim and Wagner lease blocks. Closing is scheduled for December 17, 2012. Petrie Partners acted as financial advisor for Abraxas on the sale.
Per the Abraxas’ November 12, 2012 release, the Company’s borrowing base was recently raised to $150mm from its previous level of $140mm. As of quarter end September 30, 2012, the Company had $134mm drawn on the facility and $2.6mm in cash. The $150mm borrowing base already reflects the removal of reserves and production associated with the Nordheim sale. In addition to the $19.1mm Nordheim sale, the company recently announced the sale of its Alberta Basin properties in Montana for $2.85mm. The approximately $22mm of combined proceeds from these sales will immediately go to reducing borrowings on the revolver, which stood at $134mm at quarter end. Thus, pro forma liquidity post the sales will reflect current borrowings, less net proceeds from the sales, compared to a $150mm borrowing base.
Bob Watson, President and CEO of Abraxas, commented, “We remain committed to delivering shareholder value by executing on our well articulated plan of growing production and reserves, delevering the balance sheet via this production growth and noncore asset sales and refocusing the portfolio. The asset sales will consist of positions in which we have low working interests and/or assets with little associated reserves, production or cash flow. The Nordheim and Alberta Basin Bakken sales with combined proceeds of approximately $22mm is evidence this transformation is underway.”
Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, Mid-Continent, 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.