Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to provide the following operational and A&D update.
Eagle Ford Shale
In McMullen County, the Corvette C 1H averaged 867 boepd (808 barrels of oil per day, 355 mcf of natural gas per day) on a 22/64” choke over its first 30 days of production. The Corvette C 1H continues to flow to sales at a rate of 586 boepd (547 barrels of oil per day, 233 mcf of natural gas per day) on a 22/64” choke. The Gran Torino A 1H was recently completed with a 19 stage completion and is currently flowing to sales at rates above the Company’s type curve. Abraxas successfully completed the Mustang 3H with an 18 stage fracture stimulation with flowback expected to commence imminently. The Company recently drilled Mustang 2H to a total depth of 15,021 feet with an anticipated fracture stimulation date in April. Abraxas owns a 25% working interest in the Corvette C 1H and an 18.75% working interest in the Gran Torino A 1H, Mustang 3H and Mustang 2H.
Drilling continues on the Company’s Lillibridge East PAD with intermediate casing set on the 1H, 2H, 3H and 4H. The Company recently drilled and cased the lateral on the 4H with a 50 foot flare encountered while drilling. The rig is now preparing to spud the lateral of the 3H, which will be followed by the 2H and 1H. Abraxas owns a working interest of approximately 34% in the Lillibridge East PAD. As previously announced, the Ravin 2H and Ravin 3H were recently completed with the Ravin 2H performing in line and the Ravin 3H outperforming the Company’s type curve. Abraxas owns a 49% working interest in both the Ravin 2H and 3H.
The Company recently drilled and cased two shallow Yates wells, the Wilkes #1 and Wilkes #2, in Ward County, Texas. Early logs are encouraging, and Abraxas expects to complete the wells in April. Abraxas owns a 100% working interest in both wells.
Abraxas recently sold a portion of the Company’s properties in Oklahoma and Louisiana as well as scattered royalty interests in North Dakota and Montana at the March 2013 Oil and Gas Clearinghouse Auction for gross proceeds of approximately $2.9 million. Combined, the properties sold produce 27.5 barrels of oil per day and 220.7 mcf of natural gas per day. The remainder of the Company’s Oklahoma properties and additional North Dakota royalty interests are scheduled to be offered at the May 2013 Oil and Gas Clearinghouse Auction. The marketing process led by E-Spectrum Advisors for Abraxas’ non-operated Bakken and Three Forks assets is under way.
Bob Watson, President and CEO of Abraxas, commented, “Strong production volumes in February and early March, along with incremental well performance and the efficiency gains in the Eagle Ford, give us confidence in our 2013 guidance of 4,900-5,200 boepd on a $70 million CAPEX budget. With the Corvette C 1H, Abraxas completed its fourth high rate oil well in the Eagle Ford significantly above expectations. The Ravin 2H and Ravin 3H are flowing to sales at encouraging rates after we experienced significant completion issues and delays due to a third party. Furthermore, we continue to make progress in our efforts to refocus our portfolio and delever our balance sheet, with the non-op Bakken sale process starting in earnest as well as the recent sale of several non-core properties in Oklahoma, Louisiana and scattered royalty interests in North Dakota and Montana. We look forward to updating the market as we continue to execute against our strategic priorities and continue to enhance shareholder value.”
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.