Abraxas Provides Operations, Guidance and Acquisition Update; Announces Upcoming Presentations

SAN ANTONIO--(BUSINESS WIRE)-- Abraxas Petroleum Corporation (“Abraxas” or the “Company”) (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:

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.