UPDATE: Wunderlich Securities Downgrades Abraxas Petroleum to Hold on Leverage

Wunderlich Securities reduced its rating on Abraxas Petroleum

from Buy to Hold and reduced its price target from $7 to $3. Wunderlich Securities noted, "We started the year with the idea that Abraxas Petroleum (AXAS) would be able to monetize assets, pay down debt, and end the year with a focused portfolio and a lean balance sheet. This turnaround theme is not materializing. With the Eagle Ford sale terminated, AXAS will not be able to lower debt significantly any time soon. The company still needs to borrow to fund its $60 million capex in 2012. We are not comfortable with the company's liquidity and operating issues that has kept it from producing at peak capacity." Abraxas Petroleum closed at $2.28 on Thursday.