Abraxas AXAS 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.
Financial Update
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.
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