Abraxas Petroleum Corporation AXAS is pleased to provide the
following operational update; provide fourth quarter and year-end production
and reserve data; and announce the commencement of a sale process for its
non-operated Bakken and Three Forks assets.
Eagle Ford Shale
In McMullen County, Abraxas successfully completed the Corvette C 1H with a 20
stage fracture stimulation. This is the first WyCross well drilled on an
East-West azimuth by the Company and is currently flowing to sales at rates
above the Company's type curve. Moreover, the well was drilled, completed and
turned to sales for approximately $6.1 million or almost $2 million below
originally projected AFE. The Gran Torino A 1H is currently being fracture
stimulated with a 19 stage completion. The Company recently drilled and cased
the Mustang 3H to a total depth of 15,007 feet with an anticipated fracture
stimulation date in March. Abraxas plans to spud its next well at WyCross, the
Mustang 2H, within the next week. 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.
Williston Basin
Drilling continues on the Company's Lillibridge East PAD with intermediate
casing set on the 1H, 2H, 3H and 4H. The Company is currently preparing to
drill the lateral on the 4H after which the rig will move to drill the
laterals of the 3H, 2H and 1H. Abraxas owns an approximately 34% working
interest in the Lillibridge East PAD. The Company recently completed the Ravin
3H and is currently finishing the fracture stimulation of the Ravin 2H.
Flowback is expected to commence within the next few days from both wells.
Abraxas owns a 49% working interest in both the Ravin 2H and 3H.
December 31, 2012 Reserves
Abraxas' December 31, 2012 proved oil and natural gas reserves consisted of
approximately 30.1 million barrels of equivalent (“mmboe”), a net increase of
0.84 mmboe over 2011 year end reserves of 29.3 mmboe^(1). December 31, 2012
reserves consisted of approximately 58% oil, 9% NGLs and 34% natural gas
versus December 31, 2011 reserves of approximately 46% oil, 8% NGLs and 46%
natural gas. Proved oil reserves increased approximately 30% in 2012. 48% of
proved reserves as of December 31, 2012 and December 31, 2011 were classified
as proved developed. The present value, using a 10% discount rate (“PV-10”),
of future net cash flows before income taxes of Abraxas' proved reserves was
approximately $316.9 million, using 2012 average prices of $2.86/mcf of
natural gas and $95.14/bbl of oil. The lower average natural gas price of
$2.86/mcf in 2012 versus $4.16/mcf in 2011 resulted in the removal of 3.1
mmboe of previously proved undeveloped natural gas reserves, which were
uneconomic to drill at 2012 average natural gas prices. The independent
reserve engineering firm DeGloyer and MacNaughton (“D&M”) prepared a complete
engineering analysis on 98.9% of Abraxas' proved reserves on a BOE basis.
The following table outlines changes in Abraxas' proved reserves from December
31, 2011:
Oil Natural Gas NGL Total
(MMbbl) (Bcf) (MMbbl) (MMboe)
Proved Reserves
December 31, 13.37 81.37 2.36 29.29
2011^(1)
Additions 4.87 6.98 0.94 6.97
Purchases^(2) 0.00 0.07 0.00 0.01
Revisions^(2) 0.05 (16.77 ) (0.06 ) (2.80 )
Sales^(3) (0.31 ) (6.36 ) (0.54 ) (1.91 )
Production (0.64 ) (4.11 ) (0.11 ) (1.43 )
Proved Reserves 17.34 61.18 2.59 30.13
December 31, 2012
(1) Includes Abraxas' 34% working interest in Blue Eagle as of December 31,
2011
(2) Reserves associated with Abraxas' Ward county acquisition in July, 2012
included as a positive revision. Revisions also includes the removal of proved
developed not producing and proved undeveloped gas reserves
(3) Reserves associated with Abraxas' sale of its Eagle Ford Nordheim
properties in December, 2012
Fourth Quarter 2012 Production
Production in the fourth quarter averaged approximately 4,147 barrels of
equivalent per day (“boepd”). Variance from original guidance was caused by
the delayed completions of the Ravin 2H and 3H, considerable unanticipated
weather related downtime in the Williston Basin and gas plant issues in the
Eagle Ford shale that relegated the Company to flare gas. These issues
remained throughout the month of January. Production volumes for the month of
February have returned to more normalized levels of an estimated 4,400-4,600
boepd before the recent incremental completions of the Ravin 2H, Ravin 3H and
Gran Tornio A 1H as well as the upcoming completion of the Mustang 3H. Given
the recent strong base production and incremental production anticipated from
the above mentioned Bakken and Eagle Ford completions, Abraxas reiterates its
production guidance of 4,900 – 5,200 boepd for 2013.
Non-Operated Bakken/Three Forks Sale Process
Abraxas recently retained E-Spectrum Advisors (formerly Energy Spectrum
Advisors) to market its non-operated Bakken and Three Forks assets in North
Dakota and Montana. The potential divestiture consists of approximately 435
boepd and 14,502 net acres. If the Company is successful in achieving an
acceptable price for these assets, the proceeds will be used to pay down the
Company's revolver and redeployed into its core operated Bakken and Eagle Ford
assets.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in