Abraxas Petroleum Corporation (NASDAQ:AXAS) today reported financial and operating results for the three and twelve months ended December 31, 2020 and provided an operational update.

“adjusted net income (loss), excluding certain non-cash items”

Financial and Operating Results

Including Abraxas’ equity interest in Blue Eagle’s production, the twelve months ended December 31, 2020 resulted in:

• Production of 1.4 MMBoe (3,762 Boepd), of which 45% was oil or natural gas liquids

The twelve months ended December 31, 2020 resulted in:

• Production of 1.3 MMBoe (3,484 Boepd), excluding Abraxas’ equity interest in Blue Eagle’s production
• Revenue of $64.6 million
• EBITDA^(a) of $31.5 million
• Discretionary cash flow^(a) of $24.7 million
• Net income of $13.7 million, or $0.15 per share
• Adjusted net income^(a) of $6.3 million, or $0.07 per share, excluding certain non-cash items

(a) See reconciliation of non-GAAP financial measures below.

Net income for the year ended December 31, 2020 was $13.7 million, or $0.15 per share, compared to a net income of $1.8 million, or $0.02 per share, for the year ended December 31, 2020.

Adjusted net income, excluding certain non-cash items, for the year ended December 31, 2020 was $6.3 million, or $0.07 per share, compared to adjusted net loss, excluding certain non-cash items, of $3.7 million or $0.05 per share for the year ended December 31, 2020. For the year ended December 31, 2020, adjusted net income excludes the unrealized gains on derivative contracts of $7.5 million. For the year ended December 31, 2020, adjusted net loss excludes the ceiling test impairment of $4.8 million and unrealized gains on derivative contracts of $10.3 million.

Unrealized gains or losses on derivative contracts are based on mark-to-market valuations which are non-cash in nature and may fluctuate drastically period to period. As commodity prices fluctuate, these derivative contracts are valued against current market prices at the end of each reporting period in accordance with Accounting Standards Codification 815, “Derivatives and Hedging,” as amended and interpreted, and require Abraxas to either record an unrealized gain or loss based on the calculated value difference from the previous period-end valuation. For example, NYMEX oil prices on December 31, 2020 were $98.83 per barrel compared to $79.20 on September 30, 2020; therefore, the mark-to-market valuation changed considerably period to period.

Operational Update

Rocky Mountain – North Dakota / Montana

• In the Bakken / Three Forks play in the Williston Basin, during the fourth quarter of 2011, 1 gross (<1% net) non-operated well came on-line and 2 gross (0.3 net) wells are currently drilling or awaiting completion. Additionally, we have recently elected to participate in 6 gross (0.6 net) wells that have yet to spud.
• The refurbishment of the Company owned drilling rig has been completed and the rig is currently on its way to McKenzie County, North Dakota to begin drilling its first multi-well pad site.

Rocky Mountain – Wyoming

• In Campbell County, Wyoming, the Hedgehog State 16-2H, a horizontal well targeting the Turner formation, was recently completed with a 17-stage fracture stimulation. The well is currently flowing back with encouraging initial results. Abraxas owns a 100% working interest in this well.

South Texas – Eagle Ford

• At December 31, 2020, Abraxas owned a 34.7% equity interest in Blue Eagle, a joint venture between Abraxas and Rock Oil Company, LLC.
• In McMullen County, Texas, the Cobra 1H, a horizontal well targeting the Eagle Ford Shale, was recently completed with a 15-stage fracture stimulation. The well is currently flowing back at very promising rates. Blue Eagle owns a 100% working interest in this well.

Canada – Pekisko

• In Alberta, Canada, the pipeline hook-up for three wells is underway and should be completed within the next few weeks. Two wells continue to await stimulation; however, the completions have been delayed as the availability of acid for the stimulations is in short supply. Canadian Abraxas owns a 100% working interest in each of these wells which have targeted the Pekisko formation.

Commodity Hedges

The Company’s gas hedges were recently monetized for $12.4 million and additional NYMEX-based fixed price oil hedges were entered into at prices above $100 per barrel for the reminder of 2012 through 2014.

Source: Business Wire

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