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Abraxas provides operational update

Wednesday, Aug 14, 2020

Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to provide an operational update, announce the closing of the Company’s non-operated Bakken asset sale and provide an activity, CAPEX and production guidance update.

Operational Update

In McKenzie County, North Dakota, Abraxas successfully remediated the sand plug on the Lillibridge 4H. The Lillibridge 4H, producing from the Three Forks, is currently producing 1,436 boepd (1,112 barrels of oil per day, 140 barrels of NGLs per day, 1,105 mcf of natural gas per day) on a 20/64” choke. Combined, the four wells on the company’s Lillibridge East pad are producing approximately 5,503 boepd (4,036 barrels of oil per day, 721 barrels of NGLs per day, 4,476 mcf of natural gas per day). Abraxas owns a working interest of approximately 34% in the Lillibridge East pad.

Non-Operated Bakken Closing

Abraxas recently closed the sale of its non-operated Bakken assets for $38.3 million after accounting for purchase price adjustments. Accounting for the asset sale, Abraxas’ credit facility was revised to $143 million. After providing the company’s updated June 30, 2020 internal reserve report to the company’s bank group, Abraxas will undergo its fall redetermination process. Given the activity levels and reserve adds from the company’s Eagle Ford and Bakken assets over the last six months, it is management’s expectation that the facility will increase from $143 million.

Activity, CAPEX and Production Guidance Update

Abraxas plans to use a portion of the additional liquidity following the non-operated Bakken asset sale to accelerate growth in its core regions. Additions to the capital program include the following:

Eagle Ford: Abraxas currently holds 100% working interest in approximately 4,400 net acres in Atascosa County, TX in the Jourdanton Prospect. In September 2011, Abraxas completed a lateral in the Eagle Ford, the Grass Farm 1H, as part of the Blue Eagle Joint venture on the same prospect. This well averaged a modest 103 BOPD over its first 30 days of production, but the relatively flat decline rate has yielded cumulative production of 40,000 BO. Since completion of the initial well, Abraxas acquired a new 3D seismic survey, and interpretation indicates that the Grass Farm 1H was only in the target zone about 10% of its lateral length. Also, recent completions by area operators at similar depths (8,000-8,200 ft) have shown marked improvement in initial rates. The company plans to drill one 100% working interest Eagle Ford horizontal in late September 2013 at an estimated completed well cost of $6 million.

Source: Business Wire

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