SAN ANTONIO--(BUSINESS WIRE)--Nov. 4, 2015--
Abraxas Petroleum Corporation (“Abraxas” or the “Company”) (NASDAQ:AXAS)
today provided the following operational update; announces 2016 guidance
and capital budget.
Williston Basin
On the Ravin Northwest pad at Abraxas’ North Fork prospect, in McKenzie
County, North Dakota, the Ravin 8H, Sten–Rav 1H and Stenehjem 5H were
successfully fracture stimulated and are currently being drilled-out.
Abraxas also successfully drilled and cased the Stenehjem 14H-15H and is
currently drilling the lateral section of the Stenehjem 13H. This will
be followed by the lateral sections of the Stenehjem 10H-12H. Abraxas
owns a working interest of approximately 74% and 78% in the Ravin
Northwest wells and Stenehjem 10H-15H, respectively.
Gulf Coast
At Abraxas’ Portilla Field, in San Patricio County, Texas, the Company
is commencing a pilot program to test Glori Energy’s (NASDAQ: GLRI)
microbial enhanced oil recovery (EOR) technology known as AERO. Glori
Energy estimates that the deployment of the technology can potentially
recover an additional 9-12% of the original oil in place or up to 20% of
the remaining oil in analogous fields. As a reminder, Portilla Field was
discovered by the Superior Oil Company in 1950 and has cumulative
production of approximately 80 million barrels of oil from various
sandstone reservoirs from about 3,500 to 9,600 feet. Abraxas acquired a
100% working interest in the field from Mobil Oil Corporation in 1992.
The three main reservoirs at depths of 7300 – 8100 feet are the
objectives of the AERO technology, and Abraxas estimates those
reservoirs originally contained about 125 million barrels of oil. To
date the reservoirs have produced about 70 million barrels of oil and
continues to steadily produce over 200 BOPD. These main reservoirs
produce with a natural water drive mechanism, which permits relatively
inexpensive deployment of the AERO technology. None of the field has
been subjected to other enhanced oil recovery methods, such as CO2. If
the pilot is successful, full field deployment will commence in 2016.
2016 Guidance and Capital Budget
Abraxas recently received board approval for a $25-$40 million capital
budget for 2016 (broken down in further detail below). Estimated
production volumes associated with this budget are forecasted to be
6,100 boepd at the midpoint of guidance. The low end of the production
and CAPEX guidance range anticipates six gross well completions in the
Bakken in the third quarter of 2016. With a commodity price recovery,
Abraxas expects to deploy additional cash flow into the Company’s asset
base. The high end of the production and CAPEX guidance range
anticipates an additional four gross well completions in the Bakken in
the fourth quarter of 2016 and approximately $6 million of additional
CAPEX in the Eagle Ford/Austin Chalk, Powder River Basin or at Portilla.
Abraxas is not assuming any incremental volumes associated with the
additional $6 million of spending at this time.
|
|
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Full Year 16E
|
|
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Low
|
|
High
|
Production
|
|
|
|
|
Total (Boepd) |
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5,900
|
|
6,300
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% Oil
|
|
64%
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% NGL
|
|
11%
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% Natural Gas
|
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25%
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Operating Costs
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|
|
|
|
LOE ($/Boe) |
|
$9.50
|
|
$11.50
|
Production Tax (% Rev) |
|
9.5%
|
|
10.0%
|
Cash G&A ($mm) |
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$8.0
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$9.0
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|
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CAPEX
($mm)
|
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$25
|
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$40
|
|
|
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|
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Net CAPEX
|
|
|
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Low
|
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High
|
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($mm
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)
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|
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($mm
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)
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Basin/Region
|
|
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Bakken
|
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$
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25.0
|
|
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$
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34.0
|
|
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Other
|
|
|
- |
|
|
|
6.0 |
|
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Total
|
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$
|
25.0
|
|
|
$
|
40.0
|
|
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|
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Bob Watson, President and CEO of Abraxas, commented, “Given the
depressed commodity price environment, we elected to pursue a more
conservative capital plan in 2016. This reduced capital plan will allow
us to maintain our 2015 yearly average production volumes and we expect
it to generate free cash flow. Should commodity prices recover, Abraxas
retains the ability to further accelerate the Company’s capital
expenditures and growth.
“Abraxas anticipates a significant near-term production increase as
shut-in wells, offsetting our three recent completions, are returned to
production. Additionally, we expect to turn these three high working
interest wells over to production in the near future. Our efforts to
reduce LOE and G&A have been quite successful and allowed us to protect
our cash margins in this depressed commodity price environment.
Management plans to update 2015 production, cash expense and CAPEX
guidance after the Company achieves stabilized production given the
flurry of recent activity.”
Abraxas Petroleum Corporation is a San Antonio-based crude oil and
natural gas exploration and production company with operations across
the Rocky Mountain, Permian Basin and onshore Gulf Coast regions of the
United States.
Safe Harbor for forward-looking statements: Statements in this release
looking forward in time involve known and unknown risks and
uncertainties, which may cause Abraxas’ actual results in future periods
to be materially different from any future performance suggested in this
release. Such factors may include, but may not be necessarily limited
to, changes in the prices received by Abraxas for crude oil and natural
gas. In addition, Abraxas’ future crude oil and natural gas production
is highly dependent upon Abraxas’ level of success in acquiring or
finding additional reserves. Further, Abraxas operates in an industry
sector where the value of securities is highly volatile and may be
influenced by economic and other factors beyond Abraxas’ control. In the
context of forward-looking information provided for in this release,
reference is made to the discussion of risk factors detailed in Abraxas’
filings with the Securities and Exchange Commission during the past 12
months.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151104005208/en/
Source: Abraxas Petroleum Corporation
Abraxas Petroleum Corporation
Geoffrey King, 210-490-4788
Vice
President – Chief Financial Officer
[email protected]
www.abraxaspetroleum.com