UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
October 3, 2001
Abraxas Petroleum Corporation
(Exact name of registrant as specified in its charter)
Nevada
(State of other jurisdiction of incorporation)
0-19118 74-2584033
(Commission File Number) (I.R.S. Employer Identification Number)
500 N. Loop 1604 East, Suite 100
San Antonio, Texas 78232
(Address of principal executive offices)
Registrant's telephone number, including area code:
210-490-4788
Item 5.OTHER EVENTS
See attached Press Release
The following exhibits are filed as part of this report:
NUMBER DOCUMENT
99.1 Press release dated October 3, 2001
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ABRAXAS PETROLEUM CORPORATION
By: ___________________________________
Chris Williford
Executive Vice President, Chief Financial
Officer and Treasurer
Dated: October 3, 2001
NEWS RELEASE
ABRAXAS UPDATES SUCCESSFUL OPERATIONS AND GIVES OPERATIONAL GUIDANCE
FOR THIRD AND FOURTH QUARTER
SAN ANTONIO, TX (October 3, 2001) - Abraxas Petroleum Corporation (AMEX:ABP)
Chairman and CEO, Bob Watson, commented on the Company's current operations in
Canada and the United States and gave guidance regarding operations for the
balance of 2001.
"In Canada, the Company has now drilled nine successful wells since mid-year in
the Caroline and Pouce Coupe areas, none of which are currently booked as proved
or probable reserves by the Company's outside engineering firms. Abraxas expects
reserves of 3-5 Bcfe (gross) per well and has identified over forty additional
locations in the areas based on the recent drilling and the 3-D seismic surveys
completed in each area this past winter. We also are eagerly awaiting winter
weather to begin our drilling program in the Ladyfern area of northeastern
British Columbia. We expect to participate in the drilling of 4 gross (1.3 net)
wells this winter based on 3-D seismic acquired last winter that compares
favorably with 3-D seismic covering the successful wells drilled last winter by
Murphy Oil Corp. (NYSE:MUR) and Apache Corp. (NYSE:APA) that immediately offset
our acreage block.
In the Pouce Coupe area, the third well since mid-year is online producing over
5 MMcfpd and 40 Bopd (gross). Two additional wells are expected to be online
later this month and one well is currently drilling. In Caroline, two wells have
been tested at a combined rate of over 8 MMcfpd and 100 Bopd (gross) and are
expected to be online this month. One additional well is awaiting completion and
one well is currently drilling. Abraxas has an average 86% working interest in
the wells drilled or drilling to date but has a 100% working interest in the
majority of the subsequent drilling locations.
In the S.W. Oates area of west Texas, the Company recently completed operations
to re-enter an existing wellbore to a total depth of 13,400 feet. Re-entering
the existing well saved approximately half the cost of a new well and will allow
the Company to test the Montoya formation in a cost effective manner. The clean
out was done with a workover rig and the Company is currently considering
options for a drilling rig to complete the horizontal portion of the well.
Abraxas has finished the evaluation of its recently acquired 3-D seismic and has
identified as many as 9 potential locations on its 100% working interest
acreage. In addition to the Montoya potential, the shallower Devonian formation
will also be evaluated.
In the Montoya joint participation area with EOG Resources (NYSE:EOG), EOG is
building the location for the next well which it expects to spud in the next
week and expects to spud an additional well before year end.
In light of current commodity prices, our current level of drilling activity is
being evaluated and the current pace of drilling will slow down to conserve
liquidity until industry conditions improve. This will not have a significant
impact on 2001 production in light of the successful drilling in the third
quarter, but could impact projected production growth for 2002. While overall
production for the third quarter is expected to be modestly below second quarter
due to the impact of previously announced asset sales and normal summer plant
turnarounds in Canada, Abraxas is expecting fourth quarter production to be back
to second quarter levels and growing as we exit 2001. In addition, the Company
expects LOE and G&A to be within current analysts' estimates. By operating and
controlling major projects, capital expenditures can be adjusted as there are no
current drilling obligations to maintain acreage. With the closing of the
successful tender for Grey Wolf Exploration, we are continuing to review, with
our investment bankers, options to refinance some or all of our existing
long-term debt including the potential sale of additional non-core assets to
improve liquidity and give additional financial flexibility."
Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas
exploitation and production company that also processes natural gas. The Company
operates in Texas, Wyoming and western Canada. For additional information about
the Company, please visit our web site, www.abraxaspetroleum.com for the most
current and updated information. The web site is updated daily in order to
comply with the SEC Regulation FD (Fair Disclosure).
Safe Harbor for forward-looking statement: Statements in this release looking
forward in time involve known and unknown risks and uncertainties, which may
cause the Company's 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 the
Company for crude oil and natural gas. In addition, the Company's future crude
oil and natural gas production is highly dependent upon the Company's level of
success in acquiring or finding additional reserves. Further, the Company
operates in an industry sector where the value of securities is highly volatile
and may be influenced by economic and other factors beyond the Company's
control. In the context of forward-looking information provided for in this
release, reference is made to the discussion of risk factors detailed in the
Company's filing with the Securities and Exchange Commission during the past 12
months.
FOR MORE INFORMATION CONTACT:
Janice Herndon/Manager Corp. Communications
Telephone 210.490.4788
jherndon@abraxaspetroleum.com
www.abraxaspetroleum.com