Abraxas Announces Signing of Nordheim Definitive Agreement, Provides Financial Update

  Abraxas Announces Signing of Nordheim Definitive Agreement, Provides
  Financial Update

Business Wire

SAN ANTONIO -- November 20, 2012

Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to provide the
following divestiture and financial update.

Nordheim Definitive Agreement

Abraxas today signed an agreement to sell the Company’s 25% working interest
at the Nordheim Project in the Eagle Ford shale to a large institutional buyer
for proceeds of $19.1mm. The sale is subject to customary closing conditions
and purchase price adjustments and reflects an effective date of September 1,
2012. The asset consists of 544 net acres in DeWitt County, Texas and
approximately 64 boepd (56% gas; 26% NGLs; 26% oil) of net production. Abraxas
will retain the rights to its Edwards production, reserves and upside across
both its Nordheim and Wagner lease blocks. Closing is scheduled for December
17, 2012. Petrie Partners acted as financial advisor for Abraxas on the sale.

Financial Update

Per the Abraxas’ November 12, 2012 release, the Company’s borrowing base was
recently raised to $150mm from its previous level of $140mm. As of quarter end
September 30, 2012, the Company had $134mm drawn on the facility and $2.6mm in
cash. The $150mm borrowing base already reflects the removal of reserves and
production associated with the Nordheim sale. In addition to the $19.1mm
Nordheim sale, the company recently announced the sale of its Alberta Basin
properties in Montana for $2.85mm. The approximately $22mm of combined
proceeds from these sales will immediately go to reducing borrowings on the
revolver, which stood at $134mm at quarter end. Thus, pro forma liquidity post
the sales will reflect current borrowings, less net proceeds from the sales,
compared to a $150mm borrowing base.

Bob Watson, President and CEO of Abraxas, commented, “We remain committed to
delivering shareholder value by executing on our well articulated plan of
growing production and reserves, delevering the balance sheet via this
production growth and noncore asset sales and refocusing the portfolio. The
asset sales will consist of positions in which we have low working interests
and/or assets with little associated reserves, production or cash flow. The
Nordheim and Alberta Basin Bakken sales with combined proceeds of
approximately $22mm is evidence this transformation is underway.”

Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas
exploration and production company with operations across the Rocky Mountain,
Mid-Continent, Permian Basin and onshore Gulf Coast regions of the United
States and in the province of Alberta, Canada.

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.

Contact:

Abraxas Petroleum Corporation
Geoffrey King, 210-490-4788
Vice President – Chief Financial Officer
gking@abraxaspetroleum.com
www.abraxaspetroleum.com