Abraxas Provides Operational Update

  Abraxas Provides Operational Update

Business Wire

SAN ANTONIO -- January 7, 2013

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

Eagle Ford Shale

In McMullen County, the Cobra B 1H averaged 592 boepd (95% oil) on a
restricted choke over its first 30 days of production. The Mustang 1H was
successfully completed with a 19 stage completion in mid-December and is
currently flowing to sales at rates above the Company’s in-house type curve.
The Corvette C 1H reached TD at 15,049 feet in under 8 drilling days and is
scheduled to be completed in mid-January. Abraxas recently spudded the Gran
Torino A 1H and is currently drilling the curve at 9,600 feet. Abraxas owns a
25% working interest in the Cobra B 1H and Corvette C 1H and an 18.75% working
interest in the Mustang 1H and Gran Torino A 1H.

Williston Basin

Drilling continues on the Company’s Lillibridge East PAD with intermediate
casing set on the 1H and 2H. The curve is currently being built on the
Lillibridge 3H after which the rig will move to the 4H. Abraxas owns an
approximately 37% working interest in the Lillibridge PAD. The expected
mid-December completion of the Raven 2H has been delayed by the discovery of a
third party downhole equipment failure, which required remediation work.
Remediation work is expected to be completed in the near future with a revised
stimulation date set for late January. The Ravin 3H recently experienced
similar mechanical completion issues to the Ravin 2H. Remediation work will
begin on the Ravin 3H post the completion of the Ravin 2H with an expected
stimulation date in mid-February. Abraxas owns a 49% working interest in both
the Ravin 2H and 3H.

Bob Watson, President and CEO of Abraxas, commented, “Although we are
disappointed with the completion delays in the Bakken, operations continue to
perform exceptionally well at Abraxas with well results and efficiency gains
in our Bakken and Eagle Ford drilling programs consistently above
expectations. We now enter 2013 anticipating a strong and immediate production
boost from our forthcoming Bakken and Eagle Ford completions.”

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