Abraxas Announces Signing of Non-Operated Bakken Definitive Agreement and
Provides Financial Update
SAN ANTONIO -- June 17, 2013
Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to announce the signing
of a definitive agreement to sell the majority of the Company’s non-operated
Bakken properties and provide a financial update.
Non-Operated Bakken Definitive Agreement
Abraxas signed an agreement to sell the majority of the Company’s non-operated
Bakken properties to Natural Resource Partners L.P. (NYSE:NRP) for $35.3
million plus the assumption of an estimated $8.1 million in AFEs from 22 wells
that are producing, have recently been drilled or completed or Abraxas has
elected to participate. The sale is subject to customary closing conditions
and purchase price adjustments and reflects an effective date of March 1,
2013. The asset consists of approximately 13,500 net Bakken acres. Closing is
scheduled for the third quarter of 2013. E-Spectrum Advisors LLC acted as
divestiture agent for Abraxas on the sale.
Inclusive of the non-operated Bakken sale, Abraxas has divested approximately
502 boepd for gross proceeds of $47.3 million^(1) since the beginning of 2013.
These asset sales have also removed approximately $10 million of budgeted
CAPEX commitments for Abraxas. It is Abraxas’ intention to use the proceeds
from these sales to pay down the Company’s bank line before being ultimately
redeployed to accelerate growth in the Company’s core areas. Taking these
asset sales into effect, Abraxas now projects production of 4,550-4,700 boepd
Bob Watson, President and CEO of Abraxas commented, “This is obviously a
transformational day for Abraxas as we significantly reduce our leverage while
simultaneously shifting our focus to a core operated portfolio. Heading
forward we will continue to rationalize our asset base to focus on our core
operated properties primarily in the Bakken and Eagle Ford. Moreover, the
removal of the non-operated Bakken assets from our portfolio will provide the
Company with a much more predictable production growth profile and CAPEX
schedule. We look forward to updating the market shortly as we evaluate
opportunities to accelerate growth in our core operated areas.”
(1) Sales proceeds inclusive of an estimated $7.6 million of assumed CAPEX
associated with AFEs on 25 wells in Abraxas’ non-operated Bakken sale.
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.
Abraxas Petroleum Corporation
Geoffrey King, 210-490-4788
Vice President – Chief Financial Officer
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