Current AXAS Stock Info

Abraxas Petroleum Corporation (ticker: AXAS) reported a net loss of $4.1 million, or $(0.02) per share. For 2017, the company reported a net income of $16 million, or $0.10 per share.

In Q4 2017, the company produced 808 MBOE, or 8,788 BOEPD. For 2017, the company produced 2.7 MMBOE, or 7,391 BOEPD.

Operations

Delaware Basin

In Ward County, Texas, Abraxas recently drilled and cased three wells and is drilling the fourth well on the company’s 660’ downspacing test at Caprito. Abraxas owns a 57.8% working interest in the Caprito wells 99-301H, 99-311H, 99-202H and 99-211H.

Abraxas’ next pad will be the Greasewood 201H and 301H. These locations are four sections north of the Caprito acreage and will test the Wolfcamp A1 and A2. Abraxas owns a 100% working interest in these wells.

On February 28, 2018, Abraxas closed on the acquisition of 944 net acres in Winkler County for $14.3 million. Abraxas’ combined net Bone Spring/Wolfcamp acreage position now consists of 9,211 net acres.

Abraxas Petroleum Drilling the Delaware Basin, June Completions on Tap in the Williston

AXAS Delaware Basin Acquisition, Mar. 2018

Williston Basin

At Abraxas’ North Fork prospect, in McKenzie County, North Dakota, the company recently drilled and cased the Yellowstone 5H-7H wells, in which the company owns a 52% working interest. These wells are scheduled for a June completion date.

Abraxas also recently drilled and cased the Lillibridge 9H-12H wells, in which the company owns a 25-29% working interest. These wells are scheduled for a July completion date. Abraxas’ next pad will be the Ravin 9H-12H, in which Abraxas estimates a 50% owned working interest.

Delaware Basin focus

Abraxas President and CEO Bob Watson said, “In early 2017, Abraxas commenced and executed a successful equity offering with four distinct goals: de-risk four zones on our Ward County assets, add Bone Spring/Wolfcamp acres in the Delaware Basin at a reasonable cost, grow our production base to critical mass and maintain our balance sheet. We are happy to report that we successfully de-risked the Wolfcamp A1, Wolfcamp A2, Wolfcamp B and Third Bone Spring on our acreage position in Ward County. Since January 2017, we added approximately 4,000 net Bone Spring/Wolfcamp acres to our Delaware Basin position. We reached critical mass with our production base as evidenced by our 11,480 BOEPD production average during the month of January 2018. Finally, we ended the year with a solid balance sheet that will enable us to continue our two-rig program and remain acquisitive in the Delaware Basin.

“Our goals for 2018 remain largely unchanged. We will look to continue to expand our acreage position in the Delaware Basin at a reasonable cost while protecting our balance sheet, streamline our portfolio by continuing to divest non-core assets, further delineate our acreage position by drilling outside of Caprito and test downspacing to the industry norm 660 feet between wells in the same zone. Ultimately, success on these fronts will position Abraxas for an optimal multi-year, high return and focused development program in the Delaware Basin,” Watson concluded.

2018

Abraxas Petroleum Drilling the Delaware Basin, June Completions on Tap in the Williston

AXAS 2018 Guidance, Mar. 2018

Q&A conference call excerpts

Q: First question is just a follow-up on the 2018 production outlook. It does seem like you’re ahead of schedule in the Bakken, but also to me it looks like you maybe a little ahead of schedule in the Delaware. How far ahead of schedule you’re tracking versus the underlying assumptions in your current 2018 guidance. And if you continued at this pace, potentially how many additional net wells you could have in both the Bakken and the Delaware? Thanks.

CEO Robert (Bob) Watson: Two?

CFO Geoffrey King: At least two more…

Watson: Two more in the Bakken? Yeah, two more in the Bakken. And what about the Delaware?

King: I think we’re just right on schedule in the Delaware right now for what we’re seeing. If you remember from our last update, we moved our assumed well count up with the increase in the CapEx budget to 12 wells for the year.

And the thinking there is you will get those 12 wells, but obviously there’s a delay in bringing those volumes on given their slower flow back. So, pretty comfortable with where we are in the Delaware, but Bakken is definitely well ahead of schedule.

Q: I understand that you’re drilling ahead of schedule. In terms of your completion schedule that you had in mind when you laid out the first quarter production guidance and the full-year production guidance, is the completion schedule still on track, or has there been any slippage there?

Watson: It’s still pretty much on track. The wildcard there is weather in the Bakken. We typically don’t like to frac wells in bad weather conditions. So, we have one frac crew scheduled to do all seven wells, so they’ll move from one pad to the next. They’re not going to – we’re not going to frac them all at the same time obviously. So, just for conservatism’s sake, we’re saying we start the fracs on one pad in June and the other one in July. That could move up a little bit depending on weather, but no one can predict that.

Q: You obviously had very good success with the short lateral wells. Any ability or desire to try some longer laterals at this point?

Watson: Our ultimate goal is trying to put together our acreage, which will allow us to drill longer laterals. We do it every day in the Bakken. We’re quite adept at doing so. I have no problem doing it. Texas, and specifically West Texas is a different ballgame from an acreage ownership perspective, and not all leases will allow you to cross the lease line, which is pretty much required to drill a 2-mile lateral. So, we’re continuing to work on that. We’ve got a great land staff. They know that’s one of our goals. And I would say that ultimately we would like to have a large inventory of 2-mile laterals to drill.

But in the meantime, everything that we’re doing, at least through the end of the summer, is going to be – well, maybe not, we might have a 7,500-foot lateral well sometime in the summer. But at least the next two on Greasewood are going to be lease-line limited to 1-mile laterals.


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