Thursday, June 30, 2011
Abraxas Petroleum Corporation
Abraxas Petroleum Corporation today provided an operational update.
Rocky Mountain – North Dakota / Montana
In McKenzie County, North Dakota, Abraxas drilled the Stenehjem 27-34 1H to a total measured depth of 16,504 feet, including a 5,965 foot lateral in the middle Bakken formation, and completed the well with a 17-stage fracture stimulation. The well was recently placed on production, including gas (and natural gas liquids) directly into the sales line, and is currently in the early stages of cleaning up and producing at rates in excess of 800 barrels of oil equivalent per day, which is comprised of approximately 600 barrels of oil, 100 barrels of natural gas liquids and 700 Mcf of residue gas. We anticipate providing initial rates (after recovery of frac fluid) when 30-day rates are also available. Abraxas owns an approximate 79% working interest in this well.
In various counties in North Dakota and Montana, fourteen non-operated horizontal wells, targeting the Bakken or Three Forks formation, in which Abraxas owns a working interest are currently in progress or recently placed on-line. Four gross (0.15 net) wells went on production in mid-June, three gross (0.15 net) wells have been fracture stimulated and are currently cleaning up, three gross (0.50 net) wells are waiting on completion and four gross (0.07 net) wells are waiting on a drilling rig. Since January 2010, Abraxas has elected to participate in 19 gross (1.02 net) non-operated wells in the Bakken / Three Forks play.
In McKenzie County, North Dakota, two gross (0.11 net) non-operated horizontal wells targeting the Mission Canyon have been drilled and completed and are currently waiting on production facilities.
Abraxas anticipates being in a position in the near future to discuss long-term service availability to allow a multi-year continuous development plan on its Bakken / Three Forks acreage.
Rocky Mountain - Wyoming
In Campbell and Niobrara Counties, Wyoming, a two well oil development program is scheduled to begin this fall. One of these horizontal wells will target the Niobrara formation and one will target the Turner formation. Abraxas owns a 100% working interest in each of these wells.
Rocky Mountain – Alberta Basin Bakken
Abraxas has been approached by a number of companies in the industry with respect to a joint venture or similar arrangement; however, Abraxas has elected to wait for more definitive results from wells drilled to-date in the play before planning a course of action. Abraxas’ leases have a primary term of 5-10 years providing plenty of time to evaluate the results of other operators in the play.
South Texas – Eagle Ford
Abraxas currently owns a 50% equity interest in Blue Eagle, which is a joint venture between Abraxas and Rock Oil Company, LLC.
In DeWitt County, Texas, Blue Eagle’s first well, the T-Bird 1H, continues to outperform expectations and is currently producing approximately 1,100 barrels of oil equivalent per day, which is comprised of approximately 200 barrels of condensate, 340 barrels of natural gas liquids and 3.2 MMcf of residue gas. The well has produced approximately 200,000 barrels of oil equivalent during its first 150 days on production. Blue Eagle owns a 100% working interest in this well.
In DeWitt County, Texas, Blue Eagle participated in a non-operated horizontal well with its 43.9% working interest. The well, the Matejek Gas Unit 1, was drilled to a total measured depth of approximately 17,865 feet, including a 3,600 foot lateral, and recently completed with a 14-stage fracture stimulation. The well flow tested at restricted rates in excess of 780 barrels of oil equivalent per day through a choke while recovering frac fluid. The well is currently shut-in waiting on pipeline hookup.
In Atascosa County, Texas, the Grass Farms 1H should spud this week as the rig is currently rigging up. This well is located in the oil window of the play and will be drilled to a total measured depth of approximately 12,500 feet, including a 5,000 foot lateral. A fracture stimulation date has been secured for this well in August. Blue Eagle owns a 100% working interest in this well.
South Texas – Portilla
In San Patricio County, Texas, seven wells have been drilled and completed to-date in the multi-well in-fill drilling program and one additional well was recently recompleted. Three of the new wells targeted the dual objectives of the 7,400 and 8,100 foot Frio sands and four targeted the 7,400 foot Frio sand. These wells have increased production in the field by 100% and have added approximately 300 barrels of oil equivalent per day, 82% of which is oil. This drilling program has met the Company’s economic expectations and six additional locations remain to be drilled, all of which are scheduled for later this year. Abraxas owns a 100% working interest in each of these wells.
West Texas
In Nolan County, Texas, the Spires 126 2H recently reached a total measured depth of approximately 9,000 feet, including a 2,000 foot lateral. Completion operations will commence on this well in the near future. Abraxas owns a 100% working interest in this well.
In Coke County, Texas, in the NE Millican Reef field, Abraxas anticipates drilling two vertical delineation wells targeting the Canyon Sand play which is located approximately 30 miles to the southwest of Spires Ranch in the near future. The rig that drilled the Spires Ranch well will move to drill one of these two wells, after which, the rig will return to Spires Ranch for a continual horizontal development program, and assuming favorable results on the first well, the rig will return to NE Millican when convenient to drill the second well. Abraxas owns a 100% working interest in these wells.
In Reeves County, Texas, Abraxas recently acquired 640 net acres, for a total of approximately 3,000 net acres, in the emerging Wolfbone play. Two wells directly adjacent to our acreage are being currently drilled by the industry.
Canada - Pekisko
In Alberta, Canada, production from the Twining 9-11 remains relatively stable at approximately 100 barrels of oil equivalent per day. Two wells offsetting the successful Twining well will be drilled back-to-back, the first of which spudded this week. The two wells will be drilled horizontally and will target the Pekisko formation. Canadian Abraxas owns a 100% working interest in each of these wells.
Comments
“With the expected performance of the Portilla and Twining wells and the recent new production in the Bakken / Three Forks play, we have more than offset production disruptions from wells shut-in in the Williston Basin due to unprecedented high water and flooding. With all of our drilling activity, we should be in a position to continue sequential quarterly production growth for the foreseeable future,” commented Bob Watson, Abraxas’ President and CEO.
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 Gulf Coast regions of the United States and in the province of Alberta, Canada.
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