Abraxas Petroleum Corporation (“Abraxas” or the “Company”)
(NASDAQ:AXAS) today provided the following reserve and operational
update. Highlights include:
- Total proved reserves as of December
31, 2017 of 65.9 MMBoe up 21.2 MMBoe or 47.5%
- Proved developed producing (“PDP”)
reserves grew 48.5% to 20.7 MMBoe
- PV-10 (1) of $425.9
million using SEC 12-month average pricing of $51.34/bbl and
$2.99/mcf natural gas
- 2017 reserve replacement ratio of
887%
- 2017 PDP finding and development
(“PDP F&D”) cost of $10.42/Boe
- In the Delaware Basin, Abraxas
booked 17 gross Wolfcamp A1, 17 gross Wolfcamp A2, two gross
Wolfcamp B and two gross Third Bone Spring proved undeveloped
locations across four gross sections at Caprito (1320 foot spacing
assumed)
- In the Delaware Basin, Abraxas
booked an additional eight gross Third Bone Spring, Wolfcamp A1 and
Wolfcamp A2 proved undeveloped locations across four additional
gross sections
- Potential downspacing and the
remainder of Abraxas’ leasehold in the Delaware Basin remains
unbooked for future years
- In Ward County, Texas, the Caprito
82-101, a 4,820 foot lateral and the Company’s first Third Bone
Spring well, averaged 1,122 Boepd (878 barrels of oil per day,
1,463 mcf of natural gas per day)(2) over the well’s
first 30 days of production
- In Ward County, Texas, the Caprito
82-202, a 4,820 foot lateral targeting the Wolfcamp A1, averaged
1,134 Boepd (863 barrels of oil per day, 1,626 mcf of natural gas
per day)(2) over the well’s first 30 days of
production
December 31, 2017 Reserves
As of December 31, 2017, Abraxas’ proved oil and natural gas
reserves consisted of approximately 65.9 MMBoe, a net increase of
21.2 MMBoe or 47.5% over 2016 year-end reserves of 44.7 MMBoe.
December 31, 2017 reserves consisted of approximately 37.6 million
barrels of oil, 12.0 million barrels of NGLs and 97.8 billion cubic
feet of natural gas. PDP reserves were 20.7 MMBoe an increase of
48.5% over 2016 PDP reserves and comprised 31.4% of proved reserves
as of December 31, 2017.
The SEC-priced pre-tax PV-10 (1) (a non-GAAP financial measure)
was $425.9 million, using 2017 average prices of $51.34/bbl of oil
and $2.99/mcf of natural gas. Realized pricing, including
differentials, used in this calculation equated to $46.82/bbl of
oil and $1.79/mcf of natural gas.
Net proved reserve additions of 23.9 MMBoe resulted in a reserve
replacement ratio of 887% (defined as the sum of extensions,
discoveries, revisions and purchases, divided by annual
production). PDP F&D cost (defined as total drilling and
completion capital expenditures divided by total PDP reserve
additions) was $10.42/Boe.
The majority of Abraxas’ reserve additions came from the
Delaware Basin, where Abraxas booked 17 gross Wolfcamp A1, 17 gross
Wolfcamp A2, two gross Wolfcamp B and two gross Third Bone Spring
proved undeveloped locations across four gross sections at Caprito
(1320 foot spacing assumed). Abraxas booked an additional eight
gross Third Bone Spring, Wolfcamp A1 and Wolfcamp A2 proved
undeveloped locations across four additional gross sections. The
remainder of Abraxas’ leasehold in the Delaware Basin remains
entirely unbooked for future years. Abraxas also sold 1.3 MMBoe of
reserves during 2017.
The independent reserve engineering firm DeGolyer and
MacNaughton prepared a complete engineering analysis on 98.5% of
Abraxas’ proved reserves on a Boe basis.
The following table outlines changes in Abraxas’ proved reserves
from December 31, 2016:
Oil
(MMbbl)
Natural Gas
(Bcf)
NGL
(MMbbl)
Total
(MMBoe)
Proved Reserves December 31, 2016
24.2
70.8
8.6 44.7 Additions 14.5 14.5 2.8 19.8 Purchases 0.0
1.0 0.0 0.2 Revisions 0.8 19.3 1.3 5.3 Sales (0.4 ) (4.0 ) (0.3 )
(1.3 ) Production
(1.6 )
(3.9 ) (0.5 )
(2.7 ) Proved Reserves December 31, 2017
37.6 97.8 12.0 65.9
Fourth Quarter and Year End 2017
Production and CAPEX Update
Production for the fourth quarter of 2017 averaged approximately
8,788 Boepd (5,325 barrels of oil per day, 12,334 mcf of natural
gas per day, 1,407 barrels of NGL per day). Production for the year
ending December 31, 2017 averaged approximately 7,391 Boepd (4,311
barrels of oil per day, 10,655 mcf of natural gas per day, 1,304
barrels of NGL per day).
Capital expenditures for the year ended December 31, 2017 are
expected to be approximately $135 million ($132 million cash and $3
million stock issuance). Approximately $31 million of the capital
expenditures were spent on acquisitions with the remainder spent on
drilling, completion and facilities.
Operations Update
In Ward County, Texas, the Caprito 82-101H, a 4,820 foot lateral
and the Company’s first Third Bone Spring test, averaged 1,122
Boepd (878 barrels of oil per day, 1,463 mcf of natural gas per
day)(2) over the well’s first 30 days of production. The Caprito
82-202H, a 4,820 foot lateral targeting the Wolfcamp A1 zone,
averaged 1,134 Boepd (863 barrels of oil per day, 1,626 mcf of
natural gas per day)(2) over the well’s first 30 days of
production. Abraxas owns a 100% and 57.1% working interest in the
Caprito 82-101H and 82-202H, respectively.
Bob Watson, President and CEO of Abraxas, commented, “We are
pleased to report our sixth consecutive year of production and
reserve growth. 2018 promises to be a continuation of this trend
with substantial upside left to be booked in the Delaware Basin and
current production rates that are 50% higher than our 2017 average
production. Our focused inventory of highly economic development
locations in the Bakken and Wolfcamp/Bone Spring position us to
drive multiple-years of high-return production and reserve growth
for our shareholders.
“We are also pleased to announce another highly productive zone
on our Ward County acreage in the Third Bone Spring. This
represents the fourth zone we have derisked in Ward County. We are
currently testing downspacing on our acreage. The results of this
will dictate the optimal development of these four zones on our
acreage. Importantly, very little of this potential or downspacing
is currently booked as proved undeveloped reserves, which bodes
well for future reserve growth.”
(1) The following table provides a reconciliation of PV-10 to
the standardized measure of discounted future net cash flows at
December 31, 2016 and 2017:
December 31, (in thousands)
2016 2017
PV-10 $ 160,600 $ 425,936 Estimated present value of
future income taxes discounted at 10% —
(32,448
)
Standardized measure of discounted future net cash flows $ 160,600
$
393,488
(2) The 30-day average rates represent the highest 30 days of
production and do not include the impact of natural gas liquids and
shrinkage at the processing plant and include flared gas.
Abraxas Petroleum Corporation is a San Antonio based crude oil
and natural gas exploration and production company with operations
in the Williston Basin, Permian Basin and South Texas regions of
the United States.
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180220005422/en/
Abraxas Petroleum CorporationGeoffrey King, 210-490-4788Vice
President – Chief Financial
Officergking@abraxaspetroleum.comwww.abraxaspetroleum.com
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