Quarterly / Earnings Reports | Second Quarter (2Q) Update

Abraxas Details Q2 2019 Results

By: Abraxas Petroleum Corp.

Share Print Bookmark    |    Wednesday,August 07,2019

Abraxas Petroleum Corp. reported financial and operating results for the three and six months ended June 30, 2019.

Financial Highlights for the Three Months Ended June 30, 2019

The three months ended June 30, 2019 resulted in:

• Production of 871 MBoe (9,572 Boepd)
• Revenue of $34.8 million
• Net income of $11.7 million, or $0.07 per share
• Adjusted net income (excluding certain non-cash items)^(a) of $4.2 million, or $0.02 per share
• EBITDA^(a) of $19.8 million
• Adjusted EBITDA per bank loan covenants^(a) of $19.8 million

Operational Highlights

Production (sales) for the quarter ended June 30, 2019 averaged 9,572 barrels of oil equivalent per day (Boepd) down 12 percent from the average for the quarter ended March 31, 2019. Approximately 71 percent was crude oil compared to 67 percent in the first quarter. Seven new wells were placed on production during the second quarter. Production was negatively impacted by the shut-in of wells in North Dakota to accommodate the fracing of our Lillibridge NW pad. We are close to restoring production on all wells on this pad and have used the opportunity to perform maintenance operations on older pad wells with the goal of enhancing production moving forward. Realized production was also impacted by the Company's monetization of roughly 350 net Boepd of non-operated Bakken assets during the quarter, and roughly 650 net Boepd of shut-in natural gas volumes in West Texas during the quarter due to low natural gas prices realizations in the region.

Williston Basin, North Dakota

In North Dakota, the four-well Lillibridge NW pad (in which Abraxas owns an approximate average 33 percent working interest) was successfully completed and placed on production. This four well pad has averaged 745 Boepd per well over its first month of production and continues to increase following the Company's choke management protocol.

Raven Rig #1 has commenced drilling operations on the Abraxas six-well Jore Fed Extension pad, in which Abraxas owns an approximate average 90 percent working interest. Timing of first production from this pad will depend on weather, oil prices, and gas takeaway capacity.

Delaware Basin, West Texas

Operations in the Delaware Basin of West Texas continue to proceed smoothly. In Winkler County Abraxas successfully brought online the Hackberry #201H (5,000-foot lateral in the Wolfcamp A-1), in which the Company owns a 75 percent working interest. In Ward County, the two-well Woodberry pad (5,000-foot laterals in the Wolfcamp A-1 and 3^rdBone Spring) have been completed and are beginning their flowback with encouraging initial production rates. Both wells were drilled and completed under budget.

On the Greasewood pad, in which Abraxas owns a 100 percent working interest, two 5,000-foot laterals in the Third Bone Spring and the Wolfcamp B are drilling the lateral sections with frac operations scheduled to commence in September. As the Greasewood wells represent the last remaining obligation wells for the Company for 2019, upon completion, the rig will be released giving the Company time to work on production optimization on the twenty plus producing wells in the area.

Response to Saltstone Capital Management Letter

Abraxas welcomes open communications with its shareholders and considers input that may advance the Company's goal of enhancing shareholder value. While it is the Company's policy not to comment on specific discussions with shareholders, it is important to note that members of the Senior Management and Board of Directors of Abraxas have held multiple discussions with Saltstone to better understand their views.

While we expect communications with Saltstone may continue, the Company is focused on evaluating and, if deemed appropriate, executing strategies to enhance value for all Abraxas shareholders. The Board has and will continue to explore a wide range of potential avenues to increase Abraxas stockholder value. No decision has been made with regards to any alternatives, and there can be no assurance that this ongoing assessment process will result in any transaction or transactions.