Abraxas Petroleum Corporation (NASDAQ:AXAS) today provided an operational update.
Abraxas 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.
- In McKenzie County, North Dakota, Abraxas drilled the Ravin 26-35 1H to a total measured depth of 20,835 feet, including a 9,800 foot lateral in the Three Forks formation. A production liner with 28 swell packers has been run to total depth and the well is currently waiting on the availability of fracture stimulation equipment. Abraxas owns an approximate 60% working interest in this well.
- In McKenzie County, North Dakota, Abraxas anticipates spudding the Stenehjem 27-34 1H during the fourth quarter of 2010, after rig repairs and equipment upgrades are complete. This well will target the middle Bakken formation and will include similar lateral length and fracture stimulation stages as the Ravin well. Abraxas owns an approximate 70% working interest in this well.
- In Dunn and Divide Counties, North Dakota, Abraxas elected to participate in five non-operated Bakken/Three Forks wells that are currently drilling. Abraxas owns an approximate 4% working interest in four of these wells and a 1% working interest in the fifth well.
- In Nolan County, Texas, Abraxas anticipates spudding its first of two operated wells within the next two weeks. The first well will be a vertical well and will target the Strawn, Caddo and Ellenburger formations at an approximate depth of 7,400 feet and the second well will be a horizontal well and will target the Strawn formation at an approximate depth of 7,200 feet. Abraxas owns a 100% working interest in each of these wells.
- In DeWitt County, Texas, Abraxas is currently drilling the vertical section of the Dlugosch 1H below 8,000 feet toward the Wilcox formation at an approximate depth of 10,000 feet. It is anticipated that the well will have a horizontal lateral of approximately 5,000 feet and be completed with 15 stages of fracture stimulation. Abraxas owns a 100% working interest in this well.
- In DeWitt County, Texas, Blue Eagle Energy, LLC, the recently announced joint venture between Abraxas and Blue Stone Oil & Gas, LLC, anticipates spudding its first horizontal Eagle Ford well, the T Bird 1H, during the fourth quarter of 2010 with the rig currently drilling the Dlugosch well. Abraxas currently owns an approximate 50% interest in the joint venture.
- In the Twining area of Alberta, two horizontal wells targeting the Pekisko formation have been drilled by Canadian Abraxas Petroleum, ULC ("Canaxas"), a wholly-owned subsidiary of Abraxas. The Swalwell 6-6 was drilled to a total measured depth of 9,725 feet, including a 4,400 foot lateral, and completed with a ten-stage fracture stimulation. The well is currently recovering load water with minor amounts of oil and gas. The Twining 9-11 was drilled to a total measured depth of 10,650 feet, including a 5,250 foot lateral. A production liner with 15 swell packers has been run to total depth and the well is currently scheduled to be stimulated next week. Two successful wells will earn Canaxas approximately 10 sections of land, or 6,400 net acres. Canaxas owns a 100% working interest in each of these wells.
- Abraxas continues its previously announced non-core, principally non-operated divestiture program and recently raised approximately $7.15 million in net proceeds during the August Oil & Gas Asset Clearinghouse auction. These producing properties were located in the Mid-Continent region of the United States. Since the program started in late 2009, Abraxas has raised approximately $20.5 million in net proceeds which have been used to pay down debt and accelerate capital projects.
"These past two months have been busy operationally and we look forward to announcing well results in the near future, or in the case of the Williston Basin, as soon as service equipment becomes available. In any emerging play with rapidly increasing activity levels, drilling rigs, service equipment and crews become scarce until equipment is relocated and crews trained. For example, the Ravin well took much longer to drill than originally anticipated as we experienced a number of down days as the drilling rig was poorly equipped, poorly maintained and run by an inexperienced crew. That being said, the rig is getting a complete overhaul before moving to our second operated location. We plan on continuing our divestiture program throughout the end of the year and if we are successful, we anticipate an additional $15 - $20 million in net proceeds," commented Bob Watson, Abraxas' President and CEO.