Message #30 From:
NewsBot Date: December 21, 2006 06:00:00 AM
ABP News Abraxas Provides Operations Update
SAN ANTONIO--(BUSINESS WIRE)--Abraxas Petroleum Corporation (AMEX:ABP) today provided an operational
update.
In the Oates SW Field of West Texas:
La Escalera #5-1 – the lower zone in the
Wolfcamp formation was tested after the fracture stimulation and
deemed not commercial. A bridge plug will be set and the upper
Wolfcamp zones will be perforated and tested next; and
Manzanita State #1H – the vertical section
of this Devonian re-entry has been cleaned out to the kick-off point
and the horizontal lateral should begin drilling in the first quarter
of 2007.
In the Abraxas Cherry Canyon Field of West Texas, the Company recently
began drilling the first of four vertical wells planned for 2007. These
in-fill wells will target the Bell Canyon and Cherry Canyon sands
between 5,000’ and 7,000’.
The Company discovered the field in 1995 and has since drilled
approximately 50 oil wells in the field.
In the Brooks Draw Field of Wyoming, the Company’s
technical team is conducting a full-scale review of the burgeoning Mowry
oil shale play to determine the feasibility of accelerating the activity
on our acreage block of approximately 50,000 acres.
“While the La Escalera #5-1 was a geological
success as we encountered the expected sand package of over 500’
in gross thickness as predicted by the interpretation of the 3-D
seismic, we are disappointed at the amount of water production in the
lower zone. If the upper Wolfcamp zones prove productive, it will be a
bonus for us, as the primary reason for acquiring this acreage block was
the deeper Devonian formation, which currently produces approximately 8
MMcfepd. Even as we focus on the Devonian, we are actively monitoring
the developments in the surrounding Woodford/Barnett Shale play. We have
recently entered into a verbal data swap agreement with another operator
that is currently drilling a Woodford Shale test approximately 12 miles
northwest of our acreage and has plans to drill another Woodford test
less than one mile from our acreage. During the 3rd
quarter of 2006 we sold approximately 3% of our daily net production
which we have not been able to replace due to the planned capital
spending slow-down as a result of low natural gas prices relative to the
high cost of services; therefore, our revised exit rate guidance for
2006 is 20-22 MMcfepd,” commented Bob Watson,
Abraxas’ President and CEO.
Abraxas Petroleum Corporation is a San Antonio-based crude oil and
natural gas exploitation and production company with operations in Texas
and Wyoming.
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 natural gas and crude oil. In addition, Abraxas’
future natural gas and crude oil 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.
