Abraxas provides operational update, closes sale of non-operated Bakken assets


Abraxas provides operational update, closes sale of non-operated Bakken assets


SAN ANTONIO -- Abraxas Petroleum recently closed the sale of its non-operated Bakken assets, and has provided updates on its activities in the Eagle Ford shale, and the Williston and Permian basins.

In McKenzie County, N.D., Abraxas successfully remediated the sand plug on Lillibridge 4H. Lillibridge 4H, producing from Three Forks, is currently producing 1,436 boed (1,112 bopd, 140 bbl of NGLs per day, 1,105 mcfd) on a 20/64-in. choke. Combined, the four wells on the company’s Lillibridge East pad are producing approximately 5,503 boed (4,036 bopd, 721 bbl of NGLs per day, 4,476 mcfd). Abraxas owns a working interest of approximately 34% in the Lillibridge East pad.

Additionally, the company recently closed the sale of its non-operated Bakken assets for $38.3 million, after accounting for purchase price adjustments.

Abraxas said it plans to use a portion of the additional liquidity following the non-operated Bakken asset sale to accelerate growth in its core regions. Additions to the capital program include the following:

Eagle Ford: Abraxas currently holds 100% working interest in approximately 4,400 net acres in Atascosa County, Texas, in the Jourdanton Prospect. In September 2011, Abraxas completed a lateral in the Eagle Ford, the Grass Farm 1H, as part of the Blue Eagle JV on the same prospect. This well averaged 103 bopd over its first 30 days of production, but the relatively flat decline rate has yielded cumulative production of 40,000 bbl. Since completion of the initial well, Abraxas acquired a new 3D seismic survey, and interpretation indicates that the Grass Farm 1H was only in the target zone about 10% of its lateral length. Also, recent completions by area operators at similar depths (8,000 to 8,200 ft) have shown marked improvement in initial rates. The company plans to drill one 100% working interest Eagle Ford horizontal in late September 2013, at an estimated completed well cost of $6 million.

Abraxas also recently secured a new 410-ne- acre prospect in northern McMullen County. The lease will accommodate up to four Eagle Ford laterals, with anticipated lengths of 7,000 to 9,000 ft. Abraxas plans to spud an initial well in the fourth quarter of 2013, with 100% working interest.

Williston Basin: In addition to Abraxas’ Bakken acreage in the Williston basin, it also holds low-risk development targets of a conventional nature. The company plans to drill the Crusch 2-33 as a PUD replacement for a producing well in Roosevelt County, Mont., which has to be abandoned for mechanical reasons. Producing zones included the Red River, Gunton and Winnepegosis. The new well will spud in the fourth quarter, with an estimated $2.5-million completed well cost. Similarly, Abraxas plans to drill another 100% working interest twin well to develop reserves in the Ratcliff zone. The original well produced from the deeper Red River zone, but was abandoned for mechanical reasons. The shallower Ratcliff, at a depth of about 8,000 ft, had an excellent oil show. The Christiansen 12-2 will also spud in fourth-quarter 2013, at an estimated completed well cost of $1.5 million.

Permian: Over the last several years, Abraxas drilled four horizontal wells on its Spires Ranch prospect targeting the Strawn formation. The most recent of these wells, the Spires Ranch 89 #1H, was drilled in a non-pressure depleted area, and consequently it is the best producer. The company recently drilled the Spires Ranch 129 #2H in a similar environment to the 89 #1H targeting the Strawn formation. Given the company’s past success in stimulating analogous rock in the Edwards formation, which greatly enhanced well productivity, Abraxas plans to stimulate this well with a small, multi-stage frac completion, rather than the openhole design of previous wells. Abraxas holds a 100% working interest in the Spires 129 #2H, and anticipates a completed well cost of $2.3 million.

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