In Abraxas’ Gulf Coast region, the Company recently signed a definitive agreement and closed on the sale the Company’s Portilla field and associated surface acreage for net proceeds of approximately $13 million. The assets sold produced approximately 145 boepd (127 barrels of oil per day, 112 mcf of natural gas per day) on average during the month of June, 2016. The effective date of this transaction is June 1, 2016. Proceeds will be used to pay down the Company’s credit facility to approximately $88 million.
In Pecos County, Texas, the Company recently signed a contract to sell the Company’s 12,178 acre surface ranch and ½ of the Company’s minerals on the property for gross proceeds of $6.7 million. The contract is currently in the 30-day option period. Abraxas will retain the remaining ½ of the Company’s current mineral interest. Abraxas expects this transaction to close in November, 2016. Upon closing, proceeds from the sale will be used to further reduce borrowings on the Company’s credit facility.
Prior to the recent pullback in oil prices, Abraxas added additional oil hedges in 2017 and 2018. Abraxas’ updated hedge schedule is as follows:
|Q3 2016||Q4 2016||2017||2018|
|Oil Swaps (bbls/day)||1948||2500||2401||1796|
|NYMEX WTI (1)||$39.04||$43.25||$54.53||$47.48|
(1) Straight line average price
At Abraxas’ North Fork prospect, in McKenzie County, North Dakota, the Stenehjem 10H-15H wells have been successfully fracture stimulated and are currently flowing back at very encouraging rates. Specifically, the six wells have been on for 17-32 days and averaged 1,131 boepd (861 barrels of oil per day, 1,619 mcf of natural gas per day)(1) over their first 15 days of production. Abraxas owns a working interest of approximately 78% in Stenehjem 10H-15H.
At Abraxas’ Jourdanton prospect in Atascosa County, Texas, the Bulls Eye 101H was successfully completed with a 31 stage fracture stimulation. The well is currently in the very early stages of flowback. Abraxas owns a 100% working interest in the Bulls Eye 101H.
In Ward County Texas, Abraxas is currently drilling the lateral of the Caprito 99-101H at a depth below 12,000 feet toward an objective of 15,600 feet. Abraxas plans to complete this well in late October. Abraxas owns a 100% working interest in the Caprito 99-101H.