SAN ANTONIO–(BUSINESS WIRE)–Abraxas Petroleum Corporation (“Abraxas” or the “Company”) (NASDAQ:AXAS) provides the following operational update.
Williston Basin, North Dakota
In McKenzie County North Dakota, our four well Ravin NE Pad has been on production for 25 days and has averaged 1,182 barrels of oil and 2.1 million cubic feet of gas per day (1,532 barrels of oil equivalent per day, BOEPD) per well. Production is currently being restricted due to an aberration in the North Dakota crude oil market where December differentials are approximately $21 per barrel. However, we have been successful in locking in January differentials at less than $9 per barrel. The latest two Abraxas pads are not subject to our existing crude oil market agreement, which calls for a fixed differential of less than $5 per barrel through February 2019, and therefore are subject to spot market differentials. The gas from this pad is currently being flared due to third party delays in getting connected to a gas sales line. Abraxas owns an approximate 55% working interest in two of these wells and an approximate 29% percent working interest in the other two.
On the four well Ravin North Central Pad, two of the wells have been on production for 30 days and have averaged 606 barrels of oil and 1.2 million cubic feet of gas per day (806 BOEPD) per well. Production from these two wells has also been restricted due to the differential issue discussed above. A gas sales line has been in place on this pad from the start, which has allowed gas sales with minimal flaring due to high line pressure. Completion work continues on the remaining two wells which has been complicated by stuck coil tubing in both wells. Fishing the stuck pipe has been successful in one well and has recently commenced on the second. We expect to have both wells on production early in the new year. This pad was drilled close to existing wells that have been on production for approximately 5 years, therefore we expect reduced rates, although still above our type curve. Abraxas owns an approximate 55.4% interest in the four wells on this pad.
Raven Rig #1 has successfully completed the drilling of four wells on the Lillibridge NW Pad to total depths in excess of 21,000 feet. Abraxas owns an approximate 25% interest in this pad. The rig will shut down for several weeks over the holidays for some routine maintenance and will then spud the five well Jore Federal East Extension Pad. Abraxas will own an approximate 76% interest on this pad. The Lillibridge and Jore wells will not be completed until next summer, and only if conditions warrant.
Delaware Basin, West Texas
In the Delaware Basin of West Texas, our one well Pecan 47 pad in Ward County has begun to cut oil and is making appreciable amounts of oil and gas under our conservative flow back regime. We expect it could be another 45 to 60 days before this well achieves peak rate. Abraxas owns a 100% interest in this well.
Drilling has been successfully completed on our two well Creosote Pad, with both wells having slightly less than 5,000’ laterals. Abraxas owns an approximate 80% interest in these two wells that are scheduled to be completed in early February. The rig will be moving soon to drill one well on our Hackberry Pad in Winkler County.
Bob Watson, President, commented, “We continue to produce results above our expectations but with the recent downturn in oil prices our focus going forward will emphasize capital efficiency over growth, even more than we have done in the past. We intend to issue a revised capital budget for 2019 early in the new year that will allow us to continue to operate within projected cash flow, but with flexibility to accelerate or decelerate capital spending should conditions warrant.”
Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, Permian Basin and South Texas regions of the United States.