Abraxas Announces Year-End 2007 Reserve Increase
Abraxas Petroleum Corporation (AMEX:ABP) today announced year-end 2007 reserves for both its existing asset base and the properties recently acquired from St. Mary Land & Exploration Company.
Existing Asset Base (Consolidated)
Abraxas’ independent reservoir engineering firm, DeGolyer and MacNaughton, estimated total proved oil and natural gas reserves of 106.8 Bcfe (17.8 MMBOE) as of December 31, 2007, an 8% increase over December 31, 2006. Natural gas reserves account for 82% of the total proved reserves and 44% were classified as proved developed. Abraxas operates over 95% of its proved reserve base. The Company’s proved reserve life index exceeds 20 years.
The present value, using a 10% discount rate, of the future net cash flows before income tax (“PV10″) of the Company’s proved oil and natural gas reserves is approximately $215.7 million using realized oil and natural gas prices of $87.30 and $6.33, respectively. Such prices were based on market prices for oil and natural gas on December 31, 2007, as adjusted for the Company’s basis differentials.
Total capital expenditures for 2007 were approximately $16.7 million. Overall, the Company added approximately 14.8 Bcfe (2.5 MMBOE) of proved reserves which was offset by 6.7 Bcfe (1.1 MMBOE) of production, for a finding and development cost of $1.13 per Mcfe and a 219% reserve replacement for 2007. Future development costs of $28.5 million associated with the added undeveloped reserves equate to an all-in finding and development cost of $3.06 per Mcfe.
Properties Recently Acquired (Consolidated)
Abraxas internally engineered reserves for the properties acquired from St. Mary Land & Exploration on January 31, 2008. The Company estimated total proved oil and natural gas reserves of 60.8 Bcfe (10.1 MMBOE) as of December 31, 2007, a slight decrease from previously announced reserve estimates due to the roll-forward date, year-end prices and certain properties excluded at closing. Oil reserves account for 56% of the total proved reserves and 85% were classified as proved developed. The PV10 of these properties is approximately $178.5 million using year-end oil and natural gas prices, as adjusted for basis differentials.
Please refer to the table at the end of this release for a division of estimated proved reserves by Abraxas Petroleum Corporation and Abraxas Energy Partners, L.P.
“In 2007, we not only fixed our balance sheet through the formation of Abraxas Energy Partners, L.P., but we added reserves and replaced production at an attractive F&D cost. We look forward to continuing this trend in 2008 as we develop our existing asset base and integrate the St. Mary properties into our large inventory of projects,” commented Bob Watson, President and CEO.
Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations in Texas and Wyoming. Abraxas Petroleum Corporation also owns a 47% interest in an upstream master limited partnership, Abraxas Energy Partners, L.P., which entitles Abraxas Petroleum Corporation to receive its proportionate share of cash distributions made by Abraxas Energy Partners, L.P.
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.
Estimated Proved Reserves as of December 31, 2007
(Reserves in Bcfe and Dollars in Millions)
Abraxas PetroleumCorporationConsolidated
Abraxas PetroleumCorporation
Stand-Alone
Abraxas EnergyPartners, L.P.(the “Partnership”)
Existing Proved Developed Reserves
47.0
10.7
36.3
Existing Proved Undeveloped Reserves
59.8
23.4
36.4
Existing Proved Reserves
106.8
34.1
72.7
Existing PV10
$ 215.7
$ 67.9
$ 147.8
Acquired Proved Developed Reserves
51.4
2.0
49.4
Acquired Proved Undeveloped Reserves
9.3
2.1
7.2
Acquired Proved Reserves
60.7
4.1
56.6
Acquired PV10
$ 178.5
$ 14.4
$ 164.1
Total Proved Developed Reserves
98.4
12.7
85.7
Total Proved Undeveloped Reserves
69.1
25.5
43.6
Total Proved Reserves
167.5
38.2
129.3
Total PV10
$ 394.2
$ 82.3
$ 311.9
Total Percent of Gas Reserves
68%
61%
70%
Total Percent of Proved Developed Reserves
59%
33%
66%
Note: Abraxas Petroleum currently owns approximately 47% of the Partnership