Exhibit 99.1
8-K Robert L.G. Watson will be presenting at the Pritchard Capital Partner’s Energize 2007 Conference in San Francisco, January 8-12, 2007
Slide 1: | Abraxas Petroleum Corporation |
Energize 2007: New Year, New Realities – January 8-12, San Francisco
The information presented herein may contain predictions, estimates and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, the need to develop and replace reserves, environmental risks, competition, government regulation and the ability of the Company to meet its stated business goals.
Picture: | Pencil drawing of a drilling rig in an oil field |
Slide 2: | Abraxas... |
Abraxas Petroleum Corporation
• | AMEX: ABP |
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| • | Market capitalization ~ $135 million |
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| • | Enterprise value ~ $260 million |
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• | Options: CBOE and PCX |
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• | Fully diluted shares outstanding – 44.1 million | ||||||||
• | Ownership: ~13% insider |
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~29% institutional
• | Average trading volume (3 mos): ~ 200,000 shares per day |
Slide 3: | Why Abraxas... |
Natural gas (> 80%)
• | Operations in Texas and Wyoming |
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• | > 10 year inventory of projects on existing leasehold | ||
• | Proved RLI: > 17 years |
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Quality assets
• | High ownership interests (79% WI) | ||||
• | Operational control (95%) |
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• | High producing rates per well |
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• | Large acreage positions |
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• | Substantial upside |
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Bar & line chart from 1977 through 2005 detailing long-term debt, market cap and proved reserves at December 31st of each year
Slide 4: | Goals... |
Increase Shareholder Value
by...
Drill Bit Growth targeting Conventional Reservoirs & watching Resource Plays
Slide 5: | Growth... |
...through the drill bit
Bar chart of production by quarter from Q1 2005 through Q3 2006 by area, CAGR 29%
Slide 6: | Areas of Operations... |
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Wyoming – Powder River Basin – Converse & Niobrara Counties |
West Texas – Delaware Basin – Pecos, Reeves & Ward Counties
- Eastern Shelf – Coke, Dawson, Howard, Martin, Mitchell & Scurry Counties |
South Texas – Gulf Coast Basin – DeWitt, Goliad, Lavaca & San Patricio Counties
Map of the United States highlighting Wyoming and Texas
Slide 7: | Production / Reserves... |
Proved Reserves – 104.7 Bcfe (1)
Net Production – 22.2 MMcfepd (2)
Pie chart = Wyoming 2%, South Texas 31%, West Texas 67%
3P Reserves – 303.6 Bcfe (1)
Pie chart = Wyoming 3%, South Texas 13%, West Texas 84%
(1) | as of 12/31/05 | |
(2) | Q3 actual |
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Slide 8: | Acreage / Projects... |
Net Undeveloped Acres ~ 64,600 (1)
Pie chart = Wyoming 71%, South Texas 2%, West Texas 27%
237 3P Projects (2)
221 Incremental Projects (2)
Pie chart = Wyoming 19%, South Texas 8%, West Texas 73%
(1) | as of 12/31/05, includes mineral interest | |
(2) | as of 12/31/05 |
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Slide 9: | West Texas... |
Map of Texas highlighting certain counties in West Texas
165 wells (74% WI) (1)
73.0 Bcfe (Proved) (1)
254.3 Bcfe (3P) (1)
14.3 MMcfepd (2)
17,600 NUA (3)
175 projects (3P) (1)
157 incremental projects (1)
Average depth: >14,000’
Project Areas:
IRA
Clearfork / Strawn Reef |
Delaware
Atoka-Wolfcamp / Mississippian / |
Devonian / Montoya / Ellenburger
Cherry Canyon
Cherry & Bell Canyon |
Oates SW
| Wolfcamp / Woodford / Devonian |
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(1) | as of 12/31/05 |
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(2) | Q3 actual |
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(3) | as of 12/31/05, includes mineral interest | |||
2007 Plans
Oates SW: Devonian, Woodford
In-fill drilling programs at: Cherry Canyon, Spraberry, Clearfork, Strawn Reef
Slide 10: | Oates SW... |
Map of Texas highlighting Pecos County in West Texas
38 sq. miles of 3-D seismic
~15,000 acres
Focus – Conventional Reservoir
DEVONIAN
4 wells producing – 1 awaiting completion
Q1 2007 – drill horizontally re-entry
Hudgins 34-2H: Devonian - <1.0 MMcfepd
La Escalera 1AH: Devonian - < 7.0 MMcfepd
Hudgins 37-1H: Devonian – on-line – needs fracture stimulation
Elsinore Cattle 56: Devonian - ~0.2 MMcfepd
Manzanita: Q1 07 Devonian horizontal re-entry
Secondary – Resource Play
WOODFORD
Woodford – 1 well producing
Hudgins 11-1: Woodford – producing small amount of dry gas
La Escalera 5-1: Lower Wolfcamp – not commercial
Lease map of Oates SW Field area with well locations, 3-D outline, current activity and wellbores available for re-entry depicted
Slide 11: | Resource Play... |
Map of Texas highlighting Culberson, Reeves, Pecos and Ward Counties in West Texas with well locations and acreage position depicted
Delaware Basin Shale Players:
ABP, COP, CHK, CRZO, CWEI, DVN, ECA, EOG, FST, KWK, PPP, RRC, SWN, XTO, Reliance and Petro-Hunt
EOG (building pipeline after positive test)
COP (flowing gas)
Petro-Hunt (flowing gas)
ABP: Nine Mile Draw Field
2,350 net acres HBP
ABP: Oates SW Field
~15,000 acres
(gained valuable reservoir knowledge & producing small amount of dry gas)
ABP: ROC Complex
6,210 net acres HBP
Conventional Reservoirs
Slide 12: | Pecos County... |
Map of Texas highlighting Pecos County in West Texas with well locations and acreage position depicted
Pecos County Players:
ABP, CHK, PXD, Reliance and Petro-Hunt (P-H)
Reliance / CHK / PXD – 3-D seismic & data swap
PXD (1 drilling & 1 permitted)
CHK 50% / P-H 50% ~100,000 acres – 3-D seismic swap
P-H (1 flowing gas & 2 permitted)
ABP: Oates SW Field
~15,000 acres
(gained valuable reservoir knowledge & producing small amount of dry gas)
Slide 13: | Resource Play Comparison... |
Map of Texas highlighting Delaware Basin Shale & Ft. Worth Barnett Shale
Delaware Basin Shale Players:
ABP, COP, CHK, CRZO, CWEI, DVN, ECA, EOG, FST, KWK, PPP, RRC, SWN, XTO, Reliance and Petro-Hunt
Barnett Shale Players:
BEXP, COP, CHK, CRZO, DNR, DVN, ECA, EOG, IFNY, KWK, PPPL, RRC, XTO
Sources:
1 Natexis Bleichroeder Inc.
2 CHK estimates
3 ABP estimates
4 Pickering Energy Partners
Slide 14: | South Texas... |
Map of Texas highlighting certain counties in South Texas
46 wells (93% WI) (1)
30.2 Bcfe (Proved) (1)
39.4 Bcfe (3P) (1)
7.4 MMcfepd (2)
1,200 NUA (1)
33 projects (3P) (1)
4 incremental projects (1)
Average depth: > 11,000’
Project Areas:
Edwards
Edwards / Wilcox |
Wilcox
Wilcox / Reklaw / Mackhank |
Portilla
| Frio / Vicksburg | ||
(1) | as of 12/31/05 |
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(2) | Q3 actual |
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2007 Plans
Several exploratory wells targeting the Wilcox formation
Continual maintenance of Portilla to keep production flat
Slide 15: | Wyoming... |
Map of Wyoming highlighting certain counties in east central Wyoming
10 wells (100% WI) (1)
1.5 Bcfe (Proved) (1)
9.9 Bcfe (3P) (1)
0.4 MMcfepd (2)
>50,000 Acres (3)
29 projects (3P) (1)
60 incremental projects (1)
Average depth: 9,000’
Project Area:
Brooks Draw
Teapot / Niobrara / |
Turner / Mowry / Muddy
(1) | as of 12/31/05 |
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(2) | Q3 actual |
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(3) | Gross acres (>92% MI), >12,000 HBP | ||
Slide 16: | Mowry Oil Shale Play... |
Map of Converse & Niobrara Counties, Wyoming with well locations and acreage positions depicted.
ABP: Brooks Draw 10 wells (5 horizontal / 5 vertical)
2 vertical wells producing from Mowry (commingled with other zones)
2007 Plans
Accelerate ? Full-scale technical evaluation of our acreage
AEZ/BEXP Horizontal Mowry Shale ~15 miles to the SE of Brooks Draw
1st well: ~150 BOPD
2nd well: drilling horizontal lateral
Slide 17: | Increase Shareholder Value... |
Line chart of ABP share price and NYMEX gas since January 2005
Continue to improve balance sheet
Maintain financial flexibility and liquidity
Prioritize large opportunity set of projects
Slide 18: | ABP Undervalued... |
...compared to NAV
Bar chart of NAV/share from $3 – > $18
Sky’s the Limit | ?? Bcfe – incremental (highest risk) |
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$8-11 3P | 172 Bcfe (1) – possible (higher risk) | | |
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| (304 Bcfe 3P reserves) | | - significant un-booked potential | |||
$5-7 2P | 27 Bcfe (1) – probable (low-risk) | | |
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(132 Bcfe 2P reserves)
$3-5 Proved | 105 Bcfe (1) – proved |
(1) | as of 12/31/05 |
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(2) | PV10 ranges from 12.5% discount to 12.5% increase to 12/31/05 SEC PV10 |
Slide 19: | 2006 CapEx Budget & Guidance... |
Production
Annual (Bcfe) | 7.5 – 8.5 | ||
Exit Rate (MMcfe/d) | 20 - 22 |
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Price Differentials off NYMEX
Gas (%/Mcf) | 15% |
| Oil ($/Bbl) | 2.00 |
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Production Taxes (% of Revenue) | 10% |
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Direct Lease Operating Expenses ($/Mcfe) | 1.10 |
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G&A ($/Mcfe) | 0.55 |
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Interest ($/Mcfe) | 2.00 |
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D/D/A ($/Mcfe) | 1.80 |
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Capital Expenditure Budget | ($MM) | 40.0* | ||||
* or 1x cash flow, whichever is lower
Guidance does not include non-cash and extraordinary items
Hedge position: 10,000 MMbtu per day through July 2007 with $4.25-$5.50 floor
Slide 20: | 2007 CapEx Budget & Guidance... |
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Capital Expenditure Budget | ($MM) | 27-44 | ||
Guidance – after necessary drilling contracts have been secured.
Slide 21: | Summary... |
Niche exploitation and production company
High quality assets with substantial upside
Goals:
• | Increase Shareholder Value | ||
• | Drill Bit Growth |
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Slide 22: | www.abraxaspetroleum.com |
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Picture: | Hudgins Ranch, Delaware Basin, West Texas |