EXHIBIT 99.1
8-K Robert L.G. Watson will be presenting at the IPAA Oil & Gas Investment Symposium in New York on April 23-25, 2007
Slide 1: | Abraxas Petroleum Corporation |
IPAA OGIS NEW YORK, April 23, 2007
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: | Company Overview |
Abraxas Petroleum Corporation
| • | AMEX: ABP |
| o | Market capitalization ~ $128 million |
| o | Enterprise value ~ $256 million |
| • | Options: CBOE and PCX |
| • | Fully diluted shares outstanding ~ 44 million |
| • | Ownership: ~ 13% insider |
| • | Average trading volume (3 mos): ~ 200,000 shares per day |
Slide 3: | Consolidated Asset Base |
Quality assets
| • | High ownership interests (79% WI) |
| • | Operational control (95%) |
| • | High producing rates per well |
| • | Large acreage positions |
| • | Substantial upside |
Natural gas (> 80%)
| • | Operations in Texas and Wyoming |
| • | > 10 year inventory of projects on existing leasehold |
| • | Proved RLI: > 15 years |
Bar & line chart from 1977 through 2006 detailing long-term debt, market cap and proved reserves at December 31st of each year, with a notation of acquisitions: <$0.65 / Mcfe in the mid-1990’s.
Slide 4: Proved Reserve Valuation
Peer Group Analysis
21 peer group mean (1):
| Enterprise Value (EV) / Net Proved Reserves = $3.83 / Mcfe |
ABP: |
Net Proved Reserves | 99 Bcfe |
EV / Net Proved Reserves | $3.83 / Mcfe |
Implied ABP EV | $379 million |
| less debt | $128 million |
Implied Market Cap | $251 million |
Fully Diluted Shares Outstanding | 44 million (2) |
Implied Price per Share | $5.70 |
Current ABP | $3.00 |
| % undervalued compared | - 89% |
| to our peer group |
(1) AEZ, ARD, BEXP, CPE, CRZO, CWEI, MCF, DPTR, DBLE, EPEX, GSX, GMXR, GDP, TMR, NGAS, PLLL, PETD, HAWK, PQ, TXCO, WRES, excludes EV/NPR in excess of $10/Mcfe
(2) Treasury method
Slide 5: | Upside Potential |
| Number of potential / identified projects (1) | Potential Bcfe (2) | $0.50 per Mcfe ($MM) | $1.00 per Mcfe ($MM) | $1.50 per Mcfe ($MM) |
Probable & Possible (3) |
84 |
78 |
$ 39 |
$ 78 |
$ 117 |
Woodford Shale Play |
185 |
555 |
$ 277 |
$ 555 |
$ 832 |
Mowry Shale Oil Play |
300 |
600 |
$ 300 |
$ 600 |
$ 900 |
Exploratory Wilcox Plays |
15 |
37 |
$ 19 |
$ 37 |
$ 56 |
Total |
584 |
1,270 |
$ 635 |
$ 1,270 |
$ 1,905 |
Upside Potential |
|
|
$ 14 |
$ 29 |
$ 43 |
(1) Woodford Shale on 80 acre spacing and Mowry Shale on 160 acre spacing
(2) Capital required $1.8 billion – volumes and resultant values are mid-point of range
(3) Net of reserves in specific plays
Slide 6: Production / Reserves
Proved Reserves – 99 Bcfe (1)
Net Production – 21 MMcfepd (2)
Pie chart = Wyoming 2%, South Texas 31%, West Texas 67%
3P Reserves – 298 Bcfe (3)
Pie chart = Wyoming 3%, South Texas 13%, West Texas 84%
| (1) | as of 12/31/06 |
| (2) | FY 2006 E |
| (3) | As of 12/31/06, 2P & 3P as of 12/31/05 |
Slide 7: | Acreage / Projects |
Net Undeveloped Acres ~ 64,300 (1)
Pie chart = Wyoming 67%, South Texas 5%, West Texas 28%
233 3P Projects (2) plus, numerous incremental projects
Pie chart = Wyoming 12%, South Texas 13%, West Texas 75%
| (1) | as of 12/31/06, includes mineral interest |
| (2) | as of 12/31/06, 2P & 3P as of 12/31/05 |
Slide 8: | Operational Goals |
Increase Shareholder Value
through...
Drill Bit Growth targeting Conventional Reservoirs & emerging Resource Plays
Reserve Ratio Improvement by converting proved undeveloped (and probable / possible) reserves to the proved developed category
Slide 9: | Reserve Ratio Improvement |
2006 CapEx
Pie chart = PUD 26%, Probable 12%, Possible 23%, Incremental 3%, Land / G&G 7%, Maintenance 29%
2007 CapEx
Pie chart = PUD 40%, Probable 11%, Possible 14%, Incremental 21%, Land / G&G 9%, Maintenance 5%
Slide 10: | Production Growth |
...100% through the drill bit
Bar chart of MMcfepd production for 2005 and 2006, by area, with a notation for the Three Rivers Divestiture and 28% (1) increase
(1) 26% excluding Three Rivers Divestiture
Slide 11: | Areas of Operations |
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 12: | Conventional Reservoirs |
Map of Texas highlighting certain counties in Texas
Developing Existing Proved Reserves
Projects for 2007 and beyond...”the low hanging fruit”
IRA
| Clearfork / Strawn Reef / Spraberry |
Delaware
| Atoka-Wolfcamp / Mississippian / |
Devonian / Montoya / Ellenburger
Cherry Canyon
| Cherry & Bell Canyon |
Oates SW
| Devonian |
Edwards
| Edwards / Wilcox |
Wilcox
| Wilcox / Reklaw / Mackhank |
Portilla
| Frio / Vicksburg |
Slide 13: | Conventional & Resource |
Map of Texas highlighting Pecos County in West Texas
38 sq. miles of proprietary 3-D, plus > 40 sq. miles from offset operators
~15,000 acres
Focus – Conventional Reservoir
DEVONIAN
4 wells producing – 1 awaiting completion
2007 – currently drilling
Hudgins 34-2H: Devonian - <1.0 MMcfepd
La Escalera 1AH: Devonian - ~ 6.0 MMcfepd
Hudgins 37-1H: Devonian – on-line – needs fracture stimulation
Elsinore Cattle 56: Devonian - ~0.2 MMcfepd
Manzanita 1H: 2007 Devonian Currently drilling
Secondary – Resource Play
WOODFORD SHALE
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, outline of 3-D seismic surveys, current activity and available wellbores.
Slide 14: | Delaware Basin Shale Play |
Map of Texas highlighting Pecos County in West Texas with well locations and acreage positions depicted
Reliance / CHK / PXD – 3-D seismic & data swap
PXD (1 drilling & 1 permitted)
CHK 50% / Petro-Hunt 50% ~100,000 acres – 3-D seismic swap
Petro-Hunt (1 flowing gas & 2 permitted)
ABP: Oates SW Field
~15,000 acres
(gained valuable reservoir knowledge & producing small amount of dry gas)
Slide 15: | Gas Shale 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, PXD, 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., CHK and internal estimates
(2) Pickering Energy Partners
Slide 16: | Mowry Shale Oil Play |
Map of Wyoming highlighting certain counties in east central Wyoming & detailed map of Converse & Niobrara Counties, Wyoming with well locations, 3-D seismic survey and acreage positions depicted.
Brooks Draw
~50,000 acres (1)
23 sq. miles proprietary 3-D seismic survey
Converse & Niobrara Counties, Wyoming
ABP: Brooks Draw 10 wells (5 horizontal / 5 vertical)
3 vertical wells producing from Mowry (commingled with other zones)
2007 Plans
Permitting several wells (full-scale technical evaluation of our acreage)
AEZ/BEXP: Krejci
Horizontal Mowry Shale ~15 miles to the SE of Brooks Draw
1st well: ~150 BOPD
2nd well: completing
3rd well: drilling
2007 Plans – Continuous drilling program
(1) Gross acres (>92% MI), 12,000 HBP
Slide 17: | Oil Shale Play Comparison |
Map of Wyoming, Montana and North Dakota highlighting Mowry Shale & Bakken Shale
Mowry Shale Players:
ABP, AEZ, BEXP
Bakken Shale Players:
BBG, BEXP, COP, EOG, MRO, SM, WLL and several privately-held companies
Mowry Shale (1) |
| Bakken Shale (2) |
Lower Cretaceous | Geologic age | Upper Devonian / Lower Mississippian |
Siliceous silty shale | Reservoir Rock | Dolomitic siltstone |
7,500’ – 10,000’ | Depth (feet) | 10,000’ - 11,000’ |
110’ - 175’ | Thickness (feet) | 10’ - 50’ |
150 – 500 | Potential EUR (MBOE) per well | 200 - 500 |
160 | Well spacing (acres) | 640 |
2.0 – 3.0 | Average well cost ($MM) | 3.0 – 4.5 |
Sources:
(1) AEZ/BEXP, Powder River Energy Partners, R.P. Nixon paper and internal estimates
(2) EOG, BEXP, OG Journal, Landmark, F.F. Meissner paper
Slide 18: | Exploratory Plays |
Map of Texas highlighting Bee, Karnes and Live Oak Counties
Potentially High Impact
Targeting the Wilcox Formation
Janssen Prospect, Karnes County
Goebel Prospect, Live Oak County
Plummer & Tuleta Prospects, Bee County
Slide 19: | Capture the Upside |
Increase shareholder value
Continue to improve balance sheet
Maintain financial flexibility and liquidity
Prioritize large opportunity set of projects
Line chart of ABP share price and NYMEX gas from January 2005 to current
Slide 20: 2007 Budget
Capital Expenditure Budget | ($MM) | 27-44 |
Slide 21: | Summary |
Niche exploitation and production company
High quality assets with substantial upside
Goals:
| • | Increase Shareholder Value |
| • | Drill Bit Growth / Reserve Ratio Improvement |
Slide 22: | www.abraxaspetroleum.com |
Picture: | Hudgins Ranch, Delaware Basin, West Texas |