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Energize 2010
January 6-8
San Francisco
Exhibit 99.2
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2
Forward-Looking Statements
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.
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.
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.
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Bakken producers Abraxas operated wells
Bakken permits Abraxas non-operated wells
2008-2009
Bakken Sleeper
Numerous additional
opportunities
opportunities
(operated and non-operated)
NO LEASE EXPIRATIONS -
acreage principally held by
production
acreage principally held by
production
MINIMAL RESERVES
BOOKED TO-DATE
BOOKED TO-DATE
10% WI NON-OP WELL -
Completing
Completing
AXAS: 3 operated lease
blocks within 1 location of
commercial Bakken /
Three Forks production with
potential of:
blocks within 1 location of
commercial Bakken /
Three Forks production with
potential of:
>100 1st gross
Bakken
wells in unit *
Bakken
wells in unit *
Montana North Dakota
Parshall
Nesson
Anticline
Elm
Coulee
Rough
Rider
* ~90 on 1280 acre unit spacing, excludes Lewis &
Clark Three Forks potential
Clark Three Forks potential
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The Bakken Advantage
Total enterprise value - Proved PV10 =
Bakken acreage value / Net Bakken acres = Bakken value per acre
Small-cap Bakken Players | ||
Bakken value per acre | Q3 2009 Boepd | |
Company A | $ 3,149 | 144 |
Company B | $ 4,498 | 5,200 |
Company C | $ 6,768 | 963 |
Company D | $ 6,839 | 751 |
Company E | $15,244 | 5,348 |
AXAS | $ 1,613 | 4,430 |
AXAS utilizing mid-year proved reserves on a typical bank
price deck
price deck
Source: Company filings with the SEC
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Peer Group Analysis
Source: Company filings with the SEC and market capitalization on December 30, 2009
E&P analysis includes market capitalization < $1B (AEZ, AREX, ATPG, AXAS, CFW, CPE, CRZO, CWEI, DBLE, DNE, DPTR, END, EPM, EXXI, FXEN, GDP, GEOI, GMET, GMXR,
GPOR, GPR, GST, GSX, KOG, MCF, MHR, MMR, NGAS, NOG, PETD, PHX, PINN, PQ, PVA, RAME, REXX, SFY, SGY, TMR, VQ, WRES)
GPOR, GPR, GST, GSX, KOG, MCF, MHR, MMR, NGAS, NOG, PETD, PHX, PINN, PQ, PVA, RAME, REXX, SFY, SGY, TMR, VQ, WRES)
Mean equates to an AXAS share price of:
$19.42
Mean equates to an AXAS share price of:
$5.56
48% undervalued compared to E&P in analysis
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Peer Group Analysis
65% under average of E&P in analysis
In-line with average of E&P in analysis
In-line with average of E&P in analysis
Source: Company filings with the SEC
E&P analysis includes market capitalization < $1B (AEZ, AREX, ATPG, AXAS, CFW, CPE, CRZO, CWEI, DBLE, DNE, DPTR, END, EPM, EXXI, FXEN, GDP, GEOI, GMET, GMXR,
GPOR, GPR, GST, GSX, KOG, MCF, MHR, MMR, NGAS, NOG, PETD, PHX, PINN, PQ, PVA, RAME, REXX, SFY, SGY, TMR, VQ, WRES)
GPOR, GPR, GST, GSX, KOG, MCF, MHR, MMR, NGAS, NOG, PETD, PHX, PINN, PQ, PVA, RAME, REXX, SFY, SGY, TMR, VQ, WRES)
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Special Situation
§ Exciting upside (not just the Bakken)
§ Undervalued
§ Why ?
§ 26 months in SEC
§ Complicated financials
§ Analyst & investors don’t relish homework
§ Solution !
§ Merger closed - October 5, 2009
§ Tell the story
§ Straight forward financials (except MTM on commodity swaps)
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Background
Ø Abraxas Petroleum Corporation
§ Founded in 1977
§ NASDAQ: AXAS
Ø 2006 - 2008: Upstream MLPs were reincarnated
§ Attractive cost of capital - yields < 10%
Ø Abraxas Energy was formed in May 2007 as an upstream master limited
partnership (“MLP”) to produce, develop and acquire oil and gas properties
partnership (“MLP”) to produce, develop and acquire oil and gas properties
§ AXAS contributed properties to MLP
– Sold 53% to institutional investors ($100 million private placement)
§ Lehman Brothers / Citigroup / Merrill Lynch
§ Top-tick market: 9% yield
– AXAS retained 47% of MLP
– AXAS owns 100% of general partner, which manages MLP
§ MLP required to “go public”
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IPO Timeline
2007
July 2007 - MLP filed initial registration statement (S-1) for IPO
November 2007 - cleared by the SEC (S-1/A #4)
November 2007 - won bid on large property acquisition from St. Mary - financed with senior
bank debt & 2nd lien bridge (extension from private investors)
bank debt & 2nd lien bridge (extension from private investors)
2008
July 2008 - cleared by the SEC (S-1/A #7)
July 2008 - lead underwriter walked
September 2008 - new underwriting syndicate in place (S-1/A #8)
September 2008 - financial world started its collapse
(extension from private investors)
2009
January 2009 - maturity date of sub. debt extended to July 1
January 2009 - MLP yields > 20% = downsize IPO, need 2nd lien
(underwriting syndicate walks)
March 2009 - new underwriting syndicate in place (S-1/A #9), launch 2nd lien
April 2009 - new 2nd lien terms unacceptable / vicious circle / explore alternatives
(extension from private investors)
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Upstream MLP Meltdown
Market darling à ??
§ Last IPO - April 2008
§ 4 MLPs - suspended distributions
§ Bank support diminished for upstream MLPs
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Alternatives
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Merger Events
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New and Improved AXAS
Abraxas Petroleum Corporation
• High quality assets
• Daily production of 4,430 Boe (26.6 MMcfe)
• Proved reserves of 27.9 MMBoe (167.3 Bcfe)
• Unparalleled upside opportunities
§ 158 proved undeveloped locations (excluding Bakken)
§ Numerous additional identified locations
§ 85% of PDP hedged through 2012 and 70% in 2013
§ $74.96 per barrel and $6.38 per MMbtu
• NASDAQ: AXAS
• Fully diluted shares outstanding: ~76 million
§ ~50% institutional
§ ~10% insider
• Current average trading volume: ~470,000 shares per day
• Total long-term debt: ~$145 million
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Overview of Properties
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Property Overview
Ø Predictable, long-lived production
§ R/P ratio of 16.9 years (PD of 9.3 years)
§ Conventional and unconventional reservoirs
Ø 1,811 gross (429 net) producing wells: average working interest 24%
§ ~690 gross (250 net) wells/units comprise top 90% by PV
Ø Substantial inventory: 158 proved undeveloped locations (plus Bakken)
§ Numerous additional identified locations
Ø 307,310 gross (160,141 net) acres
§ No material lease expiry issues or drilling commitments
Ø Operational control - - over 80% of PV10
§ Over 30 years of operational history
§ Efficient, low-cost operator
§ Long history of drilling success
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High Quality Assets
ND
SD
MT
WY
CO
UT
TX
OK
AR
LA
Proved Reserves (MMBoe): 27.9
- Proved Developed: 55%
- Gas/Oil %: 71/29%
- Operated: 83%
Abraxas Petroleum Corporation
Net proved reserves as of June 1, 2009
Bakken
Shale Play
Haynesville
Shale Play
Central Anadarko
Cana - - Woodford
Shale Play
Barnett / Woodford
Shale Play
Wolfberry Trend
Rocky Mountain
Mid-Continent
Permian Basin
Gulf Coast
Eagle Ford Shale Play
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Reserve / Production Summary
Proved Reserves - 27.9 MMBoe
Production - - 4,430 Boepd
Net proved reserves as of June 1, 2009
Daily net production for the quarter ended September 30, 2009
Rocky
Permian
Basin
36%
Gulf
Rocky
Basin
30%
Gulf
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Production Profile
Net proved reserves as of June 1, 2009
Next 5 years - 9%
Thereafter - - 8%
Projected Annual PDP Decline Rate
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ND
SD
MT
WY
CO
UT
TX
OK
LA
Unparalleled Upside Potential
Rocky Mountain
Mid-Continent
Permian Basin
Gulf Coast
Medicine Pole Hills Unit
Bowman Co., ND
2 PUD
Red River B: 9,350’
Operator: Continental
Cow Hollow Field
Lincoln Co., WY
32 PUD
Frontier: 11,000’
Operator: Kerr-McGee
Pittsburg County CBM
Pittsburg Co., OK
53 PUD
Hartshorne Coal: 3,000’
Operator: Chesapeake / Abraxas
Edwards Trend
DeWitt / Lavaca Co., TX
10 PUD (4 PDNP)
Edwards: 13,500’
Operator: Abraxas
Portilla Field
San Patricio Co., TX
3 PUD (2 PDNP)
Frio: 7,000’
Vicksburg: 9,000’
Vicksburg: 9,000’
Operator: Abraxas
Oates SW
Pecos Co., TX
5 PUD
Devonian: 14,000’
Montoya: 16,000’
Montoya: 16,000’
Operator: Abraxas
ROC Complex
Ward Co., TX
7 PUD
Devonian: 13,000’
Montoya: 14,000’
Operator: Abraxas
Bakken
Shale Play
Haynesville
Shale Play
Central Anadarko
Cana - - Woodford
Shale Play
Wolfberry Trend
Natural Buttes Field
(Chapita Wells Unit)
Uintah Co., UT
20 PUD
Wasatch: 7,000’
Operator: EOG Resources
Roosevelt Field
Billings Co., ND
4 PUD
Nisku: 10,000’
Operator: Abraxas/Summit
North Fork Field
McKenzie Co., ND
6 PUD
Bakken: 10,000’
Red River: 14,000’
Operator: Abraxas
Comertown South Field
Sheridan Co., MT
2 PUD
Red River: 11,000’
Operator: Abraxas
Eastern Shelf
Coke Co., TX
3 PUD
Strawn 6,700’
Operator: Abraxas
Beulah Coleman
Midland Co., TX
5 PUD
Devonian: 11,000’
Operator: Abraxas
Barnett / Woodford
Shale Play
Eagle Ford
Shale Play
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Near-Term Drilling Catalysts
AXAS OPERATED: | OUTSIDE OPERATED: |
Portilla, South Texas • 2 vertical wells • 9,000’ Frio • Q1 2010 • AXAS 100% WI | Bakken/Three Forks, North Dakota • BTA operated • Completing • AXAS 10% WI |
Normanna, South Texas • 10,000’ Wilcox • Q1 2010 • AXAS 20%/40% WI | Granite Wash, Texas Panhandle • 2 wells • Cimarex / Mewbourne operated • Drilling • AXAS <1-8% WI |
Spires Ranch, West Texas • 7,000’ Ellenburger • Testing • AXAS 100% WI |
Non-op wells gather information
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Business Plan
§ Closed merger - October 5th
§ Allocate portion of 2010 CapEx to Bakken
§ Investigate Bakken acceleration
§ Financial partner
§ Industry farmout
§ Non-core asset sales
§ Pay down debt
§ 50/50 oil/gas production mix by end of 2010
§ Awareness of NOL preservation
§ Increase Eagle Ford position
§ Principally in oil leg
§ Increase investor interest
§ Increase analyst coverage
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NASDAQ: AXAS
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Appendix
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Rocky Mountain
Ø 7.0 MMBoe of proved reserves
Ø 75% proved developed
Ø 75% crude oil
Ø 1,175 Boepd of production
Ø 15.7 R/P ratio
Ø 894 gross (110 net) producing wells
Ø 67 PUD locations
Ø 97,279 net acres
Ø Primary producing basins include:
§ Williston Basin (MT and ND)
§ Powder River & Green River Basins (WY)
§ Unita Basin (UT)
Ø Bakken / Three Forks - - HBP
Rocky Mountain
ND
SD
MT
WY
CO
Medicine Pole Hills Unit
Bowman Co., ND
2 PUD
Red River B: 9,350’
Operator: Continental
Natural Buttes Field
(Chapita Wells Unit)
Uintah Co., UT
20 PUD
Wasatch: 7,000’
Operator: EOG Resources
Cow Hollow Field
Lincoln Co., WY
32 PUD
Frontier: 11,000’
Operator: Kerr-McGee
Bakken Shale Play / Three Forks / Sanish
Area of Operations
Overview
Net proved reserves as of June 1, 2009
Daily net production for the quarter ended September 30, 2009
Roosevelt Field
Billings Co., ND
4 PUD
Nisku: 10,000’
Operator: Abraxas/Summit
North Fork Field
McKenzie Co., ND
6 PUD
Bakken: 10,000’
Red River: 14,000’
Operator: Abraxas
Comertown South Field
Sheridan Co., MT
2 PUD
Red River: 11,000’
Operator: Abraxas
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Mid-Continent
Ø 3.4 MMBoe of proved reserves
Ø 73% proved developed
Ø 85% natural gas
Ø 711 Boepd of production
Ø 13.0 R/P ratio
Ø 602 gross (103 net) producing wells
Ø 53 PUD locations
Ø 22,937 net acres
Ø Primary producing basins include:
§ Anadarko Basin (Western OK)
§ Arkoma Basin (Eastern OK)
§ ARK-LA-TEX
Ø Cana Shale (Cimarex, Devon, Chesapeake) - HBP
Ø Haynesville Shale - HBP
TX
KS
OK
AR
LA
Haynesville
Shale Play
Central Anadarko
Cana - - Woodford
Shale Play
Pittsburg County CBM
Pittsburg Co., OK
53 PUD
Hartshorne Coal: 3,000’
Operator: Chesapeake / AXAS
Area of Operations
Overview
Net proved reserves as of June 1, 2009
Daily net production for the quarter ended September 30, 2009
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Permian Basin
Permian Basin
Ø 10.1 Bcfe of proved reserves
Ø 39% proved developed
Ø 83% natural gas
Ø 1,330 Boepd of production
Ø 19.7 R/P ratio
Ø 236 gross (161 net) producing wells
Ø 30 PUD locations
Ø 31,237 net acres
Ø Primary producing sub-basins:
§ Delaware Basin
§ Eastern Shelf
Ø Barnett / Woodford Shale - fee minerals
TX
Oates SW
Pecos Co., TX
5 PUD
Devonian: 14,000’
Montoya: 16,000’
Montoya: 16,000’
Operator: Abraxas
ROC Complex
Ward Co., TX
7 PUD
Devonian: 13,000’
Montoya: 14,000’
Operator: Abraxas
Area of Operations
Overview
Beulah Coleman
Midland Co., TX
5 PUD
Devonian: 11,500’
Operator: Abraxas
Operator: Abraxas
Millican Reef Unit
Coke Co., TX
3 PUD
Strawn: 6,700’
Operator: Abraxas
Operator: Abraxas
Barnett / Woodford
Shale Play
Wolfberry Trend
Net proved reserves as of June 1, 2009
Daily net production for the quarter ended September 30, 2009
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Gulf Coast
Gulf Coast
Ø 7.4 Bcfe of proved reserves
Ø 49% proved developed
Ø 92% natural gas
Ø 1,214 Boepd of production
Ø 17.2 R/P ratio
Ø 79 gross (55 net) producing wells
Ø 13 PUD locations
Ø 8,688 net acres
Ø Primary producing sub-basin:
§ Onshore Gulf Coast
Ø Eagle Ford Shale - HBP
§ Currently leasing addtional acreage
TX
LA
AL
MS
Portilla Field
San Patricio Co., TX
3 PUD (2 PDNP)
Frio: 7,000’
Vicksburg: 9,000’
Vicksburg: 9,000’
Operator: Abraxas
Edwards Trend
DeWitt / Lavaca Co., TX
10 PUD (4 PDNP)
Edwards: 13,500’
Operator: Abraxas
Area of Operations
Overview
Eagle Ford
Shale Play
Net proved reserves as of June 1, 2009
Daily net production for the quarter ended September 30, 2009
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2008-2009 OBO Drilling Activity
23 wells drilled in 2008
7 wells drilled in 2009
Chapita Wells Unit
Uintah County, UT
Operator: EOG Resources
Average IP: 1.1 MMcfepd
WI: 1%
7 wells drilled in 2008
Medicine Pole Hills West Unit
Bowman County, ND
3 wells drilled in 2008
1 well drilled in 2009
Mansfield Prospect
Scott County, AR
Operator: XTO Energy
Average IP: 2.2 MMcfepd
2 wells drilled in 2008
1 well drilled in 2009
Bear Creek Field
Bienville Parish, LA
Operator: El Paso
Average IP: 2.3 MMcfepd
WI: 2%
1 well drilled in 2008
Red Oak Prospect
Latimer County, OK
Operator: Unit Petroleum
IP: 2.1 MMcfepd
WI: 12%
2 wells drilled in 2008
Cow Creek / Moxa Arch
Lincoln County, WY
Operator: Kerr McGee
Average IP: 1.2 MMcfepd
WI: 1%
1 well drilled in 2008
2 wells drilled in 2009
Sawyer Field
Sutton County, TX
Operator: Highmount
Average IP: 0.2 MMcfepd
WI: 4%
2 wells drilled in 2009
Bakken / Three Forks
McKenzie / Divide Counties, ND
Operator: Continental Resources / BTA
IP: 760 Boepd / completing
WI: 1-10%
3 wells drilled in 2009
Granite Wash
Hemphill County, TX
Operator: Cimarex /
Mewbourne
Mewbourne
WI: 1-8%
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NASDAQ: AXAS