Filed by Abraxas Petroleum Corporation
                                                  (Commission File No. 0-19118)
                         Pursuant to Rule 425 Under the Securities Act of 1933,
                                                                    as amended,
                                      And Deemed Filed Pursuant to Rule 14a-12
                                     Under the Securities Exchange Act of 1934,
                                                                    as amended.
                                   Subject Company:  Grey Wolf Exploration Inc
                                                       (no Commission File No.)


                                  NEWS RELEASE


ABRAXAS  CEO SAYS GREY WOLF  EXPLORATION  EXCHANGE  OFFER  ADDS  EQUITY  THAT IS
ACCRETIVE TO EARNINGS AND BOOK VALUE PER SHARE

SAN ANTONIO,  TX (April 25, 2001) - Discussing the proposed exchange offer to be
made by Abraxas Petroleum Corporation  (AMEX:ABP) to the shareholders of its 49%
owned subsidiary, Grey Wolf Exploration Inc. (TSE:GWX),  Abraxas' CEO Bob Watson
commented,  "This offer  presents a real win-win  situation for both Abraxas and
Grey  Wolf  Exploration.  By  eliminating  the  minority  interest  on  Abraxas'
financial  statements,   assuming  100%  acceptance  by  Grey  Wolf  Exploration
shareholders, this transaction will add approximately $0.10 to EPS, based on the
Company's projected 2001 results, and $0.50 to book value per share while at the
same time simplifying our corporate structure and financial reporting.  For Grey
Wolf Exploration  shareholders,  the proposed transaction provides a substantial
premium to the market price of Grey Wolf  Exploration's  stock prior to the time
that Abraxas and Grey Wolf Exploration  first announced they were in discussions
regarding  a  possible  combination  as well  as a  significant  improvement  in
liquidity in a stock with a much broader following in the investment community."
The proposed  exchange  offer is subject to customary  regulatory  approvals and
approval of the  shareholders of Abraxas.  Once it has completed the preparation
of the necessary documents and all applicable filings,  Abraxas expects to begin
the exchange offer for the 51% of Grey Wolf Exploration that it does not already
own and close the transaction in June.

THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION  OF AN
OFFER TO EXCHANGE  THE  SECURITIES  OF ABRAXAS FOR THE  SECURITIES  OF GREY WOLF
EXPLORATION.  ANY  SUCH  OFFER OR  SOLICITATION  WILL BE MADE  ONLY BY  ABRAXAS'
PROSPECTUS AND OTHER EXCHANGE OFFER MATERIALS, WHICH WILL BE MAILED TO GREY WOLF
EXPLORATION'S STOCKHOLDERS AT A LATER DATE. GREY WOLF EXPLORATION'S STOCKHOLDERS
ARE URGED TO READ THESE DOCUMENTS WHEN THEY BECOME AVAILABLE,  BECAUSE THEY WILL
CONTAIN  IMPORTANT  INFORMATION  ABOUT THE  OFFER.  THE  DOCUMENTS  WILL ALSO BE
AVAILABLE  AT NO CHARGE FROM THE SEC'S WEB SITE,  WWW.SEC.GOV,  AND FROM ABRAXAS
PETROLEUM CORPORATION AT 500 NORTH LOOP 1604 EAST, SUITE 100, SAN ANTONIO, TEXAS
78232.

Abraxas Petroleum  Corporation is a San Antonio-based  crude oil and natural gas
exploration and production  company that also processes natural gas. It operates
in Texas,  Wyoming and western  Canada.  For  additional  information  about the
Company,  please  visit  our web  site,  www.abraxaspetroleum.com,  for the most
current  and  updated  information.  The web site is  updated  daily in order to
comply with the SEC Regulation FD (Fair Disclosure).

Safe Harbor for  forward-looking  statement:  Statements in this release looking
forward in time involve  known and unknown  risks and  uncertainties,  which may
cause the Company's 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 the
Company for crude oil and natural gas. In addition,  the Company's  future crude
oil and natural gas production is highly  dependent upon the Company's  level of
success in  acquiring  or finding  additional  reserves.  Further,  the  Company
operates in an industry  sector where the value of securities is highly volatile
and may be  influenced  by  economic  and other  factors  beyond  the  Company's
control.  In the context of  forward-looking  information  provided  for in this
release,  reference is made to the  discussion  of risk factors  detailed in the
Company's filing with the Securities and Exchange  Commission during the past 12
months.

FOR MORE INFORMATION CONTACT:
Janice Herndon/Manager Corp. Communications
Telephone 210-490-4788
jherndon@abraxaspetroleum.com
www.abraxaspetroleum.com