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' OWNERSHIP OF GREY WOLF EXPLORATION INC. NOW AT 94%,
                       EXCHANGE OFFER EXTENDED FOR BALANCE

SAN ANTONIO, TX (September 18, 2001) - Abraxas Petroleum Corporation  (AMEX:ABP)
("Abraxas") and its wholly-owned  subsidiary,  Abraxas  Acquisition  Corporation
("AcquisitionCo"),  announced the exchange offer for Grey Wolf  Exploration Inc.
("Grey  Wolf")  shares that Abraxas and its  wholly-owned  Canadian  subsidiary,
Canadian Abraxas  Petroleum  Limited  ("Canaxas"),  did not already own has been
extended for ten days, until 5:00 pm, Calgary time, Friday,  September 28, 2001.
A total of 5.9 million shares of Grey Wolf, representing 88% of what Abraxas and
Canaxas did not own,  have now been  tendered and taken up.  Abraxas and Canaxas
now own 94% of the common outstanding shares of Grey Wolf. AcquisitionCo intends
to effect a subsequent  transaction  to acquire the  remaining  Grey Wolf shares
that are not tendered pursuant to the offer.

The shares may be tendered by holders  whose  certificates  are not  immediately
available by completing a validly executed Notice of Guaranteed  Delivery in the
form enclosed with the Exchange Offer materials or a facsimile thereof.

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. ANY
SUCH OFFER OR SOLICITATION WILL BE SUBJECT TO CERTAIN  CUSTOMARY  CONDITIONS AND
WILL BE MADE ONLY BY ABRAXAS'  PROSPECTUS AND OTHER  EXCHANGE  OFFER  MATERIALS,
WHICH HAVE BEEN FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE  COMMISSION
("SEC")  AND  HAVE  BEEN  MAILED  TO  GREY  WOLF'S  STOCKHOLDERS.   GREY  WOLF'S
STOCKHOLDERS  ARE URGED TO READ THESE DOCUMENTS  BECAUSE THEY CONTAIN  IMPORTANT
INFORMATION  ABOUT THE OFFER. THE DOCUMENTS ARE ALSO 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
exploitation and production company that also processes natural gas. The Company
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).

Grey Wolf  Exploration  Inc. is a junior crude oil and natural gas company which
focuses its efforts on exploring for, developing, acquiring, and producing crude
oil and natural gas in western Canada and the Northwest Territories. Natural gas
in central and northern Alberta accounts for over 90% of Grey Wolf Exploration's
reserves and production.

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