Exhibit 99.1
NEWS RELEASE
ABRAXAS COMMENCES CONSENT SOLICITATION
OF THE HOLDERS OF ITS 11 1/2% NOTES
SAN ANTONIO, TX (June 3, 2004) - Abraxas Petroleum Corporation (AMEX:ABP)
announced today the commencement of a consent solicitation relating to its 11
1/2% Secured Notes due May of 2007. The record date for the Consent Solicitation
is May 3, 2004. As of the record date there was approximately $128.0 million
aggregate principal amount of the notes outstanding. Abraxas is soliciting
consents to modify the covenant currently limiting the Company to $10 million
per year in capital expenditures. Assuming holders of a majority of the
principal amount of the notes consent, capital expenditures will instead be
limited so that the ratio of the Company's consolidated EBITDA (as determined
under the Indenture) to the sum of the Company's consolidated cash interest
expense plus its capital expenditures minus the net proceeds the Company
receives from certain qualifying equity security or subordinated debt offerings
must not be less than 1.0 to 1.0 for any fiscal year beginning with the fiscal
year ending December 31, 2004.
The consent payment to be paid for each consent properly delivered prior to the
expiration of the consent solicitation will be $10 in cash for each $1,000
principal amount of notes. If consents received from Holders exceed the majority
consent requirement, Abraxas will pay the consent payment on a pro rata basis.
Holders of notes who do not consent will not be eligible to receive the consent
payment. The consent solicitation will be open until 5:00 p.m., New York City
time, on Monday, June 14, 2004, unless terminated or extended by Abraxas in its
sole discretion.
This announcement is not an offer to purchase, a solicitation of an offer to
purchase, or a solicitation of consent with respect to any securities. The
consent solicitation is being made solely by a Consent Solicitation Statement
dated June 3, 2004.
Guggenheim Capital Markets, LLC is serving as Solicitation Agent in connection
with the consent solicitation. Questions regarding the terms of the consent
solicitation may be directed to the Solicitation Agent at 212-381-7500. Global
Bondholder Services Corporation is serving as Tabulation Agent and Information
Agent in connection with the consent solicitation. Questions regarding the
delivery procedures for the consents and requests for additional copies of the
consent solicitation statement or related documents may be directed to the
Information Agent at 212-430-3774.
Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas
exploitation and production company. The Company operates in Texas, Wyoming and
western Canada.
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