Exhibit 5.1
COX SMITH MATTHEWS
INCORPORATED
112 EAST PECAN STREET
SUITE 1800
SAN ANTONIO, TEXAS 78205-1521
(210) 554-5500
FAX (210) 226-8395
www.coxsmith.com
Writer's Direct Number Writer's E-Mail Address
(210) 554-5255 srjacobs@coxsmith.com
December 3, 2004
Abraxas Petroleum Corporation
500 North Loop 1604 East, Suite 100
San Antonio, TX 78232
Re: Registration Statement on Form S-4 filed on
December 3, 2004 by Abraxas Petroleum Corporation
Ladies and Gentlemen:
We have acted as counsel to Abraxas Petroleum Corporation, a Nevada
corporation (the "Company"), and its subsidiaries Eastside Coal Company, Inc., a
Colorado corporation, Sandia Oil & Gas Corporation, a Texas corporation, Sandia
Operating Corp., a Texas corporation, Wamsutter Holdings, Inc., a Wyoming
corporation and Western Associated Energy Corporation, a Texas corporation
(these subsidiaries, the "Subsidiary Guarantors" and the Company and the
Subsidiary Guarantors collectively the "Registrants"), in connection with the
Registrants' Registration Statement on Form S-4 filed on December 3, 2004 (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the Company's offer to exchange (the "Exchange
Offer") up to $125,000,000 aggregate principal amount of the Company's Floating
Rate Senior Secured Notes due 2009, Series B (the "Exchange Notes"), for a like
principal amount of the Company's issued and outstanding Floating Rate Senior
Secured Notes due 2009, Series A (the "Old Notes"). The Indenture dated October
28, 2004 (the "Indenture"), by and among the Company, the Subsidiary Guarantors
and U.S. Bank National Association, as trustee (the "Trustee"), provides for the
guarantee of the Exchange Notes by each of the Subsidiary Guarantors (the
"Guarantees") to the extent set forth in the Indenture. The Company is
conducting the Exchange Offer to satisfy its obligations under the Exchange and
Registration Rights Agreement, dated October 28, 2004 (the "Registration Rights
Agreement"), by and among the Company, the Subsidiary Guarantors and Guggenheim
Capital Markets, LLC.
December 3, 2004
Page2
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as facsimile, electronic, or photostatic copies, and
the authenticity of the originals of such copies. In making our examination of
documents executed or to be executed, we have assumed that the parties thereto
had the power, corporate or otherwise, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all requisite action,
corporate or otherwise, by such parties, and the execution and delivery by such
parties of such documents and, except to the extent expressly set forth in our
opinion below, the validity and binding effect thereof on such parties. As to
any facts material to the opinions expressed herein that we did not
independently establish or verify, we have relied upon statements and
representations of officers and other representatives of the Company and others
and of public officials.
We have examined and are familiar with originals or copies, the
authenticity of which have been established to our satisfaction, of all such
documents, corporate records, certificates of officers of the Company and public
officials, and other instruments as we have deemed necessary to express the
opinions hereinafter set forth. In expressing our opinions herein, we express no
opinion as to compliance with federal and state securities laws. The opinions
expressed herein are limited to the laws of the State of Texas and the federal
laws of the United States that are normally applicable to transactions of the
type contemplated by the Exchange Offer (the "Applicable Law").
The opinions set forth below are subject to the following qualifications,
further assumptions and limitations:
(a) we do not express any opinion as to the effect on the opinions
expressed herein of (i) the compliance or noncompliance of any party to each of
the Exchange Notes, the Guarantees, the Indenture and the Registration Rights
Agreement with any state, federal or other laws or regulations applicable to it
or them or (ii) the legal or regulatory status or the nature of the business of
any party; and
(b) we do not express any opinion as to the enforceability of the
Indenture, the Exchange Notes and the Guarantees.
Members of our firm are admitted to the practice of law in the state of
Texas and we do not express any opinion as to the laws of any other jurisdiction
other than the Applicable Law to the extent referred to specifically herein.
Insofar as the opinions expressed herein relate to matters governed by laws
December 3, 2004
Page 3
other than the Applicable Law, we have assumed, without having made any
independent investigation, that such laws do not affect any of the opinions set
forth herein. The opinions expressed herein are based on laws in effect on the
date hereof, which laws are subject to change with possible retroactive effect.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, it is our opinion that:
(1) the Indenture has been duly authorized, validly executed and delivered
by the Company and the Subsidiary Guarantors;
(2) the Exchange Notes to be issued and sold as described in the
Registration Statement have been duly and validly authorized by the Company for
such issuance and sale;
(3) the Exchange Notes, when duly executed, issued, sold and delivered by
the Company, authenticated by the Trustee in accordance with the provisions of
the Indenture and exchanged for the Old Notes, will be duly issued and will
constitute valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except to the extent that the
enforceability of the Exchange Notes may be limited by bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or other laws or decisions
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(4) each Guarantee has been duly and validly authorized by such Subsidiary
Guarantor; and
(5) each Guarantee, when executed in accordance with the terms of the
Indenture and upon due execution, authentication and delivery of the Exchange
Notes in accordance with the Exchange Offer and the Indenture, will be duly
issued and will constitute a valid and binding obligation of such Subsidiary
Guarantor in accordance with its terms, except to the extent that the
enforceability of such Guarantee may be limited by bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or other laws or decisions
relating to or affecting the enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
December 3, 2004
Page 4
We hereby consent to the use of our name in the Registration Statement as
counsel who has expressed an opinion upon certain legal matters in connection
with the issue and sale of the Exchange Notes (including specifically the
reference contained under the caption "Legal Matters") and to the filing of this
opinion with the Securities and Exchange Commission (the "Commission") as an
exhibit to the Registration Statement. In giving this consent, we do not admit
that we are within the category of persons whose consent is required under
Section 7 of the Securities Act or the general rules and regulations of the
Commission promulgated thereunder.
Yours very truly,
COX SMITH MATTHEWS INCORPORATED
By: /s/ Steven R. Jacobs
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Steven R. Jacobs
For the Firm