Slide 1: Abraxas Petroleum Corporation
IPAA Small Cap OGIS Presentation
February 7, 2005
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. 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. Picture: Collage of oil field pictures & outline of
the U.S. and western Canada
Slide 2: Re-Emerging Growth Story
Abraxas Petroleum Corporation
o AMEX: ABP
o Basic shares outstanding - 36.6 million
o Average trading volume 2004 - 308,500 shares per day
o Share price appreciation 2004 - 53.6%
o Operations in Texas and Wyoming
o (Western Canada - Grey Wolf Exploration Inc.)
Natural gas
o Approximately 80%
Quality assets
o High ownership interests
o Operations
o High producing rates per well
o Large acreage positions
o Substantial upside
Slide 3: Restructured 2004...
11 1/2% notes contained capital expenditure restrictions
Restructured debt in October:
Sources: Uses:
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New $125 mm floating rate notes due 2009 11 1/2% notes due 2007
New $25 mm bridge loan Foothill credit facility
New $35 mm term loan in Canada
New $15 mm revolving credit facility (undrawn at closing)
Slide 4: Goals 2005...
Grey Wolf Exploration Inc. IPO
o Preliminary Prospectus filed January 18
o Treasury shares by Grey Wolf
o proceeds to repay $35 mm term loan and general
corporate purposes
o Secondary & Over-Allotment shares by Abraxas
o proceeds to repay $25 mm bridge loan and general
corporate purposes (reduce debt / accelerate
capital development)
o if over-allotment is exercised in full - Abraxas
will own 0 shares
o Closing expected - late February 2005 Capital Development Program
in Texas and Wyoming Maximize Shareholder Value
Slide 5: Focus...Focus...Focus...
Reserve Distribution of 100.1 Bcfe at 12/31/03
Map of the United States highlighting Wyoming and Texas
Wyoming 0.4 Bcfe 0.4%
West Texas 71.1 Bcfe 71.0%
South Texas 28.6 Bcfe 28.6%
Assumes Grey Wolf IPO completed
Slide 6: U.S. Production 2004...
U.S. Production declined 10% amid capital expenditure restrictions ($8 mm:
2004E) Bar Chart of U.S. 2004 production & capital expenditures by quarter
Assumes Grey Wolf IPO completed
Slide 7: West Texas...
Map of Texas highlighting West Texas
Working interest average of 74% in 158 wells
Focus - continued development of deep Devonian / Montoya gas, overlying Cherry
Canyon oil and Clearfork Slope oil plays
112 identified drilling locations (32 PUD's)
2004 activity - Intensive engineering field studies in preparation for expanded
budget
2005 plans - 12 wells (3 drilling)
Slide 8: South Texas...
Map of Texas highlighting South Texas
Working interest average of 93% in 43 wells
Focus - continued development of deep horizontal Edwards gas
15 identified drilling locations (11 PUD's)
2004 activity - Preparation for expanded budget
2005 plans - 3 wells (1 drilling and 1 completing)
Slide 9: Wyoming...
Map of Wyoming highlighting East Central Wyoming
100% working interest in 5 horizontal wells plus 1 vertical well
53,500 net acres, long-term leases
Focus - development of multiple oil horizons
18 identified drilling locations
2004 activity - 1 vertical well
2005 plans - 1 vertical well to test 3-D defined fault block
Slide 10: Maximize Shareholder Value...
Continue to improve balance sheet with target debt/total mkt. cap of 40% to 60%
Maintain financial flexibility and liquidity
Prioritize large opportunity set of 145 identified drilling locations, 43 of
which are PUD's
Assumes Grey Wolf IPO completed
Slide 11: U.S. Net Asset Value...
MM
Proved Reserves (1) $ 161.6
Incremental Reserves (2 124.0
Acreage (3) 2.9
Working Capital (4) 1.5
Debt (4) (125.0)
-----------------
Net Asset Value $ 165.0
Shares Outstanding 36.6
NAV/Share $ 4.51
Notes:
(1) 100.1 Bcfe valued at SEC PV10 at 12/31/03 = NYMEX $6.19 / $32.55
(2) 89.9 Bcfe of unrisked projects on existing Company acreage requiring
$61.2 mm of capital
(3) 58,235 net undeveloped acres (12/31/03) valued at $50/acre
(4) Pro-forma the October restructuring & Grey Wolf IPO at 100% Assumes
Grey Wolf IPO completed
Slide 12: 2005 U.S. Guidance...
Production:
Full Year (Bcfe) 6.5-7.5
Exit Rate (Mmcfe/d) 19-21
Price Differentials from NYMEX
Gas ($/Mcf) 0.55
Oil ($/Bbl) 0.75
Lease Operating Expenses
$/Mcfe 0.85
G&A
$/Mcfe 0.55
D/D/A
$/Mcfe 1.25
Capital Expenditures
$MM 22.0
Hedge position: 9,500 Mcfe/d through December 2005 w/ floors at $4.50-$5.00 and
$25.00
Assumes Grey Wolf IPO completed
Slide 13: Summary...
Niche exploitation and production company
High quality assets with substantial upside
2005 goals:
Grey Wolf Exploration Inc. IPO
Capital Development Program in Texas and Wyoming
Maximize Shareholder Value
Slide 14: www.abraxaspetroleum.com
Picture: Brooks Draw, Wyoming