Exhibit 99.1


                                  NEWS RELEASE

         Abraxas Announces Closing of the Grey Wolf Exploration Inc. IPO


SAN  ANTONIO  (Feb.  28,  2005)  -  Abraxas  Petroleum  Corporation  ("Abraxas")
(AMEX:ABP)  today  announced that Grey Wolf  Exploration  Inc. ("Grey Wolf") has
closed its initial public offering.

Net proceeds of approximately  $57 million from Grey Wolf's treasury shares ($37
million) and secondary  shares offered by Abraxas ($20 million),  have been used
by Grey Wolf to repay Grey Wolf's term loan in its entirety and  eliminate  Grey
Wolf's working capital  deficit and by Abraxas to reduce the amount  outstanding
under Abraxas' bridge loan to approximately $5 million.

The  offering  was led by CIBC World  Markets  Inc. on behalf of a syndicate  of
underwriters  that  included BMO Nesbitt  Burns Inc.,  GMP  Securities  Ltd. and
Canaccord Capital Corporation (collectively the "Underwriters").

Abraxas has granted the Underwriters an option (the "Over-Allotment  Option") to
exercise up to an  additional  3.9  million  shares at CDN $2.80 (USD $2.27) per
share.  The  Over-Allotment  Option may be exercised in whole or in part, at any
time, during the next 30 calendar days. In the event the  Over-Allotment  Option
is exercised in full, the net proceeds of approximately $8 million will be first
applied to the bridge loan and then to general corporate purposes.  In the event
the Over-Allotment  Option is not exercised,  Abraxas will own approximately 13%
of Grey Wolf.  Grey Wolf will trade on the  Toronto  Stock  Exchange,  under the
ticker symbol GWE.

Assuming  the  Over-Allotment  Option is exercised  in full,  approximately  $65
million of net proceeds  equates to $3.10 per proved Mcfe using 21.0 Bcfe,  Grey
Wolf's net proved reserves at December 31, 2003. In addition,  Abraxas will book
a one-time gain of approximately $20 million from this transaction, assuming the
Over-Allotment Option is fully exercised.

"The closing of this IPO represents  another  significant  step in achieving our
long-standing  goal of reducing the leverage on our balance  sheet.  By reducing
our debt  approximately 32% with these proceeds,  while proved reserves declined
only 17%, we have truly  strengthened  the balance sheet with no dilution to our
shareholders.  We have reduced our debt load by $175  million,  nearly 60%, over
the last two  years  and now feel  comfortable  with our  balance  sheet and our
ability to again grow our asset base," commented Bob Watson,  Abraxas' President
and CEO.

Abraxas  is a San  Antonio-based  crude oil and  natural  gas  exploitation  and
production company with operations in Texas and Wyoming.

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







THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION FOR AN
OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THE SECURITIES  DESCRIBED HEREIN IN
ANY  JURISDICTION  IN WHICH SUCH OFFER,  SOLICITATION  OR SALE WOULD BE UNLAWFUL
PRIOR TO QUALIFICATION  UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.  THE
SECURITIES DESCRIBED HEREIN HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE
UNITED  STATES  SECURITIES  ACT OF 1933  (THE  "SECURITIES  ACT")  OR ANY  STATE
SECURITIES  LAWS AND MAY NOT BE  OFFERED  OR SOLD IN THE  UNITED  STATES  EXCEPT
PURSUANT TO A REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

FOR MORE INFORMATION CONTACT:
Barbara M. Stuckey/Director of Corporate Development
Direct Telephone 210.757.9835
Main Telephone 210.490.4788
bstuckey@abraxaspetroleum.com
www.abraxaspetroleum.com