EXHIBIT 99.1
ABRAXAS PETROLEUM CORPORATION
500 N. Loop 1604 East, Suite 100, San Antonio, Texas 78232
P.O. Box 701007, San Antonio, Texas 78270-1007
Office: 210.490.4788 Exec/Acctg Fax: 210.490.8816
NEWS RELEASE
Abraxas Reports First Quarter 2005 Results
SAN ANTONIO (May 11, 2005) - Abraxas Petroleum Corporation ("Abraxas")
(AMEX:ABP) today reported financial and operating results for the quarter ended
March 31, 2005. As a result of the Grey Wolf Exploration Inc. ("Grey Wolf")
initial public offering ("IPO") that closed on February 28, 2005, the
information herein represents financial and operating results from operations in
the U.S. only as all of Grey Wolf's historical performance and results from the
sale of Grey Wolf shares owned by Abraxas, are treated as discontinued
operations.
Production of 1.3 Bcfe for the quarter generated revenues of $7.8 million and a
net loss of $1.5 million or $0.04 per share from continuing operations. This
compares to a net loss from continuing operations of $5.8 million or $0.16 per
share for the same quarter of 2004. Net income of $9.2 million (including a
discontinued operations impact of $10.7 million) for the first quarter of 2005
included a $19.6 million gain on the sale of the Grey Wolf shares in the IPO, a
$6.1 million non-cash income tax expense related to the sale of the Grey Wolf
shares that Abraxas owned which offset a similar tax benefit booked in the
fourth quarter of 2004, and a $2.8 million loss from operations, predominantly
for debt retirement costs of loans that were repaid with the proceeds from the
Grey Wolf IPO.
As a result of the elimination of our capital expenditure limitations, the most
significant item related to the first quarter of 2005 results included capital
expenditures of $8.7 million compared to $2.2 million in the first quarter of
2004.
"The 1st quarter of 2005 was a busy time at Abraxas - we completed the Grey Wolf
IPO thus, significantly reducing the leverage on our balance sheet and returning
our focus to U.S. development as we kicked off our capital development program
with 7 wells in South and West Texas. We are currently drilling 1 horizontal
well in West Texas and completing and/or testing 1 vertical well in West Texas
and 3 horizontal wells in South Texas. The horizontal wells have been
encouraging as we look forward to definitive results upon completion and testing
of the wells despite delays in contracting equipment," commented Bob Watson,
Abraxas' President and CEO.
Abraxas invites your participation in a conference call on Thursday, May 19th,
at 10:00 a.m. CT to discuss the contents of this release and respond to
questions. Please call 1.888.855.5428 between 9:50 a.m. and 10:00 a.m. CT,
confirmation code 4635216, if you would like to participate in the call. There
will be a replay of the conference call available by calling 1.888.203.1112,
confirmation code 4635216, beginning approximately 1:00 p.m. CT, May 19th,
through midnight CT, May 25th.
Abraxas Petroleum Corporation 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.
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
ABRAXAS PETROLEUM CORPORATION
QUARTER-END RESULTS
(UNAUDITED)
Three Months Ended
(In thousands except per share data) March 31,
------------------- -- ----------------
2005 2004
------------------- ----------------
Financial Results:
- ----------------------------------------------------------------
Revenues $7,822 $7,960
EBITDA (a) 4,380 4,478
Cash Flow (Before Working Capital Changes) (a) 1,257 1,658
Net Income (Loss) from continuing operations (1,514) (5,755)
Income (Loss) Per Share from continuing operations - Basic (0.04) (0.16)
Weighted Average Shares Outstanding 36.6 36.0
Production Per Day:
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Crude Oil (Bbl/d) 575 619
NGL (Bbl/d) - 25
Natural Gas (Mcf/d) 10,745 12,819
Mcfe/d 14,192 16,683
Realized Prices (net of hedge impact):
- ----------------------------------------------------------------
Crude Oil ($/Bbl) $47.13 $34.18
NGL ($/Bbl) - 23.55
Natural Gas ($/Mcf) (b) 5.26 4.98
Price per Mcfe 5.89 5.13
Expenses:
- ----------------------------------------------------------------
Lease Operating ($/Mcfe) $1.78 $1.51
General & Administrative ($/Mcfe) 0.74 0.69
Cash Interest ($/Mcfe) 2.44 1.22
Total Interest ($/Mcfe) 2.45 3.23
D/D/A ($/Mcfe) 1.33 1.21
- -------------------------------------------------------------------------------------------------------
(a) See reconciliation of non-GAAP financial measures below
(b) Includes deductions of $0.53 per Mcf in 2005 and $0.10 per Mcf in 2004
related to non-cash hedge accounting impact
Note: The above quarterly results exclude impact from Grey Wolf Exploration Inc.
BALANCE SHEET DATA
(In thousands) March 31, 2005 December 31, 2004
------------------------- ------------------------
Cash $ - $ 1,284
Working Capital (Deficit) (c) (10,016) (3,857)
Plant/Property/Equipment, Net 85,031 78,077
Total Assets 99,172 152,685
Long-Term Debt 125,007 126,425
Shareholders Equity (Deficit) (43,389) (53,464)
Common Shares Outstanding (Millions) 37.8 36.5
(c) Continuing operations only
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data) Three Months Ended
March 31,
-----------------------------------------------
2005 2004
----------------------- --------------------
Revenues:
Oil and gas production revenues .................... $7,525 $7,783
Rig revenues ....................................... 296 175
Other ............................................. 1 2
----------------------- --------------------
7,822 7,960
Operating costs and expenses:
Lease operating and production taxes ............... 2,278 2,288
Depreciation, depletion, and amortization .......... 1,698 1,839
Rig operations ..................................... 218 145
General and administrative ......................... 946 1,049
Stock-based compensation............................ 603 2,063
----------------------- --------------------
5,743 7,384
----------------------- --------------------
Operating income ...................................... 2,079 576
Other (income) expense:
Interest income .................................... (1) (4)
Interest expense ................................... 3,134 4,908
Amortization of deferred financing fees ............ 451 445
Financing costs .................................... - 971
Other .............................................. 9 11
----------------------- --------------------
3,593 6,331
----------------------- --------------------
Loss from continuing operations ....................... (1,514) (5,755)
Net income from discontinued operations................ 10,731 198
----------------------- --------------------
Net income (loss)................................... $9,217 $(5,557)
======================= ====================
Basic earnings (loss) per common share:
Net earnings (loss) from continuing operations... $(0.04) $(0.16)
Discontinued operations ........................ 0.29 0.01
----------------------- --------------------
Net income (loss) per common share - basic ......... $0.25 $(0.15)
======================= ====================
Diluted earnings (loss) per common share:
Net earnings (loss) from continuing operations... $(0.04) $(0.16)
Discontinued operations ........................ 0.29 0.01
----------------------- --------------------
Net income (loss) per common share - diluted....... $0.25 $(0.15)
======================= ====================
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
To fully assess Abraxas' operating results, management believes that, although
not prescribed under generally accepted accounting principles ("GAAP"),
discretionary cash flow and EBITDA are appropriate measures of Abraxas' ability
to satisfy capital expenditure obligations and working capital requirements.
Cash flow and EBITDA are non-GAAP financial measures as defined under SEC rules.
Abraxas' cash flow and EBITDA should not be considered in isolation or as a
substitute for other financial measurements prepared in accordance with GAAP or
as a measure of the Company's profitability or liquidity. As cash flow and
EBITDA exclude some, but not all, items that affect net income and may vary
among companies, the cash flow and EBITDA presented below may not be comparable
to similarly titled measures of other companies. Management believes that
operating income (loss) calculated in accordance with GAAP is the most directly
comparable measure most similar to cash flow and EBITDA.
Cash flow is defined as operating income (loss) plus depletion, depreciation and
amortization expenses, non-cash expenses, cash gains (losses) on the settlement
of non-hedge derivatives and cash portion of other income (expense) and cash
interest. The following table provides a reconciliation of cash flow to
operating income (loss) for the periods presented.
(In thousands) Three Months Ended
March 31,
----------------------------------
2005 2004
-------------- ----------------
Operating income (loss) $2,079 $576
Depletion, depreciation and amortization 1,698 1,839
Non-cash stock based compensation expense 603 2,063
Financing costs - (971)
Cash portion of other expense (9) -
Cash interest (3,114) (1,849)
- --------------------------------------------------------------------------------
Cash Flow $1,257 $1,658
- --------------------------------------------------------------------------------
EBITDA is defined as net income (loss) plus interest expense, depletion,
depreciation and amortization expenses, deferred income taxes and other non-cash
items. The following table provides a reconciliation of EBITDA to operating
income (loss) for the periods presented - see consolidated statements of
operations for a reconciliation of net income (loss) to operating income (loss).
(In thousands) Three Months Ended
March 31,
----------------------------------
2005 2004
-------------- ----------------
Operating income (loss) $2,079 $576
Depletion, depreciation and amortization 1,698 1,839
Non-cash stock based compensation expense 603 2,063
- --------------------------------------------------------------------------------
EBITDA $4,380 $4,478
- --------------------------------------------------------------------------------
Note: The above cash flow and EBITDA reconciliations exclude impact from
Grey Wolf Exploration Inc.