Exhibit 99.1


                          ABRAXAS PETROLEUM CORPORATION
                            www.abraxaspetroleum.com
           500 N. Loop 1604 East, Suite 100, San Antonio, Texas 78232
                     Office: 210.490.4788 Fax: 210.490.8816

                                  NEWS RELEASE

        Abraxas Announces the Adoption of Fair Value Method of Accounting
                  For Stock-Based Compensation Under SFAS 123R

SAN ANTONIO (Jan. 27, 2006) - Abraxas Petroleum Corporation (AMEX:ABP) announced
today  that it adopted  the fair  value  method of  accounting  for  stock-based
compensation  under  Statement of  Financial  Accounting  Standards  No. 123, as
revised  ("SFAS  123R"),  during the fourth  quarter of 2005,  as allowed by the
Securities  and Exchange  Commission.  This  adoption  will result in a positive
impact to the Company's net income,  as detailed  below, of  approximately  $9.1
million.

SFAS 123R permits the  retrospective  presentation  of financial  statements for
comparative   purposes;   therefore,   the  Company   has   adopted   SFAS  123R
retrospectively   to  January  1,  2003,   in   accordance   with  the  modified
retrospective  application  transition method of SFAS 123R. The approximate $9.1
million includes the reversal of approximately $9.7 million of previously booked
stock-based  compensation  expense under historical  accounting  methods and the
incurrence of an expense of  approximately  $590,000 to account for the adoption
of SFAS 123R.  This  pronouncement  requires all  stock-based  compensation  (in
addition  to other forms of  share-based  payment  arrangements)  granted by the
Company to be valued under a generally accepted method and expensed accordingly.
The  approximate  impact to net income by year is,  $7.1  million in 2005,  $1.2
million in 2004 and $878,000 in 2003.

The adoption of SFAS 123R does not impact the Company's daily operations or cash
flow.

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