EXHIBIT 99.1
ABRAXAS PETROLEUM CORPORATION
www.abraxaspetroleum.com
500 N. Loop 1604 East, Suite 100, San Antonio, Texas 78232
Office: 210.490.4788 Exec/Acctg Fax: 210.490.8816
NEWS RELEASE
Abraxas Replaces 280% of 2005 Production at a Finding Cost of $2.03 per Mcfe
SAN ANTONIO (Feb. 27, 2006) - Abraxas Petroleum Corporation (AMEX:ABP) today
announced total proved oil and natural gas reserves of 104.7 Bcfe as of December
31, 2005, a 12% increase over December 31, 2004. Natural gas reserves account
for 82% of the total proved reserves and 48% were classified as proved
developed. Abraxas operates over 95% of its proved reserve base.
The Company replaced 280% of production in 2005, predominantly from development
drilling, at an all-in finding and development cost of $2.03 per Mcfe. The
Company's proved reserve life index exceeds 17 years, when measured against 2005
production.
The present value, using a 10% discount rate, of the future net cash flows
before income tax ("PV10") of the Company's proved oil and natural gas reserves
is approximately $311.9 million using oil and natural gas prices of $56.92 and
$8.84, respectively. Such prices were based on market prices for oil and natural
gas on December 31, 2005, as adjusted for the Company's average basis
differential.
The Company further engaged the independent reservoir-engineering firm of
DeGolyer and MacNaughton to evaluate its probable and possible reserve
potential, in addition to its proved reserve base. As of December 31, 2005,
probable oil and natural gas reserves were estimated at 27.4 Bcfe with a PV10 of
$63.4 million and possible oil and natural gas reserves were estimated at 171.5
Bcfe with a PV10 of $161.2 million. All reserve categories combined amount to
303.6 Bcfe and $536.5 million in PV10.
"The fact that we were able to replace 280% of our 2005 production at an
attractive finding cost testifies to the quality of our assets and the ability
of our technical team. This reserve replacement is truly significant considering
47% of our 2005 capital expenditures were related to the conversion of proved
undeveloped or non-producing reserves to proved developed reserves. For the
first time in many years, we had our independent engineering firm estimate our
probable and possible reserves in order to provide greater transparency for our
shareholders and provide support to our large inventory of projects on our
existing leasehold," commented Bob Watson, Abraxas' President and CEO.
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