EXHIBIT 99.5



                                 NEWS RELEASE
- ------------------------------------------------------------------------------

FOR IMMEDIATE RELEASE

FOR MORE INFORMATION CONTACT:
JACK M. RONEY
DIRECTOR OF CORPORATE DEVELOPMENT

                    ABRAXAS PETROLEUM CORPORATION ANNOUNCES
                    TERMINATION OF CONTINGENT VALUE RIGHTS

SAN  ANTONIO,  TX - (June 23 , 1997) - Abraxas  Petroleum  Corporation  (NASDAQ:
AXAS) today  announced that it has met the terms of its Contingent  Value Rights
(CVR) Agreement, which will retire the CVRs and result in no additional issuance
of common  shares  through  the  Agreement.  The terms  required  30-consecutive
trading days in which the Company's common stock equaled or exceeded $12.50.

Reportable income for the fourth quarter of 1996, fiscal year 1996 and the first
quarter of 1997 were all diluted by potential CVR share  issuance.  Earnings per
share for the affected periods were reduced by $.05, $.03 and $.02 respectively.
Future  reporting  periods  will  not be  affected  by  the  potential  for  any
additional common share issuance related to the CVRs.

Abraxas Petroleum  Corporation is a San Antonio-based  crude oil and natural gas
exploration and production  company that also processes natural gas. It operates
primarily  along the Texas Gulf Coast,  in the Permian  Basin of western  Texas,
western Canada and southwestern Wyoming.

                                      ###