UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION



                             Washington, D.C. 20549



                                  F O R M 8 - K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934



                                 Date of Report
                                 March 20, 1998



                          Abraxas Petroleum Corporation
             (Exact name of registrant as specified in its charter)


                                     Nevada
                 (State of other jurisdiction of incorporation)





0-19118                                            74-2584033
(Commission File Number)              (I.R.S. Employer Identification Number)




                        500 N. Loop 1604 East, Suite 100
                            San Antonio, Texas 78232
                    (Address of principal executive offices)

               Registrant's telephone number, including area code:
                                  210-490-4788







                              Item 5. OTHER EVENTS.

         (a)      On February 17, 1998 Abraxas Petroleum  Corporation  announced
                  that  Abraxas and Vessels  Energy,  Inc.  had  terminated  the
                  previously  announced  proposed  merger between the two firms.
                  Under the terms of the Merger Agreement,  Vessels paid the sum
                  of $1.5 million as a termination  fee to Abraxas.  Vessels has
                  also  agreed  to  reimburse   Abraxas  for  the  drilling  and
                  completion  costs of four wells drilled on Vessels' acreage by
                  Abraxas.














                                   SIGNATURES


         Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                          ABRAXAS PETROLEUM CORPORATION



                          By:      ___________________________________
                                   Chris Williford
                                   Executive Vice President, Chief Financial
                                   Officer and Treasurer


Dated:   March 20, 1998