Abraxas Updates Successful Canadian and U.S. Operations

Abraxas Petroleum Corporation Chairman and CEO, Bob Watson, commented on the Company's current operations in the Oates S.W. field, in the Montoya trend in west Texas, and the continuing success of its drilling efforts in the Caroline and Pouce Coupe areas in Alberta, Canada.

"In Canada, the Company has drilled seven successful wells, none of which are currently booked as proved or probable reserves by the Company's outside engineering firms. Abraxas expects reserves of 3-5 Bcfe (gross) per well and has identified over forty additional locations in the Caroline and Pouce Coupe areas based on the recent drilling and the 3-D seismic surveys completed in each area this past winter. In the Pouce Coupe area a second well is online producing 2.2 MMcfpd and 60 Bopd (gross). A third well was tested at 5 MMcfpd and 180 Bopd (gross) and should be on production later this month. Two additional wells are awaiting completion and one well is currently drilling. In Caroline, two wells are being completed and one well is currently drilling. The Company has one rig under contract in each area and anticipates drilling one well per month in Pouce Coupe and one well every six weeks in Caroline for the foreseeable future. Abraxas has an average 85% working interest in the seven drilled wells but has a 100% working interest in the majority of the subsequent drilling locations.

In the S.W. Oates area of west Texas, the Company recently commenced operations to re-enter an existing wellbore, the Hudgins 34 No. 1. Reentering the existing well will save approximately half of the cost of a new well and allow the Company to test the Montoya formation in a cost effective manner. The well is currently drilling vertically at approximately 13,000 feet and is expected to drill horizontally at a depth of 13,400 feet. Abraxas has finished the evaluation of its recently acquired 3-D seismic and has identified as many as 9 potential locations on its 100% working interest acreage. In addition to the Montoya formation potential, there is a shallower Devonian formation that will be evaluated.

In the Montoya joint participation area with EOG Resources, the two wells currently on production are producing a combined 11 MMcfpd (gross) and EOG expects to spud two additional wells before year end."


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