Abraxas Reports 8% Year-End 2007 Reserve Increase



Abraxas Petroleum Corporation announced year-end 2007 reserves for both its existing asset base and the properties recently acquired from St. Mary Land & Exploration Company.

Abraxas' independent reservoir engineering firm, DeGolyer and MacNaughton, estimated total proved oil and natural gas reserves of 106.8 Bcfe (17.8 MMBOE) as of December 31, 2007, an 8% increase over December 31, 2006. Natural gas reserves account for 82% of the total proved reserves and 44% were classified as proved developed. Abraxas operates over 95% of its proved reserve base. The Company's proved reserve life index exceeds 20 years.

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 $215.7 million using realized oil and natural gas prices of $87.30 and $6.33, respectively. Such prices were based on market prices for oil and natural gas on December 31, 2007, as adjusted for the Company's basis differentials.

Total capital expenditures for 2007 were approximately $16.7 million. Overall, the Company added approximately 14.8 Bcfe (2.5 MMBOE) of proved reserves which was offset by 6.7 Bcfe (1.1 MMBOE) of production, for a finding and development cost of $1.13 per Mcfe and a 219% reserve replacement for 2007. Future development costs of $28.5 million associated with the added undeveloped reserves equate to an all-in finding and development cost of $3.06 per Mcfe.

Abraxas internally engineered reserves for the properties acquired from St. Mary Land & Exploration on January 31, 2008. The Company estimated total proved oil and natural gas reserves of 60.8 Bcfe (10.1 MMBOE) as of December 31, 2007, a slight decrease from previously announced reserve estimates due to the roll-forward date, year-end prices and certain properties excluded at closing. Oil reserves account for 56% of the total proved reserves and 85% were classified as proved developed. The PV10 of these properties is approximately $178.5 million using year-end oil and natural gas prices, as adjusted for basis differentials.

"In 2007, we not only fixed our balance sheet through the formation of Abraxas Energy Partners, L.P., but we added reserves and replaced production at an attractive F&D cost. We look forward to continuing this trend in 2008 as we develop our existing asset base and integrate the St. Mary properties into our large inventory of projects," commented Bob Watson, President and CEO.


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