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Abraxas Petroleum Corp. Message Board

  • drgreensage drgreensage Nov 27, 2012 4:18 PM Flag

    C.k. Copper maintains Buy rating


    Sentiment: Strong Buy

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    • AXAS provided an update on its drilling operations in the Bakken/Three
      Forks (“3F”) and Eagle Ford plays. Most importantly, the company
      reported that its “Jore Federal 2-11-3H” well (76% WI) completed in
      the 3F formation in McKenzie County, ND produced at 510 BOEPD (77%
      oil/23% NG) during the first 30-days of operations. The well appears to
      be holding up well, producing at a rate of 367 BOEPD (88% oil/12%
      NG) on a restricted choke. The 30-day rate of the Jore Federal well
      appears to be fairly consistent with well results in the area, as
      evidenced by our survey of 18 nearby wells that produced at an
      average rate of 560 BOEPD (80% oil/20% NG) during the first month of
       The company continues to participate in development of the Bakken/3F
      and Eagle Ford plays with one rig drilling in each play. In the
      Bakken/3F play, AXAS expects to complete 2 gross (0.98 net) wells in
      the December-January timeframe, while spudding four wells on the
      nearby Lillibridge pad in McKenzie County, ND. In the Eagle Ford, AXAS
      recently completed the “Cobra B 1H” well (25% WI) in McMullen
      County, TX and is currently flowing the well to sales. It is worth noting
      that AXAS’s first well in the area, the “Cobra 1H”, produced an
      impressive ~120 MBOE (95% oil + NGLs) during its first seven months
      of operations.
       At the current drilling pace, we estimate AXAS would drill ~6 net
      Bakken/3F wells and ~2.2 net Eagle Ford wells in 2013. The company
      has not yet announced a 2013 budget, but we think 2013 spending
      could be in the $65-$70MM range, similar to 2012, given the current
      development pace and assuming an average well cost of ~$8MM in
      both plays. This seems doable with roughly $25MM in borrowing
      capacity on the firm’s revolving credit facility after recent property sales
      and an estimated cash flow of $41.6MM in 2013. The company also
      plans to sell other non-core assets, which could provide additional funds
      as well.

      • 1 Reply to micro00
      • This is a nice little pat on the head for Watson from Cooper and a thank you for him letting Cooper share in the banking fees AXAS has generated over the last few years. Cooper is weak and virtually irrelevant. Show some moxie and tear into Watson like J.P. Morgan did to MMR today. Some wall between research and banking at Cooper? Yea, right!

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