In U.S. land surveying under the Public Land Survey System (PLSS), a section is an area nominally one square mile, containing 640 acres (260 ha), with 36 sections making up one survey township on a rectangular grid
Abraxas has only approx. 1,500 Barrels of Oil per day hedged at $90 for the balance of Year 2014.
Next year these hedges drop to approx. 1,000 Barrels per day at $$85.
If Oil continues to drop; many Oil Exploration companies will stop drilling(many have already cut back on drilling) to conserve Cash.
Oil dropping in Price has two effects.
1. Reserve Valuation will start dropping based on SEC GAAP pricing (12 month average on the 1st of the month Oil Price). If Company is Full Costing Valuation(most are) than we will see Write offs on Property Valuation on Balance Sheet. Remember, once written down, cannot be written up later.
2. The Main EFFECT is on Company with large Debt(Credit Facility). Banks use current pricing and not 12 month average to calculate the Borrowing Base. If loans are larger than Borrowing Base; there will be a call by the Banks for Companies to pay the difference. This call will cause Companies to Sell Leases to come up with the Cash.
Abraxas is in Excellent shape as far as Valuation on Balance Sheet and very Low Debt compare to Borrowing Base.
Abraxas will be in Very Good position to accumulate more Leases at reasonable pricing if Oil Prices stay low.
Abraxas is still very profitable in drilling Bakken Wells at this Oil Prices. We may see Well Completion drop as Companies stop drilling because of low Oil Prices.
Assets Held for Sale
The Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 presented approximately $17.1 million in book value of assets held for sale, consisting of $15.2 million related to Remington Village and $1.9 million related to the corporate aircraft and related facilities. These assets were sold during the nine months ended September 30, 2013.
Remington Village Sale
On September 11, 2013, the Company, through its wholly owned subsidiary Remington Village LLC, completed the sale of the Remington Village Apartment Complex in Gillette Wyoming (“Remington Village”) to an affiliate of the Miller Frishman Group, LLC for $15.0 million. The $9.5 million balance on the commercial note relating to Remington Village was paid in full at closing. After deduction of payment of the note, commission and other closing costs, the net proceeds to the Company were approximately $5.0 million. Upon closing this transaction, the assets and liabilities held for sale were reduced to $0 and we recorded a loss on the sale of discontinued of operations of $120,000.
The Mount Emmons Project is a proposed mining operation located in Gunnison County west of Crested Butte, Colorado. This "world class" deposit is believed to be one of the largest and purest molybdenum deposits in the world.
12 completed wells
3 wells drilling
Planned nine multi-well pads at 660 foot spacing
42 additional wells at 660 foot spacing
Additional 2nd and 3rd Bench Three Forks potential
Approved by NDIC Lillibridge
8 new completions
East & West pad: on production
Planned two multi-well pads at 660 foot spacing
Eight additional wells at 660 foot spacing
Additional 2nd and 3rd Bench Three Forks potential
Approved by NDIC
PLEASE NOTE the Additional 2nd and 3rd Bench three Fork potential:
Continental estimated in late 2010 that the Bakken field would eventually yield 24 billion barrels of oil equivalent (Boe), based on technology available at that time. This estimate included 20 billion barrels of oil and 4 billion Boe of natural gas, and assumed 577 billion barrels of original oil in place in the Bakken and TF1. With the addition of oil found in the lower Three Forks benches, which includes the TF2, TF3 and TF4, the Company now estimates the field has 903 billion barrels of original oil in place, a 57 percent increase .
Note these are different pool of Oil outside the normal Bakken and Three Forks formation.
Caution these formation and thickness varies upon location of lease acreage.
Abraxas maybe very lucky to be in a sweet spot.
Further Note: These 2nd and 3rd Bench Wells can be drilled from existing Pads and use existing infrastructure
(Tanks, Pipelines; etc.).
Has nothing to do with Down Spacing or picking up additional acreage but with overlapping spacing units.
Previously a lot of Oil & Gas Companies have done this with their Bakken Wells.
These overlapping units are contiguous to each other enabling drillers to drill horizontal laterals into more than one spacing units to fully utilize their existing leases.
I have to see three specialist on Thursday and Friday as a follow up to my 5 day stay.in the hospital.
Expect everything to be fine.
Still alive, that is all that counts when you get old.
Wouldn't print out last night but today it did.
NDIC Docket for Thursday, November 20, 2014
Case No. 23264: Application of Abraxas Petroleum Corp. for an order extending the field
boundaries and amending the field rules for the Siverston and/or North
Fork-Bakken Pools to create and establish two overlapping 2560-acre
spacing units comprised of Sections 22, 23, 26 and 27, T.150N., R.97W.;
and Sections 34 and 35, T.150N., R.97W., and Sections 2 and 3, T.149N.,
R.97W., McKenzie County, ND, authorizing the drilling of two horizontal
wells on or near the section line between the existing 1280-acre spacing
units of each proposed overlapping 2560-acre spacing unit, eliminating any
tool error requirements and such other relief as is appropriate.
Case No. 23265: Application of Abraxas Petroleum Corp. for an order extending the field
boundaries and amending the field rules for the Dimmick Lake, Fancy
Buttes and/or Pershing-Bakken Pools to create and establish two
overlapping 2560-acre spacing units comprised of Sections 7, 8, 17 and 18;
and Sections 19, 20, 29 and 30, T.150N., R.96W., McKenzie County, ND,
authorizing the drilling of two horizontal wells on or near the section line
between the existing 1280 and 2560-acre spacing units of said proposed
overlapping 2560-acre spacing units, eliminating any tool error
requirements and such other relief as is appropriate.
Sections 7, 8,
17, and 18,
You gave me a good laugh.
An outsider telling the Chief Operating officer how to run his company.
As a former Controller; chief financial officer, I should remind the outsiders that that the Company have management staff meetings where everything is discuss. They also usually have a Quarterly meeting with the Board of Directors to discuss all projects.
The Company publish their CAP EX Budget for the following year but internally they have projected projects for next three years.
The Company also has to be careful to plan projects to use all areas leased within five years so as not to violated SEC Guidelines and have to write down the Assets.
Abraxas has been leader in selling off Assets that are not on their priority list to develop. Abraxas has enough Assets now to keep them busy for at least three years. Abraxas is being smart in getting more leases that are continuous to existing leases.
Message #8345 on Investor Village; "AXAS" Message Board.
"Initial Test is 09/03/2014
310 Barrels of Oil per Day
156 MCF of Natural gas per Day.
Flowing Pressure: 25 PSI
Oil Gravity 26.9 Degrees:
Crude oil is classified as light, medium or heavy, according to its measured API gravity.
•Light crude oil is defined as having an API gravity higher than 31.1 °API (less than 870 kg/m3)
•Medium oil is defined as having an API gravity between 22.3 °API and 31.1 °API (870 to 920 kg/m3)
•Heavy crude oil is defined as having an API gravity below 22.3 °API (920 to 1000 kg/m3)
•Extra heavy oil is defined with API gravity below 10.0 °API (greater than 1000 kg/m3)
Well is on PUMP"
"Income Tax Expense. Income tax expense for the period ended September 30, 2013 is primarily related to income taxes assessed as a result of an Internal Revenue Service examination of our 2009 Federal income tax return as well as various state taxes. On July 23, 2013, we settled the assessment resulting in $81,000 being recognized as federal income tax expense for the nine months ended September 30, 2013. No income tax was recognized for the nine months ended September 30, 2014 as a result of the application of our operating loss carryforwards. "
The Very Good News is:
" At December 31, 2013, we had, subject to the limitation discussed below, $160.8 million of net operating loss carryforwards for U.S. tax purposes and $21.8 million for Canadian tax purposes. The U.S. loss carryforwards will expire through 2033 and the Canadian carryforward will expire in 2033, if not utilized. "
1. Credit Facility Borrowing of $52 Million: "At September 30, 2014 the interest rate on the credit facility was 2.15% based on 1 -month LIBOR borrowings and the level of utilization. "
2. "On February 14, 2012, Raven Drilling finalized the note with respect to the rig loan agreement. The principal amount of the note is $7.0 million and bears interest at 4.26% . Interest only was due for the first 18-months of the note and thereafter, the note will amortize in full over the remaining life of the note. Interest and principal, when required, are payable monthly. Subject to earlier prepayment provisions and events of default, the stated maturity date of the note is February 14, 2017. As of September 30, 2014, $5.1 million was outstanding under the rig loan agreement. "
On May 9, 2008, the Company entered into an advancing line of credit in the amount of $5.4 million for the purchase and finish out of a building to serve as its corporate headquarters. This note was refinanced in November 2008. The note was modified on April 4, 2013, reducing the interest to a fixed rate of 4.3% , and was further modified on July 20, 2013 to extend the maturity date to July 20, 2023. The note is payable in monthly installments of principal and interest of $34,354 based on a twenty year amortization. Beginning August 20, 2018, the interest rate will adjust to the bank's current prime rate plus 1.00% with a maximum annual rate of 7.25% . The note is secured by a first lien deed of trust on the property and improvements. As of September 30, 2014 , $4.4 million was outstanding on the note. "
Page #23 of 10Q:
"(1) The Brent swap was monetized in October 2014 for $0.1 million and replaced with a $85.30 WTI swap for 3,800 Bbl per month for 2015"
Comment: In Lay person terms:
1. Abraxas sold out their Brent Swaps for 2015 for a $100,000 Profit.
2. Abraxas added approx. 126 Barrels per day Swaps at $85.30 for the Year 2015.
Page #22 #23
"Prices closed on September 30, 2014 at $91.16 per Bbl of oil and $4.12 per MMBtu of gas, compared to closing on September 30, 2013 at $102.33 per Bbl of oil and $3.56 per MMBtu of gas. Since September 30, 2014, oil prices have declined significantly with prices closing on November 4, 2014 at $77.19 per Bbl. If oil prices remain at these levels or decrease further or if gas prices begin to decrease, we may reduce our drilling activity which would reduce the amount of oil and gas we produce. In addition, the borrowing base under our credit facility is subject to periodic re-determinations based in part on changing commodity
price expectations. Lower prices and/or lower production may decrease revenues, cash flows and the borrowing base under our credit facility, thus reducing the amount of financial resources available to meet our capital requirements. "
If Crude Prices stay below $80; AXAS will again have a large Hedge Gain(Realized & Unrealized of approx. $7 Million for the 4th Quarter).
I wouldn't worry about borrowing Base because Abraxas has only borrowed approx. 1/3 of the Total Borrowing Base. Lower Prices lowers the Borrowing Base but drilling and increasing Proven Developed increases the Borrowing Base.
"impressed"; not really; I expected as much:
1. We will have a whole quarter of the three Stenehjem Wells Production in the 1st Quarter, 2015.
2. We will have a whole quarter of Dutch #3 & Dutch #4 Production.in the 1st Quarter,2015.
3. We will have a full quarter of Cat Eye Production in the first quarter, 2015.
4. We will have a full quarter Production of the Ravin#4H Well in the 1st quarter, 2015.
5 We will even a partial quarter Production of the Grass Farms #2 &3H Wells in the 1st quarter, 2015.
The above will more than offset production depletion from existing Abraxas Wells.
What you are forgetting is that the Bakken Wells being drilled now; won't be completed until April.
What you are forgetting that Bakken and Eagle Ford Wells Production drop each month.
"The arrangement agreement provides that, upon a termination of the arrangement agreement under specified circumstances, Kodiak is required to pay a termination fee equal to $130.0 million to Whiting plus reimbursement of up to $10.0 million of Whiting’s expenses and, alternatively, Whiting is required to pay a termination fee equal to $130.0 million to Kodiak plus reimbursement of up to $10.0 million of Kodiak’s expenses. If the arrangement agreement is terminated due to the failure to obtain the Whiting stockholder approval of the share issuance proposal, Whiting would be required to reimburse up to $10.0 million of Kodiak’s expenses; and if the arrangement agreement is terminated due to the failure to obtain the Kodiak shareholder approval of the continuation resolution or Kodiak securityholder approval of the arrangement resolution, Kodiak would be required to reimburse up to $10.0 million of Whiting’s expenses."
November 5th Press Release:
1. "At Abraxas’ Cave prospect, in McMullen County, Texas, the Company successfully completed the Dutch 3H and Dutch 4H with a combined 74 frac stages. Both wells are expected to begin flowback shortly. Abraxas holds a 100% working interest in the Dutch 3H and 4H. "
2. "The three Stenehjem wells are scheduled to be fracture stimulated next week."
3. " The Cat Eye 1H is scheduled to be fracture stimulated in December"