Abraxas Raises Eagle Ford Cap-Ex Budget by $35 Million

Abraxas Eagle Ford Acreage Map
Abraxas Eagle Ford Acreage Map

San Antonio-based Abraxas Petroleum announced in June it will spend an additional $35-million in the Eagle Ford in 2014, raising the company's total cap-ex budget for the year to $160-million. Due to the increase in capital, Abraxas raised its total production guidance for the year to 5500 - 5700 boe/d from 5,200 - 5,300 boe/d.

The newly approved capital funds will be directed to the drilling of three additional Eagle Ford wells, two of which will be drilled in McMullen County, TX. In April of 2014, the company released strong initial production figures for one of its recently completed wells in the area.

Read more: Abraxas Petroleum Operations Update Reveals Strong Initial Production (IP) Rate for McMullen County Well

The incremental capital will go directly to drilling three long lateral wells in the Eagle Ford, which will drive additional production and cash flow growth.
— Bob Watson, President and CEO of Abraxas

Company officials say the increased capital program will be funded by increased cash flows from operations and borrowings under the company's credit facility.

At the end of 2013, Abraxas Petroleum sold some of its Eagle Ford acreage and production in the company’s WyCross area in McMullen County for $73 million. The deal included ~1,200 net acres from a 25% working interest in 5,986 gross (4,809.5 net) acres and net production of 655 boe/d (~90% oil). Proved reserves on the property were estimated at 3.7 million boe. A portion of the proceeds from the sale were used to pay down company debt, which has fallen to $38 million from $140 million in 2012.

Read more: Abraxas Petroleum Sells Eagle Ford Acreage in McMullen County to Redman Resources - $73 Million

In addition to its Eagle Ford operations, Abraxas is also active in North Dakota's Bakken Shale play, and the Delaware Basin in West Texas.

Read more at abraxaspetroleum.com