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Abraxas Petroleum (AXAS) Releases Update on Well Operations

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Independent energy company, Abraxas Petroleum Corporation (AXAS - Free Report) released an update on its well operations.

Caprito 98-201H and Caprito 98-301HR, both a 4,880 foot lateral targeting the Wolfcamp A1 zone and the Wolfcamp A2 zone, respectively, gave outstanding results. These wells are located in Ward County, TX. The company holds about 98% interest in both the wells. The Caprito 98-201H averaged 1,036 barrels of oil equivalent per day (Boepd), 873 barrels of oil per day and 978 million cubic feet (mcf) of natural gas per day during the first 30 days of production. The Caprito 98-301HR averaged 999 Boepd, 838 barrels of oil per day and 962 mcf of natural gas per day in the first 30 days of production..

On monitoring the practices of compensating operators, Abraxas Petroleum flowed back both wells using a more conventional choke management procedure. This is expected to boost the current results, though the exact amount remains uncertain till the new wells attain maximum pressure drawdown.

Abraxas Petroleum’s 100% owned Caprito 83-304H and 83-404H, targeting the Wolfcamp A2 and Wolfcamp B, respectively, are anticipated to commence completions this week. Currently, Abraxas is drilling the Caprito 82-101H and 82-202H, where the company holds a 100% and 62.5% working interest, respectively. Consequently, Abraxas intends to test 660’ spacing at Caprito. The four-well downspacing test will comprise two wells of both Wolfcamp A2 and Wolfcamp A1. Abraxas Petroleum implied that spacing will shift to the industry’s norm of eight wells per section from four wells per section in the Wolfcamp A1 and A2.

Recently, the company drilled and cased a replacement well in the Yellowstone 4HR in McKenzie County, North Dakota. Abraxas Petroleum owns an interest of 52% in Yellowstone 2H-4HR three-well pad, which is slated for completion in October. The first well on the Yellowstone 5H-7H pad, in which the company holds an interest of 52%, was recently spud.

Abraxas Petroleum’s producing assets in South Texas were spared from the brunt of Hurricane Harvey. The company had temporarily lowered activities in the affected areas owing to the closure of third party midstream facilities and Gulf Coast refineries. Wells with associated production of about 700 Boepd were reduced for a period of one to three weeks. All wells have come back to normal operations and are producing at full rates. Due to the hurricane, the company’s planned frac date on the Shut Eye 1H has been deferred to mid-October 2017.

From mid-August through September, Abraxas Petroleum has faced gas cut backs in the Permian and Bakken due to disruptions at third party processing and compression facilities, which is expected to be fixed this week. Cumulatively, these curtailments in the Eagle Ford, Permian and Bakken are expected to reduce natural gas and NGL production volumes by about 350 Boepd for the quarter. Abraxas Petroleum has kept its annual average production and exit rate guidance for the year unchanged.

Similar to Abraxas Petroleum, other oil and gas companies have also provided operation updates. Some of them are Ultra Petroleum Corp , Jagged Peak Energy Inc and W & T offshore Inc (WTI - Free Report) . Abraxas Petroleum’s performance in Delaware shows its efforts to boost long-term growth and enhance shareholder value. Despite Harvey, the company’s operations remain unaffected in Texas. The delays that occurred were more due to hindrances faced by the third party.

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