Abraxas Petroleum Corp. (AXAS): Coors Light Isn’t the Only Brand tapping the Rockies

Page 1 of 2

While most of the attention on the Bakken in the Williston Basin goes to larger players, Abraxas Petroleum Corp. (NASDAQ:AXAS) is a name worth learning. The company is a smaller E&P with significant exposure to the Rockies — 42% of first quarter production and 50% of proven reserves come from the region. After the Bakken, the company’s Eagle Ford assets are its next most important strategic asset. As the company continues to expand under careful management toward producing assets, Abraxas is seeing the types of improved efficiencies and results that you may wish to include in your portfolio.

Recent results

In early June, Abraxas Petroleum Corp. (NASDAQ:AXAS) announced earnings of $0.08 per share, or $7.9 million, on revenue of $21.5 million. In the second quarter of 2012, the company earned $0.12 per share, or $10.9 million. CEO Bob Watson commented on the company’s efforts to reduce debt during the quarter: “During the first half of 2013 Abraxas successfully executed on numerous asset sales in an effort to refocus our portfolio and true up our balance sheet.”

Abraxas Petroleum Corp.

The company also recently reaffirmed its 2013 production guidance of 4,550 to 4,700 barrels of oil equivalent per day. Watson took a positive outlook as part of the release: “The third quarter of 2013 promises to be exceptional for Abraxas Petroleum Corp. (NASDAQ:AXAS), as we benefit from the two high-rate Eagle Ford wells added late in the second quarter of 2013, three strong Lillibridge wells [in the Bakken], and three recent Eagle Ford completions.” The company looks well positioned heading into the second half of the year.

The strategy

Abraxas Petroleum Corp. (NASDAQ:AXAS) continued to pursue asset divestitures to achieve positive balance sheet events during the second quarter, and, as of June, planned to focus 95% of its capital on the Bakken and Eagle Ford regions. In the Bakken, Abraxas is using a company owned rig to complete pad drilling. In the Eagle Ford, the focus has been on improving efficiencies, having achieved as low as 5.6 drilling days. With 100% of the company’s capital focused on oil or liquids, other regions are being deprioritized. The Powder River Basin in slated to receive no capital in 2013, and only tests will be performed at Permian.

The investment

Part of what makes Abraxas Petroleum Corp. (NASDAQ:AXAS) particularly interesting as an investment is that both the Bakken and Eagle Ford assets have thus far outperformed their respective type curves. These declining curves depict the expected rate of production decline to be expected in a particular well. Shale wells tend to see sharp declines early in the life of the well, so outperforming these curves is positive. It should be noted, however, that the models that define type curves are based on empirical data rather than physical certainty. This means that they are estimated, and that outperforming them is not necessarily indicative of future results.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!