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

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

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!