Abraxas Petroleum acquires Wolfcamp and Bone Spring acreage

By Patrick C. Miller | May 30, 2017

Abraxas Petroleum Corp. of San Antonio has signed a $22.2 million agreement to acquire 2,008 net acres in the Wolfcamp and Bone Spring formations of the Delaware Basin in Texas.

The acquisition contains approximately 1,888 net acres held by production and 120 net leasehold acres covered by a three-year primary term lease. The acreage consists of two operated units, four non-operated units and additional interests in three existing Abraxas operated units adjoining the company’s current acreage. Abraxas said it plans to continue expanding its Delaware Basin acreage.

“This Delaware Basin acquisition fits seamlessly within our existing acreage footprint and increases our exposure to the Delaware Basin Bone Spring/Wolfcamp play by approximately 35 percent to 7,757 net acres,” said Bob Watson, Abraxas president and CEO. “Importantly this was done at a favorable price of just over $10,000 per acre. We continue to evaluate similar bolt-on opportunities to further expand our Delaware Basin footprint.“

The acreage is prospective for up to four zones across the Wolfcamp and Third Bone Spring, providing an additional 80 gross potential locations to Abraxas’ inventory—not including increased working interests in existing operated units. The company plans to fund the acquisition entirely on the company’s line of credit with an anticipated closing date in June 2017. Abraxas capital budget of $110 million remains unchanged.

Watson said that during the company’s January 2017 equity raise, its goals were to add Wolfcamp and Bone Spring acres in the Delaware Basin at a reasonable cost, continue to de-risk its Delaware Basin acreage position, build a production base to a critical mass by year’s end and maintain its balance sheet.

“We are pleased to announce that we remain on track to achieve all of these goals,” he said.

Abraxas is a crude and natural gas exploration and production company with operations across the Rocky Mountain, Permian Basin and South Texas regions of the United States.