Abraxas Provides Reserve and Operational Update

SAN ANTONIO--(BUSINESS WIRE)-- Abraxas Petroleum Corporation (“Abraxas” or the “Company”) (OTCQX:AXAS) today provided the following reserve and operational update. Note that all annual reserve comparisons stated below are for Delaware Basin assets only (all sold Bakken assets were removed from the December 31, 2020 totals). Highlights include:

• Total Proved PV-10 reserves grew 467% to $229 million at December 31, 2021 using SEC pricing
• Reserve Report captures the Company’s Delaware Basin West Texas assets only, post-sale of the Company’s Bakken assets, as previously reported
• Reserve Report doesn’t include additional geologic horizons being pursued by offset operators such as the Woodford/Meramec
• Company has approximately 11k net acres in the heart of the Southern Delaware Basin where it has successfully drilled 23 Wolfcamp/3^rd Bone Springs horizontals across 5 distinct geologic benches.
• Company’s leasehold is entirely HBP and includes all depths/rights along with associated water infrastructure

December 31, 2021 Reserves
According to its recently received reserve report, as of December 31, 2021, Abraxas’ proved oil and natural gas reserves consisted of approximately 24.1MMBoe, a net increase of 8.5 MMBoe over 2020 year-end reserves of 15.6 MMBoe. December 31, 2021 reserves consisted of approximately 16.8 million barrels of oil, 2.5 million barrels of NGLs and 29.2 billion cubic feet of natural gas. Proved developed producing reserves were 8.3 MMBoe and comprised 34% of proved reserves as of December 31, 2021. The SEC-priced pre-tax PV-10⁽¹⁾ (a non-GAAP financial measure) was $229.3 million, using 2021 average prices of $66.55/bbl of oil and $3.64/mcf of natural gas. Realized pricing, including differentials, used in this calculation equated to $62.89/bbl of oil and $1.85/mcf of natural gas.

The independent reserve engineering firm DeGolyer and MacNaughton (“D&M”) prepared a complete engineering analysis on roughly 95% of Abraxas’ proved reserves on a Boe basis.

The following table outlines changes in Abraxas’ proved reserves as of December 31, 2021 vs December 31, 2020 (Delaware Basin assets only):

	2020							2021
		Sales		Oil					Sales		Oil
	Oil	Gas	NGL	Equivalent	PV			Oil	Gas	NGL	Equivalent	PV
Estimated Reserves (net)	(Mbbl)	(MMcf)	(Mbbl)	(Mboe)	(M$)			(Mbbl)	(MMcf)	(Mbbl)	(Mboe)	(M$)
Proved Developed:	4,142	12,140	1,069	7,234	$	46,434		3,729	19,162	1,374	8,297	$	89,001
Proved not producing:	103	151	19	147	$	580		124	1,962	65	516	$	3,083
Proved Undeveloped:	5,938	7,246	1,120	8,266	$	2,669		12,939	8,097	1,063	15,351	$	137,254
Total Proved:	10,183	19,537	2,208	15,647	$	49,683		16,793	29,220	2,502	24,165	$	229,338

Bob Watson, President and CEO of Abraxas commented, "When adjusted for our Bakken sale, our year-over-year net proved reserves increased by 8.5 MMBoe, due primarily to our adoption of a two-mile lateral strategy across our Wolfcamp acreage. This change resulted in an increase of 7.1 net MMBoe in the undeveloped category. Our PV-10 increased roughly 467% from $49 million at December 31, 2020 to $229 million at December 31, 2021. At December 31, 2021, our proved oil and natural gas reserves were valued using an oil price of $66.55 per barrel and a natural gas price of $3.64 per MMBtu, an increase of 68% and 79%, respectively, as compared to $39.54 per barrel and $2.03 per MMBtu at December 31, 2020. At current strip prices, the Company’s PV-10 is now roughly $260 million.”

“In working with D&M the Company has developed a conservative approach to assigning future drilling locations using 1,320’ acre spacing between wells with 4 wells per section across 4 benches equating to 16 wells per section. As outlined below, the Company has over 200 net locations on 1,320’ spacing, which have been largely delineated from development drilling. However, given the SEC’s 5-year limitation on booking PUD locations depending on a company’s funding ability, Abraxas can only book 27 (net) of these locations as proved. Alternatively, a company with the funding availability to develop all the locations could book the majority of these engineered locations as proven. Further, utilizing the industry standard spacing of 880’ between wells increases the Company’s location count to over 300 net future locations.”

	NET LOCATIONS
ZONE	PROVED			PROBABLE			POSSIBLE
	1 MILE	2 MILE		1 MILE	2 MILE		1 MILE	2 MILE		TOTALS
UPPER 3BS SHALE	0	0		16	19		0	0		35
3 BS SAND	0	9		25	14		0	0		47
WOLFCAMP A1	2	8		22	14		0	0		45
WOLFCAMP A2	3	6		13	3		0	0		26
WOLFCAMP B	0	0		0	0		25	23		48
	5	23		76	49	0	25	23		201*
CLASS TOTALS		27			125			48

*assumes 1,320’ spacing between wells

“We are excited with the balance sheet moves we’ve made over the past 60 days. These include the full retirement our prior credit facility along with a debt for preferred equity exchange with Angelo Gordon. This is a new chapter for the Company as we begin 2022 as a pure play Delaware Basin operator with no debt. We are currently finalizing our 2022 drilling plans and are in advanced negotiations with new lenders for a credit facility to help fund developmental drilling on our highly economic WTX leasehold. We will seek to drill at a measured pace, and within cash flow in order to drive multiple-years of growth and returns for our shareholders.”

Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations in the Permian Basin of the United States.

Safe Harbor for forward-looking statements: Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause Abraxas’ actual results in future periods to be materially different from any future performance suggested in this release. Such factors may include, but may not be necessarily limited to, changes in the prices received by Abraxas for crude oil and natural gas. In addition, Abraxas’ future crude oil and natural gas production is highly dependent upon Abraxas’ level of success in acquiring or finding additional reserves. Further, Abraxas operates in an industry sector where the value of securities is highly volatile and may be influenced by economic and other factors beyond Abraxas’ control. In the context of forward-looking information provided for in this release, reference is made to the discussion of risk factors detailed in Abraxas’ filings with the Securities and Exchange Commission during the past 12 months.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220228005784/en/

Steven P. Harris/Vice President – Chief Financial Officer

Telephone 210.490.4788

sharris@abraxaspetroleum.com

www.abraxaspetroleum.com

Source: Abraxas Petroleum Corporation