Abraxas Petroleum Corp. has exited South Texas after revealing Oct. 3 it has executed two agreements selling the non-core assets and other non-operated acreage in West Texas’ Reeves County for a total of about $7.9 million.
The transactions with the undisclosed buyers are expected to close within the next 45 days, the company said in a news release. Combined, the assets produced on average about 310 barrels of oil equivalent per day, nearly half of which was crude oil, in August.
The San Antonio, Texas-based E&P, which has operations in the Rocky Mountain region and Permian Basin, has been streamlining its portfolio aiming to become a Delaware Basin pure play and to generate free cash flow.
Earlier this year, the company said it sold non-operated assets in North Dakota’s Williston Basin for $15.5 million. At the time, the sale represented roughly 5% of Abraxas’ Bakken daily production of 7,000 barrels of oil equivalent.
News of the latest asset sale also came with an operational update.
Abraxas said its 100%-operated two-well Woodberry Pad—one in the Wolfcamp A and the other in the Lower Third Bone Spring Formation—in Ward County produced about 72,000 barrels of oil and 85 million cubic feet of gas during its first 66 days of production.
“Both wells are producing from approximate 4,800-foot laterals and were fracked with 30 and 32 stages, respectively,” the company said in the release.
Also in Ward County, Abraxas expects to complete frac jobs on its two-well Greasewood NE pad in the “next several days with flowback to begin shortly thereafter.”
Meanwhile, “Drilling operations in the Delaware Basin have been suspended with three commitment wells to be drilled in 2020,” according to the release. “Two of these wells will be owned 100% by Abraxas, while the third will be approximately 50% owned by Abraxas.”
Farther north, in McKenzie County, North Dakota, Abraxas said winter weather has already arrived. So, although drilling operations on the six-well Jore Federal Extension pad is finished, the wells won’t be completed until warmer weather arrives next spring.
Abraxas is scheduled to release is third-quarter 2019 earnings Nov. 7 followed by an earnings conference call on Nov. 11.
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