AXAS the higher capex will allow it to run a full time development rig on its Delaware Basin assets during 2017; as previously announced, it plans to spud the company’s first two wells next month, with plans to drill and complete an additional five gross wells for a total of seven gross wells across its Delaware Basin assets in 2017.
AXAS expects the increase in activity will lead to average production of 8,200 boe/day, at the midpoint of updated 2017 guidance, with a 2017 exit rate of 9,500 boe/day.
AXAS also files for a 20M-share public offering, with an underwriters option to purchase up to an additional 3M common shares.
AXAS says Q2 production of 4,883 boe/day was held down by gas processing curtailments in the Permian and shut-ins and downtime in the Bakken associated with offsetting fracture stimulations.
Despite the disappointing Q2 results, AXAS says it plans to complete its well on the Bulls Eye lease and start drilling its well on the Caprito 99 lease this weekend; AXAS also plans to revive its dormant drilling activity in North Dakota.
Abraxas Petroleum (AXAS +8.2%) is higher after reporting a smaller than expected Q4 loss, although revenues trailed analyst estimates following a 57% Y/Y drop.
AXAS says FY 2015 production totaled 537K boe (5,841 boe/day), up 4% Y/Y, despite a 64% drop in capex from 2014; it expects to maintain or slightly improve production volume this year even with an expected drop in capital spending to $17.5M-$40M.
AXAS also says it aims to further improve its liquidity by planning to sell ~17.3K acres of oil leases in Ward, Reeves and Pecos counties in the Permian Basin.
AXAS says that although its borrowing base may be revised lower, the lower level would be manageable and not inhibit the achievement of its goals.