Abraxas Q1 Report Misses Zacks Consensus

May 8, 2019


Abraxas Petroleum Corp. reported a net loss of $25.5 million ($0.15 per share) on revenue of $34.5 in revenue as part of it’s first quarter report released Monday.

The San Antonio company also reported production of 979 MBoe (10,874 Boepd) and adjusted net income (excluding certain non-cash items) of $2.6 million, or $0.02 per share, and EBITDA of $19.7 million

The report includes notice of quarterly earnings at $0.02 per share, below the Zacks Consensus Estimate of $0.03 per share.

Among operational highlights:

Production (sales) for the quarter ended March 31, 2019 averaged 10,874 barrels of oil equivalent per day (BOEPD) up 4 percent from the average for the quarter ended December 31, 2018. Approximately 67 percent was crude oil compared to 69 percent in the fourth quarter. No new wells were placed on production during the first quarter. Negatively impacting sales were weather conditions in both North Dakota and West Texas, periodic electrical outages in West Texas, and continuing issues with third party gas processing constraints which led to higher than anticipated natural gas flaring. During the quarter, the Company flared an average of 5.5 million cubic feet per day (MMCFPD) or an equivalent 910 net BOEPD. Third party midstream projects are under way in both basins to help alleviate this unfortunate situation by the end of 2019.

With regard to production in West Texas the company stated:

“Natural gas production in West Texas exceeds the area’s ability to process and transport gas out of the basin. This has caused natural gas prices at the Waha trading hub to trade into negative territory. The average price for April was negative $.20 per mcf. In response to this situation, Abraxas has shut in substantially all its dry gas production in West Texas. This translates into approximately 500 net BOEPD of reduced production but has little impact on cash flow. We plan to keep these wells shut in until prices improve. This shut in does not impact our current Wolfcamp and Bone Spring drilling program.

“Operations in the Delaware Basin of West Texas are proceeding smoothly. The two-well Creosote pad (5000-foot laterals in the Wolfcamp A-1 and A-2) has been on flowback for approximately 44 days and is currently producing approximately 1840 barrels of oil and 3.7 MMCFPD for a total of 2456 BOEPD (67 percent oil). The gas is currently not being sold due to extended maintenance on our third-party sour gas processing plant. Because of the “slowback” protocol, where production is constrained to conserve reservoir pressure and increase well performance, this production rate could continue to escalate over the next month or so. Abraxas owns an approximate 96 percent working interest in this two-well pad.”