UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION



                             Washington, D.C. 20549



                                   F O R M 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934



                                 Date of Report
                                February 24, 2004


                          Abraxas Petroleum Corporation
             (Exact name of registrant as specified in its charter)


                                     Nevada
                 (State of other jurisdiction of incorporation)





0-19118                                                    74-2584033
(Commission File Number)              (I.R.S. Employer Identification Number)




                        500 N. Loop 1604 East, Suite 100
                            San Antonio, Texas 78232
                    (Address of principal executive offices)

                                          Registrant's telephone number,
including area code:
                                  210-490-4788







Item 9. REGULATION FD DISCLOSURE

See attached Press Release



The following exhibits are filed as part of this report:

NUMBER                                               DOCUMENT

99.1                                   Press release dated February 24, 2004




                                   SIGNATURES


     Pursuant to the  requirement  of the  Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                          ABRAXAS PETROLEUM CORPORATION



                           By:      __/s/Chris Williford__________
                                    Chris Williford
                                    Executive Vice President, Chief Financial
                                    Officer and Treasurer


Dated:    February 24, 2004




                                                                Exhibit 99.1



                                  NEWS RELEASE

      ABRAXAS INCREASES SIZE AND REDUCES COST OF FIRST LIEN CREDIT FACILITY

     SAN ANTONIO, TX (February 24, 2004) - Abraxas Petroleum  Corporation (AMEX:
ABP) today  announced that it has executed an amendment to its First Lien Credit
Facility  resulting in enlarging the facility,  reducing the current cost of the
credit to the Company,  and improving certain covenants.  Significant changes to
the facility include:

        o   Increasing the size of the facility from $50 million to $65 million,
        o   Reduction of interest rate from a current  floating 9% to a floating
            rate currently at approximately 7.5%,
        o   Extending the maturity from January 2006 to February 2007,
        o   $45  million  of  facility  becomes  a loan with no  borrowing  base
            component,
        o   Improvement of certain financial covenant tests, and
        o   The outstanding  balance under the amended facility is approximately
            $51 million with another approximate $14 million of availability.

Abraxas President, Bob Watson, commented, "We believe that the amendment of this
facility demonstrates the value we have added through our continuing development
activities,  as well as the continuing  strength of the commodity markets.  This
expanded  facility removes some  restrictions that were impacting our ability to
manage our assets and provides us with  additional  liquidity  that we intend to
utilize to enhance shareholder value.  Cheaper capital with an extended maturity
and less  exposure to the  cyclical  nature of our  business  should allow us to
continue the process of improving our balance sheet and increasing  value to our
shareholders."

Durham Capital  Corporation  acted as a financial advisor to the Company related
to this transaction.

Abraxas Petroleum  Corporation is a San Antonio-based  crude oil and natural gas
exploitation and production company.  The Company operates in Texas, Wyoming and
western Canada.

Safe Harbor for  forward-looking  statement:  Statements in this release looking
forward in time involve  known and unknown  risks and  uncertainties,  which may
cause the Company's 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 the
Company for crude oil and natural gas. In addition,  the Company's  future crude
oil and natural gas production is highly  dependent upon the Company's  level of
success in  acquiring  or finding  additional  reserves.  Further,  the  Company
operates in an industry  sector where the value of securities is highly volatile
and may be  influenced  by  economic  and other  factors  beyond  the  Company's
control.  In the context of  forward-looking  information  provided  for in this
release,  reference is made to the  discussion  of risk factors  detailed in the
Company's filing with the Securities and Exchange  Commission during the past 12
months.

FOR MORE INFORMATION CONTACT:
Janice Herndon/Manager Corp. Communications
Telephone 210.490.4788
jherndon@abraxaspetroleum.com
www.abraxaspetroleum.com