EX-99 2 ipaa2005.txt Slide 1: Abraxas Petroleum Corporation IPAA Small Cap OGIS Presentation February 7, 2005 The information presented herein may contain predictions, estimates and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, the need to develop and replace reserves, environmental risks, competition, government regulation and the ability of the Company to meet its stated business goals. Picture: Collage of oil field pictures & outline of the U.S. and western Canada Slide 2: Re-Emerging Growth Story Abraxas Petroleum Corporation o AMEX: ABP o Basic shares outstanding - 36.6 million o Average trading volume 2004 - 308,500 shares per day o Share price appreciation 2004 - 53.6% o Operations in Texas and Wyoming o (Western Canada - Grey Wolf Exploration Inc.) Natural gas o Approximately 80% Quality assets o High ownership interests o Operations o High producing rates per well o Large acreage positions o Substantial upside Slide 3: Restructured 2004... 11 1/2% notes contained capital expenditure restrictions Restructured debt in October: Sources: Uses: ------------------------------------------------------------------- New $125 mm floating rate notes due 2009 11 1/2% notes due 2007 New $25 mm bridge loan Foothill credit facility New $35 mm term loan in Canada New $15 mm revolving credit facility (undrawn at closing) Slide 4: Goals 2005... Grey Wolf Exploration Inc. IPO o Preliminary Prospectus filed January 18 o Treasury shares by Grey Wolf o proceeds to repay $35 mm term loan and general corporate purposes o Secondary & Over-Allotment shares by Abraxas o proceeds to repay $25 mm bridge loan and general corporate purposes (reduce debt / accelerate capital development) o if over-allotment is exercised in full - Abraxas will own 0 shares o Closing expected - late February 2005 Capital Development Program in Texas and Wyoming Maximize Shareholder Value Slide 5: Focus...Focus...Focus... Reserve Distribution of 100.1 Bcfe at 12/31/03 Map of the United States highlighting Wyoming and Texas Wyoming 0.4 Bcfe 0.4% West Texas 71.1 Bcfe 71.0% South Texas 28.6 Bcfe 28.6% Assumes Grey Wolf IPO completed Slide 6: U.S. Production 2004... U.S. Production declined 10% amid capital expenditure restrictions ($8 mm: 2004E) Bar Chart of U.S. 2004 production & capital expenditures by quarter Assumes Grey Wolf IPO completed Slide 7: West Texas... Map of Texas highlighting West Texas Working interest average of 74% in 158 wells Focus - continued development of deep Devonian / Montoya gas, overlying Cherry Canyon oil and Clearfork Slope oil plays 112 identified drilling locations (32 PUD's) 2004 activity - Intensive engineering field studies in preparation for expanded budget 2005 plans - 12 wells (3 drilling) Slide 8: South Texas... Map of Texas highlighting South Texas Working interest average of 93% in 43 wells Focus - continued development of deep horizontal Edwards gas 15 identified drilling locations (11 PUD's) 2004 activity - Preparation for expanded budget 2005 plans - 3 wells (1 drilling and 1 completing) Slide 9: Wyoming... Map of Wyoming highlighting East Central Wyoming 100% working interest in 5 horizontal wells plus 1 vertical well 53,500 net acres, long-term leases Focus - development of multiple oil horizons 18 identified drilling locations 2004 activity - 1 vertical well 2005 plans - 1 vertical well to test 3-D defined fault block Slide 10: Maximize Shareholder Value... Continue to improve balance sheet with target debt/total mkt. cap of 40% to 60% Maintain financial flexibility and liquidity Prioritize large opportunity set of 145 identified drilling locations, 43 of which are PUD's Assumes Grey Wolf IPO completed Slide 11: U.S. Net Asset Value... MM Proved Reserves (1) $ 161.6 Incremental Reserves (2 124.0 Acreage (3) 2.9 Working Capital (4) 1.5 Debt (4) (125.0) ----------------- Net Asset Value $ 165.0 Shares Outstanding 36.6 NAV/Share $ 4.51 Notes: (1) 100.1 Bcfe valued at SEC PV10 at 12/31/03 = NYMEX $6.19 / $32.55 (2) 89.9 Bcfe of unrisked projects on existing Company acreage requiring $61.2 mm of capital (3) 58,235 net undeveloped acres (12/31/03) valued at $50/acre (4) Pro-forma the October restructuring & Grey Wolf IPO at 100% Assumes Grey Wolf IPO completed Slide 12: 2005 U.S. Guidance... Production: Full Year (Bcfe) 6.5-7.5 Exit Rate (Mmcfe/d) 19-21 Price Differentials from NYMEX Gas ($/Mcf) 0.55 Oil ($/Bbl) 0.75 Lease Operating Expenses $/Mcfe 0.85 G&A $/Mcfe 0.55 D/D/A $/Mcfe 1.25 Capital Expenditures $MM 22.0 Hedge position: 9,500 Mcfe/d through December 2005 w/ floors at $4.50-$5.00 and $25.00 Assumes Grey Wolf IPO completed Slide 13: Summary... Niche exploitation and production company High quality assets with substantial upside 2005 goals: Grey Wolf Exploration Inc. IPO Capital Development Program in Texas and Wyoming Maximize Shareholder Value Slide 14: www.abraxaspetroleum.com Picture: Brooks Draw, Wyoming