Exhibit 99.1

Abraxas  Closes a $12 Million  Private  Placement to Accelerate  Development  of
Recent West Texas Acquisition

SAN  ANTONIO--(BUSINESS  WIRE)--July  21,  2005--Abraxas  Petroleum  Corporation
(AMEX:ABP) today announced it closed a $12 million private placement through the
issuance of 4.0 million shares of common stock to  institutional  investors at a
price of $3.00 per share, a 6% discount to the prior 15-day trading average.


Net  proceeds  of  approximately  $11.3  million  will be used  for  development
drilling in Texas and  Wyoming,  and for working  capital and general  corporate
purposes.  The shares issued  represent  approximately 9% of the pro forma fully
diluted shares outstanding.


"This  private  placement  provides  additional  funding  for our  2005  capital
expenditure program, including the accelerated development of the Wolfcamp sands
in the  Oates SW Field  area of West  Texas,"  commented  Bob  Watson,  Abraxas'
President and CEO.


Energy Capital Solutions, LP acted as financial advisor in the transaction.


Abraxas Petroleum  Corporation is a San Antonio-based  crude oil and natural gas
exploitation and production company with operations in Texas and Wyoming.


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


These  securities have not been registered  under the Securities Act of 1933, as
amended,  or state  securities laws and may not be offered or sold in the United
States  absent  registration  with the SEC or an applicable  exemption  from the
registration  requirements.  Abraxas has agreed to file a registration statement
with  respect to the resale of the shares.  This news release is not an offer to
sell or the solicitation of an offer to buy the securities discussed herein.


    CONTACT: Abraxas Petroleum Corporation, San Antonio
             Barbara M. Stuckey, 210-757-9835 or 210-490-4788 (main)
             bstuckey@abraxaspetroleum.com
             www.abraxaspetroleum.com

    SOURCE: Abraxas Petroleum Corporation