0000867665-13-000104.txt : 20131226 0000867665-13-000104.hdr.sgml : 20131225 20131226110032 ACCESSION NUMBER: 0000867665-13-000104 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20131220 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20131226 DATE AS OF CHANGE: 20131226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ABRAXAS PETROLEUM CORP CENTRAL INDEX KEY: 0000867665 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 742584033 STATE OF INCORPORATION: NV FISCAL YEAR END: 1112 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16071 FILM NUMBER: 131298045 BUSINESS ADDRESS: STREET 1: 18803 MEISNER DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78258 BUSINESS PHONE: 2104904788 MAIL ADDRESS: STREET 1: 18803 MEISNER DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78258 8-K 1 a8-kclosingofwycrosssale2.htm 8-K 8-KCLOSINGOFWYCROSSSALE2


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
December 20. 2013
 
Date of Report (Date of earliest event reported)
ABRAXAS PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Nevada
1-16071
74-2584033
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification Number)

18803 Meisner Drive
San Antonio, Texas 78258
(210) 490-4788
(Address of principal executive offices and Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.01    Completion of Acquisition or Disposition of Assets
On December 20, 2013, Abraxas completed the sale of its Eagle Ford interests at WyCross in McMullen County, Texas for net proceeds of $71.4 million after fees and purchase price adjustments. to F-250, LLC..   The assets sold consist of approximately 1,200 net acres, 3.7 million barrels of proved reserves, based on the Company’s June 30, 2013 internal reserve report. (2.8 million barrels of oil, 3.0 billion cubic feet of gas and 0.5 million barrels of NGLS. The Company plans to use the proceeds from this sale to immediately pay down the company’s bank

The description of the sale described under this Item 2.01 is qualified in its entirety by a copy of the Purchase and Sale Agreement incorporated by reference into this Form 8-K (the “Agreement”). The representations and warranties of the parties in the Agreement are, in many respects, qualified by materiality and limited to the knowledge of the entity making the representation and warranty, but their accuracy forms the basis of one of the conditions to the obligations of the parties to complete the transaction. Please note, however, that these representations and warranties were made only for purposes of the Agreement and as of specific dates, were solely for the benefit of the parties thereto, and are subject to limitations agreed to between the parties, including that they are qualified by disclosures between the parties that are not included with this report. Accordingly, investors and third parties should not rely on these representations and warranties as independent characterizations of the actual state of facts at the time they were made or otherwise but should consider them together with the other information that we have disclosed in other filings with the SEC.
Item 7.01    Regulation FD Disclosure
On December 23, 2013, Abraxas issued a news release announcing the closing of Wycross Eagle Ford sale. The full text of the release is included as Exhibit 99.2.
The information in this Report (including Exhibit 99.2) is furnished pursuant to Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of the Section. The information in this Report will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.
Item 9.01    Financial Statements and Exhibits
(b)
Pro Forma Financial Information
The pro forma financial information specified in Article 11 of Regulation S-X is filed as Exhibit 99.1 to this Current Report on Form 8-K.

(d)
Exhibits
Number      Description 
2.1
Purchase and Sale Agreement dated December 5, 2013, between Abraxas Petroleum Corporation and F-250, LLC (previously filed as Exhibit 10.1 to Abraxas’ Current Report on Form 8-K filed with the SEC on December 9, 2013.)





99.1
Unaudited Pro Forma Condensed Consolidated Financial Information giving effect to the sale of the properties described in Item 2.01 above.

99.2
Press Release dated December 23, 2013

3



Pursuant to the requirements 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/ Geoffrey R. King    
Geoffrey R. King
Vice President and Chief Financial
Officer

Dated: December 26 , 2013






 EX-99.1 2 proformawycross.htm PRO-FORMA FIANCIAL STATEMENTS ProFormaWycross


Exhibit 99.1


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA



On December 20, 2013, Abraxas completed the sale of the majority of the Company’s interest in the Wycross area Eagle Ford formation properties ("Wycross Properties") for net proceeds of $71.4 million after accounting for all fees and purchase price adjustments. The assets sold consist of approximately 1,200 net acres, 3.7 million barrels of proved reserves, (2.8 million barrels of oil, 3.0 billion cubic feet of gas and 0.5 million barrels of NGLs), based on the Company's June 30, 2013 internal reserve report. The Company plans to use the proceeds from this sale to immediately pay down the Company’s bank line, before being ultimately redeployed into additional operated lease blocks in the Eagle Ford and Bakken. The effective date of the sale was December 1, 2013.

The following Unaudited Pro Forma Condensed Consolidated balance sheet as of September 30, 2013, has been prepared assuming the divestiture of the Wycross Properties was consummated on September 30, 2013. The Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2012 and for the nine months ended September 30, 2013, have been prepared assuming the divestiture of the Wycross Properties was consummated on January 1, 2012. These Unaudited Pro Forma Condensed financial statements should be read in conjunction with the notes thereto, and the Consolidated Financial Statements and notes thereto of Abraxas Petroleum Corporation filed with the Company’s Form 10-K for the year ended December 31, 2012 and Form 10-Q for the nine months ended September 30, 2013.

The Unaudited Pro Forma Financial Information is not indicative of the financial position or results of operations of Abraxas Petroleum Corporation which would actually have occurred if the transactions had occurred at the dates presented or which may be obtained in the future. In addition, future results may vary significantly from the results reflected in such statements due to normal oil and gas production declines, changes in prices of oil and gas, future acquisitions and other factors.

1




Abraxas Petroleum Corporation
Unaudited Pro-Forma Condensed Consolidated Balance Sheets
(in thousands)
 
 
 
As of September 30, 2013
 
 
 

Historical
 
 
Pro-Forma
Adjustments
 
 

Pro-Forma
 
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
4,985

 
$
—

 
$
4,985

 
Accounts receivable, net
 
37,851

 
 
—

 
 
37,851

 
Derivative asset – current
 
735

 
 
—

 
 
735

 
Other current assets
 
652

 
 
—

 
 
652

 
Total current assets
 
44,223

 
 
—

 
 
44,223

 
 
 
 
 
 
 
 
 
 
 
Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and gas properties, full cost method of accounting:
 
 
 
 
 
 
 
 
 
Proved
 
579,365

 
 
(31,067
)
(1
)
 
548,298

 
   Unproved properties excluded from depletion
 
3,976

 
 
—

 
 
3,976

 
   Other property and equipment
 
38,858

 
 
—

 
 
38,858

 
Total
 
622,199

 
 
(31,067
)
 
 
591,132

 
Less accumulated depreciation, depletion, and amortization
 
(412,544
)
 
 

—

 
 
(412,544
)
 
Total property and equipment – net
 
209,655

 
 
(31,067
)
 
 
178,588

 
 
 
 
 
 
 
 
 
 
 
Deferred financing fees, net
 
2,477

 
 
—

 
 
2,477

 
Derivative asset – long-term
 
489

 
 
—

 
 
489

 
Other assets
 
391

 
 
—

 
 
391

 
Total assets
$
257,235

 
$
(31,067
)
 
$
226,168

 



 

See notes to unaudited pro forma condensed consolidated financial statements.


2




Abraxas Petroleum Corporation
Unaudited Pro-Forma Condensed Consolidated Balance Sheets (continued)
(in thousands, except per share data)
 
 
 
 
As of September 30, 2013
 
 
 

Historical
 
 
Pro-Forma
Adjustments
 
 

Pro-Forma
 
Liabilities and Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable
$
40,750

 
$
—

 
$
40,750

 
   Oil and gas production payable
 
27,964

 
 
—

 
 
27,964

 
   Accrued interest
 
67

 
 
—

 
 
67

 
   Other accrued expenses
 
2,161

 
 
—

 
 
2,161

 
   Derivative liability – current
 
3,784

 
 
—

 
 
3,784

 
   Current maturities of long-term debt
 
2,113

 
 
—

 
 
2,113

 
Total current liabilities
 
76,839

 
 
—

 
 
76,839

 
 
 
 
 
 
 
 
 
 
 
Long-term debt, excluding current maturities
 
108,495

 
 
(71,436
)
(2)
 
37,059

 
 
 
 
 
 
 
 
 
 
 
Derivative liability – long-term
 
2,022

 
 
—

 
 
2,022

 
Other liabilities
 
57

 
 
—

 
 
57

 
Future site restoration
 
10,214

 
 
—

 
 
10,214

 
Total liabilities
 
197,627

 
 
(71,436
)
 
 
126,191

 
 
 
 
 
 
 
 
 
 
 
Stockholders’ Equity
 
 
 
 
 
 
 
 
 
Preferred stock, par value $0.01 per share, authorized 1,000,000 shares; -0- issued and outstanding
 
—

 
 


—

 
 
—

 
Common stock, par value $0.01 per share,
authorized 200,000,000 shares; 92,799,762 issued and outstanding
 
928

 
 


—

 
 
928

 
Additional paid-in capital
 
252,703

 
 
—

 
 
252,703

 
Accumulated deficit
 
(193,605
)
 
 
40,369

(3)
 
(153,236
)
 
Accumulated other comprehensive (loss)
 
(418
)
 
 
—

 
 
(418
)
 
Total stockholders’ equity
 
59,608

 
 
40,369

 
 
99,977

 
Total liabilities and stockholders’ equity
$
257,235

 
$
(31,067
)
 
$
226,168

 



 

 
See notes to unaudited pro forma condensed consolidated financial statements.

3



Abraxas Petroleum Corporation
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(in thousands, except per share data)
 
 
 
Year Ended December 31, 2012
 
 
Historical
 
 
Pro-Forma
Adjustments
 
 
 
Pro-Forma
 
Revenue:
 
 
 
 
 
 
 
 
 
 
Oil and gas production revenues
$
68,499
 
 
$
(823
)
 
(1)
$
67,676

 
Other
 
74
 
 
 
—

 
 
 
74

 
 
 
68,573
 
 
 
(823
)
 
 
 
67,750

 
Operating costs and expenses:
 
 
 
 
 
 
 
 
 
 
Lease operating expenses
 
24,806
 
 
 
(111
)
 
(1)
 
24,695

 
Production taxes
 
6,613
 
 
 
(39
)
 
(1)
 
6,574

 
Depreciation, depletion, and amortization
 
23,016
 
 
 
(877
)
 
(1)
 
22,139

 
Impairment
 
19,774
 
 
 
—

 
 
 
19,774

 
General and administrative
 
10,712
 
 
 
—

 
 
 
10,712

 
 
 
84,921
 

 
(1,027
)
 
 
 
83,894

 
Operating loss
 
(16,348
)
 
 
204

 
 
 
(16,144
)
 
 
 
 
 
 
 
 
 
 
 
 
Other (income) expense:
 
 
 
 
 
 
 
 
 
 
Interest income
 
(4
)
 
 
—

 
 
 
(4
)
 
Interest expense
 
5,520
 
 
 
(2,265
)
 
(2)
 
3,255

 
Amortization of deferred financing fees
 
937
 
 
 
—

 
 
 
937

 
Loss (gain) on derivative contracts - Realized
 
459
 
 
 
—

 
 
 
459

 
Loss (gain) on derivative contracts - Unrealized
 
(2,669
)
 
 
—

 
 
 
(2,669
)
 
Equity in income of joint venture
 
(2,207
)
 
 
1,373

 
(3)
 
(834
)
 
Other
 
97
 
 
 
—

 
 
 
97

 
 
 
2,133
 

 
(892
)
 
 
 
1,241

 
Net loss before income tax
 
(18,481
)
 
 
1,096

 
 
 
(17,385
)
 
Income tax expense
 
310
 
 
 
—

 
 
 
310

 
Net loss
$
(18,791
)
 
$
1,096

 
 
$
(17,695
)
 
 
 
 
 
 
 
 
 
 
 
 
Net loss per common share – basic
$
(0.20
)
 
$
—

 
 
$
(0.19
)
 
Net loss per common share – diluted
$
(0.20
)
 
$
—

 
 
$
(0.19
)
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding - basic
 
91,914
 
 
 
—

 
 
 
91,914

 
Weighted average shares outstanding - diluted
 
91,914
 
 
 
—

 
 
 
91,914

 

 
 

See notes to unaudited pro forma condensed consolidated financial statements.

4




Abraxas Petroleum Corporation
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(in thousands, except per share data)
 
 
Nine Months Ended September 30, 2013
 
 
Historical
 
 
Pro-Forma
Adjustments
 
 
 
Pro-Forma
 
Revenue:
 
 
 
 
 
 
 
 
 
 
Oil and gas production revenues
$
71,733

 
$
(12,088
)
 
(1)
$
59,645

 
Other
 
52

 
 
—

 
 
 
52

 
 
 
71,785

 
 
(12,088
)
 
 
 
59,697

 
Operating costs and expenses:
 
 
 
 
 
 
 
 
 
 
Lease operating expenses
 
18,097

 
 
(494
)
 
(1)
 
17,603

 
Production taxes
 
6,475

 
 
(694
)
 
(1)
 
5,781

 
Depreciation, depletion, and amortization
 
19,545

 
 
(1,106
)
 
(1)
 
18,439

 
Impairment
 
2,135

 
 
—

 
 
 
2,135

 
General and administrative
 
7,737

 
 
—

 
 
 
7,737

 
 
 
53,989

 
 
(2,294
)
 
 
 
51,695

 
Operating income
 
17,796

 
 
(9,794
)
 
 
 
8,002

 
 
 
 
 
 
 
 
 
 
 
 
Other (income) expense:
 
 
 
 
 
 
 
 
 
 
Interest income
 
(2
)
)
 
—

 
 
 
(2
)
 
Interest expense
 
3,577

 
 
(1,699
)
 
(2)
 
1,878

 
Amortization of deferred financing fees
 
1,020

 
 
—

 
 
 
1,020

 
Loss (gain) on derivative contracts - Realized
 
3,832

 
 
—

 
 
 
3,832

 
Loss (gain) on derivative contracts - Unrealized
 
(2,374
)
 
 
—

 
 
 
(2,374
)
 
Other
 
5

 
 
—

 
 
 
5

 
 
 
6,058

 
 
(1,699
)
 
 
 
4,359

 
Net income before income tax
 
11,738

 
 
(8,095
)
 
 
 
3,643

 
Income tax expense
 
87

 
 
—

 
 
 
87

 
Net income
$
11,651

 
$
(8,095
)
 
 
$
3,556

 
 
 
 
 
 
 
 
 
 
 
 
Net income per common share – basic
$
0.13

 
$
—

 
 
$
0.04

 
Net income per common share – diluted
$
0.12

 
$
—

 
 
$
0.04

 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding - basic
 
92,435

 
 
—

 
 
 
92,435

 
Weighted average shares outstanding - diluted
 
93,375

 
 
—

 
 
 
93,375

 

 
 

See notes to unaudited pro forma condensed consolidated financial statements.





5




Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet:

The Unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as if the transactions had occurred as of September 30, 2013.

(1)
To reflect allocated cost of properties sold.
(2)
To reduce long-term debt for net cash proceeds from the property sales.
(3)
To adjust accumulated deficit for gain recognition


Notes to the Unaudited Pro Forma Condensed Consolidated Statements of Operations:

The Unaudited Pro Forma Statements of Operations are presented as if the transactions had occurred as of the beginning of the period presented.

(1)
To adjust oil and gas production revenues, lease operating and production taxes and depreciation, depletion and amortization as if the transactions had been completed as of the beginning of the period.
(2)
To adjust interest expense, giving effect to pay-down of the Company’s long-term debt, at the stated interest rates of the associated debt.
(3)
To adjust earnings from equity method investment for income related to the properties sold that were held in the joint venture through August 2012.

    
The Company estimates that the costs of completing this transaction were approximately $150,000, and estimated income taxes of approximately $570,000.


6

 EX-99.2 3 newsrelease-wycrossclosing.htm NEWS RELEASE News Release - Wycross Closing


Exhibit 99.2
ABRAXAS PETROLEUM CORPORATION
www.abraxaspetroleum.com
18803 Meisner Drive
San Antonio, Texas 78258
Phone: 210.490.4788 Fax: 210.918.6675

NEWS RELEASE
Abraxas Announces Closing of WyCross Divestiture; Provides 2014 Guidance and Divestiture Update

SAN ANTONIO (December 23, 2013) - Abraxas Petroleum Corporation (NASDAQ:AXAS) is pleased to announce the closing of the previously announced WyCross divestiture, provide 2014 guidance and provide a divestiture update.

WyCross Closing
Abraxas’ recently closed the previously announced divestiture of the company’s WyCross assets for net proceeds of $71.4 million after accounting for all fees and purchase price adjustments. Proceeds were used to repay borrowings on the company’s bank line and will be ultimately redeployed into additional Bakken and Eagle Ford opportunities.

2014 Guidance
Abraxas’ Board of Directors recently approved a 2014 capital budget of $105 million. In the Bakken, the company will maintain its one rig continuous drilling program resulting in the drilling of 7.2 and completion of 6.4 net wells. In the Eagle Ford, the company will complete one well on its Cave prospect in McMullen County and drill and complete five net wells on its Jourdanton prospect in Atascosa County. Approximately $10 million is budgeted to be spent acquiring additional leasehold in Abraxas’ core areas, the Bakken and Eagle Ford.


 
Net Wells
 
 
Drilled
Completed
Net CAPEX
Bakken
7.2
6.4
$53.8
Eagle Ford
5.0
6.0
$40.8
Leasehold/Other
 
 
$10.4
 
 
 
$105.0


Taking this capital budget into consideration, Abraxas expects 2014 production to average between 4,900 and 5,100 boepd.

Divestiture Update
Abraxas recently monetized several non-core assets in North Dakota, Wyoming and Texas at the December Oil and Gas Clearinghouse Auction for gross proceeds of approximately $3.6 million. The assets sold produced approximately 54 boepd (33 barrels of oil per day, 125 mcf of gas per day).


Bob Watson, President and CEO of Abraxas commented, “Abraxas enters 2014 with a pristine balance sheet and far more profitable and focused asset base. We continue to identify additional opportunities in the Bakken and Eagle Ford and will announce the results of these efforts when it is prudent. We look forward to what promises to be an active 2014 Bakken and Eagle Ford drilling program.”


Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, Permian Basin and onshore Gulf Coast regions of the United States and in the province of Alberta, Canada.





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’ filings with the Securities and Exchange Commission during the past 12 months.

FOR MORE INFORMATION CONTACT:
Geoffrey King/Vice President - Chief Financial Officer
Telephone 210.490.4788
gking@abraxaspetroleum.com
www.abraxaspetroleum.com