Abraxas Energy Announces Hedge Monetization and Debt Repayment.SAN ANTONIO San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. -- Abraxas Petroleum Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AXAS) today announced that Abraxas Energy Partners, L.P. ("the Partnership") elected to monetize its "in-the-money" commodity swaps Commodity Swap A swap where exchanged cash flows are dependent on the price of an underlying commodity. This is usually used to hedge against the price of a commodity. Notes: covering a portion of its estimated production for the remainder of 2009 and continuing through 2011. Net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the monetization were approximately $26.7 million and together with the July 2009 hedge settlement of $2.0 million, a total of $28.7 million was used to re-pay debt under the Partnership's credit facility. In conjunction with the monetization, the Partnership was required to re-hedge a portion of its estimated production for the fourth quarter of 2009 through 2013 at prevailing market prices. The new commodity swaps cover approximately 65% and 50% of our estimated total production (pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma the pending merger with the Partnership) for 2010 and 2011, respectively, and are at volume weighted average prices of $74.47 per barrel of oil and $6.21 per Mmbtu of gas for the full duration of the contracts. "All-in, the Partnership realized $34.2 million in cash from the commodity swaps that we entered into in 2007 and 2008. Paying down debt has always been a priority for us and the monetization of these commodity swaps enabled us to realize this value today as opposed to over time, in addition to significant savings on interest costs going forward. In essence, the $28.7 million repayment equaled the approximate amount of cash distributions that would have been paid to the limited partners of the Partnership, other than us, over the next three years," commented Bob Watson
Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations principally in Texas, the Mid-Continent and the Rocky Mountains Rocky Mountains, major mountain system of W North America and easternmost belt of the North American cordillera, extending more than 3,000 mi (4,800 km) from central N.Mex. to NW Alaska; Mt. Elbert (14,431 ft/4,399 m) in Colorado is the highest peak. . Abraxas Petroleum, through a wholly-owned subsidiary, owns 48% of Abraxas Energy and manages its day-to-day operations through its 100% ownership of the general partner. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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 natural gas and crude oil. In addition, Abraxas' future natural gas and crude oil 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. |
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