Abraxas Petroleum Corporation Announces 14% Increase in Natural Gas Production in February Compared to Q4.

Business Editors & Energy Writers

SAN ANTONIO--(BUSINESS WIRE)--Feb. 23, 2001

Abraxas Petroleum Corporation (AMEX:ABP) announced it has completed the drilling and tie-in of five new wells and workovers on three wells during its winter drilling program in Canada.

The Company has also completed a significant portion of its gas plant and gathering system upgrades to handle this new production. The Company estimates that net sales gas production has increased by 7.0 MMcfpd and 200 barrels of NGL's per day during February 2001 related to this activity. This is a 14% increase in overall company gas production and a 26% increase in NGL production on a consolidated basis compared to fourth quarter 2000 levels.

In the Caroline (Sundre) area of Alberta, Canada, Abraxas and its 49% owned public subsidiary, Grey Wolf Exploration Inc. (TO:GWX), have completed the upgrade of their gas plant to increase gross capacity from 10 MMcfpd to 20 MMcfpd. They have also completed the majority of the gathering system upgrades to tie-in two recently drilled wells. Initial results indicate that gas production has increased by 2.7 MMcfpd, net sales gas after royalty, plus NGL's. Additional gas production is expected once the gathering system upgrade is completed later in the first quarter of 2001. The Company has also commenced an 80 square mile 3D seismic shoot over this area to help delineate additional locations for drilling.

In the Pouce Coupe area of Alberta, Canada, tie-in has been completed on two new wells that are currently producing at a combined rate of 3.8 MMcfpd, net sales gas after royalty, plus NGL's. The Company anticipates drilling two additional wells during the winter drilling season and recently acquired 23 square miles of 3D seismic in the area to help identify additional drilling locations.

Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas exploration and production company that also processes natural gas. It operates in Texas, Wyoming and western Canada. For additional information about the Company, please visit our Web site, www.abraxaspetroleum.com, for the most current and updated information. The Web site is updated daily in order to comply with the SEC Regulation FD (Fair Disclosure).

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.