Abraxas Provides Operations Update.

SAN ANTONIO -- Abraxas Petroleum Corporation (AMEX:ABP) today provided an operational update.

In the Oates SW Field of West Texas:

* La Escalera #5-1 - the lower zone in the Wolfcamp formation was tested after the fracture stimulation and deemed not commercial. A bridge plug will be set and the upper Wolfcamp zones will be perforated and tested next; and

* Manzanita State #1H - the vertical section of this Devonian re-entry has been cleaned out to the kick-off point and the horizontal lateral should begin drilling in the first quarter of 2007.

In the Abraxas Cherry Canyon Field of West Texas, the Company recently began drilling the first of four vertical wells planned for 2007. These in-fill wells will target the Bell Canyon and Cherry Canyon sands between 5,000' and 7,000'. The Company discovered the field in 1995 and has since drilled approximately 50 oil wells in the field.

In the Brooks Draw Field of Wyoming, the Company's technical team is conducting a full-scale review of the burgeoning Mowry oil shale play to determine the feasibility of accelerating the activity on our acreage block of approximately 50,000 acres.

"While the La Escalera #5-1 was a geological success as we encountered the expected sand package of over 500' in gross thickness as predicted by the interpretation of the 3-D seismic, we are disappointed at the amount of water production in the lower zone. If the upper Wolfcamp zones prove productive, it will be a bonus for us, as the primary reason for acquiring this acreage block was the deeper Devonian formation, which currently produces approximately 8 MMcfepd. Even as we focus on the Devonian, we are actively monitoring the developments in the surrounding Woodford/Barnett Shale play. We have recently entered into a verbal data swap agreement with another operator that is currently drilling a Woodford Shale test approximately 12 miles northwest of our acreage and has plans to drill another Woodford test less than one mile from our acreage. During the 3rd quarter of 2006 we sold approximately 3% of our daily net production which we have not been able to replace due to the planned capital spending slow-down as a result of low natural gas prices relative to the high cost of services; therefore, our revised exit rate guidance for 2006 is 20-22 MMcfepd," commented Bob Watson, Abraxas' President and CEO.

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 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.