Tuesday, May 7, 2013

ONGC, Oil India in Mozambique Gas Field Bid

ONGC, Oil India in Mozambique Gas Field Bid

NEW DELHI - India's state-run Oil & Natural Gas Corp. and Oil India Ltd. have made a joint bid for a 20% stake in a Mozambique oil and gas field operated by Anadarko Petroleum Corp., a person with direct knowledge of the matter said Friday.

The move underscores the South Asian nation's interest in buying hydrocarbon assets overseas, even if that means it may have to work in alliance with Chinese companies in future.

ONGC's wholly owned unit, ONGC Videsh Ltd., and Oil India have bid for shares being sold by U.S.-based Anadarko and India's Videocon Industries Ltd., said the person, who didn't want to be named.

If the bid by the companies is approved and eventually results in a stake purchase, analysts say it could be India's biggest foreign deal in the oil and gas sector and may also see India and China--who have a history of frosty relations--working together.

The bid follows Thursday's agreement between oil producer Eni SpA and China National Petroleum Corp. under which the Italian oil producer would sell a 20% stake in its Mozambique offshore natural-gas field to the Chinese company for $4.21 billion.

Eni and Anadarko have an agreement to coordinate on their offshore Mozambique reservoirs. The companies last year agreed to conduct separate but coordinated activities, as well as to build common on-shore LNG liquefaction facilities on the northern part of the African country.

The person with knowledge of the matter said Anadarko is planning to bring down its stake in block-1 of the Rovuma offshore field by 10% to 26.5% to raise funds for the project. Videocon plans to sell its 10% stake, the person added.

The person declined to give any financial details and didn't say when the bids will be considered.

ONGC Videsh Managing Director D.K. Sarraf declined comment, while Videocon Chairman Venugopal Dhoot didn't reply to an email seeking comment. Anadarko spokesman John Christiansen said as a matter of policy, it will not discuss any specifics until it has an agreement.

Anadarko's Mozambique assets currently estimated to hold up to 65 trillion cubic feet of gas reserves. According to Eni its oil field has potential reserves of 75 trillion cubic feet of gas in place-equivalent to about four years of total European gas demand, said Bernstein Research. It is Eni's largest gas find.

Sanjay Kaul, President at University of Petroleum and Energy Studies in India, said the stake that the Indian companies are bidding to buy will be valuable.

"Good assets have a good price tag," he added.

ONGC Videsh's $5 billion offer in November to buy an 8.4% stake from ConocoPhillips in a Kazakhstan field is so far the biggest overseas bid by an Indian energy company. The deal has yet to get the approval of the governments in India and Kazakhstan.

Mr. Kaul expects India and China to "cross roads" in the African country as both are working toward achieving energy security for their expanding population. "But I don't see it [China's presence] as a threat to India's interest."

India and China--two energy-deficient countries--already work together on several international oil projects and are also in pact to explore assets overseas. But their bilateral relations aren't often friendly, troubled by a long-simmering border dispute; India's hosting of Tibet's spiritual leader, the Dalai Lama; and Chinese support for Pakistan.

India meets more 75% of its oil and gas requirements through imports and its companies have been scouting for energy assets overseas amid falling output from ageing local assets.

Mr. Kaul said state-run companies need to go through several rounds of bureaucratic checks to buy foreign companies, delaying their overseas plans. He said, most foreign acquisitions by Chinese companies are state-supported.

China has been more successful than India in getting oil and gas equity stakes across the globe, often providing large loans and funding for infrastructure projects in developing nations to tie up deals signed by its four state-owned energy giants.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Rosetta Buying Permian Basin Assets from Comstock for $768M

Rosetta Buying Permian Basin Assets from Comstock for $768M

Rosetta Resources Inc. agreed to buy all of Comstock Resources Inc.'s oil and gas properties in the Reeves and Gaines counties of West Texas for $768 million, giving Rosetta exposure to the Permian Basin and a complement to its Eagle Ford properties.

"This transaction provides entry into the prolific Permian Basin with both existing production and strong growth potential...as well as prospective exploration targets," said Rosetta Chief Executive Jim Craddock.

Comstock's shares jumped 5.8% premarket to $16.88, while Rosetta's were inactive at $50.

The acquisition covers about 53,300 net acres. The Reeves County assets include about 40,200 net acres and 74 producing wells. Total current net production is about 3,300 barrels of oil equivalent per day, of which more than 73% is oil. Rosetta said it projects significant growth potential in the area and the company will be the operator of the majority of the Reeves County assets.

The Gaines County assets cover about 13,100 net acres, with multiple exploratory opportunities for the area, Rosetta said.

The deal is expected to close in mid-May, and Rosetta secured an additional $700 million of financing for the transaction.

Comstock said it plans to use the proceeds from the sale to reduce its outstanding debt and fund an increase to its 2013 drilling program in the Eagle Ford shale in South Texas. The company now forecasts spending $410 million in 2013 on drilling activities and $12 million in exploratory leasehold, for total capital spending of $422 million. Comstock plans to spend $312 million in Eagle Ford.

Last month, Rosetta said its fourth-quarter profit had risen 31% as revenue climbed, but results missed expectations. Also last month, its former chief executive, Randy Limbacher, stepped down and was replaced by Mr. Craddock, who had been Rosetta's senior vice president of drilling and production operations.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Energy Boom Helps Fuel West Texas, Great Plains Population Growth

The boom in Bakken and Permian Basin oil and gas activity helped fuel population growth in North Dakota and Texas from 2011 to 2012, the U.S. Census Bureau reported Thursday.

Midland, Texas ranked as the fastest-growing metro area from July 1, 2011 to July 1, 2012, with population growth of 4.6 percent. Neighboring Odessa, Texas, ranked fifth, with Casper and Cheyenne, Wyo., and Bismarck, N.D. ranked among the top 20 fastest-growing metropolitan areas.

"After a long period of out-migration, some parts of the Great Plains – from just south to the Canadian border all the way down to West Texas –are experiencing rapid population growth," said Thomas Mesenbourg, the Census Bureau's senior adviser and acting director, in a statement. "There are probably many factors fueling this growth on the prairie, but no doubt the energy boom is playing a role. For instance, the Permian Basin, located primarily in West Texas, and North Dakota accounted for almost half of the total U.S. growth in firms that mine or extract oil and gas, during a recent one-year period."

In micropolitan areas, which contain an urban cluster of between 10,000 and 49,999 people, Williston, N.D. topped the list of fastest-growing cities with 9.3 percent. Dickinson, N.D. ranked third among fastest-growing micropolitan areas with 6.5 percent.

Eleven Texas counties ranked among the 50 fastest-growing as well as among the 50 highest numeric gainers from July 1, 2011 through July 1, 2012. Bexar County, which encompasses San Antonio and close to the core South Texas counties impacted by Eagle Ford shale activity, ranked 11th among the largest numeric gainers in this timeframe, a U.S. Census Bureau spokesperson told Rigzone in an email.

Dimmitt County, located on the Texas-Mexico border, ranked 20th on the list of U.S. counties that experienced the largest percentage gain in population from 2011 to 2012. Guadalupe County, just east of San Antonio, ranked 49th among the counties nationwide with the largest percent gain in population.

Two North Dakota counties, Williams and Stark, ranked among the five fastest-growing counties with populations of 10,000 or more.

Exploration and production activity from Permian Basin and Eagle Ford helped bolster Texas oil production to nearly 1.5 million barrels of oil per day, an almost 50 percent increase in crude oil production since 2011, Texas Railroad Commissioner Christi Craddick said in a Feb. 28 statement. Craddick added that Texas now represents nearly a fourth of total U.S. crude oil production, and noted that the oil and gas energy sector created 427,761 jobs in Texas and paid $9.25 billion in state taxes in 2011.

The surge in exploration and production (E&P) activity in the Eagle Ford supported nearly 50,000 full-time jobs in 20 counties and contributed more than $25 billion to the South Texas economy, according to a March 13 report by the Eagle Ford Shale Task Force. However, the surge in E&P activity has created infrastructure challenges for South Texas, including the need for a sustainable housing plan for the region and roads wearing down from greater traffic.

The Permian Basin continues to play a significant role in Texas oil production as the increased use of enhanced oil recovery practices in the Permian Basin has substantially impacted U.S. oil production. More than 270 million barrels of oil were produced in the Permian Basin in 2010, and over 280 million barrels of oil were produced in 2011, according to the Texas Railroad Commission.

In 2011, North Dakota was the fourth largest crude oil producing U.S. state, accounting for more than 7 percent of U.S. oil production, according to the U.S. Energy Information Administration (EIA). A 35 percent increase in production from 2010 to 2011 was primarily driven by horizontal drilling and hydraulic fracturing in the Bakken formation.

EIA expects U.S. crude oil production to keep growing rapidly over the next two years, growing from an average 6.5 million barrels per day in 2012 to an average 7.3 million bpd in 2013 and 7.9 million bpd in 2014. Drilling in tight oil plays in the onshore Williston, western Gulf of Mexico and Permian Basins, is expected to account for the bulk of that forecasted production growth, EIA reported in its March 12 Short-Term Energy Outlook.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Energy Boom Helps Fuel West Texas, Great Plains Population Growth

The boom in Bakken and Permian Basin oil and gas activity helped fuel population growth in North Dakota and Texas from 2011 to 2012, the U.S. Census Bureau reported Thursday.

Midland, Texas ranked as the fastest-growing metro area from July 1, 2011 to July 1, 2012, with population growth of 4.6 percent. Neighboring Odessa, Texas, ranked fifth, with Casper and Cheyenne, Wyo., and Bismarck, N.D. ranked among the top 20 fastest-growing metropolitan areas.

"After a long period of out-migration, some parts of the Great Plains – from just south to the Canadian border all the way down to West Texas –are experiencing rapid population growth," said Thomas Mesenbourg, the Census Bureau's senior adviser and acting director, in a statement. "There are probably many factors fueling this growth on the prairie, but no doubt the energy boom is playing a role. For instance, the Permian Basin, located primarily in West Texas, and North Dakota accounted for almost half of the total U.S. growth in firms that mine or extract oil and gas, during a recent one-year period."

In micropolitan areas, which contain an urban cluster of between 10,000 and 49,999 people, Williston, N.D. topped the list of fastest-growing cities with 9.3 percent. Dickinson, N.D. ranked third among fastest-growing micropolitan areas with 6.5 percent.

Eleven Texas counties ranked among the 50 fastest-growing as well as among the 50 highest numeric gainers from July 1, 2011 through July 1, 2012. Bexar County, which encompasses San Antonio and close to the core South Texas counties impacted by Eagle Ford shale activity, ranked 11th among the largest numeric gainers in this timeframe, a U.S. Census Bureau spokesperson told Rigzone in an email.

Dimmitt County, located on the Texas-Mexico border, ranked 20th on the list of U.S. counties that experienced the largest percentage gain in population from 2011 to 2012. Guadalupe County, just east of San Antonio, ranked 49th among the counties nationwide with the largest percent gain in population.

Two North Dakota counties, Williams and Stark, ranked among the five fastest-growing counties with populations of 10,000 or more.

Exploration and production activity from Permian Basin and Eagle Ford helped bolster Texas oil production to nearly 1.5 million barrels of oil per day, an almost 50 percent increase in crude oil production since 2011, Texas Railroad Commissioner Christi Craddick said in a Feb. 28 statement. Craddick added that Texas now represents nearly a fourth of total U.S. crude oil production, and noted that the oil and gas energy sector created 427,761 jobs in Texas and paid $9.25 billion in state taxes in 2011.

The surge in exploration and production (E&P) activity in the Eagle Ford supported nearly 50,000 full-time jobs in 20 counties and contributed more than $25 billion to the South Texas economy, according to a March 13 report by the Eagle Ford Shale Task Force. However, the surge in E&P activity has created infrastructure challenges for South Texas, including the need for a sustainable housing plan for the region and roads wearing down from greater traffic.

The Permian Basin continues to play a significant role in Texas oil production as the increased use of enhanced oil recovery practices in the Permian Basin has substantially impacted U.S. oil production. More than 270 million barrels of oil were produced in the Permian Basin in 2010, and over 280 million barrels of oil were produced in 2011, according to the Texas Railroad Commission.

In 2011, North Dakota was the fourth largest crude oil producing U.S. state, accounting for more than 7 percent of U.S. oil production, according to the U.S. Energy Information Administration (EIA). A 35 percent increase in production from 2010 to 2011 was primarily driven by horizontal drilling and hydraulic fracturing in the Bakken formation.

EIA expects U.S. crude oil production to keep growing rapidly over the next two years, growing from an average 6.5 million barrels per day in 2012 to an average 7.3 million bpd in 2013 and 7.9 million bpd in 2014. Drilling in tight oil plays in the onshore Williston, western Gulf of Mexico and Permian Basins, is expected to account for the bulk of that forecasted production growth, EIA reported in its March 12 Short-Term Energy Outlook.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Abraxas Looks Ahead to 2013 Production Ops

Abraxas Petroleum Corporation provided the following operational and acquisitions and divestitures (A&D) update.

In McMullen County, the Corvette C 1H averaged 867 barrels of oil equivalent per day (boepd) (808 barrels of oil per day (bopd) 355 million cubic feet (Mcf) of natural gas per day) on a 22/64" choke over its first 30 days of production. The Corvette C 1H continues to flow to sales at a rate of 586 boepd (547 bopd, 233 Mcf of natural gas per day) on a 22/64" choke. The Gran Torino A 1H was recently completed with a 19 stage completion and is currently flowing to sales at rates above the Company's type curve. Abraxas successfully completed the Mustang 3H with an 18 stage fracture stimulation with flowback expected to commence imminently. The Company recently drilled Mustang 2H to a total depth of 15,021 feet with an anticipated fracture stimulation date in April. Abraxas owns a 25 percent working interest in the Corvette C 1H and an 18.75 percent working interest in the Gran Torino A 1H, Mustang 3H and Mustang 2H.

Drilling continues on the Company's Lillibridge East PAD with intermediate casing set on the 1H, 2H, 3H and 4H. The Company recently drilled and cased the lateral on the 4H with a 50 foot flare encountered while drilling. The rig is now preparing to spud the lateral of the 3H, which will be followed by the 2H and 1H. Abraxas owns a working interest of approximately 34 percent in the Lillibridge East PAD. As previously announced, the Ravin 2H and Ravin 3H were recently completed with the Ravin 2H performing in line and the Ravin 3H outperforming the Company's type curve. Abraxas owns a 49 percent working interest in both the Ravin 2H and 3H.

The Company recently drilled and cased two shallow Yates wells, the Wilkes #1 and Wilkes #2, in Ward County, Texas. Early logs are encouraging, and Abraxas expects to complete the wells in April. Abraxas owns a 100 percent working interest in both wells.

Abraxas recently sold a portion of the Company's properties in Oklahoma and Louisiana as well as scattered royalty interests in North Dakota and Montana at the March 2013 Oil and Gas Clearinghouse Auction for gross proceeds of approximately $2.9 million. Combined, the properties sold produce 27.5 barrels of oil per day and 220.7 Mcf of natural gas per day. The remainder of the Company's Oklahoma properties and additional North Dakota royalty interests are scheduled to be offered at the May 2013 Oil and Gas Clearinghouse Auction. The marketing process led by E-Spectrum Advisors for Abraxas' non-operated Bakken and Three Forks assets is under way.

Bob Watson, President and CEO of Abraxas, commented: "Strong production volumes in February and early March, along with incremental well performance and the efficiency gains in the Eagle Ford, give us confidence in our 2013 guidance of 4,900-5,200 boepd on a $70 million CAPEX budget. With the Corvette C 1H, Abraxas completed its fourth high rate oil well in the Eagle Ford significantly above expectations. The Ravin 2H and Ravin 3H are flowing to sales at encouraging rates after we experienced significant completion issues and delays due to a third party. Furthermore, we continue to make progress in our efforts to refocus our portfolio and delever our balance sheet, with the non-op Bakken sale process starting in earnest as well as the recent sale of several non-core properties in Oklahoma, Louisiana and scattered royalty interests in North Dakota and Montana. We look forward to updating the market as we continue to execute against our strategic priorities and continue to enhance shareholder value."

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DOI: BP Can Bid for US Gulf Oil Leases Despite Suspension

Deepwater Horizon Gulf of Mexico Oil Spill

BP PLC can bid in Wednesday's Gulf of Mexico oil lease sale but won't be granted a contract if a suspension from obtaining new contracts with the federal government is still in force at the time of the award, the U.S. Department of the Interior said.

The notice from the U.S. DoI Thursday highlights how slow BP's recovery has been from the devastating April 2010 Deepwater Horizon accident in the Gulf of Mexico, that resulted in the worst offshore oil spill in the U.S. It also comes as BP is still contesting potentially billions of dollars in civil fines in a court in New Orleans.

BP is one of the biggest producers of oil and gas in the Gulf and one of its most active prospectors. BP sees the Gulf as one of the main drivers of medium- and long-term growth for the company.

In November, the U.S. government's Obama-led administration imposed the temporary ban on BP obtaining new contracts with the government, including oil-drilling leases, citing a "lack of business integrity" that resulted in the 2010 oil spill.

If the suspension has been lifted and the DoI determines that BP is the highest bidder then it will be awarded the lease. If the suspension hasn't been revoked and BP is the highest bidder, it will be disqualified from that position and the next highest bidder will become the highest qualified bidder, the DoI said.

BP declined to comment on whether it would be submitting a bid in the upcoming Gulf round. The bids are opened on March 20; this is followed by an evaluation period which lasts 90 days before the winners are announced. A BP spokesman also declined to comment on what progress was being made to get the ban lifted.

In February, BP Chief Executive Bob Dudley said the company may decide not to bid for oil drilling leases in this March round as the company already holds a large number of contracts in the U.S. Gulf.

"We didn't, as a matter of course, bid on the last round of leases in the Gulf and may not in the next one. We have such a large position in the Gulf of Mexico that it's questionable how much we want to add to that," Mr. Dudley said in February.

The ban doesn't impact current operations and BP continues to receive the permits it requires to drill in the Gulf, where it already has around 700 licenses, Mr. Dudley said.

Since the 2010 Deepwater Horizon disaster, BP continues to incur huge costs from the spill. To date, BP has spent over $24 billion in response, cleanup and restoration costs and in payments of compensation claims made by individuals, businesses and governments.

Copyright (c) 2012 Dow Jones & Company, Inc.

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DOI: Shell Failed to Finalize Key Components of Alaska Program

DOI: Shell Failed to Finalize Key Components of Alaska Program

Royal Dutch Shell plc's failure to finalize key components of its 2012 Alaska Arctic drilling program, including its oil spill containment system Arctic Challenger, led to Shell's failure in receiving needed permits to drill into oil-bearing zones in the Chukchi and Beaufort seas, according to the findings of a U.S. Department of Interior (DOI) review released Thursday.

Secretary of the Interior Ken Salazar called for a high-level, expedited review of Shell's program Jan. 8, including Shell's preparations for last year's drilling season and its maritime and emergency response operations – to identify the challenges Shell faced in its Arctic drilling plans and future lessons to be learned from that experience.

The review examined Shell's safety management system and the company's ability to meet the stringent standards set by the Department of the Interior for Arctic development. It focused on Shell's inability to obtain certification for the Arctic Challenger on a timely basis, the difficulty Shell encountered in deploying the vessel, and the marine transport issues Shell faced with the Noble Discoverer (mid-water drillship) and Kulluk drilling rigs, including the Kulluk's grounding offshore Kodiak Island, Alaska while being towed. Both rigs are en route to Asia for repairs.

Shell's failure to monitor contractor progress on key components of its Arctic drilling program, including the Arctic Challenger, was a pervasive theme in the review's findings. The contractor that Shell used to design and build the Arctic Challenger, had extensive experience working in the Gulf of Mexico, but ultimately, Shell ran into problems bringing the containment system online. The vessel failed to receive its U.S. Coast Guard certification, and the deployment of the system itself failed.

"Working in the Arctic requires thorough advanced planning and preparation, rigorous management focus, a close watch over contractors, and reliance on experienced, specialized operators who are familiar with the uniquely challenging conditions of the Alaska offshore," Salazar commented during a conference call Thursday with reporters.

Shell fell short in this area, Salazar noted, which contributed to many of the problems it faced, including the inability to deploy a functioning containment system, as well as the violation of air emissions requirements Shell encountered.

DOI Deputy Secretary David J. Hayes said the review confirmed the importance of strong coordination of among federal agencies in connection with permitting and exploration activities. This coordination has been an initiative through Executive Order 13580. Established in July 2011, the working group was created to coordinate efforts of federal agencies responsible for overseeing safe and responsible development of onshore and offshore energy in Alaska.

These agencies include the Bureau of Ocean Energy Management (BOEM), the Bureau of Safety and Environmental Enforcement (BSEE), the U.S. Coast Guard, the National Oceanic and Atmospheric Administration (NOAA), and the U.S. Environmental Protection Agency (EPA).

The review also reinforces the Obama administration's commitment to ensuring oil and gas exploration activities maintain safety at all levels, said BSEE Director James Watson.

"We will continue to maintain rigorous oversight of drilling and hold anyone operating in public waters to the highest environmental and safety standards."

Watson noted the administration looks forward to learning more from the findings of the Coast Guard's current investigation into the Kulluk grounding incident.

Shell should submit to DOI a comprehensive, integrated plan describing all phases of operation, from preparations through demobilization, when the company resumes exploratory drilling in Alaska's Arctic offshore region. This plan will go one step beyond the current recommendations for plan submissions, including not only details of drilling plans but for maritime operations as well.

The review also recommended Shell complete a full third party management system audit to confirm the capability of the company's management system, including oversight of key contractors, are tailored for Arctic operations, and that Shell has addressed the issues it faced in the 2012 drilling season.

Additionally, the review findings confirmed the necessity of an Arctic-specific model, and recommends continuing work on safety and environmental practices appropriate for the Arctic.

"We must recognize and account for the unique challenges of this region, which holds significant energy potential, but where issues like environmental and climate conditions, limited infrastructure, and the subsistence needs of North Slope communities demand specialized planning and consideration," said Principal Deputy Assistant Secretary for Land and Minerals Management Tommy Beaudreau, who led the review team.

The review, which involved the efforts of BSEE James Watson and staff, Alaska regional staff for BSEE and the BOEM, as well as input from NOAA and the EPA, which oversaw Shell's Alaska activity. The Coast Guard also provided technical assistance. Additionally, DOI officials met with Alaska state legislators, native Alaskan organizations, and environmental groups, as well as marine contractors and oil and gas companies.

When asked whether Shell's Alaska program highlighted any changes that needed to be made to the government process, Salazar noted government officials had learned a great deal from Shell's 2012 effort and still had a lot to learn.

"The Arctic is a difficult environment, and Shell is one of the most resource-capable companies in the world. Just because Shell encountered problems there doesn't mean that exploration shouldn't occur," Salazar commented, noting that 30 exploration wells have previously been drilled in both the Beaufort and Chukchi seas. "We allowed Shell to move forward cautiously with limited activity in the Arctic because Shell didn't meet the requisite permit requirements," Salazar said.

Hayes noted that Shell had been cooperative with the review process, and has acknowledged the issues it faced in terms of contractor timing with the Arctic Challenger.

"They put a lot of effort late into the game to get it certified, but not in time for the 2012 season."

Salazar said Shell should use its planned pause of its Alaska drilling plans for 2013 to learn the lessons from its 2012 drilling season. Hayes noted that Shell would use the time to conduct more testing of the Arctic Challenger to ensure all of its systems are in place so they will not be pressed for time the same way they were pressed for time for the 2012 season. 

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Abraxas Looks Ahead to 2013 Production Ops

Abraxas Petroleum Corporation provided the following operational and acquisitions and divestitures (A&D) update.

In McMullen County, the Corvette C 1H averaged 867 barrels of oil equivalent per day (boepd) (808 barrels of oil per day (bopd) 355 million cubic feet (Mcf) of natural gas per day) on a 22/64" choke over its first 30 days of production. The Corvette C 1H continues to flow to sales at a rate of 586 boepd (547 bopd, 233 Mcf of natural gas per day) on a 22/64" choke. The Gran Torino A 1H was recently completed with a 19 stage completion and is currently flowing to sales at rates above the Company's type curve. Abraxas successfully completed the Mustang 3H with an 18 stage fracture stimulation with flowback expected to commence imminently. The Company recently drilled Mustang 2H to a total depth of 15,021 feet with an anticipated fracture stimulation date in April. Abraxas owns a 25 percent working interest in the Corvette C 1H and an 18.75 percent working interest in the Gran Torino A 1H, Mustang 3H and Mustang 2H.

Drilling continues on the Company's Lillibridge East PAD with intermediate casing set on the 1H, 2H, 3H and 4H. The Company recently drilled and cased the lateral on the 4H with a 50 foot flare encountered while drilling. The rig is now preparing to spud the lateral of the 3H, which will be followed by the 2H and 1H. Abraxas owns a working interest of approximately 34 percent in the Lillibridge East PAD. As previously announced, the Ravin 2H and Ravin 3H were recently completed with the Ravin 2H performing in line and the Ravin 3H outperforming the Company's type curve. Abraxas owns a 49 percent working interest in both the Ravin 2H and 3H.

The Company recently drilled and cased two shallow Yates wells, the Wilkes #1 and Wilkes #2, in Ward County, Texas. Early logs are encouraging, and Abraxas expects to complete the wells in April. Abraxas owns a 100 percent working interest in both wells.

Abraxas recently sold a portion of the Company's properties in Oklahoma and Louisiana as well as scattered royalty interests in North Dakota and Montana at the March 2013 Oil and Gas Clearinghouse Auction for gross proceeds of approximately $2.9 million. Combined, the properties sold produce 27.5 barrels of oil per day and 220.7 Mcf of natural gas per day. The remainder of the Company's Oklahoma properties and additional North Dakota royalty interests are scheduled to be offered at the May 2013 Oil and Gas Clearinghouse Auction. The marketing process led by E-Spectrum Advisors for Abraxas' non-operated Bakken and Three Forks assets is under way.

Bob Watson, President and CEO of Abraxas, commented: "Strong production volumes in February and early March, along with incremental well performance and the efficiency gains in the Eagle Ford, give us confidence in our 2013 guidance of 4,900-5,200 boepd on a $70 million CAPEX budget. With the Corvette C 1H, Abraxas completed its fourth high rate oil well in the Eagle Ford significantly above expectations. The Ravin 2H and Ravin 3H are flowing to sales at encouraging rates after we experienced significant completion issues and delays due to a third party. Furthermore, we continue to make progress in our efforts to refocus our portfolio and delever our balance sheet, with the non-op Bakken sale process starting in earnest as well as the recent sale of several non-core properties in Oklahoma, Louisiana and scattered royalty interests in North Dakota and Montana. We look forward to updating the market as we continue to execute against our strategic priorities and continue to enhance shareholder value."

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Aker Wins Exxon Umbilicals Supply Deal

Norwegian oilfield services firm Aker Solutions announced Friday that it has won a deal with ExxonMobil for the supply of subsea umbilicals to the Erha North Phase 2 development, offshore Nigeria.

Erha North Phase 2 is an extension of the existing Erha subsea system and infrastructure, located approximately 60 miles off Nigeria in water depths of between 3,300 and 3950 feet.

The scope of the work includes the delivery of two dynamic and two static steel tube umbilicals of a total length of approximately 10 miles. The umbilicals will be delivered in 2014.

"We are pleased to extend our global footprint and support ExxonMobil in Nigeria. Aker Solutions provides cost effective and technically advanced subsea umbilicals worldwide and we look forward to execute another deepwater project," Tove Roskaft, head of Aker Solutions' umbilicals business area, commented in a statement.

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