Abraxas Petroleum affiliate swaps assets

Abraxas Petroleum Corp., San Antonio, said Wednesday it's increased its natural gas production and productive acreage in the Sundre, Alta., area through a property swap at its 49%-owned subsidiary, Grey Wolf Exploration Inc.


Abraxas Petroleum Corp., San Antonio, said Wednesday it's increased its natural gas production and productive acreage in the Sundre, Alta., area through a property swap involving its 49%-owned subsidiary, Grey Wolf Exploration Inc.

Grey Wolf signed a definitive agreement with an unnamed party to swap certain of its assets and $300,000 cash for long-life natural gas producing properties, including holdings in the gas plant and gathering system, and undeveloped land in the company's core area of Sundre.

Abraxas' current working interest production in Sundre will rise to 7.2 MMcfd of gas from 4 MMcfd, plus additional NGL output.

The swap in Sundre gives Abraxas and Grey Wolf 100% ownership in the gas plant, gathering system, 25 producing wells, 45,000 gross acres, and more than 30 workover and development locations.

The 20 MMcfd gas plant has excess capacity of 10 MMcfd and could be repermitted to add 15 MMcfd of capacity at modest cost, said Abraxas. The company has already commenced a drilling and workover program to utilize this excess capacity in the near term. The swap transaction is expected to close in mid-October.

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