Abraxas Petroleum Corporation Raises $60 Million Through Private Note Offering

Abraxas Petroleum Corporation, a San Antonio-based crude oil and natural gas exploration and production company, has announced a private offering of $60 million in 11.5% Senior Notes due 2004, Series C. The notes will be priced at approximately 106.75% of par to yield a minimum "yield to worst" of 9.69%. The net proceeds from the offering will be used to repay bank debt incurred primarily for corporate acquisitions and to fund a portion of the Company's 1998 capital expenditure budget.

Key Takeaways:

• Abraxas Petroleum Corporation has priced a private offering of $60 million principal amount of 11.5% Senior Notes due 2004, Series C, at approximately 106.75% of par.
• The notes will have a stated coupon rate of 11.5% and a minimum "yield to worst" of 9.69%.
• The net proceeds from the offering will be used to repay bank debt and fund a portion of the Company's 1998 capital expenditure budget.
• The offering is being made pursuant to an underwritten Rule 144A offering.
• Abraxas Petroleum Corporation operates primarily along the Texas Gulf Coast, in the Permian Basin of western Texas, western Canada, and southwestern Wyoming.
• Moody's Investor Services and Standard & Poor's confirmed ratings of B-2 and Single-B, respectively, for the proposed issue and the existing $215 million notes.

Statistics:

• $60 million principal amount of 11.5% Senior Notes due 2004, Series C will be issued.
• The notes will have a stated coupon rate of 11.5%.
• The minimum "yield to worst" of the notes is 9.69%.
• The offering is expected to close on January 27, 1998.
• Abraxas Petroleum Corporation's capital expenditure budget for 1998 will be partly funded by the net proceeds from the offering.

Sources:

• PRNewswire, January 21, 1998
• Abraxas Petroleum Corporation, http://www.abraxaspetroleum.com/
• Moody's Investor Services
• Standard & Poor's