Abraxas Petroleum, Abraxas Energy announce merger agreement

By Lisa Kerner

Charlotte, N.C., July 1 - Abraxas Petroleum Corp. and Abraxas Energy Partners, LP said they executed a definitive merger agreement in which each outstanding common unit of Abraxas Energy not currently held by a wholly owned subsidiary of Abraxas Petroleum will be acquired by Abraxas Petroleum for $6.00 payable in shares of Abraxas Petroleum common stock.

According to Abraxas Petroleum, the shares of common stock paid per Abraxas Energy common unit will range from 4.25 to 6.00 for a total of 26 million to 36 million shares of Abraxas Petroleum common stock.

The share value equates to $1.00 to $1.41 per share of Abraxas Petroleum and will be determined based on the 20-day trading average prior to a special meeting of Abraxas Petroleum stockholders.

Abraxas Petroleum said its board of directors and its special committee are recommending the company's stockholders vote in favor of the stock issuance under the agreement.

The board of directors of the general partner of Abraxas Energy is also recommending that its unitholders adopt and approve the agreement.

In June, Abraxas Petroleum and Abraxas Energy announced their intention to merge Abraxas Energy into Abraxas Petroleum.

"The merger brings all of the assets, properties and projects of Abraxas Energy into the fold of Abraxas Petroleum without the significant dilution that could have occurred under the existing exchange and registration rights agreement," Abraxas president and chief executive officer Bob Watson said in a news release.

"We further believe that the merger will simplify our organizational structure, reduce general and administrative expenses, provide greater transparency, and create a more attractive investment opportunity with increased liquidity and a larger public float," Watson said.

Abraxas Petroleum and Abraxas Energy are oil and natural gas exploration and production companies based in San Antonio. Abraxas Energy is structured as an upstream master limited partnership.

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