UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 24, 2006
Date of Report (Date of earliest event reported)
ABRAXAS PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 0-19118 74-2584033
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
500 N. Loop 1604 East, Suite 100
San Antonio, Texas 78232
(210) 490-4788
(Address of principal executive offices and Registrant's telephone number,
including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
In 2003, the Board of Directors of Abraxas Petroleum Corporation adopted an
annual bonus plan which established certain criteria for the payment of annual
bonuses to Abraxas' President and Executive Vice Presidents. Under the plan,
each participant is given an annual bonus opportunity based on the achievement
of a goal related to the Net Asset Value ("NAV"), on a per share basis, of the
Company's common stock, established by the Board of Directors after assessing
recommendations by the Chief Executive Officer. Bonuses may be paid in cash,
stock, or a combination of both. On February 24, 2006, the Board determined that
the plan should include the President, all Executive Vice Presidents and all
Vice Presidents of Abraxas who are responsible for geological and drilling and
development activities for Abraxas' operations. The plan provides that the bonus
will equal the percentage increase in NAV per share over the previous year's NAV
per share for the first 10% increase and twice the percentage increase
thereafter with a maximum award for any one year of 70% of annual salary. Under
the plan, the board has the prerogative to adjust the bonus earned by any
participant, including Messrs. Watson, Williford and Wallace and Dr.
Billingsley, to take into account extraordinary factors not contemplated by the
bonus plan when the impact of such contributions or factors cannot be adequately
reflected by the bonus determined under the methodology described above and to
determine the cash and/or share component of any earned awards. For 2005, the
goal for NAV was met. In addition, the Board increased the bonus earned by each
participant as a result of Abraxas' strong performance during 2005. The
following bonuses were approved by the Board on February 24, 2006:
Name Bonus Amount
Robert L.G. Watson $269,800
Chris E. Williford 142,600
Lee T. Billingsley 122,107
William H. Wallace 122,107
In addition, pursuant to the terms of a Severance Agreement with Robert W.
Carington, Jr., Abraxas' former Executve Vice President, Mr. Carington was
awarded a bonus of $137,083, related to the above described bonus plan.
Item 7.01 Regulation FD Disclosure
On February 27, 2006, Abraxas announced in a press release the replacement
of 280% of 2005 production at a finding cost of $2.03 per Mcfe
The information in this Item 7.01 (including Exhibit 99.1) is furnished
pursuant to and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section. The information in this Report will not be deemed
an admission as to the materiality of any information required to be disclosed
solely to satisfy the requirements of Regulation FD.
Item 9.01 Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
99.1 Press Release dated February 27, 2006 "Abraxas
Replaces 280% of 2005 Production at a Finding Cost of
$2.03 per Mcfe."
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Abraxas Petroleum Corporation
By: /s/ Chris E. Williford
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Chris E. Williford, Executive Vice President,
Chief Financial Officer and Treasurer
Dated: February 28, 2006