Joint Venture

From August 18, 2010 through August 31, 2012, Abraxas Petroleum and its wholly-owned subsidiary, Abraxas Operating, LLC, owned an equity interest in the joint venture, Blue Eagle Energy, LLC (“Blue Eagle”). Blue Eagle was dissolved effective August 31, 2012.

Through August 31, 2012, we accounted for the joint venture under the equity method of accounting in accordance with ASC 323. Under this method, Abraxas’ share of net income (loss) from the joint venture is reflected as an increase (decrease) in its investment account in “Investment in joint venture” and was also recorded as equity investment income (loss) in “Earnings from equity method investment.” For the year ended 2012 through the date of dissolution we reported income of $2.2 million, related to Blue Eagle.

The following is condensed financial data from Blue Eagle’s August 31, 2012 (date of dissolution) financial statements:



Statement of Operations:		Year Ended December 31, 2012 (1)
	(in thousands)
Revenue		$	12,106
Operating expenses		7,144
Other income		(4		)
Net income		$	4,966

(1) Through August 31, 2012