NEW YORK -- Abraxas Petroleum Corp. (NasdaqCM: AXAS) unveiled a potential “sweet spot” in the Eagle Ford that, if successful, could drive production for the company from a first-quarter level of about 4,100 barrels of oil equivalent per day (boe/d) up to as much as 8,000 to 10,000 boe/d in 2016, according to its presentation this week at the IPAA OGIS meeting.

While quick to caution that “one well does not make a play,” Abraxas showed a current projection of output growing to close to 7,000 boe/d in 2016, but accelerating to almost 8,000 boe/d if another rig is added to its Jourdanton area in the Eagle Ford. And if a second rig were added, “by 2016 we’ll be at 10,000 boe/d,” said Robert Watson, president and CEO of Abraxas.

The projection was “a pretty bold statement for Abraxas, but we feel very comfortable with it,” said Watson. “We have never, since we’ve been a public company, stuck our neck out so far as to give guidance two to three years in the future.”

Sparking the optimism for a higher production ramp-up is the performance of the company’s Jourdanton wells, in an area Abraxas entered based on “a very specific geologic reason.” The company gave data from its recently drilled Blue Eyes 1H well, which had a 30-day production test of 527 boe/d and thereafter “a pretty flat” profile of an average of 466 boe/d after 60 days and 460 boe/d after 90 days.

What particularly encouraged Abraxas was that the well’s latest seven-day production through March 31 averaged 510 boe/d, higher than the 60- and 90-day levels. The well performance is “extremely good news for us,” said Watson, and indicates this “could possibly be a nice Eagle Ford sweet spot, and we own 100%.”

An offset well to the west, the Snake Eyes 1H, has had a similar flat production profile, according to Watson, and an offset to the east, the Spanish Eyes 1H, is currently being completed. Other wells are: Eagle Eyes 1H (drilling), Ribeye (permitted) and Bulls Eye 1H. With 6,200 net acres, Abraxas projects more than 70 potential locations. Of these, 44 are in a north fault block where drilling is currently underway, while 28 are in a south fault block where drilling is expected to begin around mid-year.

Wells are drilled to a depth of 7,500 to 7,800 feet, and are expected to cost about $6 million once the program scales up. The wells don’t need big EURs, said Watson, who put average EURs at 280,000 barrels. He also estimated that wells would generate a 50% rate of return using recent strip pricing. The Blue Eyes well was currently exceeding its type curve, he said.

Abraxas’ capex of $125 million for 2014 will be focused on its Eagle Ford and Bakken operations. In the Bakken, Abraxas is drilling in McKenzie County with a drilling rig that it owns. In its Pershing field, it has eight new completions, and will have eight additional locations if downspacing is successful. In its North Fork field, it has three wells waiting on completion and four wells drilling and it could add 23 locations if downspacing is successful. Successful downspacing, said Watson, would “keep the rig busy for four to five years.”

With plans to hold debt levels at 1x EBITDA, Watson said Abraxas’ combination of “low-risk Bakken and Eagle Ford development, substantial unbooked potential upside and strong rate of return-driven production growth” was one that few small capitalization energy stocks could offer.

On a day when the Dow Jones industrial average fell over 160 points, Abraxas was one of only a few energy stocks that ended the day marginally in positive territory.