As part of a series of restructuring transactions approved in 2004, we adopted a
plan to dispose of our operations and interest in Grey Wolf Exploration Inc., a
wholly-owned Canadian subsidiary of Abraxas Petroleum Corporation. In February
2005, Grey Wolf closed on an initial public offering resulting in our
substantial divestiture of our capital stock in Grey Wolf. As a result of the
disposal of Grey Wolf, the results of operations of Grey Wolf are reflected in
our Financial Statements and in this document as “Discontinued Operations” and
our remaining operations are referred to in our Financial Statements and in this
document as “Continuing Operations” or “Continued Operations.” Unless otherwise
noted, all disclosures are for Continuing Operations. See Note 3 to the
consolidated financial statements in Item 8.  ...