ABRAXAS PETROLEUM CORPORATION SENIOR MANAGEMENT INCENTIVE BONUS
Base salaries for senior management of the Company are not structured to reflect outstanding individual
performance, but are only reflective of average salaries in peer companies. The Company believes that unusually
good performances, particularly performances that enhance stockholder value in an above average manner,
should be awarded accordingly.
President, Executive Vice Presidents and Vice Presidents involved in the geological and drilling and development
activities of Abraxas Petroleum Corporation
To create financial incentives for senior management tied directly to increases in net asset value per share as
Net Asset Value Per Share
Calculated as Follows:
+ Proved Reserves SEC PV10 (1)
+ Probable Reserves SEC PV10 (1)
+ Property and equipment, including acreage (2)
+ Other Assets
+/- Working Capital (3)
- Less Debt = Net Asset Value
/ Shares Outstanding at Year End
= Net Asset Value Per Share
(1) As determined by a consulting engineering firm, SEC PV10; year-end PV10 values will use the same price
deck (including any differentials) as the previous year to which it is being compared.
(2) Excludes proved reserves covered by (1) above and excludes DD&A.
(3) Current assets minus current liabilities without hedge affect
All values as reflected on books of the Company except as noted in footnotes.
Yearly bonuses will be the percentage increase in net asset value per share over the previous year's net asset
value per share up to the first 10% increase and twice the percentage thereafter with a maximum award for any
one year of 70% of annual salary.
Payment of Bonus
Bonuses will be calculated as soon as possible after the end of the fiscal year, generally as soon as the audit and
reserve report are available. Bonuses will normally be paid during the second quarter of each year. A participant
must be employed by the