As filed with the Securities and Exchange Commission on December 5, 1996


                                             Registration No.333-__________




                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM S-8


           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                          ABRAXAS PETROLEUM CORPORATION
               (Exact name of issuer as specified in its charter)

                              NEVADA   74-2584033
               (State or other jurisdiction of (I.R.S. Employer
              incorporation or organization) Identification No.)

        500 North Loop 1604 East, Suite 100, San Antonio, Texas 78232
             (Address of principal executive offices) (Zip Code)


           ABRAXAS PETROLEUM CORPORATION DIRECTOR STOCK OPTION PLAN
                            (Full title of the plan)

                               Robert L. G. Watson
                                    President
                          ABRAXAS PETROLEUM CORPORATION
                       500 North Loop 1604 East, Suite 100
                            San Antonio, Texas 78232
                                (210) 490-4788
                     (Name, address and telephone number,
                   including area code, of agent for service)


<PAGE>


                        CALCULATION OF REGISTRATION FEE*


                                    Proposed    Proposed
Title of                            maximum     maximum
securities        Amount            offering    aggregate   Amount of
to be             to be             price       offering    registration
registered        registered        per share   price       fee


Common Stock,     104,000           $7.625**    $793,000**  $241.00
par value $.01    shares
per share

*Pursuant  to Rule 416(c) under the  Securities  Act of 1933,  as amended,  this
Registration Statement registers an indeterminate number of plan interests to be
offered pursuant to the employee benefit plan described herein.

**In accordance with Rule 457(h), computed upon the basis of the prices reported
on NASDAQ on  December  4, 1996.  This price is used  solely for the  purpose of
calculating the registration fee.




<PAGE>



                               Page 13 of 13 Pages


0126623.01
PART II

Item 3.  Incorporation of Documents by Reference.

      The  documents  listed  in (a)  through  (c)  below  are  incorporated  by
reference in the Registration Statement, and all documents subsequently filed by
the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),  prior to the filing of a
post-effective  amendment which indicates that all of the shares of Common Stock
have been sold or which  deregisters  any Common  Stock then  remaining  unsold,
shall be deemed to be  incorporated by reference in the  Registration  Statement
and to be a part hereof from the date of filing of such documents.

      (a) The Registrant's latest annual report filed pursuant to Sections 13(a)
or 15(d) of the Exchange Act, that contains audited financial statements for the
Registrant's latest fiscal year for which such statements have been filed:

            Annual Report on Form 10-K for the year ended December 31, 1995

      (b) All other  reports  filed  pursuant  to Section  13(a) or 15(d) of the
Exchange Act since the end of the fiscal year  covered by the document  referred
to in (a) above:

            1.    Form 10-Q for the Quarter Ended March 31, 1996
                  Filed:  May 15, 1996

            2.    Form 10-Q/A Number 1 for the Quarter ended March 31, 1996
                  Filed:  June 13, 1996

            3.    Form 10-Q for the Quarter ended June 30, 1996
                  Filed:  August 14, 1996

            4.    Form 10-Q for the Quarter ended September 30, 1996
                  Filed:  November 14, 1996

            5.    Form 8-K
                  Filed:  October 15, 1996

            6.    Form 8-K/A Number 1
                  Filed:  October 29, 1996

            7.    Form 8-K
                  Filed:  November 7, 1996

            8.    Form 8-K
                  Filed:  November 14, 1996

            9.    Form 8-K
                  Filed:  November 27, 1996

      (c)   See  "Description of Registrant's  Securities to be Registered" in
Registration  Statement No. 34-0-19118 on Form 8-A filed on March 28, 1991 and
incorporated herein by reference.

Item 4.  Description of Securities.

      Not applicable.

Item 5. Interests of Named Experts and Counsel.

      None.

Item 6. Indemnification of Directors and Officers.

      The  Registrant's  Articles  of  Incorporation  contain a  provision  that
eliminates  the personal  monetary  liability  of directors  and officers to the
Registrant and its  stockholders  for a breach of fiduciary duties to the extent
currently  allowed  under  the  Nevada  General  Corporation  Law  (the  "Nevada
Statute"). If a director or officer were to breach his fiduciary duties, neither
the Registrant nor its stockholders could recover monetary damages, and the only
course of action available to the Registrant's  stockholders  would be equitable
remedies,  such as an  action to enjoin or  rescind a  transaction  involving  a
breach of fiduciary  duty. To the extent  certain  claims  against  directors or
officers are limited to equitable  remedies,  this provision of the Registrant's
Articles of Incorporation may reduce the likelihood of derivative litigation and
may discourage  stockholders or management from  initiating  litigation  against
directors or officers for breach of their duty of care. Additionally,  equitable
remedies may not be effective in many situations. If a stockholder's only remedy
is to enjoin the completion of the Board of Director's action, this remedy would
be ineffective if the stockholder did not become aware of a transaction or event
until after it had been completed.  In such a situation, it is possible that the
stockholders  and the  Registrant  would have no  effective  remedy  against the
directors or officers.

      Liability  for  monetary  damages  has not  been  eliminated  for  acts or
omissions which involve intentional misconduct,  fraud or a knowing violation of
law or payment of an improper  dividend in  violation  of section  78.300 of the
Nevada  Statute.  The  limitation of liability  also does not eliminate or limit
director liability arising in connection with causes of action brought under the
Federal securities laws.

      The Nevada  Statute  permits a corporation to indemnify  certain  persons,
including officers and directors, who are (or are threatened to be made) parties
against  all  expenses  (including  attorneys'  fees)  actually  and  reasonably
incurred by, or imposed upon,  him in  connection  with the defense by reason of
his being or having  been a director or officer if he acted in good faith and in
a manner  which  he  reasonably  believed  to be in or not  opposed  to the best
interests  of the  corporation  and,  with  respect  to any  criminal  action or
proceeding,  had no reasonable cause to believe his conduct was unlawful, except
where he has been  adjudged  by a court of  competent  jurisdiction  (and  after
exhaustion  of all  appeals)  to be  liable  for  gross  negligence  or  willful
misconduct in the performance of his duty. The Bylaws of the Registrant  provide
indemnification to the same extent allowed pursuant to the foregoing  provisions
of the Nevada Statute.

      Nevada  corporations  also are  authorized to obtain  insurance to protect
officers and directors from certain liabilities,  including  liabilities against
which  the  corporation  cannot  indemnify  its  directors  and  officers.   The
Registrant  currently has a directors' and officers'  liability insurance policy
in effect  providing $3.0 million in coverage and an additional  $1.0 million in
coverage for certain employment related claims.

      The  Registrant  has entered into  indemnity  agreements  with each of its
directors and officers.  These  agreements  provide for  indemnification  to the
extent permitted by the Nevada Statute.

Item 7.  Exemption from Registration Claimed.

      Not applicable.

Item 8. Exhibits.

      3.1   Articles of  Incorporation  of  Registrant.  (Filed as Exhibit 3.1
to Form S-4 filed September 7, 1990, Registration Statement No. 33-36565).

      3.2   Articles  of  Amendment  to  the  Articles  of   Incorporation  of
Registrant,  dated October 22, 1990.  (Filed as Exhibit 3.3 to Amendment No. 1
to Form S-4 filed October 29, 1990, Registration Statement No. 33-36565).

      3.3   Articles  of  Amendment  to  the  Articles  of   Incorporation  of
Registrant,  dated  December 18,  1990. (Filed as Exhibit 3.4 to Amendment No.
3 to Form S-4 filed December 20, 1990, Registration Statement No. 33-36565).

      3.4 Agreement and Plan of Merger,  dated December 21, 1990 between Abraxas
Petroleum Corporation,  a Texas corporation and Registrant filed with the Nevada
Secretary of State. (Filed as Exhibit 10.1 to Form 8-K filed with the Securities
and Exchange Commission on March 15, 1991).

      3.5   Certificate   of  Designation   of   Registrant's   Series  1995-B
Preferred  Stock.  (Filed as Exhibit 3.6 to Form S-3 filed  January 18,  1996,
Registration No. 333-398).

      3.6   Articles of  Amendment  to the  Articles of  Incorporation  of the
Registrant,  dated  June 8,  1995.  (Filed  as  Exhibit  3.4 to Form S-3 filed
January 18, 1996, Registration Statement No. 333-398).

      3.7   Amended and Restated Bylaws of the  Registrant.  (Filed as Exhibit
3.5 to Form S-3 filed January 18, 1996, Registration Statement No. 333-398).

      4.1 Rights  Agreement  dated as of December 6, 1994 between the Registrant
and FUNB. (Filed as Exhibit 4.1 to Registrant's  Registration  Statement on Form
8-A filed on December 6, 1994).

      5.1 Opinion of Cox & Smith  Incorporated  as to the legality of the Common
Stock being registered (filed herewith).

      23.1  Consent of Ernst & Young (filed herewith).

      23.2  Consent of Cox & Smith Incorporated (found in Exhibit 5.1).

      The  Registrant  undertakes  that it will submit or has submitted the plan
and any amendments  thereto to the Internal  Revenue Service ("IRS") in a timely
manner  and has made or will make all  changes  required  by the IRS in order to
qualify the plan.

Item 9.     Undertakings.

      The Registrant undertakes the following:

      1. To file,  during any period in which  offers or sales are being made, a
post-effective amendment to this Registration Statement:

            (i)   To include any  prospectus  required by Section  10(a)(3) of
                  the  Securities  Act of 1933,  as amended  (the  "Securities
                  Act");

            (ii)  To reflect in the prospectus any facts or events arising after
                  the effective date of the Registration  Statement (or the most
                  recent post-effective  amendment thereof) which,  individually
                  or in the  aggregate,  represent a  fundamental  change in the
                  information set forth in the Registration Statement;

            (iii) To include any material  information  with respect to the plan
                  of distribution  not previously  disclosed in the Registration
                  Statement or any material  change to such  information  in the
                  Registration Statement.

      Provided,  however,  that paragraphs (1)(i) and (1)(ii) above do not apply
if the  information  required to be included in a  post-effective  amendment  by
those  paragraphs  is  contained  in periodic  reports  filed by the  Registrant
pursuant  to  Section  13  or  Section  15(d)  of  the  Exchange  Act  that  are
incorporated by reference in the Registration Statement.

      2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

      3. To remove from registration by means of a post-effective  amendment any
of the securities being registered which remain unsold at the termination of the
offering.

      The  undersigned  Registrant  hereby  undertakes  that,  for  purposes  of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Exchange Act that is  incorporated  by reference in the  Registration  Statement
shall be deemed to be a new  registration  statement  relating to the securities
offered  therein,  and the  offering  of such  securities  at that time shall be
deemed to be the initial bona fide offering thereof.

      Insofar as  indemnification  for liabilities  arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the Registrant of expenses
incurred or paid by a director,  officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter has
been  settled  by  controlling  precedent,  submit  to a  court  of  appropriate
jurisdiction  the  question  of whether  such  indemnification  by it is against
public  policy as  expressed in the  Securities  Act and will be governed by the
final adjudication of such issue.



<PAGE>


                                   SIGNATURES


Pursuant to the  requirements  of the  Securities  Act of 1933,  the  Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in San Antonio, Texas on December 5, 1996.

                                    ABRAXAS PETROLEUM CORPORATION


                                    By:   /s/ Robert L. G. Watson
                                       Robert L.G. Watson,
                                       Chairman of the Board, President and
                                       Chief Executive Officer

      Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.

      Signature               Name and Title                    Date

/s/ Robert L. G. Watson       Chairman of the Board,        December 5, 1996
Robert L.G. Watson            President, Chief Executive Officer
                              (Principal Executive Officer)
                              and Director

/s/ Chris E. Williford        Executive Vice President,     December 5, 1996
Chris E. Williford            Chief Financial Officer, Treasurer
                              (Principal Financial and Accounting
                              Officer) and Director

/s/ Richard M. Kleberg, III   Director                       December 5, 1996
---------------------------
Richard M. Kleberg, III

/s/ James C. Phelps           Director                       December 5, 1996
---------------------------
James C. Phelps

/s/ Paul A. Powell, Jr.       Director                       December 5, 1996
---------------------------
Paul A. Powell, Jr.

/s/ Richard M. Riggs          Director                       December 5, 1996
---------------------------
Richard M. Riggs

/s/ Franklin A. Burke         Director                       December 5, 1996
---------------------------
Franklin A. Burke

/s/ Robert D. Gershen         Director                       December 5, 1996
---------------------------
Robert D. Gershen

/s/ Harold D. Carter          Director                       December 5, 1996
---------------------------
Harold D. Carter



<PAGE>


                                  EXHIBIT INDEX



Exhibit No.            Description                                    Page

   3.1      Articles of Incorporation of Registrant.
            (Filed as Exhibit 3.1 to Form S-4 filed
            September 7, 1990, Registration Statement
            No. 33-36565).                                               *

   3.2      Articles of Amendment to the Articles of
            Incorporation of Registrant, dated October 22, 1990.
            (Filed as Exhibit 3.3 to Amendment No. 1 to
            Form S-4 filed October 29, 1990, Registration
            Statement No. 33-36565).                                     *

   3.3      Articles of Amendment to the Articles of
            Incorporation of Registrant, dated December 18, 1990.
            (Filed as Exhibit 3.4 to Amendment No. 3 to
            Form S-4 filed December 20, 1990,
            Registration Statement No. 33-36565).                        *

   3.4      Agreement  and Plan of  Merger,  dated 
            December  21,  1990  between Abraxas  Petroleum
            Corporation,  a Texas corporation and Registrant
            filed with the Nevada Secretary of State.
            (Filed as Exhibit 10.1 to Form 8-K filed with the
            Securities and Exchange Commission on
            March 15, 1991).                                             *

   3.5      Certificate of Designation of the Registrant's               * 
            Series 1995-B Preferred Stock. (Filed as Exhibit 3.6 to
            Form S-3 filed January 18, 1996, Registration No. 333-398).

   3.6      Articles of Amendment to the Articles of Incorporation
            of the Registrant, dated June 8, 1995. (Filed as
            Exhibit 3.4 to Form S-3 filed January 18, 1996,
            Registration Statement No. 333-398)                          *

   3.7      Amended and Restated Bylaws of the Registrant.
            (Filed as Exhibit 3.5 to Form S-3 filed January 18,
            1996, Registration Statement No. 333-398).                   *



<PAGE>


   4.1      Rights Agreement dated as of December 6, 1994
            between the Registrant and FUNB.(Filed as Exhibit 4.1
            to Registrant's Registration Statement on Form 8-A filed
            on December 6, 1994).                                        *

   5.1      Opinion of Cox & Smith Incorporated as to
            the legality of the Common Stock being
            registered (filed herewith).                                 12

 23.1       Consent of Ernst & Young (filed herewith).                   13

 23.2       Consent of Cox & Smith Incorporated
            (found in Exhibit 5.1).                                      *




<PAGE>


                                                                     Exhibit 5.1



                                   COX & SMITH
                             I N C O R P O R A T E D
                              ATTORNEYS COUNSELORS



                              112 East Pecan Street
                                   Suite 1800
                          San Antonio, Texas 78205-1521
                                 (210) 554-5500
                               Fax (210) 226-8395


Writer's Direct Number                                 Writer's E-Mail Address
(210) 554-5255                                           srjacobs@coxsmith.com
                                December 5, 1996

Abraxas Petroleum Corporation
500 North Loop 1604 East, Suite 1800
San Antonio, Texas 78232

                     Re:   Registration  Statement on Form S-8 for the Abraxas
                           Petroleum Corporation Director Stock Option Plan

Gentlemen:

      We have acted as counsel to Abraxas Petroleum  Corporation (the "Company")
in connection  with the  preparation for filing with the Securities and Exchange
Commission  of  a  Registration   Statement  on  Form  S-8  (the   "Registration
Statement")  under the  Securities  Act of 1933,  as amended.  The  Registration
Statement relates to an aggregate of 104,000 shares (the "Shares") of the common
stock, par value $.01 per share ("Common Stock"), of the Company. The Shares are
issuable  pursuant to the Abraxas  Petroleum  Corporation  Director Stock Option
Plan (the "Plan").

      We have  examined  such  corporate  records,  documents,  instruments  and
certificates of the Company as we have deemed necessary, relevant or appropriate
to enable us to render the opinion expressed  herein.  In such  examination,  we
have assumed the  genuineness  of all  signatures  and the  authenticity  of all
documents,  instruments,  records and certificates  submitted to us as copies or
originals.

      Based upon the foregoing,  we are of the opinion that the Shares will have
been duly  authorized  and  legally  issued and will  constitute  fully paid and
nonassessable  shares of Common Stock of the Company  when issued in  accordance
with the Plan.

      We  hereby  consent  to the  use of this  opinion  as  Exhibit  5.1 to the
Registration  Statement.  In giving this  consent,  we do not admit that we come
within the category of persons whose consent is required  under Section 7 of the
Securities  Act of 1933, as amended,  the rules or regulations of the Securities
and Exchange Commission  promulgated thereunder or any similar provisions of any
state securities laws or regulations.

                                    Very truly yours,

                                    COX & SMITH INCORPORATED

                                    By:  /s/ Steven R. Jacobs
                                         For the Firm
SRJ/pmgl/0013457.01


<PAGE>






                         CONSENT OF INDEPENDENT AUDITORS




We consent to the incorporation by reference in the Registration Statement (Form
S-8) dated  December 5, 1996  pertaining  to the Abraxas  Petroleum  Corporation
Director  Stock  Option  Plan of our report  dated  March 19,  1996  (except for
paragraph 2 of Note 16 as to which the date is March 21,  1996) with  respect to
the consolidated  financial statements of Abraxas Petroleum Corporation included
in its Annual  Report (Form 10-K) for the year ended  December  31, 1995,  filed
with the Securities and Exchange Commission.

                                          /S/  ERNST & YOUNG LLP
                                          ERNST & YOUNG LLP






San Antonio, Texas
December 4, 1996
[{"type": "S-8", "sequence": "1", "description": "DIRECTORS STOCK OPTION PLAN", "secsgml_size_bytes": 23124}]
{"company-data": {"conformed-name": "ABRAXAS PETROLEUM CORP", "cik": "0000867665", "assigned-sic": "1311", "irs-number": "742584033", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-17377", "film-number": "96676702"}, "business-address": {"street1": "500 N LOOP 1604 EAST STE 100", "city": "SAN ANTONIO", "state": "TX", "zip": "78209", "phone": "2104904788"}, "mail-address": {"street1": "500 N LOOP 1604 EAST STE 100", "city": "SAN ANTONIO", "state": "TX", "zip": "78232"}}
As filed with the Securities and Exchange Commission on December 5, 1996

                                             Registration No.333-__________

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM S-8

           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                          ABRAXAS PETROLEUM CORPORATION
               (Exact name of issuer as specified in its charter)

                              NEVADA   74-2584033
               (State or other jurisdiction of (I.R.S. Employer
              incorporation or organization) Identification No.)

        500 North Loop 1604 East, Suite 100, San Antonio, Texas 78232
             (Address of principal executive offices) (Zip Code)

           ABRAXAS PETROLEUM CORPORATION DIRECTOR STOCK OPTION PLAN
                            (Full title of the plan)

                               Robert L. G. Watson
                                    President
                          ABRAXAS PETROLEUM CORPORATION
                       500 North Loop 1604 East, Suite 100
                            San Antonio, Texas 78232
                                (210) 490-4788
                     (Name, address and telephone number,
                   including area code, of agent for service)
CALCULATION OF REGISTRATION FEE*

                                    Proposed    Proposed
Title of                            maximum     maximum
securities        Amount            offering    aggregate   Amount of
to be             to be             price       offering    registration
registered        registered        per share   price       fee

Common Stock,     104,000           $7.625**    $793,000**  $241.00
par value $.01    shares
per share

*Pursuant  to Rule 416(c) under the  Securities  Act of 1933,  as amended,  this
Registration Statement registers an indeterminate number of plan interests to be
offered pursuant to the employee benefit plan described herein.

**In accordance with Rule 457(h), computed upon the basis of the prices reported
on NASDAQ on  December  4, 1996.  This price is used  solely for the  purpose of
calculating the registration fee.
Page 13 of 13 Pages

0126623.01
PART II

Item 3.  Incorporation of Documents by Reference.

      The  documents  listed  in (a)  through  (c)  below  are  incorporated  by
reference in the Registration Statement, and all documents subsequently filed by
the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),  prior to the filing of a
post-effective  amendment which indicates that all of the shares of Common Stock
have been sold or which  deregisters  any Common  Stock then  remaining  unsold,
shall be deemed to be  incorporated by reference in the  Registration  Statement
and to be a part hereof from the date of filing of such documents.

      (a) The Registrant's latest annual report filed pursuant to Sections 13(a)
or 15(d) of the Exchange Act, that contains audited financial statements for the
Registrant's latest fiscal year for which such statements have been filed:

            Annual Report on Form 10-K for the year ended December 31, 1995

      (b) All other  reports  filed  pursuant  to Section  13(a) or 15(d) of the
Exchange Act since the end of the fiscal year  covered by the document  referred
to in (a) above:

            1.    Form 10-Q for the Quarter Ended March 31, 1996
                  Filed:  May 15, 1996

            2.    Form 10-Q/A Number 1 for the Quarter ended March 31, 1996
                  Filed:  June 13, 1996

            3.    Form 10-Q for the Quarter ended June 30, 1996
                  Filed:  August 14, 1996

            4.    Form 10-Q for the Quarter ended September 30, 1996
                  Filed:  November 14, 1996

            5.    Form 8-K
                  Filed:  October 15, 1996

            6.    Form 8-K/A Number 1
                  Filed:  October 29, 1996

            7.    Form 8-K
                  Filed:  November 7, 1996

            8.    Form 8-K
                  Filed:  November 14, 1996

            9.    Form 8-K
                  Filed:  November 27, 1996

      (c)   See  "Description of Registrant's  Securities to be Registered" in
Registration  Statement No. 34-0-19118 on Form 8-A filed on March 28, 1991 and
incorporated herein by reference.

Item 4.  Description of Securities.

      Not applicable.

Item 5. Interests of Named Experts and Counsel.

      None.

Item 6. Indemnification of Directors and Officers.

      The  Registrant's  Articles  of  Incorporation  contain a  provision  that
eliminates  the personal  monetary  liability  of directors  and officers to the
Registrant and its  stockholders  for a breach of fiduciary duties to the extent
currently  allowed  under  the  Nevada  General  Corporation  Law  (the  "Nevada
Statute"). If a director or officer were to breach his fiduciary duties, neither
the Registrant nor its stockholders could recover monetary damages, and the only
course of action available to the Registrant's  stockholders  would be equitable
remedies,  such as an  action to enjoin or  rescind a  transaction  involving  a
breach of fiduciary  duty. To the extent  certain  claims  against  directors or
officers are limited to equitable  remedies,  this provision of the Registrant's
Articles of Incorporation may reduce the likelihood of derivative litigation and
may discourage  stockholders or management from  initiating  litigation  against
directors or officers for breach of their duty of care. Additionally,  equitable
remedies may not be effective in many situations. If a stockholder's only remedy
is to enjoin the completion of the Board of Director's action, this remedy would
be ineffective if the stockholder did not become aware of a transaction or event
until after it had been completed.  In such a situation, it is possible that the
stockholders  and the  Registrant  would have no  effective  remedy  against the
directors or officers.

      Liability  for  monetary  damages  has not  been  eliminated  for  acts or
omissions which involve intentional misconduct,  fraud or a knowing violation of
law or payment of an improper  dividend in  violation  of section  78.300 of the
Nevada  Statute.  The  limitation of liability  also does not eliminate or limit
director liability arising in connection with causes of action brought under the
Federal securities laws.

      The Nevada  Statute  permits a corporation to indemnify  certain  persons,
including officers and directors, who are (or are threatened to be made) parties
against  all  expenses  (including  attorneys'  fees)  actually  and  reasonably
incurred by, or imposed upon,  him in  connection  with the defense by reason of
his being or having  been a director or officer if he acted in good faith and in
a manner  which  he  reasonably  believed  to be in or not  opposed  to the best
interests  of the  corporation  and,  with  respect  to any  criminal  action or
proceeding,  had no reasonable cause to believe his conduct was unlawful, except
where he has been  adjudged  by a court of  competent  jurisdiction  (and  after
exhaustion  of all  appeals)  to be  liable  for  gross  negligence  or  willful
misconduct in the performance of his duty. The Bylaws of the Registrant  provide
indemnification to the same extent allowed pursuant to the foregoing  provisions
of the Nevada Statute.

      Nevada  corporations  also are  authorized to obtain  insurance to protect
officers and directors from certain liabilities,  including  liabilities against
which  the  corporation  cannot  indemnify  its  directors  and  officers.   The
Registrant  currently has a directors' and officers'  liability insurance policy
in effect  providing $3.0 million in coverage and an additional  $1.0 million in
coverage for certain employment related claims.

      The  Registrant  has entered into  indemnity  agreements  with each of its
directors and officers.  These  agreements  provide for  indemnification  to the
extent permitted by the Nevada Statute.

Item 7.  Exemption from Registration Claimed.

      Not applicable.

Item 8. Exhibits.

      3.1   Articles of  Incorporation  of  Registrant.  (Filed as Exhibit 3.1
to Form S-4 filed September 7, 1990, Registration Statement No. 33-36565).

      3.2   Articles  of  Amendment  to  the  Articles  of   Incorporation  of
Registrant,  dated October 22, 1990.  (Filed as Exhibit 3.3 to Amendment No. 1
to Form S-4 filed October 29, 1990, Registration Statement No. 33-36565).

      3.3   Articles  of  Amendment  to  the  Articles  of   Incorporation  of
Registrant,  dated  December 18,  1990. (Filed as Exhibit 3.4 to Amendment No.
3 to Form S-4 filed December 20, 1990, Registration Statement No. 33-36565).

      3.4 Agreement and Plan of Merger,  dated December 21, 1990 between Abraxas
Petroleum Corporation,  a Texas corporation and Registrant filed with the Nevada
Secretary of State. (Filed as Exhibit 10.1 to Form 8-K filed with the Securities
and Exchange Commission on March 15, 1991).

      3.5   Certificate   of  Designation   of   Registrant's   Series  1995-B
Preferred  Stock.  (Filed as Exhibit 3.6 to Form S-3 filed  January 18,  1996,
Registration No. 333-398).

      3.6   Articles of  Amendment  to the  Articles of  Incorporation  of the
Registrant,  dated  June 8,  1995.  (Filed  as  Exhibit  3.4 to Form S-3 filed
January 18, 1996, Registration Statement No. 333-398).

      3.7   Amended and Restated Bylaws of the  Registrant.  (Filed as Exhibit
3.5 to Form S-3 filed January 18, 1996, Registration Statement No. 333-398).

      4.1 Rights  Agreement  dated as of December 6, 1994 between the Registrant
and FUNB. (Filed as Exhibit 4.1 to Registrant's  Registration  Statement on Form
8-A filed on December 6, 1994).

      5.1 Opinion of Cox & Smith  Incorporated  as to the legality of the Common
Stock being registered (filed herewith).

      23.1  Consent of Ernst & Young (filed herewith).

      23.2  Consent of Cox & Smith Incorporated (found in Exhibit 5.1).

      The  Registrant  undertakes  that it will submit or has submitted the plan
and any amendments  thereto to the Internal  Revenue Service ("IRS") in a timely
manner  and has made or will make all  changes  required  by the IRS in order to
qualify the plan.

Item 9.     Undertakings.

      The Registrant undertakes the following:

      1. To file,  during any period in which  offers or sales are being made, a
post-effective amendment to this Registration Statement:

            (i)   To include any  prospectus  required by Section  10(a)(3) of
                  the  Securities  Act of 1933,  as amended  (the  "Securities
                  Act");

            (ii)  To reflect in the prospectus any facts or events arising after
                  the effective date of the Registration  Statement (or the most
                  recent post-effective  amendment thereof) which,  individually
                  or in the  aggregate,  represent a  fundamental  change in the
                  information set forth in the Registration Statement;

            (iii) To include any material  information  with respect to the plan
                  of distribution  not previously  disclosed in the Registration
                  Statement or any material  change to such  information  in the
                  Registration Statement.

      Provided,  however,  that paragraphs (1)(i) and (1)(ii) above do not apply
if the  information  required to be included in a  post-effective  amendment  by
those  paragraphs  is  contained  in periodic  reports  filed by the  Registrant
pursuant  to  Section  13  or  Section  15(d)  of  the  Exchange  Act  that  are
incorporated by reference in the Registration Statement.

      2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  bona fide  offering
thereof.

      3. To remove from registration by means of a post-effective  amendment any
of the securities being registered which remain unsold at the termination of the
offering.

      The  undersigned  Registrant  hereby  undertakes  that,  for  purposes  of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Exchange Act that is  incorporated  by reference in the  Registration  Statement
shall be deemed to be a new  registration  statement  relating to the securities
offered  therein,  and the  offering  of such  securities  at that time shall be
deemed to be the initial bona fide offering thereof.

      Insofar as  indemnification  for liabilities  arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the Registrant of expenses
incurred or paid by a director,  officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter has
been  settled  by  controlling  precedent,  submit  to a  court  of  appropriate
jurisdiction  the  question  of whether  such  indemnification  by it is against
public  policy as  expressed in the  Securities  Act and will be governed by the
final adjudication of such issue.
SIGNATURES

Pursuant to the  requirements  of the  Securities  Act of 1933,  the  Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in San Antonio, Texas on December 5, 1996.

                                    ABRAXAS PETROLEUM CORPORATION

                                    By:   /s/ Robert L. G. Watson
                                       Robert L.G. Watson,
                                       Chairman of the Board, President and
                                       Chief Executive Officer

      Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.

      Signature               Name and Title                    Date

/s/ Robert L. G. Watson       Chairman of the Board,        December 5, 1996
Robert L.G. Watson            President, Chief Executive Officer
                              (Principal Executive Officer)
                              and Director

/s/ Chris E. Williford        Executive Vice President,     December 5, 1996
Chris E. Williford            Chief Financial Officer, Treasurer
                              (Principal Financial and Accounting
                              Officer) and Director

/s/ Richard M. Kleberg, III   Director                       December 5, 1996
---------------------------
Richard M. Kleberg, III

/s/ James C. Phelps           Director                       December 5, 1996
---------------------------
James C. Phelps

/s/ Paul A. Powell, Jr.       Director                       December 5, 1996
---------------------------
Paul A. Powell, Jr.

/s/ Richard M. Riggs          Director                       December 5, 1996
---------------------------
Richard M. Riggs

/s/ Franklin A. Burke         Director                       December 5, 1996
---------------------------
Franklin A. Burke

/s/ Robert D. Gershen         Director                       December 5, 1996
---------------------------
Robert D. Gershen

/s/ Harold D. Carter          Director                       December 5, 1996
---------------------------
Harold D. Carter
EXHIBIT INDEX

Exhibit No.            Description                                    Page

   3.1      Articles of Incorporation of Registrant.
            (Filed as Exhibit 3.1 to Form S-4 filed
            September 7, 1990, Registration Statement
            No. 33-36565).                                               *

   3.2      Articles of Amendment to the Articles of
            Incorporation of Registrant, dated October 22, 1990.
            (Filed as Exhibit 3.3 to Amendment No. 1 to
            Form S-4 filed October 29, 1990, Registration
            Statement No. 33-36565).                                     *

   3.3      Articles of Amendment to the Articles of
            Incorporation of Registrant, dated December 18, 1990.
            (Filed as Exhibit 3.4 to Amendment No. 3 to
            Form S-4 filed December 20, 1990,
            Registration Statement No. 33-36565).                        *

   3.4      Agreement  and Plan of  Merger,  dated 
            December  21,  1990  between Abraxas  Petroleum
            Corporation,  a Texas corporation and Registrant
            filed with the Nevada Secretary of State.
            (Filed as Exhibit 10.1 to Form 8-K filed with the
            Securities and Exchange Commission on
            March 15, 1991).                                             *

   3.5      Certificate of Designation of the Registrant's               * 
            Series 1995-B Preferred Stock. (Filed as Exhibit 3.6 to
            Form S-3 filed January 18, 1996, Registration No. 333-398).

   3.6      Articles of Amendment to the Articles of Incorporation
            of the Registrant, dated June 8, 1995. (Filed as
            Exhibit 3.4 to Form S-3 filed January 18, 1996,
            Registration Statement No. 333-398)                          *

   3.7      Amended and Restated Bylaws of the Registrant.
            (Filed as Exhibit 3.5 to Form S-3 filed January 18,
            1996, Registration Statement No. 333-398).                   *
4.1      Rights Agreement dated as of December 6, 1994
            between the Registrant and FUNB.(Filed as Exhibit 4.1
            to Registrant's Registration Statement on Form 8-A filed
            on December 6, 1994).                                        *

   5.1      Opinion of Cox & Smith Incorporated as to
            the legality of the Common Stock being
            registered (filed herewith).                                 12

 23.1       Consent of Ernst & Young (filed herewith).                   13

 23.2       Consent of Cox & Smith Incorporated
            (found in Exhibit 5.1).                                      *
Exhibit 5.1

                                   COX & SMITH
                             I N C O R P O R A T E D
                              ATTORNEYS COUNSELORS

                              112 East Pecan Street
                                   Suite 1800
                          San Antonio, Texas 78205-1521
                                 (210) 554-5500
                               Fax (210) 226-8395

Writer's Direct Number                                 Writer's E-Mail Address
(210) 554-5255                                           srjacobs@coxsmith.com
                                December 5, 1996

Abraxas Petroleum Corporation
500 North Loop 1604 East, Suite 1800
San Antonio, Texas 78232

                     Re:   Registration  Statement on Form S-8 for the Abraxas
                           Petroleum Corporation Director Stock Option Plan

Gentlemen:

      We have acted as counsel to Abraxas Petroleum  Corporation (the "Company")
in connection  with the  preparation for filing with the Securities and Exchange
Commission  of  a  Registration   Statement  on  Form  S-8  (the   "Registration
Statement")  under the  Securities  Act of 1933,  as amended.  The  Registration
Statement relates to an aggregate of 104,000 shares (the "Shares") of the common
stock, par value $.01 per share ("Common Stock"), of the Company. The Shares are
issuable  pursuant to the Abraxas  Petroleum  Corporation  Director Stock Option
Plan (the "Plan").

      We have  examined  such  corporate  records,  documents,  instruments  and
certificates of the Company as we have deemed necessary, relevant or appropriate
to enable us to render the opinion expressed  herein.  In such  examination,  we
have assumed the  genuineness  of all  signatures  and the  authenticity  of all
documents,  instruments,  records and certificates  submitted to us as copies or
originals.

      Based upon the foregoing,  we are of the opinion that the Shares will have
been duly  authorized  and  legally  issued and will  constitute  fully paid and
nonassessable  shares of Common Stock of the Company  when issued in  accordance
with the Plan.

      We  hereby  consent  to the  use of this  opinion  as  Exhibit  5.1 to the
Registration  Statement.  In giving this  consent,  we do not admit that we come
within the category of persons whose consent is required  under Section 7 of the
Securities  Act of 1933, as amended,  the rules or regulations of the Securities
and Exchange Commission  promulgated thereunder or any similar provisions of any
state securities laws or regulations.

                                    Very truly yours,

                                    COX & SMITH INCORPORATED

                                    By:  /s/ Steven R. Jacobs
                                         For the Firm
SRJ/pmgl/0013457.01
CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement (Form
S-8) dated  December 5, 1996  pertaining  to the Abraxas  Petroleum  Corporation
Director  Stock  Option  Plan of our report  dated  March 19,  1996  (except for
paragraph 2 of Note 16 as to which the date is March 21,  1996) with  respect to
the consolidated  financial statements of Abraxas Petroleum Corporation included
in its Annual  Report (Form 10-K) for the year ended  December  31, 1995,  filed
with the Securities and Exchange Commission.

                                          /S/  ERNST & YOUNG LLP
                                          ERNST & YOUNG LLP

San Antonio, Texas
December 4, 1996