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| (1) |
On May
16, 1997, Carrizo and a
number of affiliated entities
were combined with the Company
in a series of transactions
in connection with its initial
public offering (the "Combination
Transactions"). Prior
to that date, Carrizo and
those other entities were
not required to pay federal
income taxes due to their
status as partnerships or
Subchapter S corporations.
The amounts shown reflect
pro forma income taxes that
represent federal income
taxes which would have been
reported under Financial
Accounting Standards (SFAS)
No. 109, "Accounting
for Income Taxes,"
had Carrizo and such entities
been tax-paying entities
during each of the periods
presented. Management of
the Company believes that
EBITDA and operating cash
flow may provide additional
information about the Company's
ability to meet its future
requirements for debt service,
capital expenditures and
working capital. EBITDA
and operating cash flow
are financial measures commonly
used in the oil and gas
industry and should not
be considered in isolation
or as a substitute for net
income, operating income,
cash flows from operating
activities or any other
measure of financial performance
presented in accordance
with generally accepted
accounting principles or
as a measure of a company's
profitability or liquidity.
Because EBITDA excludes
some, but not all, items
that affect net income and
because operating cash flow
excludes changes in assets
and liabilities and these
measures may vary among
companies, the EBITDA and
operating cash flow data
presented above may not
be comparable to similarly
titled measures of other
companies. |
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| (2) |
Operating
cash flow represents cash
flows from operating activities
prior to changes in assets
and liabilities. |
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|
| (3) |
Net income
for the year ended December
31, 1999 excludes, and earnings
per share for the year ended
December 31, 1999 includes,
the discount on the redemption
of the Company's Preferred
Stock in the amount of $21,868,413.
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| (4) |
Debt
repayments include amounts
refinanced. |
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Forward
Looking Statements. The statements
contained in all parts of this document,
(including any portion attached hereto)
including, but not limited to, those
relating to the Company's schedule,
targets, estimates or results of future
drilling, including the number, timing
and results of wells, budgeted wells,
increases in wells, the timing and risk
involved in drilling follow up wells,
expected working or net revenue interests,
planned expenditures, prospects budgeted
and other future capital expenditures,
risk profile of oil and gas exploration,
acquisition of 3-D seismic data (including
number, timing and size of projects),
planned evaluation of prospects, probability
of prospects having oil and natural
gas, expected production or reserves,
increases in reserves, acreage, working
capital requirements, hedging activities,
the ability of expected sources of liquidity
to implement its business strategy,
future hiring, future exploration activity,
production rates, efforts to regain
control of the Burkhart #1 well and
sufficiency of insurance for liabilities
and costs in connection with the Burkhart
#1 well, all and any other statements
regarding future operations, financial
results, business plans and cash needs
and other statements that are not historical
facts are forward looking statements.
When used in this document, the words
"anticipate", "budgeted",
"targeted", "potential"
"estimate", "expect",
"may", "project",
"believe" and similar expressions
are intended to be among the statements
that identify forward looking statements.
Such statements involve risks and uncertainties,
including, but not limited to, those
relating to the Company's dependence
on its exploratory drilling activities,
the volatility of oil and natural gas
prices, the need to replace reserves
depleted by production, operating risks
of oil and natural gas operations, the
Company's dependence on its key personnel,
factors that affect the Company's ability
to manage its growth and achieve its
business strategy, risks relating to
its limited operating history, technological
changes, significant capital requirements
of the Company, the potential impact
of government regulations, litigation,
competition, the uncertainty of reserve
information and future net revenue estimates,
property acquisition risks, industry
partner issues, availability of equipment,
weather and other factors detailed herein
and in the Company's other filings with
the Securities and Exchange Commission.
Should one or more of these risks or
uncertainties materialize, or should
underlying assumptions prove incorrect,
actual outcomes may vary materially
from those indicated.
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