control insurance that it believes will be sufficient to cover any liabilities to third parties and the cost to bring the well under control, including, if necessary, the drilling of a replacement well. The production from the Staubach #1 well has not been affected by the incident as the Staubach #1 well is currently producing from a deeper interval than that of the gas flow from the Burkhart #1 well. Carrizo operates the northern portion of the 3-D defined prospect area with a 55% working interest and plans to drill the initial test well in this area in the third quarter of 2002. Four additional prospects are drill-ready within current acreage control which the Company plans to further evaluate within the next 18 months.

Ganado

   The Ganado Project Area is located in Wharton County and targets both normal pressured Frio and expanded Yegua prospect opportunities within the 32 square mile proprietary seismic dataset. Following initial drilling success in the Frio, additional leases have been secured for further Frio drilling in 2002. The deeper prospect opportunities continue to be studied, however no deeper drilling is currently planned until 2003.

Starr

   The Company has a non-exclusive license to 340 square miles of 3-D seismic data which covers Frio and Vicksburg producing trends in Starr and Hildalgo Counties, Texas. Carrizo is continuing to develop prospects from this data and acquire leases, and plans to drill two additional wells in the next 12 to 18 months. Carrizo's working interest in its leases within this project area averages approximately 50%.

Southeast Texas Areas

   Carrizo has acquired approximately 96 square miles of 3-D data over its Southeast Texas project areas which are focused primarily on the Yegua and Vicksburg formations. The Liberty Project Area and Cedar Point Project Area have proven to be successful for the Company and the Company expects that the Liberty Project Area will constitute a significant portion of its 2002 drilling program. Carrizo is considering additional purchases of 3-D data during 2002 in an attempt to further exploit successful trends.

Cedar Point

   The Cedar Point Project Area is located in Chambers County, Texas, adjacent to Trinity Bay. The 30 square mile 3-D survey targets the lower Frio and Vicksburg formations. Five of six wells drilled to date, including two during 2001, have been successful. Carrizo plans to drill one or two additional wells in the next 12 to 18 months. The Company's working interest in leases in this project area ranges from 25% to 100% in these prospects.

Liberty

   Carrizo has identified and leased prospects ranging from the Frio to the Cook Mountain formations within the 52 square mile 3-D survey in the Liberty Project Area in Liberty County, Texas. The Company drilled one successful Cook Mountain and one unsuccessful Yegua well during 2001. Four wells are anticipated to be drilled in 2002. The Company's average working interest in the leases in the project area ranges from 40% to over 80%.

Louisiana

West Bay

   During 2000, a test well logged apparent pay in several zones and was successfully completed in the Company's West Bay Project Area in Plaquemine Parish Louisiana. After a unitization hearing, the Company's interest in the currently producing zone was set at 12.7%. Carrizo is currently establishing pre drill units for deeper objectives on the now proven structure. The trap configuration and seismic signature appears to be similar for the lower objectives as compared with the proven pay. Permitting is near completion for a Company operated non-pressured test well expected to be drilled mid year 2002. The Company expects its working interest in the project area wells to range from 25% to 50% depending on the amount of acreage developed and unitization results.

LaRose

   The Company successfully drilled and completed the LaRose Prospect discovery well, the "Louisiana Delta Farms #1" in Lafourche Parish, Louisiana in 2001. This well, which Carrizo operates, logged over 100 feet of net pay in three Cris I sand intervals at depths ranging from 13,500 feet to 15,300 feet. The well tested at a gross rate of 11,650 Mcf of gas and 1,466 barrels of condensate (20,446 Mcfe) per day with flowing tubing pressure of approximately 9,740 psi from approximately 18 net feet of pay from the deepest sand interval. During the fourth quarter, unitization hearings were completed, setting the Company's working interest at 40%.