voluntarily by agreement of the parties, conditioned on GMT paying the revenues into escrow and agreeing to provide ExxonMobil with certain discovery materials in this action. ExxonMobil has filed a counterclaim against GMT and all the non-operators, including the Company, to establish the validity of their lease, remove cloud on title, quiet title to the property, and for conversion, trespass and punitive damages. The Company, along with GMT and other partners, reached a final settlement with ExxonMobil on February 11, 2003. Under the terms of the settlement, the Company recovered the balance of its drilling costs (approximately $0.1 million) and certain other costs and retained no further interest in the property. No reserves with respect to these properties were included in the Company's reported proved reserves as of December 31, 2001 and 2002.

During August 2001, the Company entered into an agreement whereby the lessor will provide to the Company up to $0.8 million in financing for production equipment utilizing capital leases. At December 31, 2002, two leases in the amount of $0.5 million had been executed under this facility.

At December 31, 2002, the Company was obligated under a noncancelable operating lease for office space. Rent expense for the years ended December 31, 2000, 2001 and 2002 was $0.2 million. The Company is obligated for remaining lease payments of $0.2 million per year through December 31, 2004.

CCBM has an obligation to fund $2.5 million of drilling costs on behalf of RMG. Through December 31, 2002, CCBM has satisfied $1.5 million of its drilling obligations on behalf of RMG.

10. SHAREHOLDERS' EQUITY

The Company issued 9,016 and 113,306 shares of common stock valued at $28,000 and $0.5 million for the years ended December 31, 2001 and 2002, respectively. Of these shares, 106,472 were issued as partial consideration for the acquisition of interests in certain oil and natural gas properties during 2002.

The following table summarizes information for the options outstanding at December 31, 2002:

In June of 1997, the Company established the Incentive Plan of Carrizo Oil & Gas, Inc. (the 'Incentive Plan"). In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based Compensation", which requires the Company to record stock-based compensation at fair value. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock Based Compensation - Transition and Disclosure". The Company has adopted the disclosure requirements of SFAS No. 148 and has elected to record employee compensation expense utilizing the intrinsic value method permitted under Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees". The Company accounts for its employees' stock-based compensation plan under APB Opinion No. 25 and its related interpretations. Accordingly, any deferred compensation expense would be recorded for stock options based on the excess of the market value of the common stock on the date the options were granted over the aggregate exercise price of the options. This deferred compensation would be amortized over the vesting period of each option. Had compensation cost been determined consistent with SFAS No. 123 "Accounting for Stock Based Compensation" for all options, the Company's net income (loss) and earnings per share would have been as follows:

F-19