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Carrizo has undertaken other initiatives where?
management believes there is significant option value and upside,
These include:
- The Company has acquired over 7,500
net acres in the Barnett Shale play in North Texas. This leasehold
has already added 11.3 Bcfe of proven reserves, an interest in
23 producing wells and 150 future drilling locations. We project
finding and development costs of under $1.00 per Mcfe in this
project area.
- The Company has been successful in acquiring
three two year development licenses and one four year license
in the UK sector of the Southern and Central Basins of the North
Sea. With access to over 200,000 acres in productive areas, Carrizo
plans to acquire data, develop prospects and find industry partners
to drill these prospects.
- Carrizo's interest in most of its coalbed
methane properties has been contributed to Pinnacle Resources,
a newly formed company with $30 million in cash funded by a private
equity investor with proceeds being used to acquire additional
prospective acreage and drill and complete wells. Pinnacle drilled
124 wells in 2003 and is off to a good start.
Management believes these initiatives provide
our shareholders with considerable upside potential without significant
dilution to our efforts in Carrizo's core onshore Gulf Coast area.
Our goal is to continue our record of increasing production and
reserves within the context of good finding and development cost
while providing real upside through exposure to high reward drilling
prospects and the optionality of other initiatives, such as our
interest in Pinnacle and our North Sea acreage, which require minimal
capital spending by the Company.
Let us close by thanking our shareholders and
our employees. Our goal is to reward your continued support.
Sincerely,
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