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While the past year has been about the continued
repositioning of the Company, it also has been about specific achievements.
These include:
- Record annual production levels of 8.32 bcfe
or 22.8 mmcfe per day.
- A net increase in proven reserves from 70.4 bcfe
to 109.3 bcfe. This increase was achieved through an increase
in the onshore Gulf Coast and East Texas areas combined of 8.9
bcfe and in the Barnett Shale of 30.0 bcfe.
- An overall drilling success rate of 92%, with
32 of 38 wells successful in the onshore Gulf Coast and 33 of
33 wells successful in the Barnett Shale.
- Overall drilling and finding costs of $1.75 per
mcfe.
- Record EBITDA of $36.3 million, up 40% from 2003.
- The addition of 26,700 net acres under lease
or option in the Barnett. As of this writing, Carrizo now controls
over 40,000 net acres in this play.
Carrizo’s balance sheet has also been strengthened
during 2004. During the year, the Company raised approximately $31
million in common equity through a successful public offering and
the conversion of $7.5 million in convertible preferred stock. The
capacity under our senior debt facility has grown commensurate with
the growth of our reserve base. Carrizo continues to have undrawn
capacity under both our senior and subordinated debt facilities.
For their significant contributions and service
over the years, we would like to acknowledge and thank Chris Behrens,
Bryan Martin and Doug Hamilton who resigned as directors this past
year following the sale of the large stock positions which had been
held for years by JP Morgan Capital Partners and Mr. Hamilton. As
Carrizo has successfully transitioned from a closely-held entity
to a more broadly owned company, we have been able to add two strong
independent directors, Roger Ramsey and Tom Carter, who bring strong
general business and industry credentials to the board.
We look forward to an exciting 2005 and believe
we are off to a good start. We have budgeted a significantly larger
drilling program, balanced between the onshore Gulf Coast and Barnett
Shale focus areas. We are shooting 3-D seismic in both plays and
plan to continue to add to our acreage and prospect inventories.
Our overriding objective is  to
grow shareholder value through these initiatives. We recognize there
are challenges ahead, including maintaining balance sheet flexibility,
dealing with an increasingly competitive environment and a tightening
service sector, and incentivizing and building upon our strong technical
teams which are the lifeblood of the Company.
We appreciate the support of our shareholders
and want to thank our outstanding and dedicated employees.
Sincerely,
 
S.P. Johnson, IV Steven
A. Webster
Steven
A. Webster President
and CEO Chairman
Chairman
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