 Carrizo
Leases As of year-end 2005, Carrizo had increased its lease
position in the Barnett Shale to approximately 80,000 net acres. Over half of
this acreage is in the "Core" and "Tier I" areas of the Barnett Shale play which
are the areas with significant proven production and reserves and the best defined
geologic characteristics. The Company has acquired 3-D seismic data over all of
its large acreage blocks in this area. Outside of Tier I, industry activity has
confirmed that the Barnett Shale is gas productive and highly prospective. We
have initiated 3-D seismic programs in some of these areas and plan to begin drilling
late in 2006. During 2005, Carrizo shifted its Barnett drilling to a
primarily Carrizo operated horizontal drilling program with 29 of 37 gross wells
(22 net wells) being horizontal. Of the 22 net wells, 17 were operated by Carrizo.
At year-end 2005, the Company was operating three horizontal well drilling rigs.
Net proved reserves increased substantially as a result of this program from 31.7
Bcfe to 82.1 Bcfe year-end 2004 versus year-end 2005. As a result of our
very successful lease acquisition program, the Company has an inventory of approximately
500 horizontal drillsites. | 
