Minimum rentals and scheduled seismic data purchases for each of the five years subsequent to December 31, 2005 are as follows:

10.        SHAREHOLDERS' EQUITY

In the first quarter of 2004, the Company completed the public offering of 6,485,000 shares of common stock at $7.00 per share generating net proceeds of approximately $23.4 million. The offering included 3,655,500 newly issued shares offered by the Company and 2,829,500 shares offered by certain selling shareholders. The Company did not receive any proceeds from the shares sold by the selling shareholders. The Company used part of the net proceeds from this offering to accelerate its drilling program and to retain larger interests in portions of its drilling prospects that the Company otherwise would sell down or for which the Company would seek joint partners and for general corporate purposes. Initially, the Company used a portion of the net proceeds to repay the $7 million outstanding principal amount under its revolving credit facility and to complete an $8.2 million Barnett Shale acquisition on February 27, 2004.

On June 13, 2005, the Company sold 1.2 million shares of the Company’s common stock to institutional investors (the “Investors”) at a price of $15.25 per share in a private placement (the “Private Placement”), a 4.7% discount to the closing price on the NASDAQ stock market for the Company’s common stock the day prior to closing. The number of shares sold was approximately 5% of the fully diluted shares outstanding before the offering. The net proceeds of the Private Placement, after deducting placement agents’ fees but before paying offering expenses, were approximately $17.2 million. The Company used the proceeds from the Private Placement to fund a portion of its capital expenditure program for 2005, including the drilling programs in the Barnett Shale and onshore Gulf Coast areas.

In connection with the Private Placement, the Company was required to file a resale shelf registration statement to register the resale of the shares sold under the Securities Act. The Company filed such registration statement and is required to cause it to become and be kept effective for resale of shares for two years from the date of their original sale. In certain situations, the Company is required to indemnify the investors in the Private Placement, including without limitation, for certain liabilities under the Securities Act.

In June 1997, the Company established the Incentive Plan of Carrizo Oil & Gas, Inc. (the “Incentive Plan”), which authorizes the granting of incentive stock options (Incentive Plan Options) and restricted stock awards to selected employees. The plan also authorizes the grant of restricted stock awards to directors. The Company may grant options to purchase up to 2,350,000 shares under the Incentive Plan and has granted options covering 2,084,002 shares through December 31, 2005, net of forfeitures. Through that date, 898,634 options had been exercised. During 2005, a total of 87,585 restricted stock awards (net of forfeitures) were granted which are subject to pro rata vesting over a three-year period. These awards had a grant date fair value totaling $1.4 million that were recorded as deferred compensation and which are being amortized as compensation expense over the respective vesting periods of the awards. Such amortization totaled $0.3 million during the year ended December 31, 2005.

The Company issued 7,570,109 and 2,089,973 shares of common stock during the years ended December 31, 2004 and 2005, respectively. The shares issued during the year ended December 31, 2004 consisted of 3,655,500 shares issued through the 2004 public offering, 2,159,627 shares issued through the exercise of warrants, 1,318,124 shares issued through the conversion of Series B Preferred Stock and 436,858 shares issued through the exercise of options granted under the Company’s Incentive Plan. The shares issued during the year ended December 31, 2005 consisted of 1,200,000 shares issued in the Private Placement, 127,068 shares issued in connection with the acquisition of certain oil and gas properties, 304,669 shares issued through the exercise of warrants, 87,585 shares issued as restricted stock awards granted under the Incentive Plan and 370,651 shares issued through the exercise of options granted under the Incentive Plan.