spend
approximately $28.4 million on drilling expenditures in 2006, comprised of approximately
26 wells (11.7 net). We also plan to spend $2.2 million to purchase and reprocess
3-D seismic surveys during 2006. Texas - Wilcox Areas
We have licenses for approximately 2,066 square
miles of 3-D seismic data and 16,175 net acres of leasehold in the Wilcox trend
in Texas. From January 1, 2002 through December 31, 2005, we drilled and completed
28 wells (9.8 net) on 33 attempts in this area. We incurred capital expenditures
of $3.2 million and drilled 4 wells (1.56 net) in the Texas Wilcox area in 2005
and expect to devote approximately $2.8 million to drill 4 wells (1.48 net) in
this area in 2006. In the Wilcox area 29 exploratory drillsites have been leased,
seven of which are field extension wells based on results of initial drilling.
We are pursuing acreage on an additional 28 seismically defined prospects. Texas
Frio/Vicksburg/Yegua Areas This combined trend
area sometimes overlaps but is generally closer to the Texas Gulf Coast than the
Wilcox areas discussed above. In any particular target or prospect in this area,
the Frio is the shallower formation, above the deeper Vicksburg and still deeper
Yegua formations. We have licenses for a total of over 2,166 miles of 3-D seismic
data and 12,319 net leasehold acres over this trend. Our current focus is primarily
in Brooks County, the location of the Encinitas Field. We
have an inventory of 25 leased exploratory drillsites in the Frio/Vicksburg trend,
three of which are field extension wells based on success of initial drilling.
We are pursing acreage on an additional 13 seismically defined prospects. From
January 1, 2002 through December 31, 2005, we drilled and completed 43 wells (9.65
net) in 48 attempts in this trend. We incurred capital expenditures of $11.5 million
and drilled 9 wells (6.0 net) in the Frio/Vicksburg trend area in 2005 and expect
to devote approximately $2.7 million to drill 5 wells (1.55 net) in this area
in 2006. Encinitas Field. This field, the site
of our first 3-D seismic survey in 1995, has 38 wells currently producing. Since
1996, we have participated in the drilling of 37 wells (7.4 net) in this area,
35 (6.9 net) of which were successfully completed. During 2005, we participated
in the drilling of 8 wells, all of which were successfully completed. We expect
to drill 3 wells (0.8 net) in 2006, with an additional ten well locations to be
drilled thereafter. We expect to have a 27.5% working interest in those wells.
Southeast Texas Areas The
Southeast Texas area contains similar objective levels found in the Frio/Vicksburg/Yegua
trend area. We separate this as a focus area because of the geographic concentration
of our 3-D seismic data and because reservoirs in this area usually display seismic
amplitude anomalies. Seismic amplitude anomalies can be interpreted as an indicator
of hydrocarbons, although these anomalies are not necessarily reliable as to hydrocarbon
presence or productivity. We have acquired licenses for approximately 977 square
miles of 3-D data over our Southeast Texas project area which is focused primarily
on the Frio, Yegua, Cook Mountain and Vicksburg formations. We
have 28 leased exploratory drillsites, none of which are dependent on success
of the other wells. An additional four prospects have been seismically mapped
on which we are currently pursuing acreage. From January
1, 2002 to December 31, 2005, we participated in the drilling and completion of
15 wells (4.8 net) in 18 attempts in this area. We incurred capital expenditures
of $7.0 million and drilled 5 wells (1.58 net) in the Southeast Texas area in
2005 and expect to devote approximately $11.0 million and drill 10 wells (5.2
net) in this area in 2006. The Liberty Project Area and Cedar Point Project Area
have proven to be successful for us, and we expect that the Liberty Project Area
will constitute a significant portion of our drilling program for 2006. Liberty
We have identified and leased prospects including the
Frio, Yegua, Cook Mountain, and Wilcox formations within the 600 square miles
of 3-D seismic data in the Liberty Project Area which now covers significant areas
of Liberty, Harris, and Hardin Counties, Texas. As
of December 31, 2005, we had identified 28 leased exploratory drilling locations
and an additional four potential locations that we are attempting to lease in
the Liberty Project Area. Thirteen of the total 28 prospects were generated from
our 2005 seismic survey project. Carrizo’s 2006 drilling budget provides for drilling
of ten of these exploratory locations. Accordingly, we expect to continue significant
drilling activity in the Liberty Project area in 2007. | 
