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Carrizo Oil & Gas, Inc. is a
Houston-based independent energy company engaged in
the exploration, development and production of natural
gas and oil. Our current operations are focused in the
Barnett Shale area in North Texas and in proven, producing
natural gas and oil geologic trends along the onshore
Gulf Coast in Texas and Louisiana, primarily in the
Miocene, Wilcox, Frio, and Vicksburg trends.
We have grown our production
through our 3-D seismic-driven exploratory drilling
program. From our inception through December 31, 2006,
we participated in the drilling of 508 wells (200.3
net) with a success rate of approximately 71 percent
in our onshore Gulf Coast area and 100 percent in the
Barnett Shale area. Exploratory wells accounted for
81 percent of the total wells drilled.
As a main component of our business
strategy, we have acquired licenses for over 11,800
square miles of 3-D seismic data for processing and
evaluation. One of our primary strengths is the experience
of our management and technical staff in the development,
processing and analysis of this 3-D seismic data to
generate and drill natural gas and oil prospects. Our
technical and operating employees have an average of
over 20 years industry experience, in many cases with
major and large independent oil and gas companies. Using
our 3-D seismic database, our highly qualified technical
staff is continually adding to and refining our substantial
inventory of drilling locations.
We believe that our utilization
of large-scale 3-D seismic surveys and related technology
allows us to create and maintain a multiyear inventory
of high-quality exploration prospects. As of December
31, 2006 we had 194,719 net acres in Texas and Louisiana
under lease or lease option, including 37,644 net acres
in our onshore Gulf Coast area, almost all of which
is covered by 3-D seismic data, and 86,752 net acres
in our Barnett Shale area. On this leased acreage, we
have identified over 106 potential exploratory drilling
locations in our onshore Gulf Coast area, including
55 additional extension opportunities, depending on
the success of our initial drilling activities on those
locations. In the Barnett Shale area, where we rely
heavily on 3-D seismic to plan our development, we have
identified over 675 potential exploratory and development
horizontal drilling locations.
In 2006, our capital expenditures
were $188.3 million, used primarily to drill 70 wells
(45 net). In 2007, we expect capital expenditures to
be approximately $165 to $175 million. We expect to
drill 15 gross wells in the onshore Gulf Coast area,
53 gross wells in our Barnett Shale area, 27 gross wells
in our East Texas area and five wells in other areas.
Our
other interests include a rapidly growing position of
240,000 net acres in four additional shale resource
plays and a coalbed methane investment in the Rocky
Mountains. Additionally, in 2003 we obtained licenses
to explore in the U.K. North Sea where we expect our
working interest partners to drill one prospect in the
second quarter of 2007, with no risk capital required
from Carrizo.
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