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Announces 29 Percent Increase in Second Quarter Production
HOUSTON, July 16, 2002 -- Carrizo Oil & Gas, Inc. (NASDAQ:CRZO)
today announced the operating results for the second quarter of
2002. In the Company's core areas in South Texas and Louisiana,
the Company participated in the drilling of four gross exploratory
wells, all of which were successful, resulting in a 100 percent
apparent success rate for the quarter. As of the end of the quarter,
these four successful wells were in process of being completed,
or were awaiting pipeline hookup to commence production, and drilling
operations were underway on two additional wells. Since the beginning
of the year, Carrizo has now drilled seven wells, all of which have
been or are in the process of being completed.
Production during the second quarter of 2002 was estimated to
have reached a Company quarterly record level of 1.83 Bcfe, an increase
of 29 percent over first quarter 2002 production levels and 26 percent
over second quarter 2001 levels. Natural gas compromised 70 percent
of second quarter production. The Company estimates that second
quarter 2002 sales prices averaged approximately $3.28 per Mcf and
$23.46 per barrel. These prices include the effects of hedging activities
which resulted in a reduction of the realized price of natural gas
sold by $0.24 per Mcf and the realized price of oil sold by $0.71
per barrel. The oil sales price reflects the large volume of condensate
production relative to total oil production.
Operating highlights during the second quarter of 2002 included
the following:
-- The "Burkhart #1R" well in the Matagorda Project Area in Matagorda
County, Texas reached total depth on June 16, 2002 and logged approximately
36 feet of net pay in the lower Frio section. The well commenced
production on July 9, 2002 at a rate of 1,500 barrels of oil and
8,700 Mcf (17,700 Mcfe) per day. The Company owns a 35 percent working
interest before payout and a 29.75 percent working interest after
payout in the well. The Burkhart well is a follow-up well to the
successful "Staubach #1" well which was drilled in the first quarter
of 2002 and is presently producing at a rate of 1,690 barrels of
oil and natural gas liquids and 3,400 Mcf (13,500 Mcfe) per day.
Both the Burkhart #1R and Staubach #1 wells are operated by Brigham
Exploration Company (NASDAQ:BEXP). On July 1, 2002, Carrizo, as
operator, spud the "Pauline Huebner A-382 #1" well, which targets
the lower Frio interval at the northern end of the estimated 800
acre structure from which the Burkhart and Staubach wells are producing.
Carrizo has retained a 51 percent working interest in this well
which is expected to reach total depth in the next three to four
weeks.
-- On June 30, 2002, the Company, as operator, spud the "Delta
Farms #2" well in the Company's LaRose prospect area in Lafourche
Parish, Louisiana. The Company owns a 40 percent working interest
in this well, which is a follow-up well to the initial test well,
the "Delta Farms #1", that logged over 100 feet of net pay in three
Cris I sand intervals below 13,500 feet. The Delta Farms #1 commenced
production in late March 2002 from an 18 foot interval in the deepest
pay sand and is presently producing at a rate of approximately 980
barrels of oil and 10,000 Mcf (15,880 Mcfe) per day. The Delta Farms
#2 well is expected to reach total depth in approximately five weeks.
-- The "Riverdale #1", a follow-up well to the successful "Riverdale
#2" well in the Company's Cabeza Creek Project Area in Goliad County,
Texas, that reached total depth in the first quarter, was completed
and commenced production on May 9, 2002 at a rate of approximately
3,000 Mcfe per day. During the quarter, the Company also drilled
another follow-up well, the "Riverdale #3" which has also been completed
and is awaiting further testing and pipeline hookup. Carrizo operates
the wells and owns a 68.75 percent working interest. The Riverdale
wells are presently temporarily shut-in due to flooding from recent
heavy rains in the area which has delayed the installation of compression
facilities, but are expected to be put back on production within
the next week to ten days.
The record level of production reached in the second quarter included
no contribution from the recently completed Burkhart well or any
of the other three wells drilled during the quarter.
"Carrizo was again able to achieve exceptional operating results
in the second quarter of 2002 with 100 percent drilling success
on exploratory wells. Wells put onstream in the first quarter, particularly
the Staubach #1 and the Delta Farms #1, boosted second quarter production
to an average daily rate in excess of 20,000 Mcfe per day for the
first time in Company history," commented S.P. Johnson IV, Carrizo's
President and Chief Executive Officer. "We were also able to continue
our drilling success in Goliad County with two additional successful
Wilcox wells reaching total depth during the quarter, which, combined
with new production from the Burkhart well, should allow for a further
increase in the Company's production levels in the third quarter
of 2002. In addition, we are particularly excited about the potential
of the Matagorda County and Delta Farms follow-up wells that we
are now drilling as each of these two wells, if successful, has
the potential to boost future Company production and reserve levels
even higher. The Company is also planning to spud several additional
high impact potential wells later this year."
Carrizo Oil & Gas, Inc. is a Houston-based energy company engaged
in the exploration, development, exploitation and production of
oil and natural gas in proven onshore trends primarily along the
Texas and Louisiana Gulf Coast regions. Carrizo controls significant
prospective acreage blocks and utilizes advanced 3-D seismic techniques
to identify potential oil and gas reserves and drilling opportunities.
Statements in this news release, including but not limited to
those relating to the results, potential effects, risk profiles,
schedule, prospects or estimates for current or future drilling
or wells, expected production rate of the Burkhart #1R well, expected
timing of drilling to total depth of the Pauline Huebner A-382 #1
and Delta Farms #2 wells, expected timing of recommencement of production
from the Riverdale wells and the rates of such production, expected
production increases in the third quarter of 2002, additional high
impact potential wells planned to be spud later this year, the potential
of the Matagorda County and Delta Farms follow-up wells to boost
future Company production and reserve levels and other statements
that are not historical facts are forward looking statements that
are based on current expectations. Although the Company believes
that its expectations are based on reasonable assumptions, it can
give no assurance that these expectations will prove correct. Important
factors that could cause actual results to differ materially from
those in the forward looking statements include the results and
dependence on exploratory drilling activities, operating risks,
oil and gas price levels, land issues, availability of equipment,
weather and other risks described in the Company's Form 10-K for
the year ended December 31, 2001 and its other filings with the
Securities and Exchange Commission. Drilling success rates do not
include the results of the Company's participation in coalbed methane
wells in Wyoming and Montana, the success of which will be determined
after further evaluation.
Reports Financial Results for First Quarter 2002
HOUSTON, May 8, 2002 -- Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) today
reported the Company's financial results for the first quarter of
2002, which included the following highlights:
-- Revenues of $4.0 million. Revenues for the three months ended March 31, 2002 were $4.03
million as compared to $8.73 million during the quarter ended March
31, 2001. Although production increased two percent over prior year
levels, revenues decreased due to lower oil and natural gas prices,
which averaged 55 percent lower than prior year levels. Production
volumes during the three months ended March 31, 2002 were 1,418
MMcfe as compared to 1,386 MMcfe during the first quarter of 2001.
Production volumes increased 22 percent over fourth quarter 2001
levels. Carrizo's average oil sales price decreased 23 percent to
$20.50 per barrel from $26.69 per barrel a year ago, while the Company's
average natural gas sales price decreased 60 percent to $2.67 per
Mcf from $6.66 per Mcf during the first quarter of 2001. The above
prices include the cash effects of hedging activities and, in the
first quarter of 2002 includes $232,000 of non-cash income from
derivative instruments attributable to certain hedge arrangements
with Enron North America Corp. ("Enron"), but excludes an additional
$739,000 of first quarter 2002 hedging revenue attributable to Enron
hedge positions, the collectibility of which is uncertain.
Cash flows from operating activities before changes in assets
and liabilities ("Operating Cash Flow") during the first quarter
of 2002 was $1.89 million, or $0.13 per basic common share, as compared
to $6.68 million, or $0.48 per basic common share, during the first
quarter of 2001. The decrease in Operating Cash Flow was due primarily
to the decrease in revenues. After dividends and accretion of discount
on preferred stock, the Company reported net income of $70,000,
or $0.00 basic and diluted per common share, for the three months
ended March 31, 2002, as compared to $3.46 million, or $0.25 and
$0.21 basic and diluted per common share, respectively, for the
same quarter during 2001. Net income for the quarter ended March
31, 2001 was net of deferred federal income tax expense of $1.9
million, as compared to $100,000 of deferred federal income tax
expense during the quarter ended March 31, 2002.
Oil and gas operating expenses, including severance taxes, were
$1.01 million during the three months ended March 31, 2002 as compared
to $1.3 million during the first quarter of 2001. On a per unit
basis, oil and gas operating expenses decreased to $0.71 per Mcfe
from $0.94 per Mcfe during the first quarter of 2001 due primarily
to lower severance taxes (which are based on sales prices and averaged
$0.20 per Mcfe during the quarter versus $0.50 per Mcfe during the
first quarter of 2001) offset by relatively higher costs per unit
of operating wells as they naturally decline. Excluding severance
taxes and lifting costs at the Camp Hill oil project, oil and gas
operating expenses were $0.46 per Mcfe during the three months ended
March 31, 2002 as compared to $0.40 per Mcfe for the same quarter
during 2001.
Depreciation, depletion and amortization expenses ("DD&A") were
$1.97 million during the three months ended March 31, 2002 ($1.39
per Mcfe) as compared to $1.63 million ($1.18 per Mcfe) during the
first quarter of 2001. The increase in DD&A was primarily due to
additions to the proved property cost base.
General and administrative expenses ("G&A") increased to $916,000
during the three months ended March 31, 2002 from $870,000 during
the same quarter of 2001. On a per unit basis, G&A expenses increased
to $0.65 per Mcfe during the first quarter of 2002 as compared to
$0.63 per Mcfe during the same period during 2001. The increase
in G&A was due primarily to the addition of staff to handle increased
drilling and production activities.
"We are pleased to report a profitable quarter with strong cash
flow despite the low prevailing prices for oil and gas during the
first quarter," commented S. P. Johnson IV, Carrizo's President
and Chief Executive Officer. "On the positive side, production volumes
were up 22 percent over fourth quarter 2001 levels, and oil and
gas prices have increased significantly since the end of the quarter.
Since mid-March, production has commenced from our recently announced
'Louisiana Delta Farms #1' well which is estimated to add over 5,000
Mcfe per day of new production net to Carrizo's interest, while
the recently drilled 'Riverdale #1' well in the Cabeza Creek Project
Area, in which we have a 68.75 percent working interest, is awaiting
completion and is expected to commence production later this month."
Carrizo Oil & Gas, Inc. is a Houston-based energy company engaged
in the exploration, development, exploitation and production of
oil and natural gas in proven onshore trends primarily along the
Texas and Louisiana Gulf Coast regions. Carrizo controls significant
prospective acreage blocks and utilizes advanced 3-D seismic techniques
to identify potential oil and gas reserves and drilling opportunities.
Statements in this news release, including but not limited to
those relating to the results, potential effects, schedule, prospects
or estimates for current or future drilling or wells, expected timing
of commencement of production from the Riverdale #1 well, estimates
for increased production including the Louisiana Delta Farms #1
well and other statements that are not historical facts are forward
looking statements that are based on current expectations. Although
the Company believes that its expectations are based on reasonable
assumptions, it can give no assurance that these expectations will
prove correct. Important factors that could cause actual results
to differ materially from those in the forward looking statements
include the results and dependence on exploratory drilling operations,
operating risks, oil and natural gas price levels, land issues,
availability of equipment, weather and other risks described in
the Company's Form 10-K for the year ended December 31, 2001 and
other filings with the Securities and Exchange Commission.
Updates First Quarter 2002 Operations
HOUSTON, May 2, 2002 -- Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) today
announced the operating results for the first quarter of 2002. In
the Company's core areas in South Texas and Louisiana, the Company
participated in the drilling of three gross exploratory wells, all
of which were successful, resulting in a 100 percent apparent success
rate for the quarter. As of the end of the quarter, two successful
wells were in process of being completed, or were awaiting pipeline
hookup to commence production, and drilling operations were underway
on one additional well.
Operating highlights during the first quarter of 2002 included
the following:
-- The previously announced "Staubach #1" well in the Matagorda
Project Area in Matagorda County, Texas, which logged 36 feet of
net pay in the overpressured Lower Frio section, commenced production
on January 28, 2002 at 2,094 bopd and 4,769 Mcf (17,333 Mcfe) per
day and is currently producing at an average daily rate of approximately
14,640 Mcfe per day. Carrizo owns a 35 percent working interest
before payout and a 29.75 percent working interest after payout
in the well, which is operated by Brigham Exploration Company (NASDAQ:BEXP).
A follow-up well, the "Burkhart #1" was spud on March 6, 2002 and
drilled to 10,720 feet, however on March 24, 2002, the well encountered
an unanticipated gas reservoir, causing a loss of surface control
of the well. The well was brought under control on March 28, 2002
and drilling is now underway on a relief/replacement well. Production during the first quarter of 2002 was estimated at 1.42
Bcfe, an increase of 22 percent over fourth quarter 2001 production
levels. Natural gas compromised 78 percent of first quarter production.
The Company estimates that first quarter 2002 sales prices averaged
approximately $2.46 per Mcf and $20.50 per barrel. These prices
exclude approximately $971,000 of first quarter hedging revenue
($0.88 per Mcf) attributable to hedges with Enron North America,
Inc., the collectibility of which is uncertain. The oil sales price
reflects the large volume of condensate production relative to total
oil production.
"We again achieved an exceptional 100 percent drilling success
during the first quarter," commented S.P. Johnson IV, Carrizo's
President and Chief Executive Officer. "In addition, we were able
to achieve a 22 percent increase in production over fourth quarter
2001 levels even though the LaRose well did not commence production
until the end of the quarter. While the drilling of the Burkhart
well in Matagorda has been delayed, the drilling of the replacement
well is progressing and the well is now at a depth of approximately
8,000 feet. The full impact of the production from the LaRose well
should be reflected in the second quarter. This incremental production,
along with the expected commencement of production from the Riverdale
#1 well, is expected to result in a further production gain for
the second quarter in a time of increased oil and gas prices."
Carrizo Oil & Gas, Inc., is a Houston-based energy company engaged
in the exploration, development, exploitation and production of
oil and natural gas in proven onshore trends primarily along the
Texas and Louisiana Gulf Coast regions. Carrizo controls significant
prospective acreage blocks and utilizes advanced 3-D seismic techniques
to identify potential oil and gas reserves and drilling opportunities.
Statements in this news release, including but not limited to
those relating to the results, potential effects, risk profiles,
schedule, prospects or estimates for current or future drilling
or wells, expected timing of commencement of production from the
Riverdale #1 well, expected impact of production from the LaRose
well and Riverdale #1 well on the second quarter of 2002 and expected
production gains in the second quarter, increasing oil and gas prices,
expected number of and timing of drilling of follow-up wells in
the LaRose Prospect area and other statements that are not historical
facts are forward looking statements that are based on current expectations.
Although the Company believes that its expectations are based on
reasonable assumptions, it can give no assurance that these expectations
will prove correct. Important factors that could cause actual results
to differ materially from those in the forward looking statements
include the results and dependence on exploratory drilling activities,
operating risks, oil and gas price levels, land issues, availability
of equipment, weather and other risks described in the Company's
Form 10-K for the year ended December 31, 2001 and its other filings
with the Securities and Exchange Commission. Drilling success rates
do not include the results of the Company's participation in coalbed
methane wells in Wyoming and Montana, the success of which will
be determined after further evaluation.
Announces Fourth Quarter and Year 2001 Financial Results
HOUSTON, March 20, 2002 -- Carrizo Oil & Gas, Inc. (NASDAQ:CRZO)
today reported the Company's financial results for the fourth quarter
and year ended December 31, 2001. Revenues for the year ended December
31, 2001 were $26.2 million as compared to $26.8 million during
the year ended December 31, 2000. Production volumes during the
year ended December 31, 2001 were 5.4 Bcfe as compared to 6.7 Bcfe
during 2000. The Company's average natural gas sales price increased
29 percent to $5.04 per Mcf from $3.90 per Mcf during 2000, while
the average oil sales price decreased 13 percent to $24.28 per barrel
from $27.81 per barrel a year ago. The above prices include the
cash effect of hedging activities.
EBITDA for the year ended December 31, 2001 increased to $21.1
million, as compared to $19.6 million for the year ended December
31, 2000, while Operating Cash Flow (cash flow from operating activities
before changes in assets and liabilities) during the year ended
December 31, 2001 decreased to $19.0 million, or $1.35 per basic
share, as compared to $19.3 million, or $1.38 per basic share, during
the year ended December 31, 2000. Operating income for the year
2001 reached a record level of $12.8 million. The Company reported
net income of $9.5 million, or $0.68 per basic share, for the year
ended December 31, 2001, as compared to $12.0 million, or $0.85
per basic share, for 2000. Year 2001 net income was lower compared
to the prior year level primarily as the year 2001 results included
a non-cash charge of $5.2 million ($0.37 per basic share) for deferred
federal income taxes compared to a similar charge of $902,000 ($0.06
per basic share) during the year 2000. Other income for the year
ended December 31, 2001 included a gain on the sale of an investment
in Michael Petroleum Corporation ("MPC") of $3.9 million offset
by (1) a charge and related legal expenses of $1.4 million in respect
of the final settlement of litigation with BNP Petroleum Corporation
and (2) a non-cash valuation allowance of $759,000 relating to certain
hedge arrangements with Enron North America Corp. The investment
in MPC was obtained by the Company in 2000 as a finder's fee paid
in the form of MPC common stock and resulted in $1.5 million of
other income included in the year 2000 financial results. Net income
for the year 2000 was negatively impacted by the recording of $652,000
of non-cash compensation expense as a result of increases in the
value of employee stock options during the year in accordance with
FASB Interpretation No. 44, while the results for the year 2001
included $558,000 of income related to the reversal of a portion
of such charges.
Oil and gas operating expenses, including production taxes, decreased
to $4.1 million during the year ended December 31, 2001, as compared
to $4.9 million during 2000, primarily as a result of lower production
taxes and the implementation of cost reduction measures in fields
with decreased production. On a per unit basis, excluding production
taxes, oil and gas operating expenses increased four percent to
$0.48 per Mcfe from $0.46 per Mcfe during 2000.
DD&A expenses were $6.5 million during year ended December 31,
2001 ($1.20 per Mcfe) as compared to $7.2 million ($1.08 per Mcfe)
during 2000. The decrease in DD&A expense was due to lower production,
while the increase in the DD&A rate was primarily due to additions
to the proved property cost base.
G&A expenses increased to $3.3 million during the year ended December
31, 2001 from $3.1 million during the same period of 2000. The increase
in G&A was due primarily to the addition of staff to handle increased
drilling activities. On a per unit basis, G&A increased to $0.62
per Mcfe during 2001 as compared to $0.47 per Mcfe during 2000.
Fourth Quarter 2001 Results -- Operating Cash Flow during the fourth quarter of 2001 was $2.6
million, or $0.18 per basic share, as compared to $6.2 million,
or $0.44 per basic share, during the fourth quarter of 2000. The
Company reported net income of $222,000, or $0.02 per basic share,
for the three months ended December 31, 2001, as compared to $3.5
million, or $0.25 per basic share, for the same quarter during 2000.
The fourth quarter 2001 results included a non- cash charge of $759,000
($0.05 per basic share) for a valuation allowance relating to certain
hedge arrangements with Enron North America Corp.
Oil and gas operating expenses, including production taxes, decreased
to $779,000 during the three months ended December 31, 2001 as compared
to $1.8 million during the fourth quarter of 2000, due to the implementation
of cost reduction measures on fields with lower production levels
and lower production taxes. On a per unit basis, excluding production
taxes, oil and gas operating expenses decreased to $0.48 per Mcfe
from $0.68 per Mcfe during the fourth quarter of 2000.
Depreciation, depletion and amortization expenses ("DD&A") were
$1.5 million during the three months ended December 31, 2001 ($1.29
per Mcfe) as compared to $1.7 million ($1.06 per Mcfe) during the
fourth quarter of 2000. The reduction in DD&A was due to lower production
levels while the increase in the DD&A rate was primarily due to
additions to the proved property cost base.
General and administrative expenses ("G&A") decreased to $898,000
during the three months ended December 31, 2001 from $941,000 during
the same quarter of 2000. The decrease in G&A was due to the elimination
of year end bonuses due to low prevailing oil and natural gas prices.
"The year 2001 was a successful year for Carrizo resulting in
another year of solid financial results," commented S.P. Johnson
IV, Carrizo's President and Chief Executive Officer. "We achieved
record operating income and EBITDA for the year, even though revenues
and net income were negatively affected in the fourth quarter due
to lower oil and gas prices and non-cash charges related to our
Enron hedge positions. We were able to achieve an 80 percent drilling
success level for the year, with 100 percent success on the seven
exploratory wells drilled in the fourth quarter, while drilling
deeper, higher potential wells and retaining higher average working
interest ownership. As a result, we replaced 275 percent of production
through new discoveries with year end reserve levels reaching 59
BCFE. Despite our drilling success, we experienced delays in the
commencement of production from new wells as a result of land and
pipeline issues, resulting in lower year-over-year production levels
consistent with typical well decline rates. Significant progress
has been made in this regard since year end, with five new wells
having commenced production, adding an estimated 7,000 Mcfe per
day of production net to Carrizo's interest. Four additional wells
are either in process of being completed or awaiting pipeline hookup,
including the "Louisiana Delta Farms #1" well, which is expected
to commence sales in the next ten days at an anticipated initial
gross production rate of 20,000 Mcfe per day (6,000 Mcfe net to
Carrizo's interest).
"Drilling operations are underway on two additional wells, including
a follow-up well to the successful 'Staubach #1' well in the Matagorda
County Project Area, which commenced production in late January
2002 at an initial gross production rate of over 17,000 Mcfe per
day (4,400 Mcfe net to Carrizo's interest). With the first quarter
gains in production levels, recent improvement in oil and gas prices,
our high-grade drilling prospect inventory and our recently announced
financing available to provide for increased drilling activity,
we are optimistic that 2002 will be another excellent growth year
for Carrizo."
Carrizo Oil & Gas, Inc., is a Houston-based energy company engaged
in the exploration, development, exploitation and production of
oil and natural gas primarily in proven onshore trends along the
Texas and Louisiana Gulf Coast regions. Carrizo controls significant
prospective acreage blocks and utilizes advanced 3-D seismic techniques
to identify potential oil and gas reserves and drilling opportunities.
Statements in this news release, including but not limited to
those relating to the results, potential, risk profiles, schedule,
number, prospects or estimates for current or future drilling of
wells, prospects for continued growth in 2002, increased levels
for drilling activity, expected timing of commencement and anticipated
initial gross production rate of production from the Louisiana Delta
Farms #1 well, improvement in oil and natural gas prices, high-grade
drilling prospect inventory, and other statements that are not historical
facts are forward looking statements that are based on current expectations.
Although the Company believes that its expectations are based on
reasonable assumptions, it can give no assurance that these expectations
will prove correct. Important factors that could cause actual results
to differ materially from those in the forward looking statements
include the results and dependence on exploratory drilling activities,
operating risks, oil and gas price levels, land issues, availability
of equipment, weather and other risks described in the Company's
Form 10-K for the year ended December 31, 2000 and its other filings
with the Securities and Exchange Commission.
Announces Closing of $6 Million Financing
HOUSTON, February 22, 2002-- Carrizo Oil & Gas, Inc. (NASDAQ:CRZO)
today announced the closing and funding of a $6 million financing
with an investor group led by Mellon Ventures, Inc. Pursuant to
the financing, the Company sold $6 million of a new series of convertible
participating preferred stock and warrants to purchase Carrizo common
stock. The proceeds of the Financing are expected to be used primarily
to fund the Company's ongoing exploration and development program.
The preferred stock is convertible into common stock by the investors
at a conversion price of $5.70 per share, subject to adjustment
and is initially convertible into 1,052,632 shares of common stock.
Dividends on the preferred stock will be payable in either cash
at a rate of 8 percent per annum or, at the Company's option, by
payment in kind of additional shares of the same series of preferred
stock at a rate of 10 percent per annum. The preferred stock is
redeemable in whole or in part at the holders' option after three
years or at the Company's option at any time. The warrants have
a five-year term and entitle the holders to purchase up to 252,632
shares of Carrizo's common stock at a price of $5.94 per share,
subject to adjustment, and are exercisable at any time after issuance.
Joining Mellon Ventures in the investor group was Steven A. Webster,
Carrizo's Chairman of the Board. Both Mellon Ventures and Webster
were also investors in the Company's 1999 financing which raised
$30 million.
"We enthusiastically welcome Mellon Ventures' and Steve Webster's
increased stake in our company and the continued confidence they
have shown in Carrizo," commented S.P. Johnson IV, Carrizo's President
and Chief Executive Officer. "This financing is being made possible
because of the success of Carrizo's drilling program this past year.
We expect the transactions to provide the additional capital needed
to accelerate the pace of exploration and development program in
our areas of our recent success, especially in the LaRose Prospect
Area in Louisiana, Matagorda Project Area in Matagorda County, Texas
and the Cabeza Creek Project Area in Goliad County, Texas."
The financing includes a shareholders' agreement among the investors,
the Company and the Company's founding shareholders providing for
certain preemptive rights for new securities issuances by the Company
and tag-along rights for certain sales by the founding shareholders.
The investors will be entitled to certain registration rights relating
to the common stock underlying preferred stock and the new warrants.
Carrizo Oil & Gas, Inc. is a Houston-based energy company engaged
in the exploration, development, exploitation and production of
oil and natural gas primarily in proved onshore trends along the
Texas and Louisiana Gulf Coast regions. Carrizo controls significant
prospective acreage blocks and utilizes advanced 3-D seismic techniques
to identify potential oil and gas reserves and drilling opportunities.
Statements in this news release, including but not limited to
those relating to the use of proceeds and effect of the Financing,
accelerated pace of exploration and development program and other
statements that are not historical facts are forward-looking statements
that are based on current expectations. Although the Company believes
that its expectations are based on reasonable assumptions, it can
give no assurance that these expectations will prove correct. Important
facts that could cause actual results to differ materially from
those in the forward-looking statements include results and dependence
on exploratory drilling activities, operating risks, capital requirements
and availability, dependence on key personnel, oil and gas price
levels, availability of drilling rigs, weather, land issues, matters
outside the Company's control and other risks described in the Company's
most recent 10-K and other filings with the Securities and Exchange
Commission.
ABOUT MELLON VENTURES:
Mellon Ventures, Inc., an affiliate of Mellon Financial Corporation,
makes equity-related investments of between $3 million and $25 million
in rapidly growing operating companies. With offices in Atlanta,
Los Angeles, New York, and Pittsburgh, Mellon Ventures, Inc. invests
at all stages of the growth cycle, from early stage venture capital
to later stage growth financings and buyouts. Mellon Ventures currently
has over $1.3 billion under management.
Updates Fourth Quarter 2001 Operations
HOUSTON, February 5, 2002 -- Carrizo Oil & Gas, Inc. (NASDAQ:CRZO)
today announced the operating results for the fourth quarter of
2001. In the Company's core areas in South Texas and Louisiana,
the Company participated in the drilling of seven gross exploratory
wells, all of which were successful, resulting in a 100 percent
apparent success rate for the quarter. As of the end of the quarter,
eight successful wells were in process of being completed, or were
awaiting pipeline hookup to commence production, and drilling operations
were underway on one additional well. During 2001, the Company participated
in the drilling of 25 gross wells in South Texas and Louisiana,
20 of which were successful, resulting in an 80 percent apparent
success rate for the year.
Operating highlights during the fourth quarter of 2001 included
the following:
-- The Company made another significant discovery with the "Staubach
#1" well in the Matagorda Project Area in Matagorda County, Texas,
which reached total depth of 13,500 feet on December 14, 2001 and
logged 36 feet of net pay in the overpressured Lower Frio section.
Carrizo owns a 35 percent working interest before payout and a 29.75
percent working interest after payout in the well, which is operated
by Brigham Exploration Company (NASDAQ:BEXP). The well tested at
2,200 Mcf of natural gas and 1,368 barrels of oil (10,400 Mcfe)
per day at flowing tubing pressure of 6,670 psi and commenced production
on January 28, 2002 at 2,094 bopd and 4,769 Mcf (17,333 Mcfe) per
day. The Company expects that additional follow- up drilling will
be necessary to fully develop the prospect.
-- The Company made another Wilcox discovery in the Cabeza Creek
Project Area in Goliad County, Texas with the "C. C. Ramsey et.
al. #1" well which reached total depth on December 24, 2001 and
logged approximately 17 feet of net pay in a Wilcox zone below 10,500
feet. Carrizo is the operator of the well and owns a 41.25 percent
working interest. The well was perforated, fracture stimulated and
tested at a rate of 2,682 Mcf and 181 barrels of condensate (3,768
Mcfe) per day at 5,250 psi flowing tubing pressure. The Company
is presently in process of installing production facilities and
expects the well to commence production in late March 2002.
-- The previously announced "Riverdale #2" well in the Company's
Cabeza Creek Project Area in Goliad County, Texas which logged 36
feet of net Wilcox pay, commenced production on October 22, 2001
and is continuing to produce at a rate of approximately 8,990 Mcfe
per day. Carrizo is the operator of the well and owns a 68.75 percent
working interest. The Company spudded a follow-up well targeting
deeper zones in the Riverdale Prospect area on January 7, 2002,
which is presently drilling at a depth of approximately 9,500 feet.
The well is expected to reach total depth of 12,200 feet later this
month.
-- The initial test well targeting the Cook Mountain formation
in the Company's Liberty Project Area in Liberty County, Texas,
the "Canter Gas Unit #1", reached total depth in October 2001 and
logged approximately 29 feet of net pay in the Cook Mountain sand
interval. The well has been completed and tested at a rate of 5,178
Mcfe per day at 5,100 psi flowing tubing pressure. Carrizo is the
operator of the well and owns a 70.03 percent working interest before
payout and a 53.6 percent working interest after payout. The well
is presently awaiting pipeline connection and is expected to commence
production in late February 2002. Several additional Cook Mountain
prospects have been identified and are being evaluated for drilling
during 2002.
-- The "Albrecht #1" well, a field extension of the successful
Luker #2 and Luker #3 wells in the Company's Cabeza Creek Project
Area in Goliad County, Texas reached total depth on November 11,
2001 and logged approximately 32 feet of net pay in a Wilcox sand
interval. Carrizo owns a 15.5 percent working interest in the well.
The well has been completed and commenced production on January
18, 2002 at a rate of 3,410 Mcfe per day.
-- The Company made another successful discovery in its Cedar
Point Project Area in Chambers County, Texas with the "Sterling
Unit #2" well, which spud on October 21, 2001 and reached total
depth on November 23, 2001. The well logged approximately 60 feet
of net pay in the Vicksburg section at a depth of approximately
10,400 feet. Carrizo is the operator of the well and owns a 12.5
percent working interest. The well was completed and commenced production
on January 22, 2002, and is presently producing at a rate of 3,419
Mcfe per day. The Company expects to increase the production rate
to 5,000 Mcfe per day later this week.
-- The Company made progress toward commencement of production
from the LaRose Prospect discovery well, the "Louisiana Delta Farms
#1" in Lafourche Parish, Louisiana. This well, which Carrizo operates,
logged over 100 feet of net pay in three Cris I sand intervals at
depths ranging from 13,500 feet to 15,300 feet. The well tested
at a gross rate of 11,650 Mcf of gas and 1,466 barrels of condensate
(20,446 Mcfe) per day with flowing tubing pressure of approximately
9,740 pounds per square inch from approximately 18 net feet of pay
from the deepest sand interval. During the fourth quarter, unitization
hearings were completed, setting the Company's working interest
at 40 percent. Production facilities are in place, the gas production
contracts have been finalized and the well is awaiting completion
of the pipeline. The Company expects the well to commence production
in the next 30 days at an anticipated initial rate of approximately
20,000 Mcfe per day. The Company currently holds approximately 1,150
gross acres of leases in the LaRose Prospect area and expects that
additional follow-up drilling will be necessary to fully develop
the prospect.
Production during the fourth quarter of 2001 was estimated at
1.21 Bcfe, of which 83 percent was natural gas production. The Company
estimates that fourth quarter 2001 sales prices, including the effect
of hedging activities, averaged approximately $3.71 per Mcf and
$18.47 per barrel. The natural gas sales price was positively affected
$1.15 per Mcf by hedging activities. These prices exclude approximately
$180,000 of fourth quarter hedging revenue ($0.18 per Mcf) attributable
to hedges with Enron North America, Inc., the collectibility of
which is uncertain. The oil sales price reflects the large volume
of condensate production relative to total oil production.
"Our drilling success in the fourth quarter was exceptional with
100 percent success on seven gross exploratory wells drilled below
10,500 feet," commented S.P. Johnson IV, Carrizo's President and
Chief Executive Officer. "Since mid 2001, we have made significant
new discoveries in Goliad County, Matagorda County and Lafourche
Parish, Louisiana which we expect will have a considerable effect
on our 2002 production levels. We expect a significant boost in
production during the first quarter of 2002 with the impact of production
from new wells described above, including the Staubach well. The
anticipated commencement of production from the Louisiana Delta
Farms and the C. C. Ramsey wells toward the end of the first quarter
should further enhance expected second quarter 2002 levels.
"With the apparent success of the C. C. Ramsey well, we have now
been successful on seven out of eight Wilcox wells drilled at Cabeza
Creek. We expect to focus our 2002 drilling program in these areas
of recent success, primarily in the Wilcox drilling program in the
Cabeza Creek Project Area, and continued development drilling in
the Matagorda Project Area and the LaRose Prospect area in Louisiana.
In this regard, the Company has budgeted approximately $14 million
for drilling and completion costs during 2002, and an additional
$3 million for land/leasing costs and geologic and geophysical expenditures.
We expect to adjust actual 2002 capital spending based upon actual
operating results and cash flow."
Carrizo Oil & Gas, Inc., is a Houston-based energy company engaged
in the exploration, development, exploitation and production of
oil and natural gas in proven onshore trends primarily along the
Texas and Louisiana Gulf Coast regions. Carrizo controls significant
prospective acreage blocks and utilizes advanced 3-D seismic techniques
to identify potential oil and gas reserves and drilling opportunities.
Statements in this news release, including but not limited to
those relating to the results, potential effects, risk profiles,
schedule, prospects or estimates for current or future drilling
or wells, expected LaRose well production level and the timing of
commencement of such production, expected boost in first quarter
and second quarter 2002 production levels, the expected effect of
new discoveries on 2002 production levels, expected timing of commencement
of production from the C. C. Ramsey well, the Canter Gas Unit well
and the Louisiana Delta Farms well, expected increase in the Sterling
Unit well rate of production, expected number of and timing of drilling
of follow-up wells (including the timing of reaching total depth
on the Riverdale well), expected 2002 capital expenditure levels,
areas of focus and adjustment thereto and other statements that
are not historical facts are forward looking statements that are
based on current expectations. Although the Company believes that
its expectations are based on reasonable assumptions, it can give
no assurance that these expectations will prove correct. Important
factors that could cause actual results to differ materially from
those in the forward looking statements include the results and
dependence on exploratory drilling activities, operating risks,
oil and gas price levels, land issues, availability of equipment,
weather and other risks described in the Company's Form 10-K for
the year ended December 31, 2000 and its other filings with the
Securities and Exchange Commission.
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