Carrizo Oil & Gas, Inc. (Nasdaq:CRZO) today
announced the Company’s financial results for the fourth quarter of
2015 and provided an operational update, which includes the
following highlights:
- Record Oil Production of 24,942 Bbls/d, 13% above the
fourth quarter of 2014
- Record Total Production of 40,159 Boe/d, 7% above the
fourth quarter of 2014
- Loss From Continuing Operations of $380.7 million, or
($6.73) per diluted share, and Adjusted Net Income (as defined
below) of $18.5 million, or $0.32 per diluted share
- Adjusted EBITDA (as defined below) of $112.1
million
- Delivered 246% reserve replacement from all sources
with a drill-bit F&D cost of $15.40 per Boe
- Announcing 2016 drilling and completion capital
expenditure plan of $270-$290 million
- Announcing 2016 crude oil production growth target of
8%
Carrizo reported a fourth quarter of 2015 loss
from continuing operations of $380.7 million, or $6.73 per basic
and diluted share compared to income from continuing operations of
$129.5 million, or $2.84 and $2.79 per basic and diluted share,
respectively, in the fourth quarter of 2014. The loss from
continuing operations for the fourth quarter of 2015 includes
certain items typically excluded from published estimates by the
investment community, including the full cost ceiling test
impairment recognized this quarter. Adjusted net income, which
excludes the impact of these items as described in the statements
of operations included below, for the fourth quarter of 2015 was
$18.5 million, or $0.33 and $0.32 per basic and diluted share,
respectively, compared to $14.8 million, or $0.32 per basic and
diluted share in the fourth quarter of 2014.
For the fourth quarter of 2015, adjusted
earnings before interest, income taxes, depreciation, depletion,
and amortization, as described in the statements of operations
included below (“Adjusted EBITDA”), was $112.1 million, a decrease
of 13% from the prior year quarter as the impact of lower commodity
prices more than offset the impact of higher production
volumes.
Production volumes during the fourth quarter of
2015 were 3,695 MBoe, or 40,159 Boe/d, an increase of 7% versus the
fourth quarter of 2014. The year-over-year production growth was
driven by strong results from the Company’s Eagle Ford assets. Oil
production during the fourth quarter of 2015 averaged 24,942
Bbls/d, an increase of 13% versus the fourth quarter of 2014 and 6%
versus the prior quarter; natural gas and NGL production averaged
67,110 Mcf/d and 4,032 Bbls/d, respectively, during the fourth
quarter of 2015. Fourth quarter of 2015 production exceeded the
high end of Company guidance due primarily to strong performance
from the Company’s Eagle Ford assets.
Drilling and completion capital expenditures for
the fourth quarter of 2015 were $104.5 million. More than 75% of
the fourth quarter drilling and completion spending was in the
Eagle Ford. Land and seismic expenditures during the quarter were
$9.5 million.
Given the decline in commodity prices, Carrizo
is reducing its planned capital spending in 2016 vs. 2015.
Carrizo's initial 2016 drilling and completion plan is $270-$290
million, a decrease of nearly 45% from the 2015 level. This level
of spending should allow the Company to run one to two rigs in the
Eagle Ford during the year as well as continue to test its acreage
in the Delaware Basin. The Company’s initial land and seismic
capital expenditure plan is $15 million.
Based on this level of activity, Carrizo is
providing initial 2016 oil production guidance of 24,700-25,300
Bbls/d. Using the midpoint of this range, the Company’s 2016 oil
production growth guidance is 8%. For natural gas and NGLs, Carrizo
is providing initial 2016 guidance of 45-60 MMcf/d and 3,700-4,000
Bbls/d, respectively. For the first quarter of 2016, Carrizo
expects oil production to be 24,800-25,200 Bbls/d, and natural gas
and NGL production to be 60-64 MMcf/d and 3,800-4,000 Bbls/d,
respectively. Additionally, Carrizo currently expects crude oil
production in the fourth quarter of 2016 to exceed crude oil
production in the fourth quarter of 2015. A summary of Carrizo’s
production, commodity price realization, and cost guidance is
provided in the attached tables.
S.P. “Chip” Johnson, IV, Carrizo’s President and
CEO, commented on the results, “We wrapped up a challenging year
with another strong quarter operationally, with production again
exceeding our forecast and operating expenses coming in below our
forecast. We remain focused on further driving down costs and
improving efficiencies throughout our operations. Additionally, we
are seeing the benefit of our overhead reduction initiatives, which
should result in an approximate 15% reduction in our annual cash
G&A expense this year. Financially, we ended the year with a
solid liquidity position as we had an undrawn revolver and a strong
2016 hedge book. This, coupled with our deep inventory of some of
the lowest break-even-cost assets in the industry, has us well
positioned to manage the current environment and quickly ramp up
production once we get an appropriate commodity price signal.
“Despite the substantial reduction in commodity
prices from 2014 to 2015, the Company was still able to grow its
proved reserves by 13% during the year. This speaks to the highly
economical nature of our reserves in the Eagle Ford, where we
currently believe that more than 80% of our drilling inventory is
economical below $40/Bbl WTI.
“Our primary focus in the current commodity
price environment is protecting our balance sheet. As a result, we
are reducing our drilling and completion capital expenditure plan
by nearly 45% for 2016. However, despite the significant reduction,
we still expect to keep our oil production roughly flat with the
fourth quarter of 2015. While the current program is focused on the
Eagle Ford, it also provides us with the flexibility to continue
testing our Delaware Basin acreage and manage our leasehold in
other areas. Based on the current commodity price strip, we believe
this plan optimizes our cash flow, liquidity, and leverage metrics
not just in 2016, but also in future years. The plan also provides
the Company with enough flexibility to quickly increase or decrease
activity in response to further changes in the commodity price
outlook.”
2015 Proved Reserves
The Company’s proved reserves as of December 31,
2015 were 170.6 MMBoe, a 13% increase over year-end 2014, including
a record 109.6 MMBbls of crude oil, a 9% increase over year-end
2014. The Company’s PV-10 value was $1.4 billion as of December 31,
2015.
The table below summarizes the Company’s
year-end 2015 proved reserves and PV-10 by region as determined by
the Company’s independent reservoir engineers, Ryder Scott Company,
L.P. in accordance with Securities and Exchange Commission
guidelines, using pricing for the twelve months ended December 31,
2015 based on the West Texas Intermediate benchmark crude oil price
of $50.28/Bbl and the Henry Hub benchmark natural gas price of
$2.58/MMBtu, before adjustment for differentials.
|
|
|
|
|
|
|
|
|
Crude Oil |
NGLs |
Natural Gas |
Total |
PV-10 |
Region |
|
(MMBbl) |
(MMBbl) |
(Bcf) |
(MMBoe) |
($MM) |
Eagle Ford |
|
105.8 |
|
19.0 |
|
115.4 |
|
144.0 |
|
$ |
1,255.3 |
|
Niobrara |
|
2.8 |
|
0.5 |
|
3.4 |
|
3.9 |
|
|
40.3 |
|
Marcellus |
|
— |
|
— |
|
118.8 |
|
19.8 |
|
|
42.2 |
|
Utica |
|
0.6 |
|
0.4 |
|
5.4 |
|
1.9 |
|
|
16.9 |
|
Delaware Basin and
other |
|
0.4 |
|
0.3 |
|
1.9 |
|
1.0 |
|
|
10.5 |
|
Total |
|
109.6 |
|
20.2 |
|
244.9 |
|
170.6 |
|
$ |
1,365.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below summarizes the changes in the
Company’s proved reserves during 2015.
|
|
|
|
|
|
|
|
Crude Oil |
NGLs |
Natural Gas |
Total |
|
|
(MMBbl) |
(MMBbl) |
(Bcf) |
(MMBoe) |
Proved reserves
- December 31, 2014 |
|
100.7 |
|
13.5 |
|
221.0 |
|
151.1 |
|
Revisions of previous
estimates |
|
(9.1 |
) |
2.8 |
|
11.8 |
|
(4.4 |
) |
Extensions and
discoveries |
|
26.4 |
|
5.3 |
|
33.9 |
|
37.3 |
|
Production |
|
(8.4 |
) |
(1.4 |
) |
(21.8 |
) |
(13.4 |
) |
Proved reserves
- December 31, 2015 |
|
109.6 |
|
20.2 |
|
244.9 |
|
170.6 |
|
Proved
developed - December 31, 2015 |
|
42.3 |
|
7.9 |
|
154.7 |
|
76.0 |
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes the Company’s
costs incurred in oil and gas property acquisition, exploration,
and development activities for the year ended December 31,
2015.
|
|
|
|
|
Total |
|
|
($MM) |
Property acquisition
costs |
|
|
Proved property acquisition
costs |
|
$ |
— |
|
Unproved property acquisition
costs |
|
|
63.5 |
|
Total property acquisition
costs |
|
|
63.5 |
|
Exploration costs |
|
|
117.2 |
|
Development costs |
|
|
389.4 |
|
Total costs
incurred (1) |
|
$ |
570.1 |
|
|
|
|
|
|
(1) Total costs incurred includes capitalized general and
administrative expense and asset retirement obligations and
excludes capitalized interest.
2015 highlights include:
- Total reserve replacement was 246% at an all sources F&D
cost of $17.33 per Boe
- Drill-bit reserve replacement was 246% at an F&D cost of
$15.40 per Boe
- Excluding negative price-related revisions of 15.8 MMBoe,
drill-bit reserve replacement was 363% at an F&D cost of $10.40
per Boe
- Drill-bit reserve replacement in the Eagle Ford was 324% at an
F&D cost of $12.82 per Boe
- Eagle Ford reserves increased to 144.0 MMBoe, an 18% increase
from the 122.5 MMBoe at year-end 2014
- Crude oil represents 64% of total proved reserves and 88% of
the total PV-10 value at December 31, 2015
- Proved developed reserves increased to 76.0 MMBoe at year-end
2015, a 16% increase from the 65.5 MMBoe at year-end 2014
- 45% of total proved reserves at December 31, 2015 are
classified as proved developed, compared to 43% at year-end
2014
Operational Update
In the Eagle Ford, Carrizo drilled 17 gross
(16.8 net) operated wells during the fourth quarter and completed
13 gross (12.8 net) wells. Crude oil production from the play rose
to more than 22,300 Bbls/d for the quarter, up from about 20,700
Bbls/d in the prior quarter. At the end of the quarter, Carrizo had
29 gross (27.3 net) operated Eagle Ford wells waiting on
completion, equating to net crude oil production potential of
approximately 10,200 Bbls/d. The Company is operating two rigs in
the Eagle Ford and currently expects to drill approximately 49
gross (46 net) operated wells and complete 56 gross (53 net)
operated wells in the play during 2016.
Carrizo is testing multiple initiatives aimed at
significantly increasing its Lower Eagle Ford drilling inventory on
its existing acreage position. The Company continues to see
encouraging results from its remaining 330 ft. downspacing tests,
and currently has production online from three pads testing even
tighter spacing through various stagger-stack configurations within
the Lower Eagle Ford. The stagger-stack pads are currently testing
effective lateral spacing ranging from 165 ft. to 280 ft. which, if
successful, could increase Carrizo's drilling inventory by 200 to
more than 800 net locations relative to a single layer development
plan at 330 ft. spacing. The pads have been online for periods
ranging from three to four months, and to date, the Company has not
seen any data that would indicate a stagger-stack development is
not feasible. However, more production history is needed to
determine optimal spacing. Carrizo plans to provide an update on
the results of these initiatives later this year.
During 2015, Carrizo also began production from
its initial Upper Eagle Ford test. The well has been on production
for 115 days, and had a 30-day peak rate of 395 Boe/d (93% oil).
While the well experienced a lower initial production rate relative
to the Company's Lower Eagle Ford wells, it has also exhibited a
shallower decline. Importantly, the Upper Eagle Ford formation does
appear to be acting independently of the Lower Eagle Ford, adding
another layer of potential to the Company's development options in
the region. Carrizo currently estimates that the Upper Eagle Ford
could add approximately 50 net locations to its inventory count.
While the Company does not currently expect to allocate much
near-term capital to the Upper Eagle Ford, Carrizo currently
believes it is able to hold all of its Upper Eagle Ford rights with
wells drilled in the Lower Eagle Ford.
The Company continues to improve its drilling
efficiency in the Eagle Ford, with recent leading edge
spud-to-total-depth drilling times now becoming more the norm as it
has further optimized its drilling program using the two newbuild
rigs it received in 2015. As a result, the Company drilled
approximately 2.8 long-lateral wells per rig per month in the
fourth quarter, up from approximately 2.4 in the prior quarter.
Carrizo’s position in the Eagle Ford remains in
excess of 84,000 net acres. As the Company believes that the Eagle
Ford is one of the lowest break-even cost plays in the U.S.,
Carrizo continues to look for opportunities to add to its acreage
position in the current environment.
In the Delaware Basin, Carrizo has drilled five
gross operated wells to test the Wolfcamp Shale, including three
wells drilled during the fourth quarter. All five wells are located
along the border of Culberson and Reeves counties in Texas and have
targeted the Wolfcamp A bench. The Company was able to
significantly improve its drilling efficiency over the period as
the most efficient well was drilled in 24 days, down from 44 days
for the initial well after excluding the additional time to drill
the pilot hole. Carrizo expects to reduce the average time between
spud and rig release to 15-20 days. Based on this, the Company
believes future drilling and completion costs should be
approximately $7.5 million for a long-lateral well. To date, three
of the wells have been completed, with the third recently starting
flowback. Due to a fire at a third-party operated midstream
facility in December, the initial two wells are presently shut-in.
The Company currently expects to complete at least one of its
remaining drilled-but-uncompleted wells during 2016.
Carrizo's first operated well in the Delaware
Basin, the Mustang State 1H, began flowback in October. The well
was drilled with an approximate 7,250 ft. lateral and completed
with 33 frac stages. Prior to the third-party plant fire, the
well's peak 30-day rate was 823 Boe/d (43% oil). In January,
Carrizo elected to isolate a portion of the wellbore and test 3,000
ft. of lateral (approximately 14 frac stages) in the heel, which
appears to have treated more effectively. The Company produced this
section of the well for eight days at an average rate of 832 Boe/d
(37% oil) before shutting the well in. Normalizing this test data
for a full length lateral implies outperformance relative to the
nearest industry offset well. Carrizo operates the Mustang well
with an approximate 82% working interest. Carrizo's second operated
well, the Avenger State 1H, produced for 44 days before being
shut-in. At that time, the well was producing approximately 240
Boe/d (50% oil), with production still increasing. The Company
considered this well to have higher geologic risk as it was drilled
near a fault, and the test data confirmed a higher water cut.
Carrizo operates the Avenger well with an 87% working interest.
Data from both of these wells will aid the Company in future well
location and frac design.
At the end of the year, Carrizo held an interest
in approximately 22,000 net acres in the Delaware Basin. Given the
significant decline in commodity prices since the third quarter
update, the Company has elected to withdraw the majority of the
acquisition offers it had previously disclosed. Carrizo continues
to like the potential of the Delaware Basin and seeks to expand its
acreage position in the play over time.
In the Niobrara Formation, Carrizo completed 8
gross (4.4 net) wells during the quarter. Crude oil production from
the Niobrara was more than 1,900 Bbls/d for the quarter, down from
approximately 2,000 Bbls/d in the prior quarter due to the
Company's limited activity in the play. For 2016, Carrizo has
allocated a small amount of capital to the Niobrara for the
completion of several drilled-but-uncompleted wells as well as
lease maintenance activity.
In Appalachia, which encompasses the Company's
Utica and Marcellus positions, Carrizo did not drill or complete
any operated wells during the fourth quarter. Oil and condensate
production from the Utica during the quarter was approximately 460
Bbls/d, down relative to the third quarter as no new operated wells
were added in the play. In the dry gas window of the Marcellus, the
Company's production increased to 41.6 MMcf/d from 26.7 MMcf/d in
the prior quarter as the Company was able to obtain improved
pricing during the winter months and accordingly reduced its
voluntary production curtailments. As was the case in 2015, Carrizo
expects to vary its 2016 Marcellus production based on local market
pricing. If pricing deteriorates materially from current levels,
the Company would expect to increase its volume curtailments.
However, if regional pricing were to materially improve, the
Company could significantly ramp up its Marcellus production.
Carrizo does not currently plan to drill or complete any wells in
Appalachia during 2016.
Financial Position and
Liquidity
As of December 31, 2015, Carrizo had total
debt outstanding of $1,254.4 million and cash and cash equivalents
of $42.9 million. Net Debt to Adjusted EBITDA (as defined by the
agreement governing the revolving credit facility and based on the
trailing four quarters) was 2.7x for the fourth quarter. The
borrowing base on the Company’s senior credit facility is currently
$685.0 million, and as of February 19, 2016, Carrizo had nothing
drawn on the facility.
Hedging Activity
Carrizo currently has hedges in place for
approximately 60% of estimated crude oil production for 2016 (based
on the midpoint of guidance). For the year, the Company has hedges
covering approximately 14,800 Bbls/d of crude oil (comprised of
9,315 Bbls/d of swaps at an average price of $60.03/Bbl and 5,492
Bbls/d of collars at a weighted average floor price of $50.97/Bbl
and a weighted average ceiling price of $74.73/Bbl). Additionally,
Carrizo will receive $44.8 million of cash flow during 2016
relating to the offsetting hedge transactions it entered into
during the first quarter of 2015.
The Company has recently begun adding crude oil
hedges for 2017. For the first half of 2017, Carrizo has swaps
covering 6,000 Bbls/d of crude oil at a fixed price of $50.27/Bbl.
Additionally, Carrizo will receive $2.7 million of cash flow during
the first quarter of 2017 relating to the offsetting hedge
transactions it entered into during the first quarter of 2015.
(Please refer to the attached tables for a detailed summary of the
Company’s derivative contracts.)
Conference Call Details
The Company will hold a conference call to
discuss 2015 fourth quarter and year-end financial results on
Tuesday, February 23, 2016 at 10:00 AM Central Standard Time. To
participate in the call, please dial (800) 406-9725 (U.S. &
Canada) or +1 (303) 223-4375 (Intl.) ten minutes before the
call is scheduled to begin. A replay of the call will be available
through Tuesday, March 1, 2016 at 12:00 PM Central Standard Time at
(800) 633-8284 (U.S. & Canada) or +1 (402) 977-9140
(Intl.). The reservation number for the replay is 21806344 for
U.S., Canadian, and International callers.
A simultaneous webcast of the call may be
accessed over the internet by visiting our website at
http://www.carrizo.com, clicking on “Upcoming Events”, and then
clicking on “Fourth Quarter and Year-end 2015 Earnings Call
Webcast.” To listen, please go to the website in time to register
and install any necessary software. The webcast will be archived
for replay on the Carrizo website for 7 days.
Carrizo Oil & Gas, Inc. is a Houston-based
energy company actively engaged in the exploration, development,
and production of oil and gas from resource plays located in the
United States. Our current operations are principally focused in
proven, producing oil and gas plays primarily in the Eagle Ford
Shale in South Texas, the Delaware Basin in West Texas, the Utica
Shale in Ohio, the Niobrara Formation in Colorado, and the
Marcellus Shale in Pennsylvania.
Statements in this release that are not
historical facts, including but not limited to those related to
capital requirements, capital expenditure and other spending plans,
economical basis of wells or inventory, rig program, effect of
transactions offsetting hedge positions, production, average well
returns, acquisitions, effects of transactions, targeted ratios and
other metrics, the ability to acquire additional acreage, midstream
infrastructure availability and capacity, timing, levels of and
potential production, downspacing, crude oil production potential
and growth, oil and gas prices, drilling and completion activities,
drilling inventory, including timing thereof, resource potential,
well costs, production mix, development plans, growth, midstream
matters, use of proceeds, hedging activity, the ability to maintain
a sound financial position, the Company’s or management’s
intentions, beliefs, expectations, hopes, projections, assessment
of risks, estimations, plans or predictions for the future, results
of the Company’s strategies, expected income tax rates 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 assumptions regarding well costs, estimated recoveries,
pricing and other factors affecting average well returns, results
of wells and testing, failure of actual production to meet
expectations, performance of rig operators, spacing test results,
availability of gathering systems, costs of oilfield services,
actions by governmental authorities, joint venture partners,
industry partners, lenders and other third parties, actions by
purchasers or sellers of properties, satisfaction of closing
conditions, integration and effects of acquisitions, market and
other conditions, availability of well connects, capital needs and
uses, commodity price changes, effects of the global economy on
exploration activity, results of and dependence on exploratory
drilling activities, operating risks, right-of-way and other land
issues, availability of capital and equipment, weather, and other
risks described in the Company’s Form 10-K for the year ended
December 31, 2015 and its other filings with the U.S. Securities
and Exchange Commission. There can be no assurance any transaction
described in this press release will occur on the terms or timing
described, or at all.
Non-GAAP Measures
This release makes reference to adjusted EBITDA,
adjusted net income, adjusted total revenues, discretionary cash
flows from continuing operations, PV-10 value, all sources and
drill-bit F&D cost, all sources and drill-bit reserve
replacement and drill-bit F&D cost and reserve replacement
excluding the impact of negative price related revisions of
previously estimated proved reserves, all of which are non-GAAP
measures.
The following table reconciles the standardized
measure of future net cash flows, the most directly comparable GAAP
measure, to the PV-10 value of the Company’s proved reserves as of
December 31, 2015.
|
|
|
Reconciliation of Standardized Measure of Discounted Future
Net Cash Flows (GAAP)to PV-10 Value
(Non-GAAP) |
|
As of December 31, 2015 (in
millions) |
Standardized measure of
discounted future net cash flows (GAAP) |
|
$ |
1,365.2 |
|
Add: present value of
future income taxes discounted at 10% per annum |
|
|
— |
|
PV-10 value
(Non-GAAP) |
|
$ |
1,365.2 |
|
|
|
|
|
|
(Financial Highlights to Follow)
|
CARRIZO OIL & GAS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended December
31, |
|
Year Ended December 31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Revenues |
|
|
|
|
|
|
|
Crude oil |
$ |
86,542 |
|
|
$ |
140,882 |
|
|
$ |
376,094 |
|
|
$ |
610,483 |
|
Natural gas liquids |
|
4,006 |
|
|
|
5,381 |
|
|
|
15,608 |
|
|
|
25,050 |
|
Natural gas |
|
8,874 |
|
|
|
17,012 |
|
|
|
37,501 |
|
|
|
74,654 |
|
Total revenues |
|
99,422 |
|
|
|
163,275 |
|
|
|
429,203 |
|
|
|
710,187 |
|
Cash received (paid)
for derivative settlements, net |
|
52,387 |
|
|
|
11,970 |
|
|
|
194,296 |
|
|
|
(13,529 |
) |
Adjusted total
revenues |
|
151,809 |
|
|
|
175,245 |
|
|
|
623,499 |
|
|
|
696,658 |
|
Costs and
Expenses |
|
|
|
|
|
|
|
Lease operating |
|
22,748 |
|
|
|
23,155 |
|
|
|
90,052 |
|
|
|
74,157 |
|
Production taxes |
|
4,370 |
|
|
|
6,878 |
|
|
|
17,683 |
|
|
|
29,544 |
|
Ad valorem taxes |
|
2,243 |
|
|
|
2,881 |
|
|
|
9,255 |
|
|
|
8,450 |
|
Cash general and administrative,
net |
|
10,327 |
|
|
|
13,879 |
|
|
|
51,430 |
|
|
|
51,151 |
|
Total costs and expenses |
|
39,688 |
|
|
|
46,793 |
|
|
|
168,420 |
|
|
|
163,302 |
|
Adjusted
EBITDA, as defined |
$ |
112,121 |
|
|
$ |
128,452 |
|
|
$ |
455,079 |
|
|
$ |
533,356 |
|
Adjusted EBITDA per
common share-Basic |
$ |
1.98 |
|
|
$ |
2.81 |
|
|
$ |
8.84 |
|
|
$ |
11.76 |
|
Adjusted EBITDA per
common share-Diluted |
$ |
1.96 |
|
|
$ |
2.77 |
|
|
$ |
8.73 |
|
|
$ |
11.55 |
|
|
|
|
|
|
|
|
|
Other items of
expense included in Adjusted Net Income, as defined |
|
|
|
|
|
|
|
Depreciation, depletion and
amortization |
$ |
65,577 |
|
|
$ |
88,471 |
|
|
$ |
300,035 |
|
|
$ |
317,383 |
|
Interest expense, net |
|
17,792 |
|
|
|
16,614 |
|
|
|
69,195 |
|
|
|
53,171 |
|
Adjusted income before
income taxes |
|
28,752 |
|
|
|
23,367 |
|
|
|
85,849 |
|
|
|
162,802 |
|
Adjusted income tax
expense |
|
(10,263 |
) |
|
|
(8,529 |
) |
|
|
(30,648 |
) |
|
|
(59,423 |
) |
Adjusted Net
Income, as defined |
$ |
18,489 |
|
|
$ |
14,838 |
|
|
$ |
55,201 |
|
|
$ |
103,379 |
|
Adjusted net income per
common share-Basic |
$ |
0.33 |
|
|
$ |
0.32 |
|
|
$ |
1.07 |
|
|
$ |
2.28 |
|
Adjusted net income per
common share-Diluted |
$ |
0.32 |
|
|
$ |
0.32 |
|
|
$ |
1.06 |
|
|
$ |
2.24 |
|
|
|
|
|
|
|
|
|
Other items of
income (expense) included in Income (Loss) From Continuing
Operations |
|
|
|
|
|
|
|
Non-cash gain (loss) on
derivatives, net |
$ |
4,278 |
|
|
$ |
178,784 |
|
|
$ |
(95,035 |
) |
|
$ |
215,436 |
|
Non-cash general and administrative
(expense) benefit, net |
|
(2,018 |
) |
|
|
2,331 |
|
|
|
(15,794 |
) |
|
|
(25,878 |
) |
Impairment of oil and gas
properties |
|
(411,615 |
) |
|
— |
|
|
|
(1,224,367 |
) |
|
— |
|
Loss on extinguishment of debt |
— |
|
|
— |
|
|
|
(38,137 |
) |
|
— |
|
Other expense, net |
|
(487 |
) |
|
|
(614 |
) |
|
|
(11,276 |
) |
|
|
(2,150 |
) |
Income (Loss)
From Continuing Operations Before Income Taxes |
|
(381,090 |
) |
|
|
203,868 |
|
|
|
(1,298,760 |
) |
|
|
350,210 |
|
Income tax (expense)
benefit |
|
419 |
|
|
|
(74,417 |
) |
|
|
140,875 |
|
|
|
(127,927 |
) |
Income (Loss)
From Continuing Operations |
$ |
(380,671 |
) |
|
$ |
129,451 |
|
|
$ |
(1,157,885 |
) |
|
$ |
222,283 |
|
Income From
Discontinued Operations, Net of Income Taxes |
|
506 |
|
|
|
4,808 |
|
|
|
2,731 |
|
|
|
4,060 |
|
Net Income
(Loss) |
$ |
(380,165 |
) |
|
$ |
134,259 |
|
|
$ |
(1,155,154 |
) |
|
$ |
226,343 |
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Per Common Share - Basic |
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
$ |
(6.73 |
) |
|
$ |
2.84 |
|
|
$ |
(22.50 |
) |
|
$ |
4.90 |
|
Income from
discontinued operations, net of income taxes |
|
0.01 |
|
|
|
0.10 |
|
|
|
0.05 |
|
|
|
0.09 |
|
Net income (loss) |
$ |
(6.72 |
) |
|
$ |
2.94 |
|
|
$ |
(22.45 |
) |
|
$ |
4.99 |
|
|
|
|
|
|
|
|
|
Net Income
(Loss) Per Common Share - Diluted |
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
$ |
(6.73 |
) |
|
$ |
2.79 |
|
|
$ |
(22.50 |
) |
|
$ |
4.81 |
|
Income from
discontinued operations, net of income taxes |
|
0.01 |
|
|
|
0.10 |
|
|
|
0.05 |
|
|
|
0.09 |
|
Net income (loss) |
$ |
(6.72 |
) |
|
$ |
2.89 |
|
|
$ |
(22.45 |
) |
|
$ |
4.90 |
|
|
|
|
|
|
|
|
|
Weighted
Average Common Shares Outstanding |
|
|
|
|
|
|
|
Basic |
|
56,544 |
|
|
|
45,656 |
|
|
|
51,457 |
|
|
|
45,372 |
|
Diluted |
|
57,094 |
|
|
|
46,455 |
|
|
|
52,105 |
|
|
|
46,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARRIZO OIL & GAS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands, except share and per share data) |
(Unaudited) |
|
|
|
|
|
|
|
December 31, 2015 |
|
December 31, 2014 |
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
42,918 |
|
|
$ |
10,838 |
|
Accounts receivable, net |
|
|
54,721 |
|
|
|
92,946 |
|
Derivative assets |
|
|
131,100 |
|
|
|
171,101 |
|
Other current assets |
|
|
3,443 |
|
|
|
3,736 |
|
Total current assets |
|
|
232,182 |
|
|
|
278,621 |
|
Property and
equipment |
|
|
|
|
Oil and gas properties, full cost
method |
|
|
|
|
Proved properties, net |
|
|
1,369,151 |
|
|
|
2,086,727 |
|
Unproved properties, not being
amortized |
|
|
335,452 |
|
|
|
535,197 |
|
Other property and equipment,
net |
|
|
12,258 |
|
|
|
7,329 |
|
Total property and equipment,
net |
|
|
1,716,861 |
|
|
|
2,629,253 |
|
Deferred income
taxes |
|
|
46,758 |
|
|
|
— |
|
Derivative assets |
|
|
1,115 |
|
|
|
43,684 |
|
Debt issuance
costs |
|
|
24,873 |
|
|
|
25,403 |
|
Other assets |
|
|
5,116 |
|
|
|
4,515 |
|
Total
Assets |
|
$ |
2,026,905 |
|
|
$ |
2,981,476 |
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable |
|
$ |
74,065 |
|
|
$ |
106,819 |
|
Revenues and royalties payable |
|
|
67,808 |
|
|
|
66,954 |
|
Accrued capital expenditures |
|
|
39,225 |
|
|
|
106,149 |
|
Accrued interest |
|
|
21,981 |
|
|
|
21,149 |
|
Liabilities of discontinued
operations |
|
|
2,666 |
|
|
|
4,405 |
|
Deferred income taxes |
|
|
46,758 |
|
|
|
61,258 |
|
Other current liabilities |
|
|
32,981 |
|
|
|
57,570 |
|
Total current liabilities |
|
|
285,484 |
|
|
|
424,304 |
|
Long-term debt |
|
|
1,255,676 |
|
|
|
1,351,346 |
|
Liabilities of
discontinued operations |
|
|
1,088 |
|
|
|
8,394 |
|
Deferred income
taxes |
|
|
— |
|
|
|
77,349 |
|
Asset retirement
obligations |
|
|
16,183 |
|
|
|
12,187 |
|
Derivative
liabilities |
|
|
12,648 |
|
|
|
17 |
|
Other liabilities |
|
|
11,772 |
|
|
|
4,438 |
|
Total liabilities |
|
|
1,582,851 |
|
|
|
1,878,035 |
|
Commitments and
contingencies |
|
|
|
|
Shareholders’
equity |
|
|
|
|
Common stock, $0.01 par value,
90,000,000 shares authorized; 58,332,993 issued and outstanding as
of December 31, 2015 and 46,127,924 issued and outstanding as of
December 31, 2014 |
|
|
583 |
|
|
|
461 |
|
Additional paid-in capital |
|
|
1,411,081 |
|
|
|
915,436 |
|
Retained earnings (Accumulated
deficit) |
|
|
(967,610 |
) |
|
|
187,544 |
|
Total shareholders’ equity |
|
|
444,054 |
|
|
|
1,103,441 |
|
Total
Liabilities and Shareholders’ Equity |
|
$ |
2,026,905 |
|
|
$ |
2,981,476 |
|
|
|
|
|
|
|
|
|
|
|
|
CARRIZO OIL & GAS, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FROM
OPERATING ACTIVITIES |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December
31, |
|
Year Ended December 31, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
|
Cash Flows From
Operating Activities |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(380,165 |
) |
|
$ |
134,259 |
|
|
$ |
(1,155,154 |
) |
|
$ |
226,343 |
|
Income from
discontinued operations, net of income taxes |
|
|
(506 |
) |
|
|
(4,808 |
) |
|
|
(2,731 |
) |
|
|
(4,060 |
) |
Adjustments to
reconcile income (loss) from continuing operations to net cash
provided by operating activities from continuing operations |
|
|
|
|
|
|
|
|
Depreciation, depletion and
amortization |
|
|
65,577 |
|
|
|
88,471 |
|
|
|
300,035 |
|
|
|
317,383 |
|
Impairment of oil and gas
properties |
|
|
411,615 |
|
|
— |
|
|
|
1,224,367 |
|
|
— |
|
(Gain) loss on derivatives,
net |
|
|
(56,665 |
) |
|
|
(190,754 |
) |
|
|
(99,261 |
) |
|
|
(201,907 |
) |
Cash received (paid) for derivative
settlements, net |
|
|
52,387 |
|
|
|
11,970 |
|
|
|
194,296 |
|
|
|
(13,529 |
) |
Loss on extinguishment of debt |
|
— |
|
|
— |
|
|
|
38,137 |
|
|
— |
|
Stock-based compensation, net |
|
|
5,526 |
|
|
|
(2,331 |
) |
|
|
14,729 |
|
|
|
25,878 |
|
Deferred income taxes |
|
|
(337 |
) |
|
|
74,417 |
|
|
|
(140,875 |
) |
|
|
127,927 |
|
Non-cash interest expense, net |
|
|
725 |
|
|
|
2,251 |
|
|
|
4,289 |
|
|
|
4,272 |
|
Other, net |
|
|
1,155 |
|
|
|
4,084 |
|
|
|
5,709 |
|
|
|
2,379 |
|
Changes in operating
assets and liabilities- |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
2,386 |
|
|
|
433 |
|
|
|
29,781 |
|
|
|
(1,334 |
) |
Accounts payable |
|
|
5,498 |
|
|
|
(5,786 |
) |
|
|
(12,617 |
) |
|
|
27,238 |
|
Accrued liabilities |
|
|
(11,903 |
) |
|
|
2,277 |
|
|
|
(17,517 |
) |
|
|
(3,096 |
) |
Other, net |
|
|
(777 |
) |
|
|
(895 |
) |
|
|
(4,453 |
) |
|
|
(5,219 |
) |
Net cash
provided by operating activities from continuing
operations |
|
$ |
94,516 |
|
|
$ |
113,588 |
|
|
$ |
378,735 |
|
|
$ |
502,275 |
|
Changes in working capital
attributable to operating activities and other non-recurring items,
net |
|
|
564 |
|
|
|
3,971 |
|
|
|
6,780 |
|
|
|
(16,906 |
) |
Discretionary
cash flows from continuing operations |
|
$ |
95,080 |
|
|
$ |
117,559 |
|
|
$ |
385,515 |
|
|
$ |
485,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARRIZO OIL & GAS, INC. |
PRODUCTION VOLUMES AND REALIZED PRICES |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended December
31, |
|
Year Ended December 31, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Total
production volumes - |
|
|
|
|
|
|
|
|
Crude oil (MBbls) |
|
|
2,295 |
|
|
|
2,036 |
|
|
|
8,415 |
|
|
|
6,906 |
|
NGLs (MBbls) |
|
|
371 |
|
|
|
278 |
|
|
|
1,352 |
|
|
|
926 |
|
Natural gas (MMcf) |
|
|
6,174 |
|
|
|
6,926 |
|
|
|
21,812 |
|
|
|
24,877 |
|
Total barrels of oil
equivalent (MBoe) |
|
|
3,695 |
|
|
|
3,468 |
|
|
|
13,402 |
|
|
|
11,978 |
|
|
|
|
|
|
|
|
|
|
Daily
production volumes by product - |
|
|
|
|
|
|
|
|
Crude oil (Bbls/d) |
|
|
24,942 |
|
|
|
22,130 |
|
|
|
23,054 |
|
|
|
18,921 |
|
NGLs (Bbls/d) |
|
|
4,032 |
|
|
|
3,022 |
|
|
|
3,705 |
|
|
|
2,537 |
|
Natural gas (Mcf/d) |
|
|
67,110 |
|
|
|
75,283 |
|
|
|
59,758 |
|
|
|
68,156 |
|
Total barrels of oil
equivalent (Boe/d) |
|
|
40,159 |
|
|
|
37,696 |
|
|
|
36,719 |
|
|
|
32,816 |
|
|
|
|
|
|
|
|
|
|
Daily
production volumes by region (Boe/d) - |
|
|
|
|
|
|
|
|
Eagle Ford |
|
|
29,058 |
|
|
|
25,220 |
|
|
|
26,377 |
|
|
|
21,131 |
|
Niobrara |
|
|
2,642 |
|
|
|
2,846 |
|
|
|
2,957 |
|
|
|
2,585 |
|
Marcellus |
|
|
6,934 |
|
|
|
8,748 |
|
|
|
5,850 |
|
|
|
8,354 |
|
Utica |
|
|
1,219 |
|
|
|
629 |
|
|
|
1,286 |
|
|
|
288 |
|
Delaware Basin and other |
|
|
306 |
|
|
|
253 |
|
|
|
249 |
|
|
|
458 |
|
Total barrels of oil
equivalent (Boe/d) |
|
|
40,159 |
|
|
|
37,696 |
|
|
|
36,719 |
|
|
|
32,816 |
|
|
|
|
|
|
|
|
|
|
Realized prices
- |
|
|
|
|
|
|
|
|
Crude oil ($ per Bbl) |
|
$ |
37.71 |
|
|
$ |
69.20 |
|
|
$ |
44.69 |
|
|
$ |
88.40 |
|
Crude oil ($ per Bbl) -
including impact of derivative settlements |
|
$ |
58.11 |
|
|
$ |
74.69 |
|
|
$ |
65.67 |
|
|
$ |
87.06 |
|
NGLs ($ per Bbl) |
|
$ |
10.80 |
|
|
$ |
19.36 |
|
|
$ |
11.54 |
|
|
$ |
27.05 |
|
Natural gas ($ per Mcf) |
|
$ |
1.44 |
|
|
$ |
2.46 |
|
|
$ |
1.72 |
|
|
$ |
3.00 |
|
Natural gas ($ per Mcf) -
including impact of derivative settlements |
|
$ |
2.34 |
|
|
$ |
2.57 |
|
|
$ |
2.53 |
|
|
$ |
2.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARRIZO OIL & GAS, INC. |
COMMODITY DERIVATIVE CONTRACTS - AS OF FEBRUARY 19,
2016 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
CRUDE OIL DERIVATIVE CONTRACTS
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
Weighted Average |
|
|
|
|
Volume |
|
Floor Price |
|
Ceiling Price |
Period |
|
Type of Contract |
|
(in Bbls/d) |
|
($/Bbl) |
|
($/Bbl) |
Q1 2016 |
|
Fixed Price Swaps |
|
8,000 |
|
$ |
60.03 |
|
|
|
|
|
Costless Collars |
|
10,000 |
|
$ |
52.13 |
|
|
$ |
72.60 |
|
Q2 2016 |
|
Fixed Price Swaps |
|
9,750 |
|
$ |
60.03 |
|
|
|
|
|
Costless Collars |
|
4,000 |
|
$ |
50.00 |
|
|
$ |
76.50 |
|
Q3 2016 |
|
Fixed Price Swaps |
|
9,750 |
|
$ |
60.03 |
|
|
|
|
|
Costless Collars |
|
4,000 |
|
$ |
50.00 |
|
|
$ |
76.50 |
|
Q4 2016 |
|
Fixed Price Swaps |
|
9,750 |
|
$ |
60.03 |
|
|
|
|
|
Costless Collars |
|
4,000 |
|
$ |
50.00 |
|
|
$ |
76.50 |
|
|
|
|
|
|
|
|
|
|
Q1 - Q2 2017 |
|
Fixed Price Swaps |
|
6,000 |
|
$ |
50.27 |
|
|
|
|
|
|
|
|
|
|
|
|
FY 2018 |
|
Sold Call Options |
|
3,388 |
|
|
|
$ |
63.98 |
|
|
|
|
|
|
|
|
|
|
FY 2019 |
|
Sold Call Options |
|
3,875 |
|
|
|
$ |
65.98 |
|
|
|
|
|
|
|
|
|
|
FY 2020 |
|
Sold Call Options |
|
4,575 |
|
|
|
$ |
67.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NATURAL GAS DERIVATIVE CONTRACTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
|
|
|
Volume |
|
Ceiling Price |
Period |
|
Type of Contract |
|
(in MMBtu/d) |
|
($/MMBtu) |
FY 2017 |
|
Sold Call Options |
|
33,000 |
|
$ |
3.00 |
|
|
|
|
|
|
|
|
FY 2018 |
|
Sold Call Options |
|
33,000 |
|
$ |
3.25 |
|
|
|
|
|
|
|
|
FY 2019 |
|
Sold Call Options |
|
33,000 |
|
$ |
3.25 |
|
|
|
|
|
|
|
|
FY 2020 |
|
Sold Call Options |
|
33,000 |
|
$ |
3.50 |
|
|
|
|
|
|
|
|
|
|
(1) On February 11, 2015, Carrizo entered into derivative
transactions offsetting its existing crude oil derivative contracts
covering the periods from March 2015 through December 2016. Both
the existing crude oil derivative contracts as well as the
offsetting positions have been excluded from the table above. As a
result, in addition to the net cash to be paid or received from
settlements of the derivative contracts listed above, Carrizo will
receive cash from, and will recognize revenue and Adjusted EBITDA
for, the offsetting transactions as follows:
|
FIXED REVENUE AND ADJUSTED
EBITDAFROM OFFSETTING HEDGE
TRANSACTIONS |
|
|
|
Period |
|
Net Cash from Derivative
Settlements(in thousands) |
Q1 2016 |
|
$ |
18,338 |
|
Q2 2016 |
|
$ |
9,266 |
|
Q3 2016 |
|
$ |
9,266 |
|
Q4 2016 |
|
$ |
7,912 |
|
|
|
|
Q1 2017 |
|
$ |
2,695 |
|
|
|
|
|
|
|
CARRIZO OIL & GAS, INC. |
FIRST QUARTER AND FULL YEAR 2016 GUIDANCE SUMMARY |
|
|
|
|
|
|
|
|
|
First Quarter 2016 |
|
Full Year 2016 |
Daily Production Volumes - |
|
|
|
|
|
Crude oil (Bbls/d) |
|
24,800
- 25,200 |
|
24,700
- 25,300 |
|
NGLs (Bbls/d) |
|
3,800
- 4,000 |
|
3,700
- 4,000 |
|
Natural gas
(Mcf/d) |
|
60,000
- 64,000 |
|
45,000
- 60,000 |
|
Total (Boe/d) |
|
38,600
- 39,867 |
|
35,900
- 39,300 |
|
|
|
|
|
|
Unhedged Commodity Price Realizations - |
|
|
|
|
|
Crude oil (% of NYMEX
oil) |
|
84.0%
- 86.0% |
|
N/A |
|
NGLs (% of NYMEX
oil) |
|
18.0%
- 23.0% |
|
N/A |
|
Natural gas (% of NYMEX
gas) |
|
64.0%
- 69.0% |
|
N/A |
|
|
|
|
|
|
Cash
received for derivative settlements, net (in millions) |
|
$49.0
- $52.0 |
|
N/A |
|
|
|
|
|
|
Costs and Expenses - |
|
|
|
|
|
Lease operating
($/Boe) |
|
$6.25
- $6.75 |
|
$6.50
- $7.25 |
|
Production taxes (% of
total revenues) |
|
4.25%
- 4.50% |
|
4.25%
- 4.75% |
|
Ad valorem taxes (in
millions) |
|
$2.0 -
$2.5 |
|
$9.0 -
$11.0 |
|
Cash general and
administrative, net (in millions) |
|
$12.0
- $12.5 |
|
$42.5
- $44.5 |
|
DD&A ($/Boe) |
|
$15.00
- $16.00 |
|
$14.00
- $16.00 |
|
|
|
|
|
|
Drilling
and completion capital expenditures (in millions) |
|
N/A |
|
$270.0
- $290.0 |
|
|
|
|
|
Contact:
Jeffrey P. Hayden, CFA, VP - Investor Relations
(713) 328-1044
Kim Pinyopusarerk, Manager - Investor Relations
(713) 358-6430
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