Carrizo Oil & Gas Announces Reserves Reach Record 210 Bcfe, Replacing 607 Percent of 2006 Production; Quarterly and Annual Produ
March 15 2007 - 7:15AM
PR Newswire (US)
HOUSTON, March 15 /PRNewswire-FirstCall/ -- Carrizo Oil & Gas,
Inc. (NASDAQ:CRZO) today announced the 2006 year-end reserves and
production for the fourth quarter and full year 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030523/CRZOLOGO ) Reserves
Year-end proved reserves were a record 210 Bcfe based on reports
from Carrizo's third-party reserve engineers. This is an increase
of 39 percent (net of 2006 production of 11.7 Bcfe) over the
year-end 2005 proved reserves of 150.6 Bcfe. Year-end PV-10 value
was $394 million, based upon average posted prices for natural gas
and oil of $5.40 per Mmbtu and $59.25 per Bbl, respectively. These
additions resulted in the Company replacing 607 percent of 2006
production. Barnett Shale reserves increased 64.5 Bcfe, or 79
percent, to 146.6 Bcfe. Gulf Coast reserves decreased slightly from
26.0 Bcfe to 25.8 Bcfe, almost replacing its production of 7.3
Bcfe. Camp Hill reserves decreased 5.0 Bcfe, or 12 percent, from
42.5 Bcfe to 37.5 Bcfe, primarily due to a small reduction in the
net acreage under lease. Efforts are underway to reacquire these
leases. Production Production during the fourth quarter of 2006 was
a record 3.66 Bcfe (39.7 Mmcfe/d), or 33.7 percent above the 2.73
Bcfe (29.7 Mmcfe/d) of production in the fourth quarter 2005 and
28.0 percent above the third quarter 2006 production. Estimated
annual production for 2006 reached a record level of 11.7 Bcfe
(32.1 Mmcfe/d), or 21.8 percent higher than the 9.6 Bcfe (26.3
Mmcfe/d) of production in 2005. The Company estimates that fourth
quarter 2006 sales prices, including the effect of hedging
activities, averaged approximately $6.76 per Mcf and $59.15 per
barrel. The natural gas sales price was benefited $0.59 per Mcf by
hedging activities. The oil sales price was benefited $0.06 per Bbl
by hedging activities. Approximately 88 percent of fourth quarter
production was natural gas, with 87 percent of total 2006
production being natural gas. Carrizo Oil & Gas, Inc., is a
Houston-based energy company actively 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 and the Barnett Shale area in North Texas.
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
reserves, sales, the Company's or management's intentions, beliefs,
expectations, hopes, projections, assessment of risks, estimations,
plans or predictions for the future including potential effects or
timing, timing of completion and drilling of wells 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 delays and uncertainties that may be encountered in
connection with 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, 2005, and its
other filings with the Securities and Exchange Commission. Note
Regarding Reserve Replacement Ratio Management uses the reserve
replacement ratio as an indicator of the Company's ability to
replenish annual production volumes and grow its reserves, thereby
providing some information on the sources of future production.
Management believes reserve replacement information is frequently
used by analysts, investors and others in the industry to evaluate
the performance of companies like Carrizo. The reserve replacement
ratio is calculated by dividing the sum of reserve additions from
all sources (revisions, extensions, discoveries, and other
additions and acquisitions) by the actual production for the
corresponding period. The Company does not use unproved reserve
quantities in calculating the reserve replacement ratio. It should
be noted that the reserve replacement ratio is a statistical
indicator that has limitations. As an annual measure, the ratio is
limited because it typically varies widely based on the extent and
timing of new discoveries and property acquisitions. Its predictive
and comparative value is also limited for the same reasons. In
addition, since the ratio does not take into consideration the cost
or timing of future production of new reserves, it cannot be used
as a measure of value creation. The ratio does not distinguish
between changes in reserve quantities that are producing and those
that will require additional time and funding to begin producing.
In that regard, it might be noted that the percentage of the
Company's proved developed reserves increased from approximately 35
percent in 2005 to approximately 40 percent in 2006. The reserve
replacement ratio for 2005 was 530 percent. Carrizo Oil & Gas,
Inc. B. Allen Connell, Director of Investor Relations Paul F.
Boling, Chief Financial Officer (713) 328-1000
http://www.newscom.com/cgi-bin/prnh/20030523/CRZOLOGO
http://photoarchive.ap.org/ DATASOURCE: Carrizo Oil & Gas, Inc.
CONTACT: B. Allen Connell, Director of Investor Relations, or Paul
F. Boling, Chief Financial Officer, +1-713-328-1000, both of
Carrizo Oil & Gas, Inc.
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