Carrizo Oil & Gas Provides Operational Update and Announces Earnings Release Date
October 25 2010 - 6:12AM
Marketwired
Carrizo Oil & Gas, Inc. (NASDAQ: CRZO)
today released an update to its production results. The Company's
production for the third quarter of 2010 was 8.6 Bcfe or an average
of 93.4 Mmcfe per day. A delay in the completion of natural gas
transport pipeline capacity expansion (serving our core Barnett
Shale properties in S.E.Tarrant County, Texas) by our midstream
partner extended the period that our production was partially
constrained, resulting in the average production rate for the
quarter to be below expectations. The pipeline expansion was
completed in late September and the Company's production in the
first half of October has averaged approximately 120 Mmcfe/d.
Carrizo's EBITDA for the third quarter will reflect the benefit
of a $20.8 million cash dividend payment from its Marcellus Shale
joint venture partner, Avista Capital Partners in connection with
the sale of their interest to Reliance Industries. EBITDA for the
fourth quarter of 2010 is expected to include the benefit of
additional cash dividend payments from Avista totaling
approximately $23 million. In order to allow for the investment of
this cash dividend and the additional cash proceeds from Carrizo's
transaction with Reliance, the Carrizo Board of Directors raised
the 2010 capital expenditures budget by $55 million from $225
million to $280 million. Net capital expenditures in 2010, after
offsetting for the estimated total proceeds expected from the
Reliance transaction and the equity offering proceeds in April 2010
of $74 million, is an estimated $149 million.
The company's fifth Eagle Ford well in central La Salle County,
Texas is nearing total depth in the drilling of the horizontal leg
and a frac crew is on location pumping the initial stages of the
completion of Carrizo's first Eagle Ford well. The vertical portion
of the company's first Niobrara well has been drilled and logged in
Township 9 North, Range 60 West of Weld County, Colorado. The
drilling of the horizontal portion of this well has just
commenced.
Carrizo President and CEO S. P. "Chip" Johnson, IV commented,
"The compression installation and completion of transport
interconnects necessary to accommodate the ramp-up in production
volumes from the Arlington area was completed nearly two weeks
later than the date given us by our midstream partner. This delay
in timing had a material effect on our third quarter average
production. The new Barnett wells recently added to production have
been performing at or above our expectations and our current
production volumes are in-line with our internal projections. We
have a number of wells that have been drilled, frac'ed, and are
waiting on the addition of compression and/or connection to gas
gathering systems. Our midstream partner has notified us of
scheduling delays for connecting up three new well pads which will
delay first production from two of these new pads until late
November or early December. First production from the third new
well pad is not expected until early to mid January. Accordingly,
we currently estimate our fourth quarter production will average
around 120 Mmcfe per day and our 2010 exit rate will be
approximately 127 Mmcfe per day. We used the cash generated by our
Marcellus related transactions to accelerate the pace of our move
into the Eagle Ford and Niobrara liquids rich plays, including our
decision to add a fifth horizontal Eagle Ford well to our 2010
program. This investment should contribute to a significant
increase in our oil to gas production mix going forward. In
addition, the cash dividends from Avista improve our overall
liquidity and financial flexibility under our borrowing base".
Carrizo will hold a conference call to discuss 2010 third
quarter financial results on Tuesday, November 9 at 10:00 AM
Central Time. Carrizo plans to issue an earnings press release
prior to the market opening on Tuesday, November 9th.
Date & Time: Tuesday, November 9 at 10:00 AM Central Time
Dial-In Number: (800) 909-4145 (U.S. & Canada)
(212) 231-2900 (Intl./Local)
Telephone Replay Number: (800) 633-8284 (U.S. & Canada)
(402) 977-9140 (Intl./Local)
Enter Replay Reservation #: 21485945 for U.S., Canadian and International callers.
Replay available through Wednesday, November 17, 2010 at 11:59
AM Central Time.
A simultaneous webcast of the call may be accessed over the
internet at http://www.investorcalendar.com/IC/CEPage.asp?ID=162223
or by visiting our website at http://www.crzo.net, clicking on
"Investor Relations" and then clicking on "2010 Third Quarter
Earnings Conference Call Webcast." To listen, please go to either
website in time to register and install any necessary software. The
webcast will be archived for replay on the Carrizo website for 15
days.
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 the Barnett Shale in
North Texas, the Marcellus Shale in Appalachia, the Niobrara
Formation in Colorado, the Eagle Ford Shale in South Texas, and 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. Carrizo also
controls large acreage positions in other productive shale resource
plays.
EBITDA is a non-GAAP Financial Measure
We define EBITDA as net income (loss) before income tax expense,
interest expense, depreciation and amortization expense and certain
other items management believes affect the comparability of
operating results. The GAAP measure most directly comparable to
EBITDA is net income (loss) available to common shareholders. We
believe that EBITDA may provide additional information about our
ability to meet our future requirements for debt service, capital
expenditures and working capital. EBITDA is a financial measure
commonly used in the oil and gas industry and should not be
considered in isolation or as a substitute for net income,
operating income, cash flows from operating activities or any other
measure of financial performance presented in accordance with
generally accepted accounting principles or as a measure of a
company's profitability or liquidity. Because EBITDA excludes some,
but not all, items that affect net income, the EBITDA presented by
us may not be comparable to similarly titled measures of other
companies.
Statements in this news release that are not historical facts,
including but not limited to those related to production, new
production, production mix, drilling, fracturing, stimulation,
completion, seismic activities, future locations, performance of
drilling rigs, future development plans, distribution payments and
future announcements and timing, are forward-looking statements
that are based on current expectations. Although Carrizo 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
results of wells and production testing, performance of rig
operators, actions by joint venture partners, industry partners and
lenders, market and other conditions, availability of well
connects, capital needs and uses, commodity price changes, effects
of the global financial crisis on exploration activity, results of
and dependence on exploratory drilling activities, operating risks,
land issues, weather, and other risks described in Carrizo's Form
10-K for the year ended December 31, 2009 and its other filings
with the Securities and Exchange Commission.
Contact: Carrizo Oil & Gas, Inc. Richard Hunter Vice
President of Investor Relations Paul F. Boling Chief Financial
Officer (713) 328-1000
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