Carrizo Oil & Gas, Inc.'s (Nasdaq:CRZO) senior
management is hosting an analyst conference today to provide an
update on the company's current operations and future plans. The
presentation includes the following key highlights:
- Initiating 2015 crude oil production growth target of
17%
- Announcing 2015 drilling and completion capital
expenditure plan of $450-$470 million
- Reporting preliminary Q4'14 crude oil production of
22,130 Bbl/d, above the high-end of guidance
- Increasing average Eagle Ford Shale per-well EURs to
510 MBoe from 499 MBoe
- Decreasing average expected Eagle Ford Shale well costs
to $5.8 million
- Confirming 40-acre downspacing in the Niobrara B
bench
- Reporting initial results from the Brown 1H well in the
Utica Shale, which delivered a recent 6-day rate of 502 Bbl/d of
condensate and 1.1 MMcf/d of rich gas on a 16/64"
choke
S.P. "Chip" Johnson, IV, Carrizo's President and CEO, commented,
"2014 was a record year for Carrizo as we delivered crude oil
production growth of approximately 63%. While 2015 looks to be a
more challenging year given the sell-off in commodity prices, our
combination of high-return assets, operational flexibility, and
solid balance sheet have us well positioned to manage the downturn
and be able to take advantage of opportunities that may arise. For
2015, we're trimming our drilling and completion capital
expenditure plan by ~35%, but still expect to keep oil production
roughly flat with the fourth quarter of 2014. This should maintain
our strong balance sheet and also allow us to quickly resume rapid
oil production growth once prices recover."
"Given the decline in commodity prices, we have been working
diligently to reduce our service costs. As an example, we have
achieved cost savings of ~12% from late 2014 levels in the Eagle
Ford Shale, and expect this to increase to ~20% by year-end. If
commodity prices stay at depressed levels, we would expect service
costs to decline further."
"We are pleased with the results from our second well in the
Utica Shale, the Brown 1H. This was an updip test of our acreage in
the play and helps de-risk our western acreage position. We plan to
perform an extended flow test on the well to better understand the
reservoir performance in this part of the play."
Operational Update
In the Eagle Ford Shale, Carrizo is increasing its type curve
EUR for the play to 510 MBoe per well from 499 MBoe due to
continued strong performance across its position. Additionally,
through the combination of continued improvements in operating
efficiency and service cost reductions, Carrizo now expects
completed well costs to average $5.8 million by the fourth quarter
of 2015.
In the Utica Shale, Carrizo's second well, the Brown 1H in
Guernsey County, was brought online January 15, 2015. From January
16 through January 21, the well averaged 502 Bbl/d of condensate
and 1.1 MMcf/d of rich natural gas on a 16/64" choke. Carrizo is
encouraged by the early results from the Brown 1H well, which was
an updip test of the company's acreage on the western side of its
position. Carrizo is the operator of the Brown 1H well, and holds a
50% working interest in it.
In the Niobrara formation, Carrizo has tested 40-acre spacing in
the B bench at five separate pilots spread across its acreage
position. Based on the analysis of these well results, combined
with an analysis of non-operated results, Carrizo has adjusted its
development in Area 1 and part of Area 2 to include 40-acre spacing
vs. 60-acre spacing previously. This adds approximately 75 net
locations to the company's drilling inventory in the play.
Additionally, as the added locations are in the Company's
higher-return areas of the play, Carrizo is increasing its type
curve EUR for the play to 275 MBoe per well from 253 MBoe; the
Company's type curve EUR excludes wells that are not economical
below $80/Bbl.
2015 Production and Capital Spending
Outlook
Given the decline in commodity prices, Carrizo is reducing its
planned capital spending in 2015 vs. 2014. Carrizo's initial 2015
drilling and completion plan is $450-$470 million, a decrease of
approximately 35% vs. the 2014 level. This level of spending should
allow the Company to run three rigs in the Eagle Ford during the
year as well as participate in lease maintenance activity in the
Niobrara and Utica. Carrizo expects to be able to easily manage its
leasehold obligations during the year with its 2015 plan. The
Company's initial 2015 land and seismic capital expenditure plan in
$35 million.
Carrizo is providing initial 2015 oil production guidance of
21,800-22,400 Bbls/d. Using the midpoint of this range, the
Company's 2015 oil production growth guidance equates to 17%. For
natural gas and NGLs, Carrizo is providing initial 2015 guidance of
65-75 MMcfe/d; this assumes the Company voluntarily curtails a
larger amount of volumes in the Marcellus Shale in 2015 vs. 2014
due to depressed local market prices. For the first quarter of
2015, Carrizo expects oil production to be 20,300-20,700 Bbls/d and
natural gas and NGL production to be 63-73 MMcfe/d. A summary of
Carrizo's production and cost guidance is provided in the attached
tables.
Fourth Quarter 2014 Update
Preliminary estimates of production volumes during the fourth
quarter of 2014 were 37,699 Boe/d. Preliminary estimates of oil
production during the quarter averaged 22,130 Bbls/d, while
preliminary estimates of natural gas and NGL production averaged
93,413 Mcfe/d. Based on these preliminary estimates, production
during the fourth quarter exceeded the high end of Company
guidance. Carrizo's preliminary estimate of net cash from
derivative settlements during the fourth quarter is $12.0 million.
Updated cost guidance for the quarter is provided in the attached
tables.
Webcast Details
The Company plans to webcast its analyst conference today. The
management presentation is scheduled to begin at 9:00 am Central
Time, and the webcast of the presentation as well as the slide book
used can be accessed on the Carrizo website at
http://www.carrizo.com under the "Investor Relations" section. A
replay of the event will be available until April 26, 2015.
Carrizo Oil and Gas,
Inc. |
Fourth Quarter 2014,
First Quarter 2015, and Full Year 2015 Guidance
Summary |
|
|
Fourth Quarter
2014 |
First Quarter
2015 |
Full Year 2015 |
Daily Production Volumes |
|
|
|
Crude Oil (Bbl/d) |
22,130 |
20,300 - 20,700 |
21,800 - 22,400 |
Natural Gas and NGLs (Mcfe/d) |
93,413 |
63,000 - 73,000 |
65,000 - 75,000 |
Total (Boe/d) |
37,699 |
30,800 - 32,867 |
32,633 - 34,900 |
|
|
|
|
Net Cash from Derivative Settlements (in
millions) |
$12.0 |
N/A |
N/A |
|
|
|
|
Costs and Expenses |
|
|
|
Lease Operating ($/Boe) |
$6.65 - $6.75 |
$6.75 - $7.50 |
$6.75 - $7.50 |
Production Taxes (% of oil and gas
revenues) |
4.15% - 4.30% |
4.25% - 4.75% |
4.25% - 4.75% |
Ad Valorem Taxes (in millions) |
$2.9 - $3.0 |
$2.8 - $3.8 |
$11.0 - $15.0 |
General and Administrative (in
millions) |
$13.9 - $14.2 |
$18.5 - $19.0 |
$54.0 - $56.0 |
DD&A ($/Boe) |
$26.50 - $27.50 |
N/A |
N/A |
|
|
|
|
Drilling & Completion Capital Expenditure
Plan (in millions) |
$186.2 |
N/A |
$450.0 - $470.0 |
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
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, production, average
well returns, effects of transactions, targeted ratios and other
metrics, the ability to acquire additional acreage, midstream
infrastructure availability and capacity, timing and levels of
production, downspacing, crude oil production potential and growth,
oil and gas prices, downspacing results, drilling and completion
activities, drilling inventory, including timing thereof,
production mix, development plans, growth, midstream matters, use
of proceeds, hedging activity, 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 production testing, failure of actual production to
meet expectations, performance of rig operators, availability of
gathering systems, actions by governmental authorities, joint
venture partners, industry partners, lenders and other third
parties, actions by purchasers of properties, satisfaction of
closing conditions, integration 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, 2013 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.
CONTACT: Jeffrey P. Hayden, CFA, VP - Investor Relations
(713) 328-1044
David L. Pitts, Chief Financial Officer
(713) 328-1000
Carrizo Oil and Gas (NASDAQ:CRZO)
Historical Stock Chart
From Jun 2024 to Jul 2024
Carrizo Oil and Gas (NASDAQ:CRZO)
Historical Stock Chart
From Jul 2023 to Jul 2024