Carrizo Oil & Gas Announces Delaware Basin Acquisition
August 14 2018 - 4:05PM
Business Wire
Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today
announced that it has agreed to acquire Delaware Basin properties
from Devon Energy Corporation (Devon) for $215 million in cash,
subject to customary closing adjustments. Subject to market
conditions, the Company plans to fund the purchase price with net
proceeds from an equity offering announced concurrently with this
release.
Acquisition Highlights
- Approximately 10,600 gross (9,600 net)
acres located in the Delaware Basin in Reeves and Ward counties,
with the majority of the position adjacent to the Company’s
existing acreage
- High degree of operational control with
more than 90% of net acreage operated
- Minimal near-term drilling obligations
as 94% of the acreage is held by production
- Low average royalty of approximately
20%
- Net production of approximately 2,500
Boe/d (60% oil)
- More than 100 net potential de-risked
drilling locations identified across the Wolfcamp A and B based on
7,000-ft. laterals, with significant upside potential from
additional zones, further delineation, and future downspacing
- Includes salt-water disposal wells that
can be integrated into the Company’s system
- Significant opportunities to generate
efficiencies from increased scale, extension of lateral lengths,
and integration of infrastructure
The acquisition is currently expected to close during the fourth
quarter of 2018 and increases the Company’s acreage position in the
Delaware Basin to approximately 46,000 net acres on a pro forma
basis.
S.P. “Chip” Johnson, IV, Carrizo’s President and CEO, commented
on the acquisition, “This acquisition is an excellent fit with our
existing Phantom-area acreage and meaningfully increases our scale
in the area. Upon completion of the transaction, we will hold
approximately 26,300 net acres in our Phantom area and 46,000 net
acres in the Delaware Basin. The acquisition materially increases
our inventory of de-risked drilling locations in the area as well
as offers significant upside potential from delineating the entire
position and testing additional zones. The acreage also has a high
degree of operational control and minimal near-term drilling
obligations. As a result, we expect to seamlessly integrate these
assets into our existing development plan for the area, which
currently assumes a ramp-up in activity in the second half of 2019
as Permian pipeline takeaway is forecast to increase. Over time, we
see the potential to achieve meaningful efficiencies through
optimizing future large-scale pad development, drilling
longer-lateral wells, and integrating the existing infrastructure
within our system.”
Carrizo has posted a presentation to its website at http://www.carrizo.com that provides maps and
additional details on the properties to be acquired. The
presentation can be found by clicking on “Investor Relations” and
then “Presentations.”
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 and
the Permian Basin in West Texas.
Statements in this release that are not historical facts,
including but not limited to those related to our ability to
realize integration or any other expected benefits or effects of
any acquisition, the timing, final purchase price or consummation
of the acquisition, capital requirements, upside potential, future
downspacing, integration, effect on activity, opportunities for
efficiencies, ability to market production, capital expenditure,
guidance, production, the estimated production results and
financial performance, effects of transactions, targeted ratios and
other metrics, timing, levels of and potential production,
expectations regarding growth, oil and gas prices, drilling and
completion activities, drilling locations, including timing
thereof, 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 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
satisfaction of closing conditions of the acquisition, failure of
the acquisition to close, failure to realize the anticipated
benefits of the acquisition, effects of purchase price adjustments,
market conditions, integration and other acquisition risks, results
of typical post-signing diligence, exercise of third party purchase
rights under area of mutual interest provisions under joint
operating agreement, the results and timing of settlement of the
proposed equity offering or alternate financing, midstream
agreement provisions, transportation issues, well costs, estimated
recoveries, results of wells and testing, failure of actual
production to meet expectations, results of infrastructure program,
performance of rig operators, spacing test results, availability of
gathering systems, costs and availability of oilfield services,
actions by governmental authorities, joint venture partners,
industry partners, lenders and other third parties, actions by
purchasers or sellers of properties, risks and effects of
acquisitions and dispositions, market and other conditions, risks
regarding financing, capital needs, 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, 2017 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. In addition, the information
regarding the acquisition in this press release assumes the party
to a joint operating agreement with the Company does not exercise
its right to purchase 20% of the acreage covered by the area of
mutual interest after the closing of the acquisition.
This press release shall not constitute an offer to sell, or a
solicitation of an offer to buy, any securities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180814005702/en/
Carrizo Oil & Gas, Inc.Jeffrey P. Hayden,
CFAVP - Investor Relations(713)
328-1044orKim PinyopusarerkManager - Investor
Relations(713) 358-6430
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