SOURCE: Carrizo Oil & Gas, Inc.

Carrizo Oil & Gas, Inc.

December 07, 2010 06:30 ET

Carrizo Oil & Gas Releases Operations Update

HOUSTON, TX--(Marketwire - December 7, 2010) - Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) today in anticipation of an investor presentation to be delivered in New Orleans is providing the following operational update on the Company's activities. The Company's third Eagle Ford Shale well to be brought on production, the Pierce 10H, located in La Salle County, Texas, was production tested over 24 hours beginning on December 2nd. This well flowed 1,035 barrels of oil per day (bopd) and 3,085 thousand cubic feet per day (mcfpd) of high BTU content natural gas. As of noon on December 6th, this well was producing at a controlled rate of 600 bopd and 2,326 mcfd of natural gas is currently being flared. Carrizo owns a 100% working interest and a 75% net revenue interest in this well. Carrizo's previously announced two-well pad, the Mumme lease, is currently producing at a controlled rate of 1,260 bopd and flaring 1,800 mcfpd of gas. The initial production results from these two wells were announced on November 30, 2010. The Company anticipates that the Mumme and the Pierce wells will be connected to gas gathering systems and Eagle Ford natural gas sales will commence at approximately 3,450 mcfpd before the end of this year.

In the Niobrara Formation, fracture stimulation has been completed on Carrizo's first Niobrara well, the State 16-11-9-60H, and the well is expected to commence flowback by week's end. The horizontal leg of the Company's second Niobrara well, the Bob White 36-44-8-62H, has been completed and production casing has been installed. Fracture stimulation of this well is expected to begin in early January 2011. The rig is moving to the third, and final, 2010 Niobrara well location, which is currently expected to spud mid-week.

In the Barnett Shale, third party midstream pipeline efforts to accommodate the increase in natural gas volumes being brought on by southeast Tarrant County, Texas area producers continues to fall behind schedule. As a result, high gas gathering and transmission line pressures have caused Carrizo's Barnett production to lag the guidance for the fourth quarter of 2010, announced during the third quarter's earnings announcement conference call. Our third party midstream provider is currently attempting to remedy this situation by adding additional compression to their pipeline system. It is the Company's estimation, based on the information currently available, that total company production for the fourth quarter of 2010 will be approximately 114 million cubic feet of natural gas equivalents per day (mmcfepd), or approximately 5% below prior guidance. The Company still expects that prior guidance for a year-end exit rate of approximately 127 mmcfepd will be met or exceeded if the remaining hookups to be completed by our midstream provider in the Barnett Shale are completed on the schedule provided by the service provider. In addition, due to the initiation of Eagle Ford oil production, we expect that the Company's ratio of oil to natural gas production for the fourth quarter will be higher than our historical average.

In the Marcellus Shale, the first Carrizo-operated drilling rig in North East Pennsylvania is onsite and rigging up in Susquehanna County. The first of 6 wells to be drilled from this pad site is expected to spud by Wednesday.

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.

Statements in this news release that are not historical facts, including but not limited to those related to production rates, new production, production mix, production potential drilling, fracturing, stimulation, completion, seismic activities, future locations, performance of drilling rigs, future development plans, connections, financings, 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, results of and dependence on exploratory drilling activities, operating risks, land issues, evaluation of the Company by financing sources, 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 Information

  • Contact:
    Carrizo Oil & Gas, Inc.
    Richard Hunter
    Vice President of Investor Relations
    Paul F. Boling
    Chief Financial Officer
    (713) 328-1000