Earnings Reports

Google Ad

Carrizo Oil and Gas reported better than expected earnings after the close Monday  $CRZO last year paid $DVN $215 million to increase it's Delaware basin acerage for $215 million and as expected announced record production.

Carrizo Acerage

Carrizo Oil & Gas Inc NASDAQ: CRZO Report Earnings After Close Monday

$0.56 Matched $0.56 EPS Exp But $273.34M Beat $266.36 million forecast in revenue 

Earnings

Carrizo Oil & Gas Inc (NASDAQ: CRZO) reported fourth quarter earnings on Monday with net income attributable to common shareholders of $255.1 million, or $2.75 per diluted share, and Net cash provided by operating activities of $188.3 million. compared to a net loss attributable to common shareholders of $23.4 million, or $0.29 per basic and diluted share, in the fourth quarter of 2017.

Adjusted net income attributable to common shareholders was $52.1 million, or $0.56 per diluted share, and Adjusted EBITDA of $170.7 million matched the expected quarterly earnings of  $0.57 per share. Revenues were $273,314 million beating the expected $266.36 million, up 7.9% from the year-ago quarter. The fall in earnings reflects the drop in oil prices in the fourth quarter and the affect on activity. Investors will be eager to hear of the plans plans in the Dellaware basin with record oil production in the U.S.  

Carrizo Oil & Gas Inc NASDAQ: CRZO

Market Reaction > After Hours $11.75 +0.13 (+1.12%)

Highlights

  • Total production of 68,328 Boe/d, 9% above the fourth quarter of 2017 and 6% above the third quarter of 2018
  • Crude oil production of 43,040 Bbls/d, 7% above the fourth quarter of 2017 and 5% above the third quarter of 2018 
  • The year-over-year growth was driven by the Delaware Basin, where the Company’s production increased by approximately 96%.
  • Natural gas and NGL production were 83,067 Mcf/d and 11,443 Bbls/d, respectively, during the fourth quarter of 2018.
  • Fourth quarter of 2018 production was within the Company’s guidance range of 67,700-68,700 Boe/d.
  • Proved reserves of 329.4 MMBoe, a 26% increase over year-end 2017 
  • Standardized measure of discounted future net cash flows of $3.6 billion, and PV-10 of $4.1 billion, a 55% increase over year-end 2017
  • 478% reserve replacement from all sources at a finding, development, and acquisition (FD&A) cost of $10.34 per Boe

Guidance and Operational Highlights

  • As previously announced, 2019 DC&I capital expenditure plan of $525-$575 million, which is expected to deliver double-digit production growth while achieving positive free cash flow by the third quarter of the year
  • Achievement of cost reductions and efficiency gains that have driven materially-lower well costs across the asset portfolio
  • Encouraging results from initial two Wolfcamp C tests in the Delaware Basin

 

Carrizo Delaware Basin Purchase From Devon Energy

CRZO Delaware acerage

Devon announced they entered into a deal with Carrizo Oil & Gas in August 2018 to divest non-core Delaware Basin acreage for $215 million. Devon has been aggressively divesting assets for a number of years.

The deal includes 2.5 Mboe/d in production and 9,600 net acres in Ward and Reeves County, Texas. The deal is expected to close by the fourth quarter of 2018. Carrizo cited that the asset holds over 100 net potential de-risked locations across the Wolfcamp A and B, with upside from other zones. CRZO cited a 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 deal boosts Carrizo's position in the play to 46,000 net acres. For Devon in the Delaware, new well activity had been headlined by two Boundary Raider wells that achieved a combined 24-hour initial production rate of ~24K boe/day (80%) last year, which $DVN says are the highest-rate wells brought online in the history of the Delaware Basin.

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.”

The company also signed a deal with a major crude purchaser that provides 100% flow assurance for Delaware Basin crude oil production through mid-2020 with no minimum volume commitments Interestingly in light of this dea; Carrizo said they were shifting capital to the Eagle Ford Shale from the Delaware Basin in order to capitalize on the superior margins and rates of return being generated

About Carrizo Oil and Gas

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 shales in the Eagle Ford Shale in South Texas and the Delaware Basin in West Texas.

Source: Devon, Carrizo

Live From The Pit

Log in to comment
Discuss this article in the forums (2 replies).