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Carrizo Oil & Gas $CRZO announced better than expected fouth quarter earnings after the market close Monday. However the stock fell 6% after uneven production guidance between Eagle Ford and Delaware basin acquisitions.

Earnings

Net loss attributable to common shareholders of $23.4 million, or $0.29 per diluted share. Adjusted net income attributable to common shareholders of $47.9 million, or $0.58 per diluted share higher than the expected $0.56 cents per share.

Carrizo Oil & Gas Inc NASDAQ: $CRZO

After Hours 16.46▼ 1.18 (6.69%)

After Closing $17.64 ▼ 0.80 (4.34%)

Highlights

  • Net cash provided by operating activities of $142.4 million 
  • Adjusted EBITDA of $184.1 million
  • Adjusted EBITDA margin of $32/Boe, an increase of 23% versus the prior quarter

CRZO Production

Production

  • Total production of 62,417 Boe/d, 39% above the fourth quarter of 2016 and above the high-end of the Company's guidance range
  • Crude oil production of 40,206 Bbls/d, 40% above the fourth quarter of 2016

Reserves

  • Proved reserves of 261.7 MMBoe, a 31% increase over year-end 2016
  • 564% reserve replacement from all sources at a finding, development, and acquisition (FD&A) cost of $13.47 per Boe

Outlook

  • 2018 capital expenditure guidance of $750-$800 million, which reflects an increase in oilfield service costs
  • 2018 production guidance of 58,500-60,100 Boe/d, equivalent to pro forma annual growth of more than 30%

Total reserve replacement was 564% at an all-sources FD&A cost of $13.47 per Boe

Eagle Ford

In order to continue driving operational efficiencies, Carrizo is seeking to complete "multipads" whenever possible in the Eagle Ford Shale. This incorporates using multiple completion crews simultaneously to fill in undeveloped areas. During the first quarter of 2018, Carrizo is completing a 16-well multipad in the Eagle Ford Shale utilizing three completion crews. In order to facilitate this, the Company has temporarily moved its Delaware Basin completion crew to the Eagle Ford Shale. While this development strategy should result in enhanced project returns, it is also likely to result in more uneven quarterly production growth.

Delaware Basin

In the Delaware Basin, Carrizo plans to allocate approximately 75%-80% of its development activity to its Phantom area, where it continues to be pleased with the well results it has seen. The Company expects to drive operational efficiencies in this area during 2018 by shifting to pad drilling. The remainder of the 2018 development activity is expected to be on the northern portion of the Company's legacy acreage, where offset operators have recently drilled strong wells.

Reserves

  • Drill-bit reserve replacement was 330% at an F&D cost of $10.23 per Boe
  • Total proved reserves increased to 261.7 MMBoe, a 31% increase versus year-end 2016
  • Eagle Ford reserves increased to 167.0 MMBoe, a 3% increase versus year-end 2016
  • Delaware Basin reserves increased to 90.9 MMBoe, a 677% increase versus year-end 2016
  • Crude oil represents 64% of total proved reserves and 83% of the total PV-10 value at December 31, 2017
  • Proved developed reserves increased to 109.0 MMBoe at year-end 2017, a 19% increase versus year-end 2016

Source: Carrizo Press Release

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