CARRIZO OIL & GAS, INC. 
By Carrizo Oil & Gas, Inc. Announces Fourth Quarter and Full Year 2011 Financial Results
HOUSTON, TX -- (MARKET WIRE) -- 02/28/2012 -- Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) today announced the Company's financial results for the fourth quarter of 2011, which included the following highlights:
Results for the fourth quarter of 2011 --
-
Record production of 11.9 Bcfe, or 129,793 Mcfe/d, an
increase of 12% from the fourth quarter of 2010
-
Revenue of $55.8 million, or adjusted revenue of $66.3
million, including the impact of realized hedges
-
Oil revenue of $28.2 million, or 51% of total revenue
-
Net Income of $6.5 million, or Adjusted Net Income (as
defined below) of $9.1 million, essentially flat compared
to the third quarter of 2011 due largely to higher DD&A (of
$6.7 million) due to the predominant increase in proved oil
reserves which has a higher finding cost per energy
equivalent than natural gas
-
EBITDA, as defined below, of $48.9 million
Production volumes during the three months ended December 31, 2011 were 11.9 Bcfe, an increase of 1.2 Bcfe, or 12%, from fourth quarter 2010 production of 10.7 Bcfe and an increase of 0.6 Bcfe, or 6%, from third quarter 2011 production of 11.3 Bcfe. The increase in production from the fourth quarter of 2010 and the third quarter of 2011 to the fourth quarter of 2011 was primarily due to increased production from new wells, partially offset by normal production decline.
Adjusted revenues were $66.3 million for the fourth quarter of 2011, which includes oil and gas revenues of $55.8 million and realized hedge gains of $10.5 million, compared to $46.2 million for the fourth quarter of 2010, which includes oil and gas revenues of $35.8 million and realized hedge gains of $10.4 million. The increase in adjusted revenues was primarily driven by increased production and higher oil prices partially offset by lower gas prices. Including the impact of realized hedges, the Company's average realized gas price decreased 6% to $3.68 per Mcfe for the fourth quarter of 2011 compared to $3.93 per Mcfe for the fourth quarter of 2010 and the average realized oil price increased 20% to $100.43 per barrel for the fourth quarter of 2011 compared to $83.81 per barrel for the fourth quarter of 2010. Revenues excluding the impact of realized hedges are presented in the table below.
Adjusted net income, which excludes certain non-cash items described in the statements of operations included below ("Adjusted Net Income"), was $9.1 million, or $0.23 per basic and diluted share, during the fourth quarter of 2011, as compared to $19.5 million, or $0.55 and $0.54 per basic and diluted share, respectively, during the fourth quarter of 2010, including an $18.0 million benefit of cash distributions from a joint venture partner for the fourth quarter of 2010, as described below. The Company reported net income of $6.5 million, or $0.17 and $0.16 per basic and diluted share, respectively, for the quarter ended December 31, 2011, as compared to a net loss of $24.4 million, or $0.69 per basic and diluted share, for the same quarter during 2010.
Earnings before interest, income tax, depreciation, depletion and amortization ("EBITDA"), as defined in the Company's U.S. senior secured revolving credit facility ("Credit Facility") and described in the statements of operations included below, was $48.9 million, or $1.24 and $1.23 per basic and diluted share, respectively, during the fourth quarter of 2011, as compared to $52.2 million, or $1.47 and $1.45 per basic and diluted share, respectively, during the fourth quarter of 2010. EBITDA for the fourth quarter of 2010 included the benefit of cash distributions totaling $18.0 million received from a joint venture partner as described below.
During the fourth quarter of 2010, the Company received cash distributions of $18.0 million on its B Unit investment in ACP II Marcellus, LLC ("ACP II"), a joint venture partner in the Marcellus Shale that is an affiliate of Avista Capital Partners, LP ("Avista"), a private equity fund, as a result of ACP II's distribution to Avista of proceeds from its sale of oil and gas properties to an affiliate of Reliance Industries Limited ("Reliance"). Although such cash distributions are included in EBITDA and Adjusted Net Income, such cash distributions are recognized as a reduction of oil and gas property costs under the full cost method of accounting and accordingly, are not included in net income.
Lease operating expenses (including transportation costs of $1.1 million) were $6.9 million (or $0.58 per Mcfe) for the three months ended December 31, 2011 as compared to lease operating expenses (including transportation costs of $0.9 million) of $5.3 million (or $0.50 per Mcfe) for the fourth quarter of 2010. Lease operating expenses increased due to increased production. The increase in operating cost per Mcfe is due to the higher operating cost per Mcfe associated with oil production as well as the true up of prior estimates that benefited the fourth quarter of 2010.
Production taxes were $2.0 million (or 3.5% of revenues) for the three months ended December 31, 2011 as compared to $1.2 million (or 3.3% of revenues) for the three months ended December 31, 2010. The increase in production taxes is due to increased oil and gas production. Production taxes as a percentage of revenues increased from 3.3% to 3.5% due to increased oil production, which has a higher effective production tax rate as compared to natural gas production.
Ad valorem taxes decreased to $0.9 million (or $0.08 per Mcfe) for the three months ended December 31, 2011 from $1.3 million ($0.12 per Mcfe) for the same period in 2010. The decrease in ad valorem taxes is due to the sale of substantially all of our non-core area Barnett Shale properties in May 2011, partially offset by new oil and gas wells drilled in 2010.
General and administrative expense was $7.6 million during the three months ended December 31, 2011 as compared to $4.3 million during the three months ended December 31, 2010. The increase was primarily due to increased compensation costs related to an increase in personnel in the fourth quarter of 2011 as compared to the fourth quarter of 2010 and increased office costs related to relocating the corporate headquarters in the fourth quarter of 2011.
Depreciation, depletion and amortization ("DD&A") expense for the fourth quarter of 2011 increased $6.7 million to $27.0 million ($2.26 per Mcfe or $13.56 per BOE) from the DD&A expense for the third quarter of 2011 of $20.3 million ($1.81 per Mcfe or $10.86 per BOE) and from the DD&A expense for the fourth quarter of 2010 of $16.0 million ($1.50 per Mcfe or $9.00 per BOE). The increases in DD&A and the related per Mcfe amounts were primarily due to the increase in crude oil reserves in the Eagle Ford that were added in 2011, which have a higher finding cost per equivalent unit than the Company's natural gas reserves.
Cash interest expense, net of amounts capitalized, increased to $7.4 million for the fourth quarter of 2011 compared to $5.7 million for the fourth quarter of 2010. The increase was primarily attributable to interest on the $400 million aggregate principal amount of our Senior Notes issued in the fourth quarter of 2010 and the $200 million aggregate principal amount of our Senior Notes issued in the fourth quarter of 2011, partially offset by decreased interest attributable to the repurchase of $300 million aggregate principal amount of Convertible Senior Notes in a tender offer during the fourth quarter of 2010.
An unrealized loss on derivatives of $1.4 million was recorded for the fourth quarter of 2011 compared to an unrealized loss on derivatives of $10.2 million for the fourth quarter of 2010 due to the change in fair value of our open derivative positions during those periods.
Non-cash, stock-based compensation expense of $5.3 million was recorded for the three months ended December 31, 2011 as compared to $6.9 million for the same period in 2010. The decrease in stock-based compensation expense was driven by a smaller increase in the fair value of cash-settled stock appreciation rights due to a smaller increase in stock price during the fourth quarter of 2011 as compared to the fourth quarter of 2010, partially offset by higher stock-based compensation expense due to a higher number of stock-based compensation awards outstanding during the period.
Non-cash interest expense, net of amounts capitalized, decreased to $1.0 million for the fourth quarter of 2011 compared to $1.8 million for the fourth quarter of 2010, primarily due to decreased amortization of the discount as a result of the repurchase of $300 million aggregate principal amount of our Convertible Senior Notes in a tender offer during the fourth quarter of 2010.
The estimated annual effective income tax rates (which are used for purposes of computing Adjusted Net Income) for the year ended December 31, 2011 and 2010 were 36.6% and 35.9%. Substantially all of the income tax expense for the three months ended December 31, 2011 was offset by the prior period adjustments related to the Company's state and U.K. income tax provisions recorded during the fourth quarter of 2011. The actual effective income tax rate for the three months ended December 31, 2010 was 34.9%, which was lower than the estimated annual effective income tax rate for 2010 due to true ups of prior estimates of state income taxes.
Results for the year ended December 31, 2011 --
-
Record production of 45.1 Bcfe, or 123,448 Mcfe/d
-
Revenue of $202.2 million, or adjusted revenue of $231.9
million, including the impact of realized hedges
-
Net Income of $36.6 million, or Adjusted Net Income of
$38.8 million
-
EBITDA of $172.1 million
Production volumes during the year ended December 31, 2011 were a record 45.1 Bcfe, an increase of 8.3 Bcfe, or 22%, compared to production of 36.8 Bcfe during the year ended December 31, 2010. The increase in production for the year ended December 31, 2011 as compared to the year ended December 31, 2010 was primarily due to increased production from new wells, partially offset by normal production decline.
Adjusted revenues were $231.9 million for the year ended December 31, 2011, which includes oil and gas revenues of $202.2 million and realized hedge gains of $29.7 million, compared to $172.5 million for the year ended December 31, 2010, which includes oil and gas revenues of $138.1 million and realized hedge gains of $34.4 million. The increase in adjusted revenues was primarily driven by increased production and higher oil prices partially offset by lower gas prices and lower realized hedge gains. Including the impact of realized hedges, the Company's average realized gas price decreased 12% to $3.88 per Mcfe for 2011 compared to $4.42 per Mcfe for 2010 and the average realized oil price increased 15% to $94.69 per barrel for 2011 compared to $82.25 per barrel for 2010. Revenues excluding the impact of realized hedges are presented in the table below.
Adjusted Net Income was $38.8 million, or $0.99 and $0.98 per basic and diluted share, respectively, during the year ended December 31, 2011, as compared to $64.1 million, or $1.89 and $1.87 per basic and diluted share, respectively, during the year ended December 31, 2010, including a $3.3 million and $38.8 million benefit of cash distributions from a joint venture partner for the 2011 and 2010 periods, respectively, as described below. The Company reported net income of $36.6 million, or $0.94 and $0.92 per basic and diluted share, respectively, for the year ended December 31, 2011, as compared to net income of $9.9 million, or $0.29 per basic and diluted share for the year ended December 31, 2010.
EBITDA, as defined, was $172.1 million, or $4.40 and $4.34 per basic and diluted share, respectively, during the year ended December 31, 2011, as compared to $162.1 million, or $4.79 and $4.72 per basic and diluted share, respectively, for the year ended December 31, 2010. EBITDA for the years ended December 31, 2011 and 2010 included the benefit of cash distributions totaling $3.3 million and $38.8 million, respectively, received from a joint venture partner as described below.
During 2011 and 2010, the Company received cash distributions of $3.3 million and $38.8 million, respectively, on its B Unit investment in ACP II as a result of ACP II's distribution to Avista of proceeds from its sale of oil and gas properties to Reliance. Although such cash distributions are included in EBITDA and Adjusted Net Income, such cash distributions are recognized as a reduction of oil and gas property costs under the full cost method of accounting and accordingly, are not included in net income.
Lease operating expenses (including transportation costs of $5.7 million) were $28.3 million (or $0.63 per Mcfe) for the year ended December 31, 2011 as compared to lease operating expenses (including transportation costs of $5.1 million) of $23.7 million (or $0.65 per Mcfe) for the year ended December 31, 2010. Lease operating expenses increased due to increased production. We continue to experience a decrease in the operating cost per Mcfe of our Barnett Shale production which was partially offset by higher operating cost per Mcfe associated with oil production.
Production taxes increased to $5.7 million (or 2.8% of revenues) for the year ended December 31, 2011 from $3.6 million (or 2.6% of revenues) for the year ended December 31, 2010. The increase in production taxes is due to increased oil and gas production. Production taxes as a percentage of revenues increased from 2.6% to 2.8% due to increased oil production, which has a higher effective production tax rate as compared to natural gas production.
Ad valorem taxes decreased to $3.6 million ($0.08 per Mcfe) for the year ended December 31, 2011 from $3.7 million ($0.10 per Mcfe) for the year ended December 31, 2010. The decrease in ad valorem taxes is due to the sale of substantially all of our non-core area Barnett Shale properties in May 2011, partially offset by new oil and gas wells drilled in 2010.
General and administrative expenses were $25.6 million for the year ended December 31, 2011 as compared to $18.3 million for the year ended December 31, 2010. The increase was primarily due to increased compensation costs related to an increase in personnel in 2011 as compared to 2010 and increased office costs related to relocating the corporate headquarters in the fourth quarter of 2011.
DD&A expense for the year ended December 31, 2011 increased to $84.6 million ($1.88 per Mcfe or $11.28 per BOE) from $47.0 million ($1.28 per Mcfe or $7.68 per BOE) for the year ended December 31, 2010. The increases in DD&A and the related per Mcfe amounts were primarily due to the increase in crude oil reserves in the Eagle Ford that were added in 2011 which have a higher finding cost per equivalent unit than the Company's natural gas reserves.
Cash interest expense, net of amounts capitalized, was $26.1 million for the year ended December 31, 2011 compared to $14.8 million for the year ended December 31, 2010. The increase was primarily attributable to interest on the $400 million aggregate principal amount of the Senior Notes issued in the fourth quarter of 2010 and the $200 million aggregate principal amount of the Senior Notes issued in the fourth quarter of 2011, partially offset by decreased interest attributable to the $300 million aggregate principal amount of our repurchase of Convertible Senior Notes in a tender offer during the fourth quarter of 2010.
An unrealized gain on derivatives of $15.7 million was recorded for the year ended December 31, 2011 compared to an unrealized gain on derivatives of $12.9 million for the year ended December 31, 2010 due to the changes in fair value of our open derivative positions during those periods.
Non-cash, stock-based compensation expense was $11.9 million for the year ended December 31, 2011 compared to $16.6 million for the same period in 2010. The decrease in stock-based compensation expense was driven by a decrease in the fair value of cash-settled stock appreciation rights due to a decrease in stock price during the second half of 2011, partially offset by higher stock-based compensation expense due to a higher number of stock-based compensation awards outstanding during 2011.
Non-cash interest expense, net of amounts capitalized, decreased to $3.4 million for the year ended December 31, 2011 from $7.7 million for the same period 2010, primarily due to decreased amortization of the discount as a result of the repurchase of $300 million aggregate principal amount of our Convertible Senior Notes in a tender offer during the fourth quarter of 2010.
During 2011, we contributed $2.1 million in common stock to the University of Texas at Arlington, a university located within the area of our operations in the Barnett Shale.
The estimated annual effective income tax rates (which are used for purposes of computing Adjusted Net Income) for the year ended December 31, 2011 and 2010 were 36.6% and 35.9%. The actual effective income tax rates for the years ended December 31, 2011 and 2010 were 33.2% and 36.5%, respectively. The differences between the actual effective income tax rates and our estimated annual effective income tax rates are due to true ups of prior estimates of state income taxes in both periods as well as prior period adjustments related to the Company's state and U.K. income tax provisions recorded during the fourth quarter of 2011.
Carrizo's President and CEO, S. P. "Chip" Johnson, IV, commented, "2011 was a transformational year as our rapid growth in oil production spurred a shift in our revenue balance from being historically dependent on natural gas, to reaching parity in our oil to gas revenue ratio in the fourth quarter. We expect this trend to continue for the entire year of 2012 as we become increasingly weighted toward oil production. Evidence of our success in oil focused drilling during the year is best seen in the increase in the value of our reserves. Our proved reserves' PV-10 value grew 44% from $1.01 billion at year-end 2010 to $1.45 billion at year-end 2011, driven by an increase in the oil component from 30% of the value in 2010 to 53% in 2011. Because of our higher anticipated oil to gas production mix for 2012, at flat $95 oil and $3.15 gas, our forecast 30% overall growth in domestic production would generate an approximate 80% increase in EBITDA due to the higher margins associated with oil. We chose to exclude the effect of the initiation of production from our interest in the North Sea Huntington development project from our 2012 production guidance issued earlier this month due to the large variance created by the exact timing of first oil. Comments from the project FPSO operator indicate first production is expected this October and should quickly reach the forecast rate of 4,500 Boepd net to Carrizo. Our staff did an outstanding job this year transforming the Company from being a gas producer to an oil producer."
The Company will host a conference call to discuss 2011 fourth quarter and full year financial results on Tuesday, February 28, at 10:00 AM Central Standard Time. To participate in the call, please dial (800) 707-9231 ten minutes before the call is scheduled to begin. A replay of the call will be available through Tuesday, March 6, 2012 at 11:59 AM Central Standard Time at (800) 633-8284. The conference ID for the replay is 21579534.
A simultaneous webcast of the call may be accessed over the internet at http://www.investorcalendar.com/IC/CEPage.asp?ID=167442 or by visiting our website at http://www.crzo.net, clicking on "Investor Relations" and then clicking on "2011 Fourth Quarter Conference Call Webcast." To listen, please go to either website in time to register and install any necessary software. The webcast will be archived for replay on the Carrizo website for 15 days.
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas primarily in the United States and United Kingdom. Our current operations are principally focused in proven, producing oil and gas plays primarily in the Eagle Ford Shale in South Texas, the Niobrara Formation in Colorado, the Barnett Shale in North Texas, the Marcellus Shale in Pennsylvania, New York and West Virginia, the Utica Shale in Ohio and Pennsylvania, and the U.K. North Sea where our Huntington Field project is currently under development.
Statements in this news release that are not historical facts, including but not limited to those related to timing and levels of production, drilling and completion, production mix, development plans, growth, use of proceeds, oil and gas sales, 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, timing of completion and drilling of wells, completion and pipeline connections, expected income tax rates and deferral of income taxes and other statements that are not historical facts 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 and gathering systems, actions by governmental authorities, joint venture partners, industry partners, lenders and other third parties, 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 Carrizo's Form 10-K for the year ended December 31, 2010 and its other filings with the Securities and Exchange Commission.
(Financial Highlights to Follow)
CARRIZO OIL & GAS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- --------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
Revenues:
Oil and condensate $ 28,218,562 $ 6,004,789 $ 75,502,306 $ 13,859,026
Natural gas 25,564,726 26,872,774 116,103,146 113,597,846
NGLs 1,985,813 2,866,056 10,561,392 10,666,644
------------ ------------ ------------ ------------
Total oil and gas
revenues 55,769,101 35,743,619 202,166,844 138,123,516
Realized gain on
derivatives, net
(1), (2) 10,572,642 10,426,765 29,765,585 34,358,771
------------ ------------ ------------ ------------
Adjusted revenues 66,341,743 46,170,384 231,932,429 172,482,287
------------ ------------ ------------ ------------
Costs and expenses:
Lease operating 6,928,889 5,298,082 28,314,145 23,659,002
Production taxes 1,964,733 1,166,211 5,696,371 3,648,097
Ad valorem taxes 926,801 1,285,688 3,624,819 3,707,344
General and
administrative 7,645,211 4,308,988 25,644,124 18,303,143
------------ ------------ ------------ ------------
Total costs and
expenses 17,465,634 12,058,969 63,279,459 49,317,586
------------ ------------ ------------ ------------
Other items of
income (expense)
included in EBITDA,
as defined:
Cash
Distributions-
Related Party (3) - 18,046,445 3,333,333 38,839,093
Other income, net 1,013 61,077 79,663 49,812
------------ ------------ ------------ ------------
EBITDA, as defined $ 48,877,123 $ 52,218,937 $172,065,966 $162,053,606
============ ============ ============ ============
EBITDA per common
share-Basic $ 1.24 $ 1.47 $ 4.40 $ 4.79
============ ============ ============ ============
EBITDA per common
share-Diluted $ 1.23 $ 1.45 $ 4.34 $ 4.72
============ ============ ============ ============
Other items of
income (expense)
included in
adjusted net
income, as defined:
Depreciation,
depletion and
amortization
expense (4) $(27,009,860) $(16,015,219) $(84,606,005) $(47,029,994)
Cash interest
expense (13,055,520) (10,065,019) (46,733,281) (28,249,240)
Cash interest
capitalized 5,672,816 4,332,480 20,656,333 13,447,830
Accretion expense
related to asset
retirement
obligations (95,557) (56,724) (310,970) (216,242)
Interest income 6,606 1,288 17,989 3,268
------------ ------------ ------------ ------------
Adjusted income
before income taxes 14,395,608 30,415,743 61,090,032 100,009,228
Adjusted income tax
expense (5,268,792) (10,925,335) (22,358,952) (35,923,315)
------------ ------------ ------------ ------------
ADJUSTED net income,
as defined $ 9,126,815 $ 19,490,408 $ 38,731,080 $ 64,085,913
============ ============ ============ ============
ADJUSTED net income
per common share-
Basic $ 0.23 $ 0.55 $ 0.99 $ 1.89
============ ============ ============ ============
ADJUSTED net income
per common share-
Diluted $ 0.23 $ 0.54 $ 0.98 $ 1.87
============ ============ ============ ============
Other non-cash items
of income (expense)
included in net
income:
Unrealized gain
(loss) on
derivatives, net
(2), (5) $ (1,394,867) $(10,203,125) $ 15,699,949 $ 12,914,061
Stock-based
compensation
expense (5,268,819) (6,892,517) (11,863,967) (16,608,421)
Non-cash interest
expense (1,746,637) (3,140,164) (6,070,023) (15,014,379)
Non-cash interest
capitalized 759,087 1,351,682 2,712,638 7,298,080
Non-cash
reclassification
of Cash
Distributions-
Related Party to
oil and gas
property costs
(3) - (18,046,445) (3,333,333) (38,839,093)
Non-cash
contribution
expense - - (2,119,343) -
Non-cash rent
expense (448,547) - (598,063) -
Loss on
extinguishment of
debt - (31,022,964) (896,850) (31,022,964)
Foreign currency
gain (loss) 270,305 (1,731) 258,735 (6,719)
Recovery of
investment - 165,339 - 165,339
Impairment of oil
and gas
properties - - - (2,730,882)
Allowance for
doubtful accounts (88,599) (117,437) (30,979) (485,338)
------------ ------------ ------------ ------------
Income (loss) before
income taxes 6,477,531 (37,491,619) 54,848,796 15,678,912
Income tax benefit
(expense) 32,564 13,086,843 (18,219,853) (5,728,992)
------------ ------------ ------------ ------------
Net income (loss) $ 6,510,095 $(24,404,776) $ 36,628,943 $ 9,949,920
============ ============ ============ ============
Net income (loss)
per common share-
Basic $ 0.17 $ (0.69) $ 0.94 $ 0.29
============ ============ ============ ============
Net income (loss)
per common share-
Diluted $ 0.16 $ (0.69) $ 0.92 $ 0.29
============ ============ ============ ============
Weighted average
common shares
outstanding-Basic 39,361,232 35,522,452 39,076,871 33,860,667
------------ ------------ ------------ ------------
Weighted average
common shares
outstanding-Diluted 39,766,681 36,043,263 39,667,859 34,305,359
------------ ------------ ------------ ------------
NOTES:
(1) Includes reclassifications of approximately $0.1 million and $0.0
million for the three months ended December 31, 2011 and 2010,
respectively, and $0.7 million and $0.5 million for the years ended
December, 2011 and 2010, respectively, from general and administrative to
realized gain on derivatives, net, related to agency fees paid to enter
into certain derivative positions.
(2) Includes reclassifications of approximately $1.3 million and ($0.1)
million for the three months ended December 31, 2011 and 2010,
respectively and $5.0 million and ($1.6) million for the years ended
December 31, 2011 and 2010, respectively, from unrealized gain on
derivatives, net, to realized gain on derivatives, net, for cash received
from the optimization of certain hedge positions that settle in future
periods. Amounts for cash received are offset by the related non-cash
amortization during the period in which such hedge positions settle.
(3) During the fourth quarter of 2010 the Company received cash
distributions of $18.0 million and for the years ended December 31, 2011
and 2010, the Company received cash distributions of $3.3 million and
$38.8 million, respectively, on its B Unit investment in ACP II, a joint
venture partner in the Marcellus Shale as a result of ACP II's
distribution to Avista of proceeds from the sale of oil and gas properties
to Reliance in September 2010. These cash distributions are included in
Adjusted Net Income and EBITDA, as defined in the Company's U.S. revolving
credit facility but excluded from Net Income, under the full cost method
of accounting, as such distributions are recognized as a reduction of oil
and gas property costs.
(4) Results for the three months and year ended December 31, 2010, include
reductions of $0.5 million and $0.8 million, respectively, to the DD&A
previously presented in the preliminary fourth quarter and annual 2010
financial results. These preliminary results were reported before the
potential effect of cash distributions discussed in Note (3) above.
Because these distributions were subsequently recognized as a reductions
of oil and gas property costs, DD&A was reduced accordingly.
(5) Includes reclassifications of approximately $0.2 million and $0.0
million for the three months ended December 31, 2011 and 2010,
respectively, and $0.8 million and $0.0 million for the years ended
December 31, 2011 and 2010, respectively, from general and administrative
to unrealized gain on derivatives, net, related to accrued agency fees
incurred to enter into certain derivative positions.
CARRIZO OIL & GAS, INC.
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
----------------- -----------------
December 31, 2011 December 31, 2010
----------------- -----------------
ASSETS:
Cash and cash equivalents $ 28,112 $ 4,128
Fair value of derivative instruments 27,877 17,698
Other current assets 64,408 38,506
Deferred income taxes 59,755 72,587
Property and equipment, net 1,310,514 983,057
Other assets 34,491 24,766
Investments 2,523 3,392
----------------- -----------------
TOTAL ASSETS $ 1,527,680 $ 1,144,134
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and accrued
liabilities $ 261,151 $ 109,651
Current maturities of long-term debt - 160
Other current liabilities 10,169 9,193
Long-term debt, net of current
maturities and debt discount 729,300 558,094
Other liabilities 17,196 9,685
Fair value of derivative instruments 9 715
Shareholders' equity 509,855 456,636
----------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 1,527,680 $ 1,144,134
================= =================
CARRIZO OIL & GAS, INC.
PRODUCTION VOLUMES AND PRICES
(unaudited)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
Production volumes-
Oil and condensate (Bbls) 286,527 71,649 801,846 176,237
Natural gas (Mcfe) 10,013,315 9,785,538 38,990,596 34,097,738
NGLs (Mcfe) 208,505 440,962 1,256,977 1,659,210
Natural gas and NGLs
(Mcfe) 10,221,820 10,226,500 40,247,573 35,756,948
Natural gas equivalent
(Mcfe) 11,940,984 10,656,392 45,058,649 36,808,369
Average sales prices-
Oil and condensate ($ per
Bbl) $ 98.48 $ 83.81 $ 94.16 $ 78.64
Oil and condensate ($ per
Bbl) - with hedge impact $ 100.43 $ 83.81 $ 94.69 $ 82.25
Natural gas ($ per Mcfe) $ 2.55 $ 2.75 $ 2.98 $ 3.33
NGLs ($ per Mcfe) $ 9.52 $ 6.50 $ 8.40 $ 6.43
Natural gas and NGLs ($
per Mcfe) $ 2.70 $ 2.91 $ 3.15 $ 3.48
Natural gas and NGLs ($
per Mcfe) - with hedge
impact $ 3.68 $ 3.93 $ 3.88 $ 4.42
Natural gas equivalent ($
per Mcfe) $ 4.67 $ 3.35 $ 4.49 $ 3.75
Contact:Carrizo Oil & Gas, Inc.Richard HunterVice President of Investor RelationsPaul F. BolingChief Financial Officer(713) 328-1000
