HOUSTON, TX -- (Marketwired) -- 06/17/13 -- Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) today announced updated production guidance for the second quarter and full year 2013 as well as plans to participate in upcoming conferences.
•Raising second quarter 2013 oil production guidance from 9,600-10,000 Bbl/d to 10,800-11,200 Bbl/d •Increasing 2013 crude oil production growth target to 40% from 28% •Raising 2013 total production growth target to 10% from 6%
Second Quarter 2013 Update
Carrizo's results in the Eagle Ford Shale have been exceeding management's expectations, with oil production averaging roughly 9,500 Bbl/d through the first two months of the quarter. Key drivers of the outperformance have been flatter-than-expected decline rates from new wells in a number of areas, successful results from artificial lift installations and less well downtime than expected.
Primarily as a result of the strong Eagle Ford results, Carrizo is increasing its second quarter 2013 oil production guidance to 10,800-11,200 Bbl/d from 9,600-10,000 Bbl/d. For natural gas and NGLs, Carrizo is maintaining its prior guidance of 90-94 MMcfe/d, but expects production to be near the high end of the range. A summary of Carrizo's updated production and cost guidance is shown in the table below.
2013 Capital Expenditure and Activity Plan Update
Carrizo is revising its 2013 drilling and completion capital expenditure plan to $530-$540 million from $500 million. The revised plan remains based on three operated rigs in the Eagle Ford Shale, two in the Niobrara Formation, and one in the Marcellus Shale.
In the Eagle Ford Shale, Carrizo is increasing planned 2013 drilling activity by three wells as a result of increases in drilling efficiencies, and increasing planned completion activity by 35 net frac stages primarily for lease management purposes. In the Niobrara, Carrizo now expects to drill and complete 21 net wells, up from an estimate of 17-18 previously. This results from increased non-operated drilling and completion activity coupled with a higher working interest in a number of the company's operated wells. In the Utica Shale, construction of drilling pads is being moved into 2013 from 2014 to avoid winter construction. This work should allow development drilling in the play to begin in the second quarter of 2014. Additionally, Carrizo now plans to spud a second Utica well prior to year-end.
2013 Production Outlook
Based on the revised capital expenditure plan combined with the strong Eagle Ford Shale results to date, Carrizo is increasing its 2013 crude oil production growth target to 40% from 28% and total production growth target to 10% from 6%. Carrizo expects crude oil to account for more than 40% of production by year-end.
Carrizo President and CEO, S. P. "Chip" Johnson, IV, commented, "We're very pleased with the outstanding performance from our recent wells in the Eagle Ford Shale and the improvements our operating staff has made in minimizing production downtime in existing wells near drilling and fracking operations. These items have given us increased confidence in our updated Eagle Ford Shale type curve and allowed us to materially increase production guidance with only a small increase in spending."
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