Fourth quarter 2012 production of 2.379 MMboe consisted of:
•831 Mbbls of oil or 9,033 Bbls/day, 4% above the third quarter of 2012 and 4% above the high end of guidance •9,285 MMcfe of natural gas and NGLs or 100,924 Mcfe/day, essentially flat as compared to the third quarter of 2012 and 2% above the high end of guidance
Fourth Quarter 2012 U.S. Capital Expenditures
The Company's U.S. capital expenditures for the fourth quarter were $145.3 million, comprised of $130.7 million for drilling and completions and $14.6 million for leasehold and seismic. The drilling and completion costs by region for the fourth quarter were $115.8 million, $8.4 million, $4.8 million and $1.7 million for Eagle Ford, Marcellus, Niobrara and Barnett/Other, respectively.
2012 U.K. North Sea Proved Reserves
An agreement to sell Carrizo's interest in the Huntington Field Development Project in the U.K. North Sea to Iona Energy Inc. was announced prior to the end of 2012. Because the sale closed subsequent to year end, the U.K. reserves will be presented in Carrizo's 2012 financial statements, but have been excluded from the 2012 reserves and PV-10 values discussed above. The 2012 proved reserves in the U.K. North Sea, as determined by the Company's third-party reserve engineers, were 6.0 MMboe, comprised of 5.2 MMbbls of oil and 4.7 Bcf of natural gas.
Carrizo President and CEO S.P. "Chip" Johnson, IV commented, "By selling lower return natural gas reserves and reinvesting the proceeds in drilling higher return, high value oil properties, we increased the present value of our 2012 U.S. reserve base by over 64%, largely due to the 58% increase in our proved oil reserves, all through the drill bit and performance driven revisions. We think this is an exceptional result and believe it to be proof that our strategy to grow the oil component of our reserves has significantly increased the intrinsic value of Carrizo.
"Our operations staff has done an outstanding job making our transition a reality, replacing over 300% of our record production, keeping our drilling and completion activities on schedule, reducing our capital costs in the second half, and exceeding our production guidance every quarter this year. As we announced previously, our 2013 activities are planned to move at an intentionally constrained pace in order to keep our spending near the level of our cash flow and available cash. The oil component of our production is expected to grow at a much higher rate than our gas component and our internal forecast projects our EBITDA to grow approximately three times our overall production growth. The projected growth in our EBITDA along with our previously announced reduction in planned 2013 capital expenditures should lead to a reduction in our debt to EBITDA ratio over the course of the year.
"Although our Niobrara oil play doesn't receive the attention or the capital of our Eagle Ford play, drilling results there have been contributing to our better than expected oil production rates. The last ten Niobrara wells that we brought on production had an average 24 hour oil production test rate of 736 barrels per day (gross). Two of these wells, the Bringelson 1-20 and the Castor 2-36, both flowed over 1,000 barrels per day (gross). We continue to view our Niobrara operations very favorably and now have 2 rigs drilling in the play.
"The recent acquisition of some key Utica leases in a very competitive area has caused us to revise our Utica drilling plans. Carrizo and our partner, Avista Capital Partners, now plan to spud our first Utica horizontal well this summer in the Richland Township of Guernsey County, Ohio. We hope to have production test results to announce from this well in the fourth quarter of this year."
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