Last10K.com

Carrizo Oil Gas Inc (CRZO) SEC Filing 8-K Material Event for the period ending Monday, August 6, 2018

Carrizo Oil Gas Inc

CIK: 1040593 Ticker: CRZO


     Exhibit 99.1
carrizo_logoa05.jpg
CARRIZO OIL & GAS, INC.                      News        


PRESS RELEASE    Contact:    Jeffrey P. Hayden, CFA, VP - Investor Relations
(713) 328-1044    
Kim Pinyopusarerk, Manager - Investor Relations
    (713) 358-6430

CARRIZO OIL & GAS ANNOUNCES SECOND QUARTER RESULTS

HOUSTON, August 6, 2018 - Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today announced the Company’s financial results for the second quarter of 2018 and provided an operational update, which includes the following highlights:
 
Total production of 57,077 Boe/d, 12% above the second quarter of 2017 and above the high-end of the Company’s guidance range

Crude oil production of 37,860 Bbls/d, 13% above the second quarter of 2017 and 11% above the first quarter of 2018

Net income attributable to common shareholders of $30.1 million, or $0.36 per diluted share, and Net cash provided by operating activities of $137.1 million

Adjusted net income attributable to common shareholders of $66.6 million, or $0.79 per diluted share, and Adjusted EBITDA of $178.9 million

Multiple Delaware Basin Wolfcamp A wells that achieved crude oil production rates of more than 1,000 Bbls/d on restricted chokes

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

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

Carrizo reported second quarter of 2018 net income attributable to common shareholders of $30.1 million, or $0.37 and $0.36 per basic and diluted share, respectively, compared to net income attributable to common shareholders of $56.3 million, or $0.86 and $0.85 per basic and diluted share, respectively in the second quarter of 2017. The net income attributable to common shareholders for the second quarter of 2018 and the second quarter of 2017 include certain items typically excluded from published estimates by the investment community. Adjusted net income attributable to common shareholders, which excludes the impact of these items as described in the non-GAAP reconciliation tables included below, for the second quarter of 2018 was $66.6 million, or $0.79 per diluted share, compared to $20.0 million, or $0.30 per diluted share, in the second quarter of 2017.

For the second quarter of 2018, Adjusted EBITDA was $178.9 million. Adjusted EBITDA and the reconciliation to net income attributable to common shareholders are presented in the non-GAAP reconciliation tables included below.

Production volumes during the second quarter of 2018 were 5,193 MBoe, or 57,077 Boe/d, an increase of 12% versus the second quarter of 2017. The year-over-year comparison is impacted by a significant amount of acquisition and divestiture (A&D) activity, including the acquisition of properties in the Delaware Basin and the divestiture of the Company’s Appalachia, DJ Basin, and downdip Eagle Ford Shale assets. Pro forma for this A&D activity, the Company’s production increased by more than 30% versus the second quarter of 2017, driven by development in the Eagle Ford Shale and Delaware Basin. Crude oil production during the second quarter of 2018 averaged 37,860 Bbls/d, an increase of 13% versus the second quarter of 2017; natural gas and NGL production were 59,029 Mcf/d and 9,379 Bbls/d, respectively, during the second quarter of 2018. Second quarter of 2018 production exceeded the high end of the Company’s guidance range of 53,800-54,800 Boe/d.






Drilling, completion, and infrastructure capital expenditures for the second quarter of 2018 were $218.0 million. Nearly 55% of the second quarter drilling, completion, and infrastructure spending was in the Delaware Basin, with the balance in the Eagle Ford Shale. Land and seismic expenditures during the quarter were $6.1 million, and were primarily focused in the Delaware Basin.

In early July, Carrizo closed on the divestiture of non-operated assets in its Ford West area of the Delaware Basin. The divested assets included approximately 1,700 net acres and had associated net production during the second quarter of 2018 of approximately 820 Boe/d (34% oil, 62% liquids).

Given the relative outlook for crude oil prices in the Eagle Ford Shale and Delaware Basin over the next 18 months, Carrizo has elected to shift capital to the Eagle Ford Shale in order to take advantage of the superior returns offered from the play in the current environment. At the end of the first quarter, Carrizo was running four rigs in the Delaware Basin and two rigs in the Eagle Ford Shale. The Company moved one of its rigs to the Eagle Ford Shale during the second quarter and recently added a fourth rig to the play. For the balance of the year, Carrizo currently plans to run an average of six rigs, with four located in the Eagle Ford Shale and two located in the Delaware Basin, and two to three completion crews. Given the faster cycle times in the Eagle Ford Shale, as well as the Company’s decision to maintain a six-rig program for the remainder of the year, Carrizo now expects to drill 123-132 gross (112-121 net) operated wells and complete 108-117 gross (93-102 net) operated wells during the year. This compares to the Company’s estimate of 93-103 gross (82-91 net) operated wells drilled and 113-123 gross (96-105 net) operated wells completed under the prior plan. As a result of the increased drilling activity, Carrizo is increasing its 2018 drilling, completion, and infrastructure capital expenditure guidance to $800-$825 million from $750-$800 million.

Despite the impact of the Company’s non-operated divestiture as well as its expectation of an accelerated payout at the Brown Trust multipad as described below, Carrizo is maintaining the upper end of its 2018 production guidance range and tightening it to 58,700-60,100 Boe/d from 58,500-60,100 Boe/d. Crude oil is still expected to account for 65%-67% of the Company’s production for the year, while total liquids are expected to account for 81%-84%. This equates to annual production growth of more than 10% using the midpoint of the range. Pro forma for the Company’s A&D activity, 2018 guidance equates to year-over-year production growth of more than 30%, with crude oil production growth of more than 20%. For the third quarter of the year, Carrizo expects production to be 62,000-63,000 Boe/d; crude oil is expected to account for 65% of production, while total liquids are expected to account for 82%. A full summary of Carrizo’s guidance is provided in the attached tables.

Based on the Company’s expectation that additional pipeline capacity out of the Permian Basin will be operational in late 2019, resulting in a more normalized spread between local oil prices in the Eagle Ford Shale and Permian Basin, Carrizo currently expects to begin shifting activity back to the Delaware Basin in the second half of 2019. Carrizo maintains a significant amount of flexibility to shift capital between its plays in 2019; thus, should the announced pipelines be delayed causing local Permian Basin oil prices to remain weak, the Company has the flexibility and inventory depth to keep its activity weighted to the Eagle Ford Shale.

S.P. “Chip” Johnson, IV, Carrizo’s President and CEO, commented on the results, “The second quarter was another outstanding operational and financial quarter for the Company as we delivered production 4% above the high end of our guidance range, operating expenses 3% below the low end of our guidance range, and expanded our EBITDA margin by 17% from the first quarter to $34/Boe. During the quarter, we also successfully executed our initial capital shift from the Delaware Basin to the Eagle Ford Shale, where our margins benefit from premium Gulf Coast pricing.

“The current environment highlights the advantages of having complementary acreage positions in the Eagle Ford Shale and Delaware Basin. While we had previously taken steps to protect our Delaware Basin margins, such as placing basis hedges on a large percentage of our expected 2018 oil production at a $0.10 differential to NYMEX, we were able to quickly shift capital to the Eagle Ford Shale once it appeared that Permian Basin differentials were deteriorating sooner and to a greater degree than we had previously expected. This pivot allows us to avoid aggressively developing our valuable Delaware Basin inventory during a period of weak local market prices while at the same time enhancing our overall financial metrics as returns in the Eagle Ford Shale are significantly higher than returns in the Delaware Basin based on current strip prices.

“While our new plan should result in higher EBITDA during 2018, the bigger benefit should be realized in 2019. Our new plan allows us to build our inventory of drilled, uncompleted wells in the Eagle Ford Shale up to more than 40 by year-end, setting us up for strong growth from the play in 2019. We currently expect the Eagle Ford Shale to be the primary driver of our production growth next year. And with the higher margins that are expected to be generated by Eagle Ford Shale production based on current strip prices, we believe our new plan should result in more than $100 million of incremental EBITDA through the end of 2019. This should accelerate our leverage reduction as well as enhance our ROCE.

“Our decision to shift capital out of the Delaware Basin is entirely a returns-focused, economical decision given weak regional pricing. We continue to be very pleased with the results from our Delaware Basin position and are in an excellent position from a





midstream standpoint. We recently executed a deal with a major crude purchaser that provides us with flow assurance for 100% of our oil production through mid-2020 while not subjecting us to any minimum volume commitments. Our wells continue to deliver strong results, as we brought online multiple Wolfcamp A wells during the quarter that achieved crude oil production rates of more than 1,000 Bbls/d on restricted chokes.”

Operational Update

In the Eagle Ford Shale, where the Company holds approximately 77,300 net acres, Carrizo drilled 19 gross (18 net) operated wells during the second quarter and completed 18 gross (16 net) operated wells. Production from the play was more than 37,000 Boe/d, up 4% versus the prior quarter as production from new wells, including the Brown Trust multipad, more than offset the impact of the downdip asset sale during the prior quarter. Crude oil production during the second quarter was nearly 29,200 Bbls/d, accounting for 79% of the Company’s production from the play. At the end of the quarter, Carrizo had 15 gross (14 net) operated Eagle Ford Shale wells waiting on completion. Carrizo currently expects to drill 95-100 gross (90-95 net) operated wells and complete 85-90 gross (75-80 net) operated wells in the play during 2018.

Production from the Company’s first large-scale multipad project in the Eagle Ford Shale, located in its Brown Trust project area, continues to be strong. Production from the multipad has now been online for more than 120 days, and continues to produce more than 14,000 Boe/d (88% oil) on restricted chokes. The multipad consists of 16 wells on three pads, with an average lateral length of approximately 9,100 ft. and frac stage spacing of 150-180 ft. Given the strong performance from this project, as well as higher-than-expected commodity prices, the multipad is now expected to pay out during the second half of 2018 versus the Company’s prior expectation of early 2019. Upon payout, Carrizo’s average working interest in the wells will decline to 54% from 79%. The expected impact of this is a reduction to the Company’s full-year 2018 production of more than 200 Boe/d.

In the Delaware Basin, where it holds approximately 36,300 net acres, Carrizo drilled 9 gross (8 net) operated wells during the second quarter and completed 12 gross (9 net) operated wells. Production from the play was approximately 19,800 Boe/d for the quarter, up 30% versus the prior quarter. Crude oil production during the second quarter was approximately 8,500 Bbls/d, accounting for 43% of the Company’s production from the play. At the end of the quarter, Carrizo had 10 gross (9 net) operated Delaware Basin wells waiting on completion. Carrizo currently expects to drill 28-32 gross (22-26 net) operated wells and complete 23-27 gross (18-22 net) operated wells in the play during 2018.

During the second quarter, Carrizo’s completion activity was weighted towards wells drilled in the Wolfcamp A, with multiple wells achieving crude oil production rates of more than 1,000 Bbls/d on restricted chokes. Wolfcamp A highlights from the Company’s primary Phantom area block include the following:

the Dorothy Unit 38 11H achieved a peak 30-day rate of more than 2,200 Boe/d (50% oil, 76% liquids) from an approximate 11,000-ft. lateral
the Woodson 36 Allocation A 11H achieved a peak 30-day rate of more than 2,400 Boe/d (49% oil, 75% liquids) from an approximate 9,800-ft. lateral
three Zeman wells which have thus far achieved an average peak 30-day rate of more than 2,050 Boe/d (45% oil, 73% liquids) from an average lateral of approximately 7,600 ft.

Two of the wells the Company drilled this quarter, the Zeman 40 Allocation C 11H and Dorothy 11H, were vertical stack tests of Wolfcamp A over existing Lower Wolfcamp B. The Zeman 11H was drilled over an existing Lower Wolfcamp B well that had been online for approximately 13 months. The vertical separation between the wells was approximately 460 ft. The Dorothy 11H was drilled over an existing Lower Wolfcamp B well that had been online for approximately eight months. The vertical separation between the wells was approximately 445 ft. Carrizo is very encouraged by the early results of these tests.

Carrizo also recently brought a very encouraging Wolfcamp A well online in its northeastern Phantom area acreage in Ward County. The SRO 551 Allocation A 100H began production in July, and while it has yet to achieve a peak 30-day rate, production has recently been more than 2,400 Boe/d (41% oil, 71% liquids) on a restricted choke from an approximate 7,400-ft. lateral. Carrizo’s estimate of net de-risked drilling locations does not currently include many locations on this acreage position.





The Company has continued to enhance its portfolio of midstream contracts. Carrizo recently executed a deal with a major crude purchaser that provides it with flow assurance on 100% of its Delaware Basin crude oil production at a Midland-based price. The term of the contract is from September 2018 through July 2020, providing the Company with additional flow protection until new pipelines come online. Importantly, the agreement does not contain any minimum volume commitments, allowing Carrizo to maintain the flexibility to allocate capital between its plays in order to maximize its returns. For its natural gas production, Carrizo has continued to work with its third-party gas purchaser to increase firm capacity to WAHA and other points out of the basin. Carrizo and its third-party purchaser have currently executed contracts that have expanded firm takeaway to 60-65 MMcf/d from November 2018 through October 2019 and to 40-45 MMcf/d from November 2019 through March 2020. As the Company’s third-party gathering solution connects to multiple outlets that provide access to Mexico, the West Coast, or the Gulf Coast, Carrizo remains confident that it will be able to market its gas production.

Hedging Activity

Carrizo currently has hedges in place for approximately 70% of estimated crude oil production for the remainder of 2018 (based on the midpoint of guidance); the Company’s 2018 crude oil hedge portfolio includes both swaps and three-way collars. For 2019, the Company has three-way collars covering 15,000 Bbls/d. Additionally, Carrizo has swap contracts in place for more than 45% and 35% of its estimated NGL and natural gas production, respectively, for the remainder of 2018.

In order to further manage its commodity price exposure, Carrizo has also put various basis hedges in place. For the balance of the year, Carrizo has basis swaps locking in a $0.10/Bbl Midland-Cushing differential on 6,000 Bbls/d. The Company also has basis swaps locking in a $5.11/Bbl LLS-Cushing premium on 18,000 Bbls/d over the same period.

Please refer to the attached tables for full details of the Company’s commodity derivative contracts.

Conference Call Details

The Company will hold a conference call to discuss 2018 second quarter financial results on Tuesday, August 7, 2018 at 10:00 AM Central Daylight Time. To participate in the call, please dial (800) 732-5617 (U.S. & Canada) or +1 (212) 231-2905 (Intl.) ten minutes before the call is scheduled to begin. A replay of the call will be available through Tuesday, August 14, 2018 at 12:00 PM Central Daylight Time at (800) 633-8284 (U.S. & Canada) or +1 (402) 977-9140 (Intl.). The reservation number for the replay is 21892918 for U.S., Canadian, and International callers.

A simultaneous webcast of the call may be accessed over the internet by visiting the Carrizo website at http://www.carrizo.com, clicking on “Upcoming Events”, and then clicking on the “Second Quarter 2018 Earnings Call” link. To listen, please go to the website in time to register and install any necessary software. The webcast will be archived for replay on the Carrizo website for 7 days.

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 plays primarily in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
Statements in this release that are not historical facts, including but not limited to those related to capital requirements, effect of pivot to Eagle Ford, expectations or projections for the remainder of 2018 and 2019, free cash flow positive program, improving ROCE, capital expenditure, infrastructure program, guidance, rig program, production, average well returns, the estimated production results and financial performance, effects of transactions, targeted ratios and other metrics, timing, levels of and potential production, expectations regarding growth, oil and gas prices, drilling and completion activities, drilling inventory, including timing thereof, well costs, break-even prices, production mix, development plans, hedging activity, 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 and other statements that are not historical facts are forward-looking statements that are based on current expectations. Although the Company 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 assumptions regarding well costs, Delaware Basin constraints, estimated recoveries, pricing and other factors affecting average well returns, results of wells and testing, failure of actual production to meet expectations, results of infrastructure program, failure to reach significant growth, performance of rig operators, spacing test results, availability of gathering systems, pipeline and other transportation issues, costs and availability of oilfield services, actions by governmental authorities, joint venture partners, industry partners, lenders and other third parties, actions by purchasers or sellers of properties, risks and effects of acquisitions and dispositions, market and other conditions, risks regarding financing, capital needs, 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 the Company’s Form 10-K for the year ended December 31, 2017 and its other filings with the U.S. Securities and Exchange Commission. There can be no assurance any transaction described in this press release will occur on the terms or timing described, or at all.
(Financial Highlights to Follow)





CARRIZO OIL & GAS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
 
 
June 30, 2018
 
December 31, 2017
Assets
 
 
 
 
Current assets
 
 
 
 
Cash and cash equivalents
 

$2,099

 

$9,540

Accounts receivable, net
 
111,100

 
107,441

Derivative assets
 
10,928

 

Other current assets
 
8,378

 
5,897

Total current assets
 
132,505

 
122,878

Property and equipment
 
 
 
 
Oil and gas properties, full cost method
 
 
 
 
Proved properties, net
 
1,959,951

 
1,965,347

Unproved properties, not being amortized
 
597,892

 
660,287

Other property and equipment, net
 
10,582

 
10,176

  Total property and equipment, net
 
2,568,425

 
2,635,810

Other assets
 
20,909

 
19,616

Total Assets
 

$2,721,839

 

$2,778,304

 
 
 
 
 
Liabilities and Shareholders’ Equity
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable
 

$113,651

 

$74,558

Revenues and royalties payable
 
53,280

 
52,154

Accrued capital expenditures
 
117,934

 
119,452

Accrued interest
 
21,126

 
28,362

Derivative liabilities
 
145,520

 
57,121

Other current liabilities
 
52,020

 
41,175

     Total current liabilities
 
503,531

 
372,822

Long-term debt
 
1,502,307

 
1,629,209

Asset retirement obligations
 
16,305

 
23,497

Derivative liabilities
 
87,933

 
112,332

Deferred income taxes
 
4,164

 
3,635

Other liabilities
 
8,273

 
51,650

Total liabilities
 
2,122,513

 
2,193,145

Commitments and contingencies
 
 
 
 
Preferred stock
 
 
 
 
Preferred stock, $0.01 par value, 10,000,000 shares authorized; 200,000 issued and outstanding as of June 30, 2018 and 250,000 issued and outstanding as of December 31, 2017
 
172,858

 
214,262

Shareholders’ equity
 
 
 
 
Common stock, $0.01 par value, 180,000,000 shares authorized; 82,107,544 issued and outstanding as of June 30, 2018 and 81,454,621 issued and outstanding as of December 31, 2017
 
821

 
815

Additional paid-in capital
 
1,918,820

 
1,926,056

Accumulated deficit
 
(1,493,173
)
 
(1,555,974
)
Total shareholders’ equity
 
426,468

 
370,897

Total Liabilities and Shareholders’ Equity
 

$2,721,839

 

$2,778,304






CARRIZO OIL & GAS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 
 Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Revenues
 
 
 
 
 
 
 
Crude oil

$229,798

 

$142,806

 

$424,717

 

$270,898

Natural gas liquids
21,269

 
7,786

 
38,171

 
15,211

Natural gas
12,906

 
15,891

 
26,365

 
31,729

Total revenues
263,973

 
166,483

 
489,253

 
317,838

 
 
 
 
 
 
 
 
Costs and Expenses
 
 
 
 
 
 
 
Lease operating
35,151

 
36,048

 
74,424

 
65,893

Production taxes
12,487

 
7,143

 
23,062

 
13,351

Ad valorem taxes
3,640

 
1,073

 
5,613

 
4,040

Depreciation, depletion and amortization
72,430

 
59,072

 
136,897

 
113,454

General and administrative, net
18,265

 
11,596

 
45,557

 
33,299

(Gain) loss on derivatives, net
67,714

 
(26,065
)
 
97,310

 
(51,381
)
Interest expense, net
15,599

 
21,106

 
31,116

 
41,677

Loss on extinguishment of debt

 

 
8,676

 

Other expense, net
2,895

 
204

 
2,995

 
1,178

Total costs and expenses
228,181

 
110,177

 
425,650

 
221,511

 
 
 
 
 
 
 
 
Income Before Income Taxes
35,792

 
56,306

 
63,603

 
96,327

Income tax expense
(483
)
 

 
(802
)
 

Net Income

$35,309

 

$56,306

 

$62,801

 

$96,327

Dividends on preferred stock
(4,474
)
 

 
(9,337
)
 

Accretion on preferred stock
(740
)
 

 
(1,493
)
 

Loss on redemption of preferred stock

 

 
(7,133
)
 

Net Income Attributable to Common Shareholders

$30,095

 

$56,306

 

$44,838

 

$96,327

 
 
 
 
 
 
 
 
Net Income Attributable to Common Shareholders Per Common Share
 
 
 
 
 
 
 
Basic

$0.37

 

$0.86

 

$0.55

 

$1.47

Diluted

$0.36

 

$0.85

 

$0.54

 

$1.46

 
 
 
 
 
 
 
 
Weighted Average Common Shares Outstanding
 
 
 
 
 
 
 
Basic
82,058

 
65,767

 
81,802

 
65,479

Diluted
83,853

 
65,908

 
83,240

 
65,866







CARRIZO OIL & GAS, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
 
 
Common Stock
 
Additional
Paid-in
Capital
 

Accumulated Deficit
 
Total
Shareholders’
Equity
 
 
Shares
 
Amount
 
 
 
Balance as of December 31, 2017
 
81,454,621

 

$815

 

$1,926,056

 

($1,555,974
)
 

$370,897

Stock-based compensation expense
 

 

 
10,757

 

 
10,757

Issuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares
 
652,923

 
6

 
(30
)
 

 
(24
)
Dividends on preferred stock
 

 

 
(9,337
)
 

 
(9,337
)
Accretion on preferred stock
 

 

 
(1,493
)
 

 
(1,493
)
Loss on redemption of preferred stock
 

 

 
(7,133
)
 

 
(7,133
)
Net income
 

 

 

 
62,801

 
62,801

Balance as of June 30, 2018
 
82,107,544

 

$821

 

$1,918,820

 

($1,493,173
)
 

$426,468







CARRIZO OIL & GAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
Cash Flows From Operating Activities
 
 
 
 
 
 
 
Net income

$35,309

 

$56,306

 

$62,801

 

$96,327

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
 
Depreciation, depletion and amortization
72,430

 
59,072

 
136,897

 
113,454

(Gain) loss on derivatives, net
67,714

 
(26,065
)
 
97,310

 
(51,381
)
Cash (paid) received for derivative settlements, net
(24,083
)
 
(261
)
 
(38,448
)
 
1,258

Loss on extinguishment of debt

 

 
8,676

 

Stock-based compensation expense, net
7,206

 
1,582

 
10,724

 
3,596

Deferred income taxes
336

 

 
529

 

Non-cash interest expense, net
600

 
983

 
1,262

 
2,074

Other, net
6,664

 
1,147

 
3,975

 
2,767

Changes in components of working capital and other assets and liabilities-
 
 
 
 
 
 
 
Accounts receivable
(8,301
)
 
(5,345
)
 
2,437

 
(8,094
)
Accounts payable
(11,648
)
 
7,825

 
3,878

 
14,486

Accrued liabilities
(8,566
)
 
7,804

 
(12,883
)
 
5,650

Other assets and liabilities, net
(513
)
 
(301
)
 
(1,286
)
 
(982
)
Net cash provided by operating activities
137,148

 
102,747

 
275,872

 
179,155

Cash Flows From Investing Activities
 
 
 
 
 
 
 
Capital expenditures
(195,954
)
 
(166,876
)
 
(430,639
)
 
(290,625
)
Acquisitions of oil and gas properties

 
(9,501
)
 

 
(16,533
)
Deposit for acquisition of oil and gas properties

 
(75,000
)
 

 
(75,000
)
Proceeds from divestitures of oil and gas properties, net
3,430

 
829

 
345,789

 
18,201

Other, net
(1,009
)
 
(2,062
)
 
(1,096
)
 
(2,479
)
Net cash used in investing activities
(193,533
)
 
(252,610
)
 
(85,946
)
 
(366,436
)
Cash Flows From Financing Activities
 
 
 
 
 
 
 
Redemptions of senior notes
(4,425
)
 

 
(330,435
)
 

Redemption of preferred stock

 

 
(50,030
)
 

Borrowings under credit agreement
432,596

 
638,593

 
1,126,856

 
919,097

Repayments of borrowings under credit agreement
(369,296
)
 
(479,293
)
 
(933,156
)
 
(723,797
)
Payments of debt issuance costs
(477
)
 
(4,318
)
 
(627
)
 
(4,368
)
Payment of commitment fee for issuance of preferred stock

 
(5,000
)
 

 
(5,000
)
Payments of dividends on preferred stock
(4,474
)
 

 
(9,337
)
 

Other, net
(325
)
 
(282
)
 
(638
)
 
(617
)
Net cash provided by (used in) financing activities
53,599

 
149,700

 
(197,367
)
 
185,315

Net Decrease in Cash and Cash Equivalents
(2,786
)
 
(163
)
 
(7,441
)
 
(1,966
)
Cash and Cash Equivalents, Beginning of Period
4,885

 
2,391

 
9,540

 
4,194

Cash and Cash Equivalents, End of Period

$2,099

 

$2,228

 

$2,099

 

$2,228






CARRIZO OIL & GAS, INC.
NON-GAAP FINANCIAL MEASURES
(Unaudited)

Reconciliation of Net Income Attributable to Common Shareholders (GAAP) to Adjusted Net Income Attributable to Common Shareholders (Non-GAAP)

Adjusted net income attributable to common shareholders is a non-GAAP financial measure which excludes certain items that are included in net income attributable to common shareholders, the most directly comparable GAAP financial measure. Items excluded are those which the Company believes affect the comparability of operating results and are typically excluded from published estimates by the investment community, including items whose timing and/or amount cannot be reasonably estimated or are non-recurring.

Adjusted net income attributable to common shareholders is presented because management believes it provides useful additional information to investors for analysis of the Company’s fundamental business on a recurring basis. In addition, management believes that adjusted net income attributable to common shareholders is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry.

Adjusted net income attributable to common shareholders should not be considered in isolation or as a substitute for net income attributable to common shareholders or any other measure of a company’s financial performance or profitability presented in accordance with GAAP. A reconciliation of the differences between net income attributable to common shareholders and adjusted net income attributable to common shareholders is presented below. Because adjusted net income attributable to common shareholders excludes some, but not all, items that affect net income attributable to common shareholders and may vary among companies, our calculation of adjusted net income attributable to common shareholders may not be comparable to similarly titled measures of other companies.
 
 Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In thousands, except per share amounts)
Net Income Attributable to Common Shareholders (GAAP)

$30,095

 

$56,306

 

$44,838

 

$96,327

Loss on redemption of preferred stock

 

 
7,133

 

   Income tax expense
483

 

 
802

 

(Gain) loss on derivatives, net
67,714

 
(26,065
)
 
97,310

 
(51,381
)
Cash (paid) received for derivative settlements, net
(24,083
)
 
(261
)
 
(38,448
)
 
1,258

Non-cash general and administrative, net
7,206

 
1,582

 
10,724

 
3,596

Loss on extinguishment of debt

 

 
8,676

 

Non-recurring and other expense, net
4,264

 
204

 
5,457

 
1,178

Adjusted income before income taxes
85,679

 
31,766

 
136,492

 
50,978

Adjusted income tax expense (1)
(19,106
)
 
(11,722
)
 
(30,438
)
 
(18,811
)
Adjusted Net Income Attributable to Common Shareholders (Non-GAAP)

$66,573

 

$20,044

 

$106,054

 

$32,167

 
 
 
 
 
 
 
 
Net Income Attributable to Common Shareholders Per Diluted Common Share (GAAP)

$0.36

 

$0.85

 

$0.54

 

$1.46

Loss on redemption of preferred stock

 

 
0.09

 

   Income tax expense
0.01

 

 
0.01

 

(Gain) loss on derivatives, net
0.81

 
(0.40
)
 
1.17

 
(0.78
)
Cash (paid) received for derivative settlements, net
(0.29
)
 

 
(0.46
)
 
0.02

Non-cash general and administrative, net
0.08

 
0.03

 
0.13

 
0.05

Loss on extinguishment of debt

 

 
0.10

 

Non-recurring and other expense, net
0.05

 

 
0.06

 
0.02

Adjusted income before income taxes
1.02

 
0.48

 
1.64

 
0.77

Adjusted income tax expense
(0.23
)
 
(0.18
)
 
(0.37
)
 
(0.28
)
Adjusted Net Income Attributable to Common Shareholders Per Diluted Common Share (Non-GAAP)

$0.79

 

$0.30

 

$1.27

 

$0.49

 
 
 
 
 
 
 
 
Diluted Weighted Average Shares Outstanding
83,853

 
65,908

 
83,240

 
65,866

 
(1)
Adjusted income tax expense is calculated by applying the Company’s estimated annual effective income tax rates applicable to the adjusted income before income taxes, which were 22.3% and 36.9% for the three months ended June 30, 2018 and 2017, respectively, as well as for the six months ended June 30, 2018 and 2017, respectively.






CARRIZO OIL & GAS, INC.
NON-GAAP FINANCIAL MEASURES
(Unaudited)

Reconciliation of Net Income Attributable to Common Shareholders (GAAP) to Adjusted EBITDA (Non-GAAP) to Net Cash Provided by Operating Activities (GAAP)

Adjusted EBITDA is a non-GAAP financial measure which excludes certain items that are included in net income attributable to common shareholders, the most directly comparable GAAP financial measure. Items excluded are interest, income taxes, depreciation, depletion and amortization, impairments, dividends and accretion on preferred stock and items that the Company believes affect the comparability of operating results such as items whose timing and/or amount cannot be reasonably estimated or are non-recurring.

Adjusted EBITDA is presented because management believes it provides useful additional information to investors and analysts, for analysis of the Company’s financial and operating performance on a recurring basis and the Company’s ability to internally generate funds for exploration and development, and to service debt. In addition, management believes that adjusted EBITDA is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry.
Adjusted EBITDA should not be considered in isolation or as a substitute for net income attributable to common shareholders, net cash provided by operating activities, or any other measure of a company’s profitability or liquidity presented in accordance with GAAP. A reconciliation of net income attributable to common shareholders to adjusted EBITDA to net cash provided by operating activities is presented below. Because adjusted EBITDA excludes some, but not all, items that affect net income attributable to common shareholders, our calculations of adjusted EBITDA may not be comparable to similarly titled measures of other companies.
Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Discretionary Cash Flows (Non-GAAP)

Discretionary cash flows are a non-GAAP financial measure which excludes certain items that are included in net cash provided by operating activities, the most directly comparable GAAP financial measure. Items excluded are changes in the components of working capital and other items that the Company believes affect the comparability of operating cash flows such as items that are non-recurring.
Discretionary cash flows are presented because management believes it provides useful additional information to investors for analysis of the Company’s ability to generate cash to fund exploration and development, and to service debt. In addition, management believes that discretionary cash flows is widely used by professional research analysts and others in the valuation, comparison, and investment recommendations of companies in the oil and gas exploration and production industry.
Discretionary cash flows should not be considered in isolation or as a substitute for net cash provided by operating activities or any other measure of a company’s cash flows or liquidity presented in accordance with GAAP. A reconciliation of net cash provided by operating activities to discretionary cash flows is presented below. Because discretionary cash flows excludes some, but not all, items that affect net cash provided by operating activities and may vary among companies, our calculation of discretionary cash flows may not be comparable to similarly titled measures of other companies.
 
 Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2018
 
2017
 
2018
 
2017
 
(In thousands, except per Boe amounts)
Net Income Attributable to Common Shareholders (GAAP)

$30,095

 

$56,306

 

$44,838

 

$96,327

Dividends on preferred stock
4,474

 

 
9,337

 

Accretion on preferred stock
740

 

 
1,493

 

Loss on redemption of preferred stock

 

 
7,133

 

   Income tax expense
483

 

 
802

 

Depreciation, depletion and amortization
72,430

 
59,072

 
136,897

 
113,454

Interest expense, net
15,599

 
21,106

 
31,116

 
41,677

(Gain) loss on derivatives, net
67,714

 
(26,065
)
 
97,310

 
(51,381
)
Cash (paid) received for derivative settlements, net
(24,083
)
 
(261
)
 
(38,448
)
 
1,258

Non-cash general and administrative, net
7,206

 
1,582

 
10,724

 
3,596

Loss on extinguishment of debt

 

 
8,676

 

Non-recurring and other expense, net
4,264

 
204

 
5,457

 
1,178

Adjusted EBITDA (Non-GAAP)

$178,922

 

$111,944

 

$315,335

 

$206,109

Cash interest expense, net
(14,998
)
 
(20,123
)
 
(29,853
)
 
(39,603
)
Dividends on preferred stock
(4,474
)
 

 
(9,337
)
 

Other cash and non-cash adjustments, net
218

 
943

 
956

 
1,589

Discretionary Cash Flows (Non-GAAP)

$159,668

 

$92,764

 

$277,101

 

$168,095

Changes in components of working capital and other
(22,520
)
 
9,983

 
(1,229
)
 
11,060

Net Cash Provided By Operating Activities (GAAP)

$137,148

 

$102,747

 

$275,872

 

$179,155

 
 
 
 
 
 
 
 
Adjusted EBITDA (Non-GAAP)

$178,922

 

$111,944

 

$315,335

 

$206,109

Total barrels of oil equivalent (MBoe)
5,193

 
4,643

 
9,807

 
8,816

Adjusted EBITDA Margin ($ per Boe) (Non-GAAP)

$34.45

 

$24.11

 

$32.15

 

$23.38






CARRIZO OIL & GAS, INC.
PRODUCTION VOLUMES AND REALIZED PRICES
(Unaudited)
 
 
 Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2018
 
2017
 
2018
 
2017
Total production volumes -
 
 
 
 
 
 
 
 
    Crude oil (MBbls)
 
3,445

 
3,060

 
6,517

 
5,656

    NGLs (MBbls)
 
853

 
453

 
1,593

 
859

    Natural gas (MMcf)
 
5,372

 
6,775

 
10,182

 
13,803

    Total barrels of oil equivalent (MBoe)
 
5,193

 
4,643

 
9,807

 
8,816

 
 
 
 
 
 
 
 
 
Daily production volumes by product -
 
 
 
 
 
 
 
 
    Crude oil (Bbls/d)
 
37,860

 
33,629

 
36,008

 
31,250

    NGLs (Bbls/d)
 
9,379

 
4,982

 
8,800

 
4,746

    Natural gas (Mcf/d)
 
59,029

 
74,451

 
56,252

 
76,260

    Total barrels of oil equivalent (Boe/d)
 
57,077

 
51,019

 
54,183

 
48,706

 
 
 
 
 
 
 
 
 
Daily production volumes by region (Boe/d) -
 
 
 
 
 
 
 
 
    Eagle Ford
 
37,039

 
38,055

 
36,335

 
35,332

    Delaware Basin
 
19,783

 
2,151

 
17,522

 
2,284

    Other
 
255

 
10,813

 
326

 
11,090

    Total barrels of oil equivalent (Boe/d)
 
57,077

 
51,019

 
54,183

 
48,706

 
 
 
 
 
 
 
 
 
Realized prices -
 
 
 
 
 
 
 
 
    Crude oil ($ per Bbl)
 

$66.70

 

$46.67

 

$65.17

 

$47.90

    NGLs ($ per Bbl)
 

$24.93

 

$17.19

 

$23.96

 

$17.71

    Natural gas ($ per Mcf)
 

$2.40

 

$2.35

 

$2.59

 

$2.30








CARRIZO OIL & GAS, INC.
COMMODITY DERIVATIVE CONTRACTS - AS OF AUGUST 1, 2018
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
CRUDE OIL
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume
 
Sub-Floor Price
 
Floor Price
 
Ceiling Price
Period
 
Type of Contract
 
(Bbls/d)
 
($/Bbl)
 
($/Bbl)
 
($/Bbl)
Q3 2018
 
Fixed Price Swaps
 
6,000

 
 
 

$49.55

 
 
 
 
 
Three-Way Collars
 
24,000

 

$39.38

 

$49.06

 
 

$60.14

 
 
Basis Swaps
 
18,000

 
 
 

$5.11

(1) 
 
 
 
 
Basis Swaps
 
6,000

 
 
 

($0.10
)
(2) 
 
 
 
 
Net Sold Call Options
 
3,388

 
 
 
 
 
 

$71.33

 
 
 
 
 
 
 
 
 
 
 
 
Q4 2018
 
Fixed Price Swaps
 
6,000

 
 
 

$49.55

 
 
 
 
 
Three-Way Collars
 
24,000

 

$39.38

 

$49.06

 
 

$60.14

 
 
Basis Swaps
 
18,000

 
 
 

$5.11

(1) 
 
 
 
 
Basis Swaps
 
6,000

 
 
 

($0.10
)
(2) 
 
 
 
 
Net Sold Call Options
 
3,388

 
 
 
 
 
 

$71.33

 
 
 
 
 
 
 
 
 
 
 
 
Q1 2019
 
Three-Way Collars
 
15,000

 

$41.00

 

$49.72

 
 

$62.48

 
 
Basis Swaps
 
3,000

 
 
 

($3.83
)
(2) 
 
 
 
 
Net Sold Call Options
 
3,875

 
 
 
 
 
 

$73.66

 
 
 
 
 
 
 
 
 
 
 
 
Q2 2019
 
Three-Way Collars
 
15,000

 

$41.00

 

$49.72

 
 

$62.48

 
 
Basis Swaps
 
3,000

 
 
 

($3.83
)
(2) 
 
 
 
 
Net Sold Call Options
 
3,875

 
 
 
 
 
 

$73.66

 
 
 
 
 
 
 
 
 
 
 
 
Q3 2019
 
Three-Way Collars
 
15,000

 

$41.00

 

$49.72

 
 

$62.48

 
 
Basis Swaps
 
3,500

 
 
 

($4.18
)
(2) 
 
 
 
 
Net Sold Call Options
 
3,875

 
 
 
 
 
 

$73.66

 
 
 
 
 
 
 
 
 
 
 
 
Q4 2019
 
Three-Way Collars
 
15,000

 

$41.00

 

$49.72

 
 

$62.48

 
 
Basis Swaps
 
11,000

 
 
 

($3.84
)
(2) 
 
 
 
 
Net Sold Call Options
 
3,875

 
 
 
 
 
 

$73.66

 
 
 
 
 
 
 
 
 
 
 
 
FY 2020
 
Net Sold Call Options
 
4,575

 
 
 
 
 
 

$75.98

 
(1)
Represents the fixed premium between LLS prices and WTI prices at Cushing, Oklahoma.
(2)
Represents the fixed discount between WTI prices at Midland, Texas and WTI prices at Cushing, Oklahoma.










CARRIZO OIL & GAS, INC.
COMMODITY DERIVATIVE CONTRACTS - AS OF AUGUST 1, 2018
(Unaudited)
(Continued)
 
 
 
 
 
 
 
 
 
NATURAL GAS LIQUIDS
 
 
 
 
 
 
 
 
 
 
 
Volume
 
Fixed Price (1)
Period
 
Product Stream
 
Type of Contract
 
(Bbls/d)
 
($/Bbl)
Q3 2018
 
Ethane
 
Fixed Price Swaps
 
2,200

 

$12.01

 
 
Propane
 
Fixed Price Swaps
 
1,500

 

$34.23

 
 
Butane
 
Fixed Price Swaps
 
200

 

$38.85

 
 
Isobutane
 
Fixed Price Swaps
 
600

 

$38.98

 
 
Natural Gasoline
 
Fixed Price Swaps
 
600

 

$55.23

 
 
 
 
 
 
 
 
 
Q4 2018
 
Ethane
 
Fixed Price Swaps
 
2,200

 

$12.01

 
 
Propane
 
Fixed Price Swaps
 
1,500

 

$34.23

 
 
Butane
 
Fixed Price Swaps
 
200

 

$38.85

 
 
Isobutane
 
Fixed Price Swaps
 
600

 

$38.98

 
 
Natural Gasoline
 
Fixed Price Swaps
 
600

 

$55.23

 
(1)
The fixed prices of the Company’s natural gas liquids derivative contracts are based on the OPIS Mont Belvieu Non-TET reference prices for the applicable product stream.

NATURAL GAS
 
 
 
 
 
 
 
 
 
 
 
 
 
Volume
 
Floor Price
 
Ceiling Price
Period
 
Type of Contract
 
(MMBtu/d)
 
($/MMBtu)
 
($/MMBtu)
Q3 2018
 
Fixed Price Swaps
 
25,000

 

$3.01

 
 
 
 
Sold Call Options
 
33,000

 
 
 

$3.25

 
 
 
 
 
 
 
 
 
Q4 2018
 
Fixed Price Swaps
 
25,000

 

$3.01

 
 
 
 
Sold Call Options
 
33,000

 
 
 

$3.25

 
 
 
 
 
 
 
 
 
FY 2019
 
Sold Call Options
 
33,000

 
 
 

$3.25

 
 
 
 
 
 
 
 
 
FY 2020
 
Sold Call Options
 
33,000

 
 
 

$3.50








CARRIZO OIL & GAS, INC.
THIRD QUARTER AND FULL YEAR 2018 GUIDANCE SUMMARY
 
 
 
 
 
 
 
 
 
Third Quarter 2018
 
Full Year 2018
Daily Production Volumes (Boe/d)
 
62,000 - 63,000
 
58,700 - 60,100
 
Crude oil
 
65%
 
65% - 67%
 
NGLs
 
17%
 
16% - 17%
 
Natural gas
 
18%
 
17% - 18%
 
 
 
 
 
 
Unhedged Commodity Price Realizations
 
 
 
 
 
Crude oil (% of NYMEX oil)
 
95.0% - 97.0%
 
N/A
 
NGLs (% of NYMEX oil)
 
38.0% - 40.0%
 
N/A
 
Natural gas (% of NYMEX gas)
 
80.0% - 82.0%
 
N/A
 
 
 
 
 
 
Cash paid for derivative settlements, net ($MM)
 
($28.5) - ($24.5)
 
N/A
 
 
 
 
 
 
Costs and Expenses -
 
 
 
 
 
Lease operating ($/Boe)
 
$6.75 - $7.25
 
$7.15 - $7.50
 
Production taxes (% of total revenues)
 
4.75% - 5.00%
 
4.70% - 4.90%
 
Ad valorem taxes (% of total revenues)
 
1.25% - 1.75%
 
1.10% - 1.50%
 
Cash general and administrative, net ($MM)
 
$10.0 - $10.5
 
$52.5 - $53.5
 
Depreciation, depletion and amortization ($/Boe)
 
$13.75 - $14.75
 
$13.75 - $14.50
 
Interest expense, net ($MM)
 
$15.8 - $16.8
 
N/A
 
 
 
 
 
 
Capital Expenditures -
 
 
 
 
 
Drilling, completion, and infrastructure ($MM)
 
N/A
 
$800.0 - $825.0
 
Interest ($MM)
 
$8.0 - $8.5
 
N/A





View differences made from one to another to evaluate Carrizo Oil Gas Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Carrizo Oil Gas Inc.

Continue

Assess how Carrizo Oil Gas Inc's management team is paid from their Annual Proxy

Definitive Proxy Statement (Form DEF 14A)
Screenshot example of actual Proxy Statement

Carrizo Oil Gas Inc's Definitive Proxy Statement (Form DEF 14A) filed after their 2018 10-K Annual Report includes:

  • Voting Procedures
  • Board Members
  • Executive Team
  • Salaries, Bonuses, Perks
  • Peers / Competitors

Continue

SEC Filing Tools

Material Contracts, Statements, Certifications & more

Carrizo Oil Gas Inc provided additional information to their SEC Filing as exhibits

Ticker: CRZO
CIK: 1040593
Form Type: 8-K Corporate News
Accession Number: 0001040593-18-000109
Submitted to the SEC: Mon Aug 06 2018 5:15:58 PM EST
Accepted by the SEC: Mon Aug 06 2018
Period: Monday, August 6, 2018
Industry: Crude Petroleum And Natural Gas
Events:
  1. Earnings Release
  2. Financial Exhibit

External Resources:
Stock Quote
Social Media

Bookmark the Permalink:
https://last10k.com/sec-filings/crzo/0001040593-18-000109.htm