Carrizo announced the addition of the Union Bank of California, N.A. to its banking syndicate and the increase of commitments under its credit facility to $250 million from $222.5 million. This event raises the number of member banks from six to seven.
Chief Executive Officer S. P. "Chip" Johnson, IV stated, "We are very pleased to announce the addition of Union Bank of California to our banking consortium. Coming during this time of tightened credit availability, we believe today's announcement to be a vote of confidence in Carrizo's underlying value. While we have no current plans to make use of this increase in borrowing capability in our projected 2009 capital expenditure budget, we welcome the additional capital flexibility. As we recently announced, we plan to reduce 2009 capital expenditure levels to be equivalent to anticipated 2009 cash flow. Under our proposed 2009 budget, we believe we will still be able to increase production 70% from 2008 to 2009."
Carrizo's next credit facility borrowing base redetermination is scheduled for the first quarter of 2009. The Company expects the growth in reserves and new production resulting from the Company's fourth quarter 2008 Barnett Shale development activity to have a favorable impact on this redetermination.
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