Carrizo O&G announced an additional growth strategy in crude oil and liquids-rich plays. The Company is attempting to increase significantly the level of its crude oil and liquids production and reserves by as early as the first quarter of 2011. As part of this effort, the Company has completed the acquisition of acreage and is pursuing additional land acquisitions in an unconventional play that is rich in condensate and natural gas liquids located in the Eagle Ford shale formation, principally in LaSalle County, Texas. The Company is also pursuing land acquisitions in an unconventional oil play located in the Niobrara formation in the Denver-Julesberg basin in Weld County, Colorado.
The Company's Board of Directors has approved an increase in the Company's 2010 capital expenditure plan from $170 million to $225 million if the Company successfully completes the offering of common stock described below. The increase in the capital expenditure plan is expected to be allocated as follows:
Carrizo has commenced an underwritten public offering of 2,500,000 shares of its common stock under an effective shelf registration statement. The underwriters will have an option to purchase up to an additional 250,000 shares from Carrizo to cover any over-allotments. The Company intends to use the net proceeds from the offering to repay borrowings under its revolving credit facility. The Company expects to use the resulting additional capacity under its revolving credit facility to fund, in part, its recently expanded capital expenditure plan for 2010 and for general corporate purposes.
Wells Fargo Securities is serving as sole underwriter in the offering.
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