Carrizo Oil & Gas Increases Production

Carrizo Oil & Gas, Inc. announced the operating results for the second quarter of 2002. In the Company's core areas in South Texas and Louisiana, the Company participated in the drilling of four gross exploratory wells, all of which were successful, resulting in a 100 percent apparent success rate for the quarter. As of the end of the quarter, these four successful wells were in process of being completed, or were awaiting pipeline hookup to commence production, and drilling operations were underway on two additional wells. Since the beginning of the year, Carrizo has now drilled seven wells, all of which have been or are in the process of being completed.

Production during the second quarter of 2002 was estimated to have reached a Company quarterly record level of 1.83 Bcfe, an increase of 29 percent over first quarter 2002 production levels and 26 percent over second quarter 2001 levels. Natural gas compromised 70 percent of second quarter production. The Company estimates that second quarter 2002 sales prices averaged approximately $3.28 per Mcf and $23.46 per barrel. These prices include the effects of hedging activities which resulted in a reduction of the realized price of natural gas sold by $0.24 per Mcf and the realized price of oil sold by $0.71 per barrel. The oil sales price reflects the large volume of condensate production relative to total oil production.

Operating highlights during the second quarter of 2002 included the following:

  • The "Burkhart #1R" well in the Matagorda Project Area in Matagorda County, Texas reached total depth on June 16, 2002 and logged approximately 36 feet of net pay in the lower Frio section. The well commenced production on July 9, 2002 at a rate of 1,500 barrels of oil and 8,700 Mcf (17,700 Mcfe) per day. The Company owns a 35 percent working interest before payout and a 29.75 percent working interest after payout in the well. The Burkhart well is a follow-up well to the successful "Staubach #1" well which was drilled in the first quarter of 2002 and is presently producing at a rate of 1,690 barrels of oil and natural gas liquids and 3,400 Mcf (13,500 Mcfe) per day. Both the Burkhart #1R and Staubach #1 wells are operated by Brigham Exploration Company. On July 1, 2002, Carrizo, as operator, spud the "Pauline Huebner A-382 #1" well, which targets the lower Frio interval at the northern end of the estimated 800 acre structure from which the Burkhart and Staubach wells are producing. Carrizo has retained a 51 percent working interest in this well which is expected to reach total depth in the next three to four weeks.
  • On June 30, 2002, the Company, as operator, spud the "Delta Farms #2" well in the Company's LaRose prospect area in Lafourche Parish, Louisiana. The Company owns a 40 percent working interest in this well, which is a follow-up well to the initial test well, the "Delta Farms #1", that logged over 100 feet of net pay in three Cris I sand intervals below 13,500 feet. The Delta Farms #1 commenced production in late March 2002 from an 18 foot interval in the deepest pay sand and is presently producing at a rate of approximately 980 barrels of oil and 10,000 Mcf (15,880 Mcfe) per day. The Delta Farms #2 well is expected to reach total depth in approximately five weeks.
  • The "Riverdale #1", a follow-up well to the successful "Riverdale #2" well in the Company's Cabeza Creek Project Area in Goliad County, Texas, that reached total depth in the first quarter, was completed and commenced production on May 9, 2002 at a rate of approximately 3,000 Mcfe per day. During the quarter, the Company also drilled another follow-up well, the "Riverdale #3" which has also been completed and is awaiting further testing and pipeline hookup. Carrizo operates the wells and owns a 68.75 percent working interest. The Riverdale wells are presently temporarily shut-in due to flooding from recent heavy rains in the area which has delayed the installation of compression facilities, but are expected to be put back on production within the next week to ten days.

The record level of production reached in the second quarter included no contribution from the recently completed Burkhart well or any of the other three wells drilled during the quarter.

"Carrizo was again able to achieve exceptional operating results in the second quarter of 2002 with 100 percent drilling success on exploratory wells. Wells put onstream in the first quarter, particularly the Staubach #1 and the Delta Farms #1, boosted second quarter production to an average daily rate in excess of 20,000 Mcfe per day for the first time in Company history," commented S.P. Johnson IV, Carrizo's President and Chief Executive Officer. "We were also able to continue our drilling success in Goliad County with two additional successful Wilcox wells reaching total depth during the quarter, which, combined with new production from the Burkhart well, should allow for a further increase in the Company's production levels in the third quarter of 2002. In addition, we are particularly excited about the potential of the Matagorda County and Delta Farms follow-up wells that we are now drilling as each of these two wells, if successful, has the potential to boost future Company production and reserve levels even higher. The Company is also planning to spud several additional high impact potential wells later this year."