Carrizo to Reach Record Production for 2008
Carrizo Oil & Gas, Inc. announced current production and also estimated record production for the first half of 2008.
Net production is an estimated 72 MMcfe/d, including over 53 MMcfe/d in the Barnett Shale, with an estimated 8 MMcfe/d producing collectively from the three new horizontal wells on the Company's Christian lease in southeast Tarrant County. Including the Christian wells, Carrizo has now put 21 consecutive wells on line in its southeast Tarrant County Barnett Shale area with initial gross rates of 4,000 Mcfe/d or greater. There are currently 24 net horizontal wells (representing an estimated 61 MMcfe/d of new net production) in the Barnett Shale already drilled but waiting on completion. We anticipate no pipeline capacity related issues as we complete and bring these wells on production. Carrizo is currently operating six Barnett Shale rigs drilling horizontal wells, four in southeast Tarrant County, one in Denton County, and one in Parker County.
Production during the second quarter of 2008 is estimated to be 6.10 Bcfe (67 MMcfe/d), or 45 percent above the 4.2 Bcfe (46.2 MMcfe/d) of production in the second quarter 2007. This is about 6 MMcfe/d, or 8%, below Carrizo's second quarter production guidance and is primarily attributable to gathering line easement delays associated with bringing five new Barnett Shale wells on line (total estimated impact 11 MMcfe/d initial net rate) and with bringing Carrizo's two Gulf Coast area LL&E development wells on line in Lafourche Parrish, Louisiana (total estimated impact 3.5 MMcfe/d initial net rate). Estimated production for the first half of 2008 reached a record level of 12.4 Bcfe (68.3 MMcfe/d), or 67% higher than the 7.41 Bcfe (40.9 MMcfe/d) of production in the first half of 2007.
Production was also impacted by the shut-in of two key SE Tarrant wells for two weeks as Carrizo brought its 6,000 HP Remington compressor station on-line in June. Combined with the 17 mile gas gathering system the Company is installing in SE Tarrant County (that feeds the Remington facility), Carrizo anticipates saving over $0.7 million per month in third-party gathering and compression fees as production increases in the second half of 2008.
The Company continues to successfully grow its acreage position in Tarrant County, acquiring an additional 5,000 net acres in the first half of 2008 to bring its total to over 15,000 net acres. Accordingly, the current inventory of wells to be drilled in Tarrant County over the next four to five years has increased to more than 300 net wells. The Company continues to actively pursue additional acreage in Tarrant County, further increasing its drilling inventory in the area.
The Company continues to grow its acreage position in the Marcellus Shale, now totaling over 57,000 net acres in Pennsylvania and New York.
S.P. Johnson IV, Carrizo's President and Chief Executive Officer, said, "The recent gathering line delays have been resolved and our estimated current production rate is back up to 72 MMcfe/d. Coupled with the outstanding performance from the first 21 southeast Tarrant County horizontal wells and with the 24 additional net wells drilled and waiting on completion, representing an estimated 61 MMcfe/d of initial net rate, we remain on track to continue our forecasted substantial production growth trend in the second half of 2008."
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