Carrizo plans 12 Niobrara wells this year

WELD COUNTY – Carrizo Oil & Gas Inc., a producer operating in Weld County, has estimated its proven oil reserves in the Niobrara formation at about 731,000 barrels.

Carrizo also estimated its Niobrara proven natural-gas reserves at about 728,000 million cubic feet, the Houston-based company said in a statement Tuesday. Carrizo believes its total Niobrara proven reserves to be at 6 billion cubic feet equivalent.

The announcement comes ahead of the release of Carrizo’s fourth-quarter and 2011 earnings report, scheduled later this month.

Currently leasing more than 58,000 acres in the Niobrara, the company plans to run a rig in the area the entire year.

Carrizo began drilling in the Niobrara in late 2010, Vice President of Investor Relations Richard Hunter said in a phone interview. The company has 10 wells producing and two that are being drilled. At least another 12 wells are planned this year.

The company hired Xtreme Drilling LLC to drill the wells and Halliburton to complete them, Hunter said.

Carrizo plans operational spending of $43 million in the Niobrara this year.

The company expects to generate between $290 million and $320 million in revenue. That represents an increase of 280 percent to 320 percent from Carrizo’s prior-year crude oil revenue of $75.5 million.

“We anticipate our investment spending will be funded through cash flow, planned asset sales, a potential (joint venture) in the Niobrara, and borrowing on our revolving credit facility,” Carrizo CEO S.P. “Chip” Johnson IV said in the statement.

Carrizo’s Niobrara wells “continue to meet or exceed our expectations,” Johnson added.

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