Carrizo reports record oil and gas production in 1Q
Carrizo Oil and Gas Inc., which has been scaling back exploration in the Niobrara shale formation in Weld County, still reported record production for the first quarter in an earnings report issued Wednesday.
Officials at Houston-based Carrizo (Nasdaq: CRZO) had said in February that the company planned to allocate “a small amount of capital” to its Colorado drilling operations in 2016 as it aims to reduce overall capital spending and focus its efforts on its assets in the Eagle Ford play in Texas. Bloomberg had reported in December that Carrizo was looking to sell those assets.
In the report for the quarter that ended March 31, Carrizo said oil production and total production both were 21 percent ahead of the first quarter of 2015. It reported a loss from continuing operations of $311.4 million, or $5.34 per diluted share, compared with a loss of $21.5 million, or 46 cents per basic and diluted share, in the same quarter of 2015. Adjusted net income for the quarter was $9.2 million, or 16 cents per basic and diluted share, compared with $6.4 million, or 14 cents per basic and diluted share, in the first quarter of 2015.
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Carrizo did not drill or complete any operated wells in the Niobrara shale play during the first quarter. Crude oil production from the Niobrara was more than 2,400 barrels of oil equivalent per day for the quarter, up from approximately 1,900 barrels per day in the prior quarter because of increased non-operated production, the company said. For 2016, Carrizo has allocated a small amount of capital to the Niobrara for the completion of several drilled-but-uncompleted wells in addition to continued non-operated activity.
For the first quarter of 2016, adjusted earnings before interest, income taxes, depreciation, depletion, and amortization was $92.5 million, a decrease of 9 percent from the prior year’s first quarter as the impact of lower commodity prices more than offset the impact of higher production volumes.
“We delivered another strong quarter operationally, with production again exceeding our forecast and operating expenses coming in below our forecast,” said S.P. “Chip” Johnson IV, Carrizo’s president and chief executive. “Additionally, we remain well positioned to prudently manage the current commodity price downturn. We have a strong financial position with an excellent 2016 hedge book and ample liquidity available on our revolver. This, coupled with our deep inventory of economical drilling locations, should allow us to quickly ramp up our activity and production once we get an appropriate commodity price signal.”
On Monday, the day before the report was issued, Carrizo’s stock slid 7.22 percent to $32.79, a loss of $2.55 per share. It was trading at $32.53 a share near the close of trading on Tuesday.
