Highlights of the conference include the following operational update for the Niobrara:
[Press Release Excerpt] In the Niobrara formation, Carrizo has tested 40-acre spacing in the B bench at five separate pilots spread across its acreage position. Based on the analysis of these well results, combined with an analysis of non-operated results, Carrizo has adjusted its development in Area 1 and part of Area 2 to include 40-acre spacing vs. 60-acre spacing previously. This adds approximately 75 net locations to the company’s drilling inventory in the play. Additionally, as the added locations are in the Company’s higher-return areas of the play, Carrizo is increasing its type curve EUR for the play to 275 MBoe per well from 253 MBoe; the Company’s type curve EUR excludes wells that are not economical below $80/Bbl.
The company also provided a 2015 Production and Capital Spending Outlook:
[Press Release Excerpt] Given the decline in commodity prices, Carrizo is reducing its planned capital spending in 2015 vs. 2014. Carrizo’s initial 2015 drilling and completion plan is $450-$470 million, a decrease of approximately 35% vs. the 2014 level. This level of spending should allow the Company to run three rigs in the Eagle Ford during the year as well as participate in lease maintenance activity in the Niobrara and Utica. Carrizo expects to be able to easily manage its leasehold obligations during the year with its 2015 plan. The Company’s initial 2015 land and seismic capital expenditure plan in $35 million.
Carrizo is providing initial 2015 oil production guidance of 21,800-22,400 Bbls/d. Using the midpoint of this range, the Company’s 2015 oil production growth guidance equates to 17%. For natural gas and NGLs, Carrizo is providing initial 2015 guidance of 65-75 MMcfe/d; this assumes the Company voluntarily curtails a larger amount of volumes in the Marcellus Shale in 2015 vs. 2014 due to depressed local market prices. For the first quarter of 2015, Carrizo expects oil production to be 20,300-20,700 Bbls/d and natural gas and NGL production to be 63-73 MMcfe/d. A summary of Carrizo’s production and cost guidance is provided in the attached tables.