May 6, 2014 – In its first quarter report for 2014, Carrizo Oil & Gas, Inc. announced financial results for the first quarter of 2014 and provided an operational update. Production exceeded the high end of Company guidance due to strong performance from the Company’s Eagle Ford Shale, Utica Shale, and Marcellus Shale assets, which more than offset the impact of weather-related downtime in the Niobrara.
Operationally in the Niobrara Formation, Carrizo drilled 7 gross (2.0 net) operated wells during the first quarter, and completed 14 gross (5.5 net) wells. Crude oil production from the Niobrara was approximately 1,900 Bbls/d for the quarter, an increase of 6% versus the prior quarter. Niobrara production during the quarter was once again impacted by adverse weather conditions and other unscheduled downtime, which reduced the Company’s production by more than 450 Bbls/d. Carrizo is operating one rig in the Niobrara and currently expects to drill 32 gross (11 net) operated wells during 2014.
Carrizo has been testing multiple downspacing concepts in the Niobrara. The Company tested 60-acre spacing in the B bench at three separate pilots spread across its acreage position. The pilots have now been online for periods ranging from 60 to 120 days. Based on the analysis of these well results, combined with an analysis of non-operated results, Carrizo has adjusted its development plan to include 60-acre spacing vs. 80-acre spacing previously. This adds approximately 120 net locations to the Company’s drilling inventory in the play, bringing it to more than 470 net potential locations. Carrizo continues to participate in further downspacing tests operated by Noble Energy and Whiting Petroleum, which are testing downspacing as tight as 40-acres as well as potential in the A, B and C benches. In addition, Carrizo also has multiple operated 40-acre downspacing tests ongoing. The Company is testing both B-B-B and A-B-A lateral orientations in its 40-acre tests. While Carrizo is not currently including any potential from the A bench in its estimates, it is encouraged by the early results seen in its non-operated wells.