Summary Of Significant Accounting Policies (Policy) | 12 Months Ended |
Dec. 31, 2013 |
Accounting Policies [Abstract] | ' |
Basis Of Presentation And Principles Of Consolidation | ' |
Basis of Presentation and Principles of Consolidation |
The consolidated financial statements include the accounts of the Company after elimination of all significant intercompany transactions and balances and are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company proportionately consolidates its undivided interests in oil and gas properties as well as investments in unincorporated entities, such as partnerships and limited liability companies where the Company, as a partner or member, has undivided interests in the oil and gas properties. |
Reclassifications | ' |
Reclassifications |
Certain reclassifications have been made to prior period amounts to conform to the current period presentation. These reclassifications had no effect on total assets, total liabilities, total shareholders’ equity, net income or net cash provided by or used in operating, investing or financing activities. |
Discontinued Operations | ' |
Discontinued Operations |
On December 27, 2012, the Company agreed to sell Carrizo UK Huntington Ltd, a wholly owned subsidiary of the Company (“Carrizo UK”), and all of its interest in the Huntington Field discovery, where Carrizo UK owned a 15% non-operated working interest and certain overriding royalty interests. The sale closed on February 22, 2013. Accordingly, the Company classified the U.K. North Sea assets and associated liabilities as current and long-term assets held for sale and current and long-term liabilities associated with assets held for sale in the consolidated balance sheets as of December 31, 2012. As of December 31, 2013, the Company classified the remaining liabilities associated with the U.K. North Sea as current and long-term liabilities of discontinued operations in the consolidated balance sheets. The related results of operations and cash flows have been classified as discontinued operations in the consolidated statements of income, statements of cash flows and condensed consolidating financial information. Unless otherwise indicated, the information in these notes relates to the Company’s continuing operations. Information related to discontinued operations is included in “Note 3. Discontinued Operations”, “Note 13. Condensed Consolidating Financial Information” and “Note 14. Supplemental Disclosures about Oil and Gas Producing Activities (Unaudited).” |
Use Of Estimates | ' |
Use of Estimates |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods reported. Certain of such estimates are inherently unpredictable and will differ from actual results. The Company evaluates subsequent events through the date the financial statements are issued. |
Significant estimates include volumes of proved oil and gas reserves, which are used in calculating the amortization of proved oil and gas property costs, the present value of future net revenues included in the full cost ceiling test, estimates of future taxable income used in assessing the realizability of deferred tax assets, and the estimated costs and timing of cash outflows underlying asset retirement obligations. Oil and gas reserve estimates, and therefore calculations based on such reserve estimates, are subject to numerous inherent uncertainties, the accuracy of which, is a function of the quality and quantity of available data, the application of engineering and geological interpretation and judgment to available data and the interpretation of mineral leaseholds and other contractual arrangements, including adequacy of title, drilling requirements and royalty obligations. These estimates also depend on assumptions regarding quantities and production rates of recoverable oil and gas reserves, oil and gas prices, timing and amounts of development costs and operating expenses, all of which will vary from those assumed in the Company’s estimates. Other significant estimates are involved in determining impairments of unevaluated leasehold costs, fair values of derivative instruments, stock-based compensation expense attributable to stock appreciation rights, collectability of receivables, and in evaluating disputed claims, interpreting contractual arrangements (including royalty obligations and notional interest calculations) and contingencies. Estimates are based on current assumptions that may be materially affected by the results of subsequent drilling and completion, testing and production as well as subsequent changes in oil and gas prices, counterparty creditworthiness, interest rates and the market value and volatility of the Company’s common stock. |
Cash And Cash Equivalents | ' |
Cash and Cash Equivalents |
Cash and cash equivalents include highly liquid investments with original maturities of three months or less. |
Accounts Receivable And Allowance For Doubtful Accounts | ' |
Accounts Receivable and Allowance for Doubtful Accounts |
The Company establishes an allowance for doubtful accounts when it determines that it will not collect all or a part of an accounts receivable balance. The Company assesses the collectability of its accounts receivable on a quarterly basis and adjusts the allowance as necessary using the specific identification method. At December 31, 2013 and 2012, the Company’s allowance for doubtful accounts was $0.6 million and $1.4 million, respectively. |
Concentration Of Credit Risk | ' |
Concentration of Credit Risk |
Substantially all of the Company’s accounts receivable result from oil and gas sales, joint interest billings to third-party working interest owners in the oil and gas industry or development advances to third-party operators for drilling and completion costs of wells in progress. This concentration of customers and joint interest owners may impact the Company’s overall credit risk in that these entities may be similarly affected by changes in economic and other industry conditions. The Company does not require collateral from its customers. The Company generally has the right to offset revenue against related billings to joint interest owners. |
Derivative instruments subject the Company to a concentration of credit risk. See “Note 11. Derivative Instruments” for further discussion of concentration of credit risk related to the Company’s derivative instruments. |
Major Customers | ' |
Major Customers |
In 2013, two customers accounted for approximately 47% and 23% of the Company’s oil and gas revenues. In 2012, two customers accounted for approximately 53% and 10% of the Company’s oil and gas revenues. In 2011, one customer accounted for approximately 43% of the Company’s oil and gas revenues. |
Oil And Gas Properties | ' |
Oil and Gas Properties |
Oil and gas properties are accounted for using the full cost method of accounting under which all productive and nonproductive costs directly associated with property acquisition, exploration and development activities are capitalized to cost centers established on a country-by-country basis. Internal costs, consisting of compensation and benefits, including stock-based compensation, associated with employees directly associated with acquisition, exploration and development activities are capitalized and totaled $15.0 million, $11.8 million and $9.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. Internal costs related to production, general corporate overhead and similar activities are expensed as incurred. |
Capitalized oil and gas property costs within a cost center are amortized on an equivalent unit-of-production method, converting natural gas to barrels of oil equivalent at the ratio of six thousand cubic feet of gas to one barrel of oil, which represents their approximate relative energy content. The equivalent unit-of-production rate is computed on a quarterly basis by dividing production by proved oil and gas reserves at the beginning of the quarter then applying such amount to capitalized oil and gas property costs, which includes estimated asset retirement costs, less accumulated amortization, plus the estimated future expenditures (based on current costs) to be incurred in developing proved reserves, net of estimated salvage values. Average depreciation, depletion and amortization (“DD&A”) per Boe was $21.38, $17.55 and $11.26 for the years ended December 31, 2013, 2012 and 2011, respectively. |
Unproved properties, not being amortized, include unevaluated leasehold and seismic costs associated with specific unevaluated properties, the cost of exploratory wells in progress, and related capitalized interest. Significant costs of unevaluated properties and exploratory wells in progress are assessed individually on a quarterly basis to determine whether or not and to what extent proved reserves have been assigned to the properties or if an impairment has occurred, in which case the related costs along with associated capitalized interest are added to the oil and gas property costs subject to amortization. Factors the Company considers in its impairment assessment include drilling results by the Company and other operators, the terms of oil and gas leases not held by production and drilling and completion capital expenditure plans. The Company expects to complete its evaluation of the majority of its unproved properties within the next five years and exploratory wells in progress within the next year. The costs of individually insignificant unevaluated leaseholds are grouped by major area and added to the oil and gas property costs subject to amortization based on the average primary lease term of the properties. The Company capitalized interest costs associated with its unevaluated leasehold and seismic costs and exploratory wells in progress of $29.9 million, $24.8 million and $23.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. The amount of interest costs capitalized is determined on a quarterly basis based on the average balance of unevaluated leasehold and seismic costs and the average balance of exploratory wells in progress using a weighted-average interest rate based on outstanding borrowings. |
Proceeds from the sale of proved oil and gas properties or unevaluated leasehold costs are recognized as a reduction of capitalized oil and gas property costs with no gain or loss recognized, unless the sale significantly alters the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center. On February 22, 2013, the Company closed the sale of Carrizo UK, which included all of the Company’s proved reserves in its U.K. cost center. As a result, in the first quarter of 2013, the Company recognized a $37.3 million pre-tax gain in “Net income from discontinued operations, net of income taxes” in the consolidated statements of income. Further, on October 31, 2013, the Company closed the sale of its remaining oil and gas properties in the Barnett. The proved reserves attributable to the Barnett sale represented 40% of the Company’s proved reserves as of October 31, 2013, which significantly altered the relationship between capitalized costs and proved reserves of oil and gas attributable to the Company’s U.S. cost center. As a result, the Company recognized a pre-tax loss on the sale of $45.4 million in “Loss on sale of oil and gas properties” in the consolidated statements of income in the fourth quarter of 2013. Other than the sales noted above, the Company has not had any sales that significantly altered the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center through December 31, 2013. |
Capitalized costs, less accumulated amortization and related deferred income taxes, are limited to the “cost center ceiling” equal to (i) the sum of (A) the present value of estimated future net revenues from proved oil and gas reserves, less estimated future expenditures to be incurred in developing and producing the proved reserves computed using a discount factor of 10%, (B) the costs of unproved properties not being amortized, and (C) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; less (ii) related income tax effects. If the net capitalized costs exceed the cost center ceiling, the excess is recognized as an impairment of oil and gas properties. An impairment recognized in one period may not be reversed in a subsequent period even if higher oil and gas prices increase the cost center ceiling applicable to the subsequent period. |
The estimated future net revenues used in the ceiling test are calculated using the average realized prices for sales of oil and gas on the first calendar day of each month during the preceding 12-month period prior to the end of the current reporting period. Prices are held constant indefinitely and are not changed except where different prices are fixed and determinable from applicable contracts for the remaining term of those contracts. Prices used in the ceiling test computation do not include the impact of derivative instruments because the Company elected not to meet the criteria to qualify its derivative instruments for hedge accounting treatment. |
Depreciation of other property and equipment is recognized using the straight-line method based on estimated useful lives ranging from five to ten years. |
Deferred Financing Costs | ' |
Deferred Financing Costs |
Deferred financing costs, net were $22.9 million and $23.9 million as of December 31, 2013 and 2012, respectively and include legal fees, accounting fees, underwriting fees, printing costs, and other direct costs associated with the issuance of debt securities and costs associated with the revolving credit facility. The capitalized costs are amortized to interest expense using the effective interest method over the terms of the debt securities or credit facility. |
Financial Instruments | ' |
Financial Instruments |
The Company’s financial instruments consist of cash and cash equivalents, receivables, payables, derivative instruments and long-term debt. The carrying amounts of cash and cash equivalents, receivables and payables approximate fair value due to the highly liquid or short-term nature of these instruments. The fair values of the Company’s derivative instruments are based on a third-party industry-standard pricing model that uses market data obtained from third-party sources, including (a) quoted forward prices for oil and gas, (b) discount rates and (c) volatility factors. The carrying amounts of long-term debt under the Company’s revolving credit facility approximate fair value as the borrowings bear interest at variable rates of interest. The carrying amounts of the Company’s senior notes and convertible senior notes may not approximate fair value because the notes bear interest at fixed rates of interest. See “Note 6. Long-Term Debt” and “Note 12. Fair Value Measurements.” |
Asset Retirement Obligations | ' |
Asset Retirement Obligations |
The Company’s asset retirement obligations represent the present value of the estimated future costs associated with the plugging and abandonment of oil and gas wells, removal of production equipment and facilities and restoring the surface of the land in accordance with the terms of the oil and gas lease and applicable local, state and federal laws. Determining asset retirement obligations requires estimates of the costs of plugging and abandoning oil and gas wells, removing production equipment and facilities and restoring the surface of the land as well as estimates of the economic lives of the oil and gas wells and future inflation rates. The resulting estimate of future cash outflows are discounted using a credit-adjusted risk-free interest rate that corresponds with the timing of the cash outflows. Cost estimates consider historical experience, third party estimates, the requirements of the oil and gas leases and applicable local, state and federal laws, but do not consider estimated salvage values. The asset retirement obligation is recognized when the well is drilled or when the production equipment and facilities are installed with an associated increase in oil and gas property costs. Asset retirement obligations are accreted to their expected settlement values with any difference between the actual cost of settling the asset retirement obligations and recorded amount being recognized as an adjustment to proved oil and gas property costs. On an interim basis, when indicators suggest there have been material changes in the estimates underlying the obligation, the Company reassesses its asset retirement obligations to determine whether any revisions to the obligations are necessary. At least annually, the Company reassesses all of its asset retirement obligations to determine whether any revisions to the obligation are necessary. Revisions typically occur due to changes in estimated costs or well economic lives, or if federal or state regulators enact new requirements regarding the abandonment of oil and gas wells. |
Commitments And Contingencies | ' |
Commitments and Contingencies |
Liabilities are recognized for contingencies when (i) it is both probable that an asset has been impaired or that a liability has been incurred and (ii) the amount of such loss is reasonably estimable. |
Revenue Recognition | ' |
Revenue Recognition |
Oil and gas revenues are recognized when production is sold to a purchaser at a fixed or determinable price, delivery has occurred, title has transferred and collectability is reasonably assured. The Company follows the sales method of accounting whereby revenues from the production of oil and gas properties in which the Company has an interest with other producers are recognized for production sold to purchasers, regardless of whether the sales are proportionate to the Company’s ownership interest in the property. Production imbalances are recognized as an asset or liability to the extent that the Company has an imbalance on a specific property that is in excess of its remaining proved reserves. Sales volumes are not significantly different from the Company’s share of production and as of December 31, 2013 and 2012, the Company did not have any material production imbalances. |
Derivative Instruments | ' |
Derivative Instruments |
The Company uses commodity derivative instruments, primarily fixed price swaps and costless collars, to manage its exposure to commodity price risk. All derivative instruments, are recorded on the consolidated balance sheets as either an asset or liability measured at fair value. The Company nets its derivative instrument fair value amounts executed with the same counterparty pursuant to ISDA master agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract. Although the derivative instruments provide an economic hedge of the Company’s exposure to commodity price volatility, because the Company elected not to meet the criteria to qualify its derivative instruments for hedge accounting treatment, gains and losses as a result of changes in the fair value of derivative instruments are recognized as gain (loss) on derivative instruments, net in the consolidated statements of income in the period in which the changes occur. The net cash flows resulting from the payments to and receipts from counterparties as a result of derivative settlements are classified in operating activities along with the cash flows of the underlying hedged transactions. The Company does not enter into derivative instruments for speculative or trading purposes. |
The Company’s Board of Directors establishes risk management policies and reviews derivative instruments, including volumes, types of instruments and counterparties, on a quarterly basis. These policies require that derivative instruments be executed only by the President or Chief Financial Officer after consultation with and concurrence by the President, Chief Financial Officer and Chairman of the Board. The master contracts with approved counterparties identify the President and Chief Financial Officer as the only Company representatives authorized to execute trades. See “Note 11. Derivative Instruments” for further discussion of the Company’s derivative instruments. |
Stock-Based Compensation | ' |
Stock-Based Compensation |
The Company has granted stock options, stock appreciation rights (“SARs”) that may be settled in cash or common stock at the option of the Company, SARs that may only be settled in cash, restricted stock awards and units to directors, employees and independent contractors. The Company recognized the following stock-based compensation expense, net of amounts capitalized for the periods indicated which is reflected as general and administrative expense in the consolidated statements of income: |
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| | Year Ended December 31, |
| | 2013 | | 2012 | | 2011 |
| | (In thousands) |
Stock appreciation rights | | $ | 17,303 | | | $ | (2,116 | ) | | $ | 1,546 | |
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Restricted stock awards and units | | 18,997 | | | 17,049 | | | 13,965 | |
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| | 36,300 | | | 14,933 | | | 15,511 | |
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Less: amounts capitalized | | (6,927 | ) | | (3,244 | ) | | (3,647 | ) |
Stock-based compensation expense, net of amounts capitalized | | $ | 29,373 | | | $ | 11,689 | | | $ | 11,864 | |
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Income Tax Benefit | | $ | 10,281 | | | $ | 4,449 | | | $ | 4,342 | |
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Stock Options and SARs. For stock options and for SARs that the Company may elect to settle in cash or common stock, stock-based compensation expense is based on the grant-date fair value and recognized over the vesting period (generally three years). For SARs that the Company has elected to settle in cash or SARs that may only be settled in cash, stock-based compensation expense is based on the fair value remeasured at each reporting period, recognized over the vesting period (generally three years) and classified as other accrued liabilities for the portion of the awards that are vested or are expected to vest within the next 12 months, with the remainder classified as long-term other liabilities. Subsequent to vesting, the liability for SARs that the Company expects to settle in cash is remeasured in earnings at each reporting period based on the fair value until the awards are settled. The Company recognizes stock-based compensation expense over the vesting period for stock options and SARs using the straight-line method, except for awards with performance conditions, in which case the Company uses the graded vesting method. Stock options typically expire ten years after the date of grant. SARs typically expire between four and seven years after the date of grant. |
The Company uses the Black-Scholes-Merton option pricing model to compute the fair value of stock options and SARs, which requires the Company to make the following assumptions: |
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• | The risk-free interest rate is based on the zero-coupon United States Treasury yield for the expected term at date of grant. | | | | | | | | | | | |
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• | The dividend yield on the Company’s common stock is assumed to be zero since the Company does not pay dividends and has no current plans to do so in the future. | | | | | | | | | | | |
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• | The volatility of the Company’s common stock is based on daily, historical volatility of the market price of the Company’s common stock over a period of time equal to the expected term and ending on the grant date. | | | | | | | | | | | |
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• | The expected term is based on historical exercises for various groups of directors, employees and independent contractors. | | | | | | | | | | | |
Restricted Stock Awards and Units. For restricted stock awards and units, stock-based compensation expense is based on the grant-date fair value and recognized over the vesting period (generally one to three years) using the straight-line method, except for award or units with performance conditions, in which case the Company uses the graded vesting method. The fair value of restricted stock awards and units is based on the price of the Company’s common stock on the grant date. For restricted stock awards and units granted to independent contractors, stock-based compensation expense is based on fair value remeasured at each reporting period and recognized over the vesting period (generally three years) using the straight-line method. |
Income Taxes | ' |
Income Taxes |
Income taxes are recognized based on earnings reported for tax return purposes in addition to a provision for deferred income taxes. Deferred income taxes are recognized at the end of each reporting period for the future tax consequences of cumulative temporary differences between the tax bases of assets and liabilities and their reported amounts in the Company’s financial statements based on existing tax laws and enacted statutory tax rates applicable to the periods in which the temporary differences are expected to affect taxable income. The Company routinely assesses the realizability of its deferred tax assets by taxing jurisdiction and considers its estimate of future taxable income based on production of proved reserves at estimated future pricing in making such assessments. If the Company concludes that it is more likely than not that some portion or all of the benefit from deferred tax assets will not be realized, the deferred tax assets are reduced by a valuation allowance. The Company classifies interest and penalties associated with income taxes as interest expense. |
Net Income (Loss) Per Common Share | ' |
Net Income From Continuing Operations Per Common Share |
Supplemental net income from continuing operations per common share information is provided below: |
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| | Year Ended December 31, |
| | 2013 | | 2012 | | 2011 |
| | (In thousands, except per share amounts) |
Net income from continuing operations | | $ | 21,858 | | | $ | 51,177 | | | $ | 32,534 | |
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Basic weighted average common shares outstanding | | 40,781 | | | 39,591 | | | 39,077 | |
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Effect of dilutive instruments | | 574 | | | 435 | | | 591 | |
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Diluted weighted average shares outstanding | | 41,355 | | | 40,026 | | | 39,668 | |
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Net income from continuing operations per common share | | | | | | |
Basic | | $ | 0.54 | | | $ | 1.29 | | | $ | 0.83 | |
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Diluted | | $ | 0.53 | | | $ | 1.28 | | | $ | 0.82 | |
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Basic net income from continuing operations per common share is based on the weighted average number of shares of common stock outstanding during the period. Diluted net income from continuing operations per common share is based on the weighted average number of common shares and all potentially dilutive common shares outstanding during the period which include restricted stock awards and units, stock options, SARs that the Company may elect to settle in cash or common stock, SARs the Company has elected to settle in common stock, warrants and convertible debt. The Company excludes the number of shares, units, options, rights and warrants from the calculation of diluted weighted average shares outstanding when the grant date or exercise prices are greater than the average market prices of the Company’s common stock for the corresponding period as the effect would be antidilutive to the computation. The number of shares, units, options, rights and warrants excluded for the years ended December 31, 2013, 2012 and 2011 were not significant. Shares of common stock subject to issuance upon the conversion of the Company’s convertible senior notes did not have an effect on the calculation of dilutive shares for the years ended December 31, 2013, 2012 and 2011 because the conversion price was in excess of the market price of the common stock for those periods |
Recently Adopted Accounting Pronouncements | ' |
Recently Adopted Accounting Pronouncements |
Effective January 1, 2013, the Company adopted the provisions of ASU No. 2011-11, Balance Sheet (Topic 210) Disclosures about Offsetting Assets and Liabilities, and began providing enhanced disclosures regarding the effect or potential effect of netting arrangements on an entity’s financial position by improving information about financial instruments and derivative instruments that either (1) offset in accordance with either ASC 210-20-45 or ASC 815-10-45 or (2) are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset. Reporting entities are required to disclose both gross and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The Company adopted this new disclosure requirement effective January 1, 2013. The adoption did not have a material effect on the Company’s consolidated financial statements. |