PRESS RELEASE CONTACT: CARRIZO OIL & GAS, INC.
B. ALLEN CONNELL, DIRECTOR OF INVESTOR RELATIONS
FRANK A. WOJTEK, CHIEF FINANCIAL OFFICER
(281) 496-1352
CARRIZO OIL & GAS, INC. ANNOUNCES FIRST QUARTER 2003 FINANCIAL RESULTS; REVENUES
AND EBITDA REACH RECORD LEVELS
HOUSTON, MAY 1, 2003-- CARRIZO OIL & GAS, INC. (NASDAQ: CRZO) today reported the
Company's financial results for the first quarter of 2003, which included the
following highlights:
- - PRODUCTION OF 1.94 BCFE, AN INCREASE OF 37 PERCENT OVER FIRST QUARTER
2002.
- - RECORD QUARTERLY REVENUE OF $10.7 MILLION.
- - NET INCOME OF $2.8 MILLION.
- - RECORD EARNINGS BEFORE INTEREST, TAXES, DEPLETION, DEPRECIATION AND
AMORTIZATION ("EBITDA"), AS DESCRIBED IN THE TABLE BELOW, OF $7.5
MILLION.
Revenues for the three months ended March 31, 2003 increased 165 percent to
$10.7 million as compared to $4.0 million during the quarter ended March 31,
2002. The increase in revenues was driven primarily by a 37 percent increase in
production combined with higher prevailing oil and natural gas prices.
Production volumes during the three months ended March 31, 2003 were 1.94 Bcfe
as compared to 1.42 Bcfe during the first quarter of 2002. Carrizo's average oil
sales price increased 45 percent to $29.74 per barrel from $20.50 per barrel
during the first quarter of 2002, while the average natural gas sales price
increased 121 percent to $5.91 per Mcf from $2.67 per Mcf. The above prices
include the cash effect of hedging activities.
The Company reported net income available to common shares of $2.7 million, or
$0.19 and $0.16 per basic and diluted share, respectively, for the three months
ended March 31, 2003, as compared to $0.1 million, or $0.00 and $0.00 per basic
and diluted share, respectively, for the same quarter during 2002. Net income
included a charge of $128,000 for the cumulative effect of change in accounting
principle related to the implementation of SFAS No. 143, "Accounting for Asset
Retirement Obligations" and was net of dividends and accretion of discount on
preferred stock ("Preferred Stock Dividends") of $181,000. EBITDA during the
first quarter of 2003 increased 238 percent to $7.5 million, or $0.53 and $0.43
per basic and diluted share, respectively, as compared to $2.2 million, or $0.16
and $0.14 per basic and diluted share, respectively, during the first quarter of
2002. EBITDA increased eight percent over fourth quarter 2002 levels.
Oil and gas operating expenses, including production taxes, increased to $1.7
million during the three months ended March 31, 2003 as compared to $1.0 million
during the first quarter of 2002, due to higher severance taxes as a result of
higher oil and gas prices and the cost of operating an increased number of
wells. On a per unit basis, excluding severance taxes, oil and gas operating
expenses decreased to $0.48 per Mcfe from $0.52 per Mcfe during the first
quarter of 2002.
Depreciation, depletion and amortization expenses ("DD&A") were $3.0 million
during the three months ended March 31, 2003 ($1.57 per Mcfe) as compared to
$2.0 million ($1.39 per Mcfe) during the first quarter of 2002. The increase in
DD&A was due to higher production levels as well as an increase in the DD&A rate
primarily due to additions to the proved property cost base.
General and administrative expenses ("G&A") increased to $1.4 million during the
three months ended March 31, 2003 from $0.9 million during the same quarter of
2002. The increase in G&A was due primarily to the addition of staff to handle
increased drilling activities, higher compensation costs and higher insurance
costs. On a per unit basis, G&A increased to $0.71 per Mcfe during first quarter
2003, as compared to $0.65 per Mcfe during first quarter 2002.
"The first quarter 2003 financial results were record breaking in terms of
revenue and EBITDA," commented Frank A. Wojtek, Carrizo's Vice President and
Chief Financial Officer. "First quarter production averaged over 21.5 MMcfe per
day, which, combined with strong commodity prices, allowed the Company to
achieve quarterly revenues in excess of $10 million for the first time in
Company history. At current prices and anticipated production levels, Carrizo is
on a pace to exceed $30 million of EBITDA during 2003, in excess of $2.00 per
common share outstanding."
"We are now accelerating the pace of reinvestment of this cash flow into the
drilling and further development of our high potential prospect inventory, which
we expect will contribute to future production levels, cash flow, reserve
growth, and increased shareholder value," commented S.P. Johnson IV, Carrizo's
President and Chief Executive Officer. "We presently have two rigs drilling
Carrizo-operated wells in Matagorda County and in Liberty County, Texas and
expect to spud two additional Company-operated wells shortly. Completion
operations are also under way on three recently drilled wells, including two
successful wells in Matagorda County where we are performing the completions in
stages in light of the multiple pay zones encountered in the wells."
Carrizo Oil & Gas, Inc., is a Houston-based energy company actively engaged in
the exploration, development, exploitation and production of oil and natural gas
primarily in proven onshore trends along the Texas and Louisiana Gulf Coast
regions. Carrizo controls significant prospective acreage blocks and utilizes
advanced 3-D seismic techniques to identify potential oil and gas reserves and
drilling opportunities.
Statements in this news release, including but not limited to those relating to
the Company's or management's intentions, beliefs, expectations, hopes,
projections, assessment of risks, estimations, plans or predictions for the
future including potential effects or timing, expected 2003 levels of EBITDA,
acceleration of reinvestment of cash flow into the drilling and further
development of the Company's prospect inventory, including the potential of such
prospect inventory and the expected contribution to future production levels,
cash flow, reserve growth and shareholder value, the expected timing of drilling
of additional wells and other statements that are not historical facts are
forward looking statements that are based on current expectations. Although the
Company believes that its expectations are based on reasonable assumptions, it
can give no assurance that these expectations will prove correct. Important
factors that could cause actual results to differ materially from those in the
forward looking statements include the results and dependence on exploratory
drilling activities, operating risks, oil and gas price levels, land issues,
availability of equipment, weather and other risks described in the Company's
Form 10-K for the year ended December 31, 2002 and its other filings with the
Securities and Exchange Commission.
(Financial Highlights to Follow)
CARRIZO OIL & GAS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS ENDED
MARCH 31,
- --------------------------------------------------------------------------------------------------------------------------
2003 2002
- --------------------------------------------------------------------------------------------------------------------------
Oil and natural gas revenues $ 10,663,453 $ 4,026,893
- --------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Oil and natural gas operating expenses 1,719,811 1,012,656
Depreciation, depletion and amortization 3,035,886 1,969,723
General and administrative expenses 1,382,671 915,952
Accretion expense related to asset retirement obligations 8,001 -
Stock option compensation expense (benefit) (9,480) (42,035)
- --------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 6,136,889 3,856,296
- --------------------------------------------------------------------------------------------------------------------------
Operating income 4,526,564 170,597
- --------------------------------------------------------------------------------------------------------------------------
Other income and expenses, net 99,914 93,774
Interest income 17,743 20,027
Interest expense, net of amounts capitalized (4,963) -
- --------------------------------------------------------------------------------------------------------------------------
Income before income taxes 4,639,258 284,398
- --------------------------------------------------------------------------------------------------------------------------
Income tax expense 1,668,740 140,474
- --------------------------------------------------------------------------------------------------------------------------
Net income before cumulative effect of change in accounting principle 2,970,518 143,924
- --------------------------------------------------------------------------------------------------------------------------
Dividends and accretion of discount on preferred stock 181,045 74,259
- --------------------------------------------------------------------------------------------------------------------------
Net income available to common shares before cumulative effect of
change in accounting principle 2,789,473 69,665
- --------------------------------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principle 128,374 -
- --------------------------------------------------------------------------------------------------------------------------
Net income available to common shares $ 2,661,099 $ 69,665
==========================================================================================================================
EBITDA (see table below) $ 7,541,991 $ 2,234,094
==========================================================================================================================
Basic net income per common share:
Net income before cumulative effect of change in accounting principle $ 0.20 $ 0.00
Cumulative effect of change in accounting principle (0.01) 0.00
- --------------------------------------------------------------------------------------------------------------------------
Basic net income per common share $ 0.19 $ 0.00
==========================================================================================================================
Diluted net income per common share:
Net income before cumulative effect of change in accounting principle $ 0.17 $ 0.00
Cumulative effect of change in accounting principle (0.01) 0.00
- --------------------------------------------------------------------------------------------------------------------------
Diluted net income per common share $ 0.16 $ 0.00
==========================================================================================================================
Basic weighted average common shares outstanding 14,198,134 14,128,653
- --------------------------------------------------------------------------------------------------------------------------
Diluted weighted average common shares outstanding 17,456,766 16,233,807
- --------------------------------------------------------------------------------------------------------------------------
(more)
CARRIZO OIL & GAS, INC.
CONDENSED BALANCE SHEET
- -----------------------------------------------------------------------------------------------------------------------------
03/31/03 12/31/02
- -----------------------------------------------------------------------------------------------------------------------------
(unaudited)
ASSETS:
Cash and cash equivalents $ 7,183,848 $ 4,743,459
Other current assets 8,837,124 9,358,716
Net property and equipment 121,596,441 120,526,484
Other assets 716,558 759,524
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 138,333,971 $ 135,388,183
=============================================================================================================================
LIABILITIES AND EQUITY:
Accounts payable and accrued liabilities $ 12,563,456 $ 13,935,460
Current maturities of long-term debt 1,610,900 1,608,744
Long-term notes payable 12,002,962 12,408,186
Long-term subordinated notes payable 25,849,058 25,477,844
Deferred income taxes 9,220,663 7,666,048
Other liabilities 1,357,931 1,102,941
Convertible participating preferred stock 6,554,318 6,373,273
Equity 69,174,683 66,815,687
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 138,333,971 $ 135,388,183
=============================================================================================================================
(1) Income tax expense for the quarter ended March 31, 2003 includes a
$1,623,740 provision for deferred income taxes and a $45,000 provision for
currently payable franchise taxes. Income tax expense for the quarter
ended March 31, 2002 includes a $99,539 provision for deferred income
taxes and a $40,935 provision for currently payable franchise taxes.
(2) Long-term notes payable at March 31, 2003 and December 31, 2002 includes a
note in the principal amount of $4,875,000 and $5,250,000, respectively,
payable by CCBM, Inc. (a wholly-owned subsidiary of the Company) to Rocky
Mountain Gas, Inc. recourse solely to CCBM, Inc.'s interests in certain
undeveloped oil and natural gas leases in Wyoming and Montana. At March
31, 2003 and December 31, 2002 current maturities of long-term debt
include $1,500,000 related to the CCBM, Inc. note.
(3) Subordinated notes payable are presented net of discounts of $406,594 and
$428,079 as of March 31, 2003 and December 31, 2002, respectively.
(4) Stock option compensation expense (benefit) is a non-cash charge (benefit)
resulting from the change in the price of the stock underlying employee
stock options that were repriced in February 2000.
(5) In February 2002, the Company consummated the sale of $6 million of
convertible participating preferred stock and warrants to purchase the
Company's common stock. Convertible preferred stock is presented net of
discounts.
(6) The Company adopted Financial Accounting Standards Board Statement of
Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset
Retirement Obligations" on January 1, 2003, resulting in a charge of
$128,374 for the quarter ended March 31, 2003 to record the cumulative
effect of the change in accounting principle.
(more)
CARRIZO OIL & GAS, INC.
NON-GAAP DISCLOSURES
(unaudited)
THREE MONTHS ENDED
Reconciliation of Net Income to EBITDA MARCH 31,
- ----------------------------------------------------------------------------------------------------------------------------
2003 2002
- ----------------------------------------------------------------------------------------------------------------------------
Net income before cumulative effect of change in accounting principle $ 2,970,518 $ 143,924
- ----------------------------------------------------------------------------------------------------------------------------
Cumulative effect of change in accounting principle 128,374 -
- ----------------------------------------------------------------------------------------------------------------------------
Net Income $ 2,842,144 $ 143,924
- ----------------------------------------------------------------------------------------------------------------------------
Adjustments:
Depreciation, depletion and amortization 3,035,886 1,969,723
Interest expense, net of amounts capitalized and interest income (12,780) (20,027)
Income taxes 1,668,740 140,474
Accretion expense related to asset retirement obligations 8,001 -
- ----------------------------------------------------------------------------------------------------------------------------
EBITDA, as defined $ 7,541,991 $ 2,234,094
============================================================================================================================
EBITDA per basic common share $ 0.53 $ 0.16
============================================================================================================================
EBITDA per diluted common share $ 0.43 $ 0.14
============================================================================================================================
The Company is using "EBITDA" rather than "cash flow from operations before
changes in working capital" in order to be more consistent with recently adopted
Regulation G and related SEC rules.
CARRIZO OIL & GAS, INC.
PRODUCTION VOLUMES AND PRICES
(unaudited)
Production volumes-
Oil and condensate (Bbls) 139,070 53,209
Natural gas (Mcf) 1,103,602 1,098,616
Natural gas equivalent (Mcfe) 1,938,022 1,417,870
Average sales prices-
Oil and condensate (per Bbl) $29.74 $20.50
Natural gas (per Mcf) $5.91 $2.67
Natural gas equivalent (per Mcfe) $5.50 $2.84
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