EXHIBIT 99.1
[CARRIZO OIL & GAS, INC. LOGO] [NEWS LOGO]
- --------------------------------------------------------------------------------
PRESS RELEASE CONTACT: CARRIZO OIL & GAS, INC.
B. ALLEN CONNELL, DIRECTOR OF INVESTOR RELATIONS
PAUL F. BOLING, CHIEF FINANCIAL OFFICER
(281) 496-1352
CARRIZO OIL & GAS, INC. ANNOUNCES SECOND QUARTER 2004 FINANCIAL RESULTS
INCLUDING RECORD REVENUES AND EBITDA
HOUSTON, AUGUST 16, 2004 -- CARRIZO OIL & GAS, INC. (NASDAQ: CRZO) today
reported the Company's financial results for the second quarter of 2004, which
included the following highlights:
SECOND QUARTER 2004 RESULTS --
THE SECOND QUARTER 2004 RESULTS INCLUDED THE FOLLOWING HIGHLIGHTS:
o PRODUCTION OF 1.99 BCFE.
o RECORD QUARTERLY REVENUE OF $12.0 MILLION.
o NET INCOME OF $2.0 MILLION.
o RECORD EBITDA, AS DEFINED BELOW, OF $8.3 MILLION.
Revenues for the three months ended June 30, 2004 increased 35 percent to $12.0
million as compared to $8.8 million during the quarter ended June 30, 2003. The
increase in revenues was driven by higher natural gas production and higher
prevailing oil and natural gas prices. Production volumes during the three
months ended June 30, 2004 increased 18 percent to 1.99 Bcfe as compared to 1.68
Bcfe during the second quarter of 2003. The increase was largely due to new
production contributions from the Beach House #1 and #2 wells, 29 wells now
producing from the Barnett Shale and the Shadyside #1 well. Carrizo's average
oil sales price increased 25 percent to $35.27 per barrel from $28.23 per barrel
during the second quarter of 2003, while the average natural gas sales price
increased eight percent to $6.07 per Mcf from $5.64 per Mcf in the second
quarter of 2003. The above prices include the effect of hedging activities.
After dividends, accretion of discount on preferred stock and the cumulative
effect of change in accounting principle, the Company reported net income
available to common shares ("Net Income") of $2.0 million, or $0.10 per both
basic and diluted share for the three months ended June 30, 2004, as compared to
$1.8 million, or $0.13 and $0.11 per basic and diluted share, respectively, for
the same quarter during 2003. For the quarter ended June 30, 2004, Net Income
was $2.8 million, or $0.15 and $0.14 per basic and diluted share, respectively,
excluding $0.8 million for the non-cash after-tax items of stock option
compensation expense ($0.5 million -
related to employee stock options repriced in 2000) and equity in the loss of
Pinnacle Gas Resources ($0.3 million - primarily dividends on preferred stock).
EBITDA (earnings before interest, income tax, depreciation and amortization
expenses, and certain other non-cash items) during the second quarter of 2004
was $8.3 million, or $0.43 and $0.41 per basic and diluted share, respectively,
as compared to $5.7 million, or $0.40 and $0.34 per basic and diluted share,
respectively, during the second quarter of 2003.
Oil and gas operating expenses, including production taxes, increased to $2.0
million during the three months ended June 30, 2004 as compared to $1.8 million
for the second quarter of 2003. The increase was primarily due to higher
production taxes.
Depreciation, depletion and amortization expenses ("DD&A") were $3.6 million
during the three months ended June 30, 2004 as compared to $2.6 million during
the second quarter of 2003. The increase in DD&A expense was due to (1) an
increase in the DD&A rate primarily due to additions to the proved property cost
base and (2) an increase in the production volumes.
General and administrative expenses ("G&A") increased to $1.6 million during the
three months ended June 30, 2004 from $1.3 million during the same quarter of
2003. The increase in G&A was due primarily to costs related to Sarbanes-Oxley
compliance and certain one time expenses including higher professional fees in
connection with the subordinated debt amendments.
Non-cash stock option compensation expense was $0.7 million ($0.5 million after
tax) for the three months ended June 30, 2004. This represents the increase in
value of employee stock options that were repriced in 2000.
Non-cash equity in the loss of Pinnacle Gas Resources, Inc. ("Pinnacle") was
$0.3 million (both before and after tax) for the second quarter of 2004. Net
losses are expected in this early phase of Pinnacle's development of its coalbed
methane play, initiated in the second half of 2003. Carrizo has no cash
requirements for the Pinnacle development program.
RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2004 --
THE RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2004 INCLUDE THE FOLLOWING
HIGHLIGHTS:
o PRODUCTION OF 3.85 BCFE.
o RECORD REVENUES OF $22.8 MILLION.
o NET INCOME OF $4.0 MILLION.
o RECORD EBITDA, AS DEFINED BELOW, OF $15.3 MILLION.
Revenues for the six months ended June 30, 2004 increased 17 percent to $22.8
million from $19.5 million during the six months ended June 30, 2003. The
increase in revenues was driven by higher prevailing oil and natural gas prices
and higher production. Production volumes
during the six months ended June 30, 2004 increased six percent to 3.85 Bcfe as
compared to 3.62 Bcfe during the first six months of 2003. Carrizo's average oil
sales price increased 18 percent to $34.41 per barrel from $29.04 per barrel
during the first six months of 2003, while the average natural gas sales price
increased four percent to $6.00 per Mcf from $5.78 per Mcf in the first six
months of 2003. The above prices include the effect of hedging activities.
The Company reported Net Income of $4.0 million, or $0.22 and $0.21 per basic
and diluted share, respectively, for the six months ended June 30, 2004, as
compared to $4.4 million, or $0.31 and $0.27 per basic and diluted share,
respectively, for the same period during 2003. For the six months ended June 30,
2004, Net Income was $5.1 million, or $0.28 and $0.27 per basic and diluted
share, respectively, excluding $1.1 million for the non-cash after-tax items of
(1) stock option compensation expense ($0.5 million - related to employee stock
options repriced in 2000) and (2) equity in the loss of Pinnacle Gas Resources
($0.6 million - comprised of a $0.1 million net loss from operations and $0.5
million for dividends on preferred stock).
EBITDA (earnings before interest, income tax, depreciation and amortization
expenses, and certain other non-cash items) during the first half of 2004 was
$15.3 million, or $0.86 and $0.81 per basic and diluted share, respectively, as
compared to $13.3 million, or $0.93 and $0.81 per basic and diluted share,
respectively, during the first half of 2003.
Oil and gas operating expenses, including production taxes, increased to $3.7
million during the six months ended June 30, 2004 as compared to $3.5 million in
the first six months of 2003. The increase was primarily the result of the
addition of new wells (including the Barnett Shale wells) and higher production
taxes.
Depreciation, depletion and amortization expenses ("DD&A") were $6.9 million
during the six months ended June 30, 2004 as compared to $5.6 million during the
first six months of 2003. The increase in DD&A expense was due to (1) an
increase in the DD&A rate primarily due to additions to the proved property cost
base and (2) in part to increased production volumes.
General and administrative expenses ("G&A") increased to $3.8 million during the
six months ended June 30, 2004 from $2.6 million during the same period of 2003.
The increase in G&A was due primarily to higher incentive compensation costs,
higher professional fees in connection with the 2003 year-end audit, costs
related to Sarbanes-Oxley compliance and higher professional fees in connection
with the subordinated debt amendments.
Non-cash stock option compensation expense was $0.8 million ($0.5 million after
tax) for the six months ended June 30, 2004.
Non-cash equity in the loss of Pinnacle was $0.6 million (both before and after
tax) for the first half of 2004.
"We are pleased with our performance this year both with operational results and
the increases in EBITDA," commented S.P. Johnson IV, Carrizo's President and
Chief Executive Officer. "We continue to focus on accelerating our investment in
our drilling program. Once our second quarter discoveries are all online to
sales we expect another increase in cash flow to fuel our
drilling program. We have continued to grow our Barnett Shale position as our
confidence in the economics of this play increases. In addition, we simplified
our balance sheet during the quarter with the conversion of our convertible
preferred stock into common stock."
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, 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, 2003 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ ------------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Oil and natural gas revenues $ 11,959,567 $ 8,828,186 $ 22,832,971 $ 19,491,639
------------ ------------ ------------ ------------
Costs and expenses:
Oil and natural gas operating expenses 2,046,330 1,763,214 3,722,538 3,483,025
Depreciation, depletion and amortization 3,606,390 2,605,034 6,852,986 5,640,920
General and administrative expenses 1,646,932 1,266,998 3,779,440 2,649,669
Accretion expense related to asset
retirement obligations 6,442 9,917 12,884 17,918
Stock option compensation expense (benefit) 746,302 32,850 755,984 23,370
------------ ------------ ------------ ------------
Total costs and expenses 8,052,396 5,678,013 15,123,832 11,814,902
------------ ------------ ------------ ------------
Operating income 3,907,171 3,150,173 7,709,139 7,676,737
------------ ------------ ------------ ------------
Other income and expenses, net (348,001) (81,943) (582,781) 17,972
Interest income 10,148 22,379 22,927 40,122
Interest expense, net of amounts capitalized (42,847) (5,308) (86,245) (10,272)
------------ ------------ ------------ ------------
Income before income taxes 3,526,471 3,085,301 7,063,040 7,724,559
------------ ------------ ------------ ------------
Income tax expense 1,388,416 1,124,855 2,741,564 2,793,595
------------ ------------ ------------ ------------
Net income before cumulative effect
of change in accounting principle 2,138,055 1,960,446 4,321,476 4,930,964
------------ ------------ ------------ ------------
Dividends and accretion of discount
on preferred stock 152,725 181,100 350,720 362,145
------------ ------------ ------------ ------------
Net income available to common shares
before cumulative effect of
change in accounting principle 1,985,330 1,779,346 3,970,756 4,568,819
------------ ------------ ------------ ------------
Cumulative effect of change
in accounting principle -- -- -- 128,374
------------ ------------ ------------ ------------
Net income available to common shares $ 1,985,330 $ 1,779,346 $ 3,970,756 $ 4,440,445
============ ============ ============ ============
EBITDA (see table below) $ 8,275,163 $ 5,725,031 $ 15,348,856 $ 13,257,543
============ ============ ============ ============
Basic net income per common share:
Net income before cumulative effect
of change in accounting principle $ 0.10 $ 0.13 $ 0.22 $ 0.32
Cumulative effect of change
in accounting principle -- -- -- (0.01)
------------ ------------ ------------ ------------
Basic net income per common share $ 0.10 $ 0.13 $ 0.22 $ 0.31
============ ============ ============ ============
Diluted net income per common share:
Net income before cumulative effect
of change in accounting principle $ 0.10 $ 0.11 $ 0.21 $ 0.28
Cumulative effect of change
in accounting principle -- -- -- (0.01)
------------ ------------ ------------ ------------
Diluted net income per common share $ 0.10 $ 0.11 $ 0.21 $ 0.27
============ ============ ============ ============
Basic weighted average common shares outstanding 19,213,010 14,211,173 17,913,220 14,204,690
------------ ------------ ------------ ------------
Diluted weighted average common shares outstanding 20,293,101 16,595,815 18,914,850 16,464,990
------------ ------------ ------------ ------------
CARRIZO OIL & GAS, INC.
CONDENSED BALANCE SHEET
06/30/04 12/31/03
------------ ------------
(unaudited)
ASSETS:
Cash and cash equivalents $ 2,998,547 $ 3,322,057
Other current assets 12,479,185 11,003,512
Net property and equipment 168,134,989 135,273,200
Other assets 1,027,087 567,755
Investment in Pinnacle Gas Resources, Inc. 6,027,733 6,636,589
------------ ------------
TOTAL ASSETS $190,667,541 $156,803,113
============ ============
LIABILITIES AND EQUITY:
Accounts payable and accrued liabilities $ 25,910,816 $ 24,001,971
Current maturities of long-term debt 433,187 2,139,549
Long-term notes payable 9,072,609 7,121,646
Long-term subordinated notes payable 27,777,538 26,991,413
Deferred income taxes 15,131,117 12,479,553
Other liabilities 998,069 883,117
Convertible participating preferred stock -- 7,114,103
Equity 111,344,205 76,071,761
------------ ------------
TOTAL LIABILITIES AND EQUITY $190,667,541 $156,803,113
============ ============
(1) Income tax expense for the three and six months ended June 30, 2004
includes a $1,343,416 and $2,651,564, respectively, provision for deferred
income taxes and a $45,000 and $90,000, respectively, provision for
currently payable franchise taxes. Income tax expense for the three and six
months ended June 30, 2003 includes a $1,079,855 and $2,703,595,
respectively, provision for deferred income taxes and a $45,000 and
$90,000, respectively, provision for currently payable franchise taxes.
(2) Long-term notes payable at December 31, 2003 includes a note in the
principal amount of $863,246 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 June 30, 2004 and December 31, 2003 current
maturities of long-term debt include $299,611 and $863,246, respectively,
related to the CCBM, Inc. note.
(3) Subordinated notes payable are presented net of discounts of $298,871 and
$342,012 as of June 30, 2004 and December 31, 2003, 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. All of the convertible participating preferred stock was
converted into 1,318,125 shares of common stock during the three months
ended June 30, 2004.
(6) During the six months ended June 30, 2004, 2,298,611 warrants were
converted into 2,003,070 shares of common stock.
(7) 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 SIX MONTHS ENDED
Reconciliation of Net Income to EBITDA JUNE 30, JUNE 30,
------------------------------ ------------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Net income before cumulative effect
of change in accounting principle $ 2,138,055 $ 1,960,446 $ 4,321,476 $ 4,930,964
------------ ------------ ------------ ------------
Cumulative effect of change
in accounting principle -- -- -- 128,374
------------ ------------ ------------ ------------
Net Income $ 2,138,055 $ 1,960,446 $ 4,321,476 $ 4,802,590
------------ ------------ ------------ ------------
Adjustments:
Depreciation, depletion and amortization 3,606,390 2,605,034 6,852,986 5,640,920
Interest expense, net of amounts capitalized
and interest income 32,699 (17,071) 63,318 (29,850)
Income taxes 1,388,416 1,124,855 2,741,564 2,793,595
Equity in Pinnacle Gas Resources, Inc. 600,644 356,859 9,000 9,000
Stock option compensation expense (benefit) 755,984 746,302 32,850 23,370
Accretion expense related to asset
retirement obligations 6,442 9,917 12,884 17,918
------------ ------------ ------------ ------------
EBITDA, as defined $ 8,275,163 $ 5,725,031 $ 15,348,856 $ 13,257,543
============ ============ ============ ============
EBITDA per basic common share $ 0.43 $ 0.40 $ 0.86 $ 0.93
============ ============ ============ ============
EBITDA per diluted common share $ 0.41 $ 0.34 $ 0.81 $ 0.81
============ ============ ============ ============
CARRIZO OIL & GAS, INC.
PRODUCTION VOLUMES AND PRICES
(unaudited)
Production volumes-
Oil and condensate (Bbls) 83,388 118,462 170,511 257,532
Natural gas (Mcf) 1,486,825 973,014 2,825,601 2,076,616
Natural gas equivalent (Mcfe) 1,987,153 1,683,786 3,848,667 3,621,808
Average sales prices-
Oil and condensate (per Bbl) $35.27 $28.23 $34.41 $29.04
Natural gas (per Mcf) $6.07 $5.64 $6.00 $5.78
Natural gas equivalent (per Mcfe) $6.02 $5.24 $5.93 $5.38
# # #