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 FOURTH QUARTER AND ANNUAL 2003 FINANCIAL
RESULTS; ANNUAL PRODUCTION, REVENUES AND EBITDA REACH RECORD LEVELS
HOUSTON, March 25, 2004 - Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today reported
the Company's financial results for the fourth quarter and year ended December
31, 2003.
Fourth Quarter 2003 Results --
The fourth quarter 2003 results included the following highlights:
o Production of 1.9 Bcfe.
o Oil and gas revenue of $8.9 million.
o Net income available to common shareholders of $0.8 million.
o EBITDA of $5.9 million.
Revenues for the three months ended December 31, 2003 decreased four percent to
$8.9 million as compared to $9.2 million during the quarter ended December 31,
2002. The decreased level of revenues was driven primarily by a 12 percent
decrease in production partially offset by higher prevailing oil and natural gas
prices. Production volumes during the three months ended December 31, 2003 were
1.9 Bcfe as compared to 2.1 Bcfe during the fourth quarter of 2002. Carrizo's
average oil sales price increased one percent to $28.17 per barrel from $27.93
per barrel during the fourth quarter of 2002, while the average natural gas
sales price increased 14 percent to $4.83 per Mcf from $4.24 per Mcf. The above
prices include the effects of hedging activities.
After dividends and accretion of discount on preferred stock, the Company
reported net income of $0.8 million, or $0.06 and $0.05 per basic and diluted
share, respectively, for the three months ended December 31, 2003, as compared
to $2.2 million, or $0.16 and $0.14 per basic and diluted share, respectively,
for the same quarter during 2002.
EBITDA (earnings before interest, income tax, depreciation and amortization
expenses, and certain other non-cash items) during the fourth quarter of 2003
decreased to $5.9 million, or $0.40 and $0.34 per basic and fully diluted share,
respectively, as compared to $7.0 million, or $0.49 and $0.43 per basic and
fully diluted share, respectively, during the fourth quarter of 2002.
The decrease in EBITDA was due mainly to the decrease in revenues and increases
in lease operating and general and administrative costs.
Oil and gas operating expenses, including production taxes, increased to $1.7
million during the three months ended December 31, 2003 as compared to $1.2
million during the fourth quarter of 2002, due to higher production taxes, as a
result of higher oil and gas prices, and the incremental cost of operating an
increased number of wells.
Depreciation, depletion and amortization expenses ("DD&A") were $3.1 million
($1.69 per Mcfe) during the three months ended December 31, 2003 as compared to
$3.2 million ($1.55 per Mcfe) during the fourth quarter of 2002. The rise in
DD&A per Mcfe was primarily due to an increase in the proved property cost base
from exploration and development drilling and transfers of cost from the
unproved property pool.
General and administrative expenses ("G&A") increased to $1.4 million during the
three months ended December 31, 2003 from $1.1 million during the same quarter
of 2002. The increase in G&A was due primarily to non-recurring charges for
legal and professional fees and printing costs in connection with certain
special projects.
By year-end 2003, Pinnacle Gas Resources, Inc. ("Pinnacle"), a minority-owned
subsidiary formed on June 23, 2003, had drilled 124 gross wells in its coalbed
methane play in Wyoming. A majority of these wells were in various stages of
completion, or were dewatering at year-end and, accordingly, operating losses
during the early months of Pinnacle's development program were expected. As a
result, using the equity method of accounting, Carrizo recorded a charge of $0.7
million (after tax), or $0.04 and $0.04 per basic and fully diluted share,
respectively, during the three months ended December 31, 2003 in connection with
Carrizo's equity ownership in Pinnacle's financial results for the period.
Results for the Year Ended December 31, 2003 --
The full year 2003 results included the following highlights:
o Record production of 7.5 Bcfe
o Record revenues of $38.5 million.
o Net income available to common shareholders of $7.2 million.
o Record EBITDA of $25.7 million.
Production volumes during the year ended December 31, 2003 reached a record
level of 7.5 Bcfe as compared to 7.2 Bcfe during 2002. Revenues for the year
ended December 31, 2003 were a record $38.5 million as compared to $26.8 million
during the year ended December 31, 2002 primarily due to a 39 percent increase
in the average sales price per Mcfe realized by the Company. The Company's
average natural gas sales price increased 53 percent to $5.35 per Mcf from $3.50
per Mcf during 2002, while the average oil sales price increased 16 percent to
$28.90
per barrel from $24.94 per barrel a year ago. The above prices include
the effects of hedging activities.
After dividends, accretion of discount on dividends and the cumulative effect of
change in accounting principle, the Company reported net income of $7.2 million,
or $0.50 and $0.43 per basic and diluted share, respectively, for the year ended
December 31, 2003, as compared to $4.2 million, or $0.30 and $0.26 per basic and
diluted share, respectively, for 2002.
EBITDA in the year ended December 31, 2003 reached a record level of $25.7
million, or $1.80 and $1.54 per basic and fully diluted share, respectively, as
compared to $18.2 million, or $1.28 and $1.12 per basic and fully diluted share,
respectively, during the year ended December 31, 2002. The increase in EBITDA
was due mainly to the increase in revenues partially offset by higher lease
operating and general and administrative costs.
Oil and gas operating expenses, including production taxes, increased to $6.7
million during the year ended December 31, 2003, as compared to $4.9 million
during 2002, due to a combination of higher production taxes from increased
commodity prices and higher lifting costs as a result of workovers and the
incremental cost of operating an increased number of wells.
DD&A expenses were $11.9 million ($1.59 per Mcfe) during year ended December 31,
2003 as compared to $10.6 million ($1.47 per Mcfe) during 2002. The increase in
DD&A expense was due to an increase in the DD&A rate related to the increase to
the proved property cost base from exploration and development drilling and
transfers of cost from the unproved property pool and in part to higher
production.
G&A expenses increased to $5.6 million during the year ended December 31, 2003
from $4.1 million during the same period of 2002. The increase in G&A was due
primarily to the higher salaries for additional operational staff, executive
severance expense, increased legal and professional fees related to certain
special projects and higher insurance costs.
Using the equity method of accounting, Carrizo recorded a charge of $0.8 million
(after tax), or $0.06 and $0.05 per basic and fully diluted share, respectively,
in connection with Carrizo's equity ownership in Pinnacle's financial results
for the period.
"We were very pleased with our performance in 2003, particularly regarding our
record production, EBITDA and drilling success, and the additions to our
exploration prospect inventory from our growing 3-D seismic database," commented
S.P. Johnson IV, Carrizo's President and Chief Executive Officer. "These
factors, in combination with the capital we recently raised, put us in an
excellent position to execute a much larger drilling program than in any
previous year. We have already ramped up our drilling program with five wells
currently drilling with an average working interest of 51 percent, four of which
have significant targets."
Carrizo Oil & Gas, Inc., is a Houston-based energy company engaged in the
exploration, development, exploitation and production of oil and natural gas in
proven onshore trends primarily 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
results, reserves, testing, sales, 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,
timing of completion and drilling of 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.
CARRIZO OIL & GAS, INC.
STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------- --------------------------------
2003 2002 2003 2002
-------------- -------------- -------------- --------------
Oil and natural gas revenues $ 8,892,967 $ 9,243,094 $ 38,508,067 $ 26,802,440
-------------- -------------- -------------- --------------
Costs and expenses:
Oil and natural gas operating expenses 1,653,402 1,221,355 6,723,857 4,908,377
Depreciation, depletion and amortization 3,140,338 3,242,467 11,867,651 10,574,408
General and administrative expenses 1,364,627 1,083,584 5,638,623 4,132,979
Accretion expense related to asset retirement obligations 12,842 - 41,518 -
Stock option compensation expense (benefit) (6,348) (14,220) 312,889 (84,696)
-------------- -------------- -------------- --------------
Total costs and expenses 6,164,861 5,533,186 24,584,538 19,531,068
-------------- -------------- -------------- --------------
Operating income 2,728,106 3,709,908 13,923,529 7,271,372
-------------- -------------- -------------- --------------
Equity in Pinnacle Gas Resources, Inc. (652,869) - (829,692) -
Other income and expenses, net 15,251 29,268 27,717 274,098
Interest income 8,351 10,912 58,603 55,148
Interest expense, net of amounts capitalized (61,386) (1,190) (77,118) (1,190)
-------------- -------------- -------------- --------------
Income before income taxes 2,037,453 3,748,898 13,103,039 7,599,428
-------------- -------------- -------------- --------------
Income tax expense 1,009,795 1,353,049 5,062,630 2,809,212
-------------- -------------- -------------- --------------
Net income before cumulative effect of
change in accounting principle 1,027,658 2,395,849 8,040,409 4,790,216
-------------- -------------- -------------- --------------
Dividends and accretion of discount on preferred stock 189,376 173,218 740,830 588,408
-------------- -------------- -------------- --------------
Net income available to common shares before cumulative
effect of change in accounting principle 838,282 2,222,631 7,299,579 4,201,808
-------------- -------------- -------------- --------------
Cumulative effect of change in accounting principle - - 128,374 -
-------------- -------------- -------------- --------------
Net income available to common shares $ 838,282 $ 2,222,631 $ 7,171,205 $ 4,201,808
============== ============== ============== ==============
EBITDA (see table below) $ 5,896,537 $ 6,981,643 $ 25,732,041 $ 18,119,878
============== ============== ============== ==============
Basic net income per common share:
Net income before cumulative effect of
change in accounting principle $ 0.06 $ 0.16 $ 0.51 $ 0.30
Cumulative effect of change in accounting principle 0.00 0.00 (0.01) 0.00
-------------- -------------- -------------- --------------
Basic net income per common share $ 0.06 $ 0.16 $ 0.50 $ 0.30
============== ============== ============== ==============
Diluted net income per common share:
Net income before cumulative effect of
change in accounting principle $ 0.05 $ 0.14 $ 0.44 $ 0.26
Cumulative effect of change in accounting principle 0.00 0.00 (0.01) 0.00
-------------- -------------- -------------- --------------
Diluted net income per common share $ 0.05 $ 0.14 $ 0.43 $ 0.26
============== ============== ============== ==============
Basic weighted average common shares outstanding 14,569,768 14,176,528 14,311,820 14,158,438
-------------- -------------- -------------- --------------
Diluted weighted average common shares outstanding 17,288,664 16,253,995 16,744,296 16,148,443
-------------- -------------- -------------- --------------
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CARRIZO OIL & GAS, INC.
CONDENSED BALANCE SHEET
12/31/03 12/31/02
-------------- --------------
(unaudited)
ASSETS:
Cash and cash equivalents $ 3,322,057 $ 4,743,459
Other current assets 11,003,512 9,358,716
Net property and equipment 135,273,200 120,526,484
Other assets 567,755 759,524
Investment in Pinnacle Gas Resources, Inc. 6,636,589
-------------- --------------
TOTAL ASSETS $ 156,803,113 $ 135,388,183
============== ==============
LIABILITIES AND EQUITY:
Accounts payable and accrued liabilities $ 24,001,971 $ 12,832,519
Current maturities of long-term debt 2,139,549 2,711,685
Long-term notes payable 7,121,646 12,408,186
Long-term subordinated notes payable 26,991,413 25,477,844
Deferred income taxes 12,479,553 7,666,048
Other liabilities 883,117 1,102,941
Convertible participating preferred stock 7,114,103 6,373,273
Equity 76,071,761 66,815,687
-------------- --------------
TOTAL LIABILITIES AND EQUITY $ 156,803,113 $ 135,388,183
============== ==============
(1) Income tax expense for the three and twelve months ended December 31, 2003
includes a $964,795 and $4,882,630, respectively, provision for deferred
income taxes and a $45,000 and $180,000, respectively, provision for
currently payable franchise taxes. Income tax expense for the three and
twelve months ended December 31, 2002 includes a $1,312,114 and $2,645,472,
respectively, provision for deferred income taxes and a $40,935 and
$163,740, respectivley, provision for currently payable franchise taxes.
(2) Long-term notes payable at December 31, 2003 and December 31, 2002 includes
a note in the principal amount of $863,246 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 December
31, 2003 and December 31, 2002 current maturities of long-term debt include
$863,246 and $1,500,000, respectively, related to the CCBM, Inc. note.
(3) Subordinated notes payable are presented net of discounts of $342,012 and
$428,079 as of December 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.
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CARRIZO OIL & GAS, INC.
NON-GAAP DISCLOSURES
(unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
Reconciliation of Net Income to EBITDA 2003 2002 2003 2002
-------------------------------------- ------------ ------------ ------------- -------------
Net income before cumulative effect
of change in accounting principle $ 1,027,658 $ 2,395,849 $ 8,040,409 $ 4,790,216
------------ ------------ ------------- -------------
Cumulative effect of change in accounting principle - - 128,374 -
------------ ------------ ------------- -------------
Net Income $ 1,027,658 $ 2,395,849 $ 7,912,03 $ 4,790,216
------------ ------------ ------------- -------------
Adjustments:
Depreciation, depletion and amortization 3,140,338 3,242,467 11,867,651 10,574,408
Interest expense, net of amounts capitalized
and interest income 53,035 (9,722) 18,515 (53,958)
Income taxes 1,009,795 1,353,049 5,062,630 2,809,212
Equity in Pinnacle Gas Resources, Inc. 652,869 829,692
Accretion expense related to asset retirement obligations 12,842 - 41,518 -
------------ ------------ ------------- -------------
EBITDA, as defined $ 5,896,537 $ 6,981,643 $ 25,732,041 $ 18,119,878
============ ============ ============= =============
EBITDA per basic common share $ 0.40 $ 0.49 $ 1.80 $ 1.28
============ ============ ============= =============
EBITDA per diluted common share $ 0.34 $ 0.43 $ 1.54 $ 1.12
============ ============ ============= =============
CARRIZO OIL & GAS, INC.
PRODUCTION VOLUMES AND PRICES
(unaudited)
Production volumes-
Oil and condensate (Bbls) 87,700 139,984 450,343 401,015
Natural gas (Mcf) 1,329,268 1,257,601 4,760,906 4,800,516
Natural gas equivalent (Mcfe) 1,855,468 2,097,505 7,462,964 7,206,606
Average sales prices-
Oil and condensate (per Bbl) $ 28.17 $ 27.93 $ 28.90 $ 24.94
Natural gas (per Mcf) $ 4.83 $ 4.24 $ 5.35 $ 3.50
Natural gas equivalent (per Mcfe) $ 4.79 $ 4.41 $ 5.16 $ 3.72
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