Exhibit 99.1
PRESS RELEASE Contact: Carrizo Oil & Gas, Inc.
B. Allen Connell, Director of Investor Relations
Paul F. Boling, Chief Financial Officer
(713) 328-1000
CARRIZO OIL & GAS, INC. ANNOUNCES FIRST QUARTER 2005 FINANCIAL RESULTS
HOUSTON, May 10, 2005 -- Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today reported
the Company's financial results for the first quarter of 2005, which included
the following highlights:
o Production of 2.35 Bcfe.
o Revenue of $15.5 million.
o Net Income of $2.6 million.
o EBITDA, as defined below, of $10.6 million.
Revenues for the three months ended March 31, 2005 were $15.5 million as
compared to $10.9 million during the quarter ended March 31, 2004. The increase
in revenues was driven by higher prevailing oil and natural gas prices and
higher natural gas production. Production volumes during the three months ended
March 31, 2005 were 2.35 Bcfe as compared to 1.86 Bcfe during the first quarter
of 2004 and essentially flat compared to our fourth quarter 2004 production.
Carrizo's average oil sales price increased 52 percent to $50.65 per barrel from
$33.33 per barrel during the first quarter of 2004, while the average natural
gas sales price increased four percent to $6.19 compared to $5.95 per Mcf in the
first quarter of 2004. The above prices include the cash effect of hedging
activities.
After dividends and accretion of discount on preferred stock, the Company
reported net income available to common shares ("Net Income") of $2.6 million,
or $0.11 and $0.11 per basic and diluted share, respectively, for the three
months ended March 31, 2005, as compared to $2.0 million, or $0.12 and $0.10 per
basic and diluted share, respectively, for the same quarter during 2004.
Excluding the $0.6 million non-cash, after-tax impact of the stock option
compensation expense related to the employee stock options repriced in 2000, Net
Income for the quarter ended March 31, 2005 was $3.2 million, or $0.14 and $0.14
per basic and diluted share, respectively.
EBITDA (earnings before interest, income tax, depreciation and amortization
expenses, and certain other non-cash items) during the first quarter of 2005 was
$10.6 million, or $0.47 and $0.45 per basic and diluted share, respectively, as
compared to $7.1 million, or $0.43 and $0.37 per basic and diluted share,
respectively, during the first quarter of 2004.
Oil and gas operating expenses (excluding production taxes) increased to $1.3
million during the three months ended March 31, 2005 as compared to $1.0 million
for the first quarter of 2004, largely due to the increased well count of the
Barnett Shale wells.
Depreciation, depletion and amortization expenses ("DD&A") were $4.7 million
during the three months ended March 31, 2005 ($1.99 per Mcfe) as compared to
$3.2 million ($1.74 per Mcfe) during the first quarter of 2004. The increase in
DD&A expense was due to 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 $2.6 million during the
three months ended March 31, 2005 from $2.1 million during the same quarter of
2004. The increase in G&A was due primarily to higher incentive compensation
costs of $0.3 million, higher base salary costs of $0.1 million and a $0.1
million increase in general office expenses.
Non-cash stock option compensation expense was $1.0 million ($0.6 million after
tax) for the three months ended March 31, 2005. This represents the
quarter-to-quarter increase in value of employee stock options that were
repriced in 2000.
Other income and expense for the first quarter of 2005 was a net expense of $0.2
million directly attributable to the non-cash equity in the loss of Pinnacle Gas
Resources, Inc. ("Pinnacle") of $0.2 million (both before and after tax).
Similarly, other income and expense for the first quarter of 2004 was a net
charge of $0.2 million directly attributable to the non-cash equity in the loss
of Pinnacle. Net losses are expected in this early phase of Pinnacle's
development of its coalbed methane play, and are expected to continue in 2005.
Interest expense, net of amounts capitalized, was $0.6 million for the three
months ended March 31, 2005 compared to an inconsequential amount for the three
months ended March 31, 2004. The increase is directly attributable to the
maximum interest expense that is capitalizable ("capitalizable interest") under
GAAP which has typically been equal to or greater than the gross interest
expense (i.e. interest expense before capitalization of interest expense) in
each period. Starting in the fourth quarter 2004, the gross interest expense
exceeded the capitalizable interest by an amount proportionate to the
outstanding debt in excess of our unproved property balance.
"The highlights of 2005 to date were our 100 percent drilling success in both
the Gulf Coast (six wells) and Barnett Shale (12 wells), and successful leasing
in the Barnett bringing our total acreage position to more than 50,000 net
acres," commented S.P. Johnson IV, Carrizo's President and Chief Executive
Officer. "Although our 2005 drilling activity started off slowly, our activity
level is now back to a normal pace with three rigs running in the Gulf Coast and
two in the Barnett Shale (one vertical and one horizontal). Two additional
Carrizo operated horizontal rigs will be drilling at the end of May. The first
Carrizo operated horizontal Barnett Shale well in Parker County, Texas, the El
Chico #2, began flowing to sales last week at 3.0 MMcfe/d. Carrizo has a 65
percent working interest and additional drillsites on the lease."
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 and the Barnett Shale area in North
Texas. 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, 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, 2004 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,
---------------------------------
2005 2004
--------------- ---------------
Oil and natural gas revenues $ 15,458,186 $ 10,873,404
--------------- ---------------
Costs and expenses:
Oil and natural gas operating expenses 1,265,310 1,000,814
Production taxes 970,105 675,395
Depreciation, depletion and amortization 4,677,838 3,246,596
General and administrative expenses 2,600,454 2,132,508
Accretion expense related to asset retirement obligations 17,530 6,442
Stock option compensation expense 975,780 9,682
--------------- ---------------
Total costs and expenses 10,507,017 7,071,437
--------------- ---------------
Operating income 4,951,169 3,801,967
--------------- ---------------
Other income and expenses, net (213,490) (234,780)
Interest income 44,105 12,780
Interest expense, net of amounts capitalized (608,464) (43,397)
--------------- ---------------
Income before income taxes 4,173,320 3,536,570
--------------- ---------------
Income taxes 1,587,080 1,353,148
--------------- ---------------
Net income 2,586,240 2,183,422
--------------- ---------------
Dividends and accretion of discount on preferred stock - 197,995
--------------- ---------------
Net income available to common shares 2,586,240 1,985,427
=============== ===============
EBITDA, as defined (see table below) $ 10,630,738 $ 7,073,692
=============== ===============
Basic net income per common share: $ 0.11 $ 0.12
============== ==============
Diluted net income per common share: $ 0.11 $ 0.10
============== ==============
Basic weighted average common shares outstanding 22,501,696 16,613,430
--------------- ---------------
Diluted weighted average common shares outstanding 23,402,248 $ 19,284,153
--------------- ---------------
(more)
CARRIZO OIL & GAS, INC.
CONDENSED BALANCE SHEET
03/31/05 12/31/04
--------------- ---------------
(unaudited)
ASSETS:
Cash and cash equivalents $ 8,263,502 $ 5,668,000
Other current assets 11,672,828 15,965,885
Property and equipment, net 211,817,920 205,482,585
Other assets 1,635,718 1,689,447
Investment in Pinnacle Gas Resources, Inc. 5,007,223 5,229,134
--------------- ---------------
TOTAL ASSETS $ 238,397,191 $ 234,035,051
=============== ===============
LIABILITIES AND EQUITY:
Accounts payable and accrued liabilities $ 25,077,283 $ 30,682,970
Current maturities of long-term debt 88,213 89,653
Long-term notes payable 21,032,207 18,032,002
Long-term subordinated notes payable, net 45,686,543 44,852,384
Deferred income taxes 18,719,731 18,112,950
Other liabilities 1,477,911 1,406,567
Equity 126,315,303 120,858,525
--------------- ---------------
TOTAL LIABILITIES AND EQUITY $ 238,397,191 $ 234,035,051
=============== ===============
(1) Income tax expense for the three months ended March 31, 2005 includes a
$1,538,330 provision for deferred income taxes and a $48,750 provision for
currently payable franchise taxes. Income tax expense for the three months
ended March 31, 2004 includes a $1,308,148 provision for deferred income
taxes and a $45,000 provision for currently payable franchise taxes.
(2) Long-term subordinated notes payable are presented net of discounts of
$1,862,381 and $1,987,206 as of March 31, 2005 and December 31, 2004,
respectively.
(3) Stock option compensation expense is a non-cash charge resulting from the
change in the price of the stock underlying employee stock options that
were repriced in February 2000.
(4) In February 2002, the Company consummated the sale of $6.0 million of
convertible participating preferred stock and warrants to purchase shares
of the Company's common stock. All of the convertible participating
preferred stock was converted into 1,318,125 shares of common stock during
2004.
(5) During the three and twelve months ended March 31, 2005 and December 31,
2004, 334,210 and 2,928,611 warrants were converted into 304,669 and
2,159,627 shares of common stock, respectively.
(more)
CARRIZO OIL & GAS, INC.
NON-GAAP DISCLOSURES
(unaudited)
THREE MONTHS ENDED
MARCH 31,
---------------------------------
Reconciliation of Net Income to EBITDA 2005 2004
- --------------------------------------------------------------------- --------------- ---------------
Net income $ 2,586,240 $ 2,183,422
--------------- ---------------
Adjustments:
Depreciation, depletion and amortization 4,677,838 3,246,596
Interest expense, net of amounts capitalized and interest income 564,359 30,617
Income taxes 1,587,080 1,353,148
Equity in Pinnacle Gas Resources, Inc. 221,911 243,785
Stock Option compensation expense (benefit) 975,780 9,682
Accretion expense related to asset retirement obligations 17,530 6,442
--------------- ---------------
EBITDA, as defined $ 10,630,738 $ 7,073,692
=============== ===============
EBITDA per basic common share $ 0.47 $ 0.43
=============== ===============
EBITDA per diluted common share $ 0.45 $ 0.37
=============== ===============
CARRIZO OIL & GAS, INC.
PRODUCTION VOLUMES AND PRICES
(unaudited)
Production volumes-
Oil and condensate (Bbls) 64,784 87,123
Natural gas (Mcf) 1,965,958 1,338,776
Natural gas equivalent (Mcfe) 2,354,662 1,861,514
Average sales prices-
Oil and condensate (per Bbl) $ 50.65 $ 33.33
Natural gas (per Mcf) $ 6.19 $ 5.95
Natural gas equivalent (per Mcfe) $ 6.56 $ 5.84
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