Carrizo Oil & Gas (CRZO) Update - Nov 22

[dan_s]

Carrizo is one of the leading candidates in our Small-Cap Growth Portfolio for promotion to the Sweet 16 for 2019.

I have posted an updated profile and forecast/valuation model for Carrizo to the EPG website.

Here is what I like about it.
> Non-core asset sales early in 2018 shored up the balance sheet and make it a pure play on Texas (Eagle Ford and Permian Basin).
> I have followed and modeled the company for over five years. I have a HIGH level of confidence in my forecast model for Carrizo.
> At $17.50/share today, it is trading a less than 3X operating cash flow per share. My CFPS estimate of $7.17 for 2018 compares to First Call's CFPS estimate of $7.44.
> First Call's estimate of operating cash flow per share in 2019 is $10.17.
> Most of the company's production comes from the Eagle Ford play in South Texas where oil and gas prices are much higher today than in the Permian Basin.
> Production mix is 63% crude oil (most sold at LLS pricing), 20% natural gas and 17% NGLs.
> Rising gas and NGL prices are offsetting much of the revenue impact of declining oil prices.
> Carrizo has lots of running room with ~25% YOY production growth locked in.
> Production of 64,627 Boepd in Q3 should increase to an exit rate of 70,000 Boepd as of December 31, 2018.

The most recent analyst's report on Carrizo that has been submitted to Reuters / First Call is from Piper Jaffray on 11/15/2018 with a valuation of $34.00/share.