Carrizo Oil & Gas (CRZO) - Q1 beat my forecast

[dan_s]

Carrizo's Q1 results beat my forecast and they have raised their production guidance. My guess is that they will continue to raise their production guidance quarter after quarter because their well results continue to beat the pre-drill type curves. Plus, Chip likes to "under-promise and then over-deliver".

Carrizo has been around for may years and they have a first class technical team with extensive horizontal well experience.

I have increased my valuation to $55.00, which compares to First Call's price target of $43.15.

CRZO is currently trading for about 4X my operating cash flow per share estimate for 2017.

It trades at a low multiple only because the Wall Street Gang is so in love with the Permian Basin these days. Carrizo is primarily an Eagle Ford company, but they also have activity in the Delaware Basin, the DJ Basin (Niobrara) and the Utica Shale. The company's well results in the Eagle Ford are as good or better than what some other companies are reporting in the Permian Basin.

Take a hard look at the RED BOX on the forecast model.