CRZO

[dan_s]

I really like these deals because they allow Carrizo to focus more capital on their Eagle Ford drilling program, which has the best economic return. I will update my forecast model for CRZO and have it posted under the Sweet 16 tab later today.-dan

HOUSTON, October 4, 2012 - Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) announced today
that it has entered into a joint venture agreement with subsidiaries of OIL India Ltd. and Indian
Oil Corporation Ltd., both international energy companies based in Delhi, India. Pursuant to the
agreement, OIL and Indian Oil Corp. have together acquired an undivided 30% non-operated
interest in substantially all of Carrizo’s assets and operations prospective for Niobrara Formation
oil development located primarily in Weld and Adams Counties, Colorado for approximately
$82.5 million. Included in the transaction is the sale of approximately 18,100 net mineral acres
and approximately 555 Boe/day (75% oil) of production from 24 gross currently producing
Carrizo operated wells.
Under the terms of the joint venture, Carrizo is receiving $41.25 million in cash and an
additional $41.25 million in the form of a drilling carry that will be applied to fund a portion of
Carrizo’s share of future Niobrara development costs. The carry is anticipated to be fully utilized
by early 2014. The transaction has an effective date of October 1, 2012 and is subject to
customary post-closing adjustments, consents and indemnities.
Carrizo’s President and CEO, S.P. “Chip” Johnson, IV, commented, “We are pleased to
announce this joint venture and relationship with Oil India Ltd. and Indian Oil Corporation. We
plan to apply the cash portion of the transaction to help fund our remaining 2012 capital
expenditures and the drilling carry will allow the addition of a second drilling rig in the Niobrara
in early 2013. We estimate that the acceleration in development activity net to Carrizo from the
additional rig will offset our future lower working interest and will result in an increase in
Niobrara oil production net to our shareholder’s interests over the course of 2013 compared to
our pre-JV internal estimates.”
Gulf Coast Sale
Carrizo announced today that it has completed the divestiture of substantially all of its legacy
producing properties along the onshore Gulf of Mexico located primarily in Texas and Louisiana
for approximately $19.5 million cash consideration, subject to customary post-closing
adjustments, consents and indemnities. Effective date for the transaction was July 1, 2012. Net
production from the sold properties is approximately 120 bbls/day of oil/condensate and 5,000
mcf/day of high BTU gas.

[dan_s]

Note that proceeds from property sales for Full Cost companies like CRZO go to reduce the Full Cost Pool. This means there is no "Gain on Sale" at the time a sale closes. The impact on future earnings is a reduction of DD&A expense.

Also, the cash will reduce borrowing and lower interest expense.

The "Effective Date" is just for valuing the assets. For financial and tax reporting purposes all the production and lease operating expenses are Carrizo's until the "Closing Date".

[dan_s]

Sweet 16 Growth Portfolio: An updated Net Income & Cash Flow Forecast model for Carrizo Oil & Gas (CRZO) has been posted under the Sweet 16 Tab. The model includes the impact of the asset sales announced today.