CRZO

[dan_s]

This is very good news from CRZO. Stock price should jump at the open, especially since oil prices are up this morning as well. - Dan

6:32AM Carrizo Oil & Gas raises second quarter 2013 oil production guidance from 9,600-10,000 Bbl/d to 10,800-11,200 Bbl/d; increases 2013 crude oil production growth target to 40% from 28% (CRZO) 26.16 : Co announces updated production guidance for the second quarter and full year 2013.

Second Quarter 2013 Update
Co's results in the Eagle Ford Shale have been exceeding management's expectations, with oil production averaging roughly 9,500 Bbl/d through the first two months of the quarter. Key drivers of the outperformance have been flatter-than-expected decline rates from new wells in a number of areas, successful results from artificial lift installations and less well downtime than expected. Primarily as a result of the strong Eagle Ford results, Co is increasing its second quarter 2013 oil production guidance to 10,800-11,200 Bbl/d from 9,600-10,000 Bbl/d. For natural gas and NGLs, Co is maintaining its prior guidance of 90-94 MMcfe/d, but expects production to be near the high end of the range.

2013 Capital Expenditure and Activity Plan Update
Co is revising its 2013 drilling and completion capital expenditure plan to $530-540 mln from $500 mln. The revised plan remains based on three operated rigs in the Eagle Ford Shale, two in the Niobrara Formation, and one in the Marcellus Shale.

In the Eagle Ford Shale, Co is increasing planned 2013 drilling activity by three wells as a result of increases in drilling efficiencies, and increasing planned completion activity by 35 net frac stages primarily for lease management purposes.
In the Niobrara, Co now expects to drill and complete 21 net wells, up from an estimate of 17-18 previously.
This results from increased non-operated drilling and completion activity coupled with a higher working interest in a number of the company's operated wells. In the Utica Shale, construction of drilling pads is being moved into 2013 from 2014 to avoid winter construction.
This work should allow development drilling in the play to begin in the second quarter of 2014. Additionally, Co now plans to spud a second Utica well prior to year-end.
2013 Production Outlook
Based on the revised capital expenditure plan combined with the strong Eagle Ford Shale results to date, Co is increasing its 2013 crude oil production growth target to 40% from 28% and total production growth target to 10% from 6%. Co expects crude oil to account for more than 40% of production by year-end.

[dan_s]

My Fair Value Estimate for CRZO will be going up. I am returning from Iceland on Wednesday and will update the forecast model on Thursday.

CRZO is now in our Small-Cap Growth Portfolio.

[dan_s]

Better decline curves may also help our other Eagle Ford companies, EOG, ROSE, SM, CRK and SFY.

[dan_s]

RBC Capital Markets issued a new report on CRZO. RBC has increased their target price on CRZO from $32 to $34. Their upside scenario case values it at $50,

"For the Upside analysis, we assign a higher prospectivity
and per well EUR to the Company’s Eagle Ford, Utica and
Marcellus assets. We also assume CRZO is successful in further
downspacing for its Niobrara properties. These changes in
assumptions would yield a new NAV of roughly $61 and the
value for this stock under the upside scenario would be $50."