Carrizo Agrees to Sell Remaining Barnett Shale, Other Assets For $268 Million 09/04 05:49 AM
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Carrizo Oil & Gas, Inc. (CRZO:$34.88,00$0.62,001.81%) has agreed to sell its remaining Barnett Shale properties in addition to other non-core assets in East Texas and the Marcellus Shale for $268 million as the energy company continues to shed assets to pay down debt.
"This is a bittersweet day for Carrizo as the Barnett Shale started the company's transformation into an unconventional resource player back in 2003," Chief Executive S.P. "Chip" Johnson IV said. "While we've had a great run in the play, and worked with some great partners, we believe the sale of these assets is a natural step in our continued shift towards premier oil and liquids-rich plays."
Mr. Johnson added that the sales help Carrizo continue its Eagle Ford Shale and Niobrara developments, as well as ramp up its Utica Shale activity next year.
Along with the remaining Barnett Shale assets, Carrizo has agreed to sell all of its interest in the Camp Hill Field in East Texas and certain undeveloped acreage in the Marcellus Shale. The cash component of the deal is about $250.4 million. Carrizo intends to use the proceeds to pay down debt as well as to fund a portion of the remainder of its 2013 capital expenditures program, largely in the Eagle Ford Shale.
The Barnett Shale divestiture includes about 9,000 net acres primarily in Southeast Tarrant County with year-end 2012 proved reserves of 303.5 Bcf. The deal is expected to close by late October, with an effective date of July 1, 2013.
The Camp Hill divestiture includes year-end 2012 proved reserves of about 1.0 MMBbl and current net production of about 160 Bbl/d of oil. That deal also has an effective date of July 1, 2013, and is expected to close shortly.
Meanwhile, the Marcellus Shale divestiture primarily includes 2,850 net undeveloped acres in non-core areas of the play and is expected to close in the fourth quarter.
In June, Carrizo raised its second-quarter oil production guidance, saying the results it had seen in the Eagle Ford Shale have been exceeding its expectations due to flatter-than-expected decline rates from new wells, successful results from artificial lift installations and less well downtime than expected.
Carrizo has been shedding some noncore shale assets to pay down debt while it continues to focus on the lucrative Eagle Ford shale formation in south Texas.
In December, Carrizo said it had sell its interest in the Huntington Field in the U.K. North Sea to Iona Energy Inc. (INA.V) for $184 million in cash. Prior to that, in October, India's state-run explorer Oil India Ltd. (533106.BY) and refiner Indian Oil Corp. (530965.BY) agreed to acquire a 30% stake in Carrizo's Niobrara shale-oil acreage in Colorado for $82.5 million. And in May 2012, the oil-and-gas exploration company sold a portion of its Barnett Shale assets in north Texas to Atlas Resource Partners LP (ARP) for roughly $190 million in cash.
Shares closed Tuesday at $34.88 and were inactive premarket. The stock has risen 31% in the past three months.
CRZO
Re: CRZO
go figure!
Analyst Actions: Carrizo Oil & Gas Inc Target Raised $1, But Keeps Underperform at Credit Suisse; Shrs Up 1.8% 09/05 11:49 AM
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12:49 PM EDT, 09/05/2013 (MidnightTrader) -- Credit Suisse says: "Revise Estimates on Barnett Sale; Revising Estimates and Raising Target Price to $29 (from $28)."
Revising TP to $29. "Following CRZO's announcement that it has entered into an agreement in sell its Barnett, East Texas and non-core Marcellus assets, we revise our NAV-based TP to $29 (from $28) and maintain an Underperform rating.
"We revise our 2013/14/15 EPS estimates by +1%/-4%/-11% to $2.68/$3.21/$3.64. Barnett Asset Sale Falls Short. CRZO announced the sale of its Barnett, East Texas and non-core Marcellus assets for total cash proceeds of $250.4MM and is expected to close in late October 2013. Assuming the East Texas production of 160 Bbl/d was valued at $80k/flowing Bbl and the 2,850 non-core Marcellus acres were valued at ~$1,500/net acre, we estimate that CRZO received ~$235MM for the Barnett assets, which fell short of the company's prior estimate of $300MM, but in line with our $200-270MM estimate. The company plans to use the proceeds to pay down the outstanding on its revolving credit facility and fund a portion of its 2013 capital program primarily in the Eagle Ford."
Valuation. "CRZO is now trading at a 16% premium to our 'PD Plus' NAV at the CS price deck vs. an 15% discount for its peers ($80 oil, $4.50 gas long-term). On multiples, CRZO trades at 4.9x 2013 and 4.8x 2014 unhedged EBITDA (futures strip) vs.6.6x and 4.9x for its SMID-cap peers, respectively."
Price: 34.28, Change: +0.61, Percent Change: +1.8
http://www.midnighttrader.com
Analyst Actions: Carrizo Oil & Gas Inc Target Raised $1, But Keeps Underperform at Credit Suisse; Shrs Up 1.8% 09/05 11:49 AM
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12:49 PM EDT, 09/05/2013 (MidnightTrader) -- Credit Suisse says: "Revise Estimates on Barnett Sale; Revising Estimates and Raising Target Price to $29 (from $28)."
Revising TP to $29. "Following CRZO's announcement that it has entered into an agreement in sell its Barnett, East Texas and non-core Marcellus assets, we revise our NAV-based TP to $29 (from $28) and maintain an Underperform rating.
"We revise our 2013/14/15 EPS estimates by +1%/-4%/-11% to $2.68/$3.21/$3.64. Barnett Asset Sale Falls Short. CRZO announced the sale of its Barnett, East Texas and non-core Marcellus assets for total cash proceeds of $250.4MM and is expected to close in late October 2013. Assuming the East Texas production of 160 Bbl/d was valued at $80k/flowing Bbl and the 2,850 non-core Marcellus acres were valued at ~$1,500/net acre, we estimate that CRZO received ~$235MM for the Barnett assets, which fell short of the company's prior estimate of $300MM, but in line with our $200-270MM estimate. The company plans to use the proceeds to pay down the outstanding on its revolving credit facility and fund a portion of its 2013 capital program primarily in the Eagle Ford."
Valuation. "CRZO is now trading at a 16% premium to our 'PD Plus' NAV at the CS price deck vs. an 15% discount for its peers ($80 oil, $4.50 gas long-term). On multiples, CRZO trades at 4.9x 2013 and 4.8x 2014 unhedged EBITDA (futures strip) vs.6.6x and 4.9x for its SMID-cap peers, respectively."
Price: 34.28, Change: +0.61, Percent Change: +1.8
http://www.midnighttrader.com
Re: CRZO
Susan & I just got back from a little trip. I will take a hard look at CRZO tomorrow.
On the surface, I like the idea of selling mature assets, so they can focus on developing their much higher rate of return Eagle Ford assets..
On the surface, I like the idea of selling mature assets, so they can focus on developing their much higher rate of return Eagle Ford assets..
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: CRZO
The Latest Shale Play To Strike It Big
http://seekingalpha.com/article/1684852 ... e_readmore
an excerpt---
<Carrizo now controls more than 53,000 net acres in Eagle Ford - one of the most prolific shale plays in the country.
In 2012, the Eagle Ford produced 52,000 barrels of oil per day. And its reserves are estimated at 3 billion barrels of oil.
Carrizo's strategy is to expand its capacity in the region with an increasing expertise in "complex extended reach horizontal wells," utilizing sophisticated 3-D seismic controlled horizontal drilling and completion technology.
Carrizo has taken this expertise and parlayed it to become one of the most productive drillers in the region.
In fact, the company has been successful in 100% of the wells it's sunk, churning up some impressive production numbers.
According to the Texas Railroad Commission - the state agency that regulates the oil-and-gas industry - Carrizo is one of the fastest-growing and most productive outfits in the region, taking more than 3 million barrels of oil from Eagle Ford in the first six months of this year alone.>
http://seekingalpha.com/article/1684852 ... e_readmore
an excerpt---
<Carrizo now controls more than 53,000 net acres in Eagle Ford - one of the most prolific shale plays in the country.
In 2012, the Eagle Ford produced 52,000 barrels of oil per day. And its reserves are estimated at 3 billion barrels of oil.
Carrizo's strategy is to expand its capacity in the region with an increasing expertise in "complex extended reach horizontal wells," utilizing sophisticated 3-D seismic controlled horizontal drilling and completion technology.
Carrizo has taken this expertise and parlayed it to become one of the most productive drillers in the region.
In fact, the company has been successful in 100% of the wells it's sunk, churning up some impressive production numbers.
According to the Texas Railroad Commission - the state agency that regulates the oil-and-gas industry - Carrizo is one of the fastest-growing and most productive outfits in the region, taking more than 3 million barrels of oil from Eagle Ford in the first six months of this year alone.>