CRZO
Posted: Wed Sep 04, 2013 8:12 am
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.
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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.