Energy Prospectus

First quarter production and adjusted earnings came in above my forecast. - Dan

HOUSTON, May 04, 2016 (GLOBE NEWSWIRE) -- Carrizo Oil & Gas, Inc. (Nasdaq:CRZO) today announced the Company's financial results for the first quarter of 2016 and provided an operational update, which includes the following highlights:

• Record Oil Production of 25,806 Bbls/d, 21% above the first quarter of 2015

• Record Total Production of 42,025 Boe/d, 21% above the first quarter of 2015

• Loss From Continuing Operations of $311.4 million, or ($5.34) per diluted share, and Adjusted Net Income (as defined below) of $9.2 million, or $0.16 per diluted share

• Adjusted EBITDA (as defined below) of $92.5 million

• Acquired 4,000 net bolt-on acres in the Eagle Ford Shale

• Reduced Eagle Ford well cost expectations to $4.1 million

• Increasing 2016 crude oil production growth target to 9%

Financial Position and Liquidity

On May 3, 2016, Carrizo's banking syndicate, led by Wells Fargo as administrative agent, completed its semi-annual borrowing base redetermination, resulting in a borrowing base of $600.0 million, down from $685.0 million previously. The reduction in the borrowing base results primarily from a bank price deck significantly below the one used in the prior redetermination. In connection with the redetermination, the Company's Net Debt to Adjusted EBITDA covenant was removed, while a Secured Debt to Adjusted EBITDA covenant of no more than 2.0x and an Adjusted EBITDA to Interest Expense covenant of no less than 2.5x were added. For the first quarter, the ratios of Secured Debt to Adjusted EBITDA and Adjusted EBITDA to Interest Expense were 0.1x and 4.8x, respectively. The next redetermination of the borrowing base is expected in the fall of 2016.

As of March 31, 2016, Carrizo had total debt outstanding of $1,285.0 million and cash and cash equivalents of $2.2 million. Net Debt to Adjusted EBITDA was 2.9x for the first quarter. As of April 29, 2016, Carrizo had $51.0 million drawn on the facility.

Based on my forecast, cash flow from operations should cover this year's capex budget.

My updated Net Income and Cash Flow forecast model will be posted to the EPG website on 5-5-2016.

My valuation of CRZO increases $0.50/share to $51.50. First Call's Price Target is $37.96.