Energy Prospectus

Carrizo's Q2 production was more than 4,000 boepd above my forecast. Adjusted EPS compares to my forecast of $0.11/share. - Dan

Carrizo Oil & Gas, Inc. Announces Second Quarter Results and Increases 2016 Production Guidance

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

• Oil Production of 23,942 Bbls/d, 7% above the second quarter of 2015

• Total Production of 41,533 Boe/d, 15% above the second quarter of 2015

• Loss From Continuing Operations of $262.1 million, or $4.46 per diluted share, and Adjusted Net Income of $17.1 million, or $0.29 per diluted share

• Adjusted EBITDA of $97.6 million

• Increasing de-risked Eagle Ford Shale drilling inventory to more than 1,000 net locations

• Increasing 2016 crude oil production growth target to 10%

I have updated my forecast model for CRZO and it will be posted to the EPG website late today.

I have increased my valuation by $0.50/share to $52.00, compared to First Call's price target of $44.30.

Carrizo's Q2 results were solid, but production will be down a bit in Q3 (based on their guidance). My guess is that they are just "under-promising so they can over-deliver", but I am going with their guidance. Production getting more "gassy", which is not so bad considering the improving outlook for natural gas and NGL prices. Best news this quarter for the entire Sweet 16 is a big increase in NGL prices.

Improved outlook for 2017: Carrizo will ramp up completions in Q4, which will lead to a nice exit rate and sets up 2017 for double digit production growth.

Carrizo does have more debt than I'd like to see for a company of this size, so if commodity prices do pull back they may have a issue with the bankers. Just because of its size, Carrizo has more RISK than the other Sweet 16 companies.

Carrizo is the smallest company in the Sweet 16, so there is a good chance I will move it down to the Small-Cap Growth Portfolio because several there now deserve a promotion. I am also thinking about adding EQT to the Sweet 16 to add more exposure to natural gas.