Delaware Basin Shows Promis; Imperial Capital Reiterates Outperform on Carrizo Oil & Gas (CRZO)

Imperial Capital maintained an Outperform rating and $48.00 price target on Carrizo Oil & Gas (NASDAQ: CRZO). CRZO continues to deliver excellent returns in the Eagle Ford through operational efficiencies and completion optimizations, with early results of its first Delaware Basin well also showing promise. Imperial believes that CRZO will be one of very few companies to achieve double-digit growth without outspending cash flow and be able to grow its reserves through
delineation of the Delaware Basin benches and continued Eagle Ford development.

Analyst Kim Pacanovsky commented, "We are maintaining our Outperform rating on CRZO shares and maintaining our one-year price target of $48, about 29% above the recent share price. We continue to believe that CRZO is one of the best positioned small cap E&Ps in our coverage universe, with ample proforma liquidity of $750mn and the ability to spend at or near cash flow generated. CRZO continues to deliver excellent returns in the Eagle Ford through operational efficiencies and completion optimizations, with early results of its first Delaware Basin well also showing promise. The firm’s recent equity raise of $240mn helped shore up the firm’s balance sheet and ensures sufficient liquidity to expand its footprint in the Delaware Basin through its current bids on several packages totaling 30,000 acres. With the Delaware Basin economics potentially competing with those of the Eagle Ford, we anticipate that the majority of the reduced capital budget for 2016 will be allocated to these plays. We believe CRZO will be one of very few companies to achieve double-digit growth without outspending cash flow and be able to grow its reserves through delineation of the Delaware Basin benches and continued Eagle Ford development. With several catalytic events expected in 1H16 (longer-term Permian results and Eagle Ford Stagger Stack results), we believe the shares can outperform the sector in the current volatile commodity market."

For an analyst ratings summary and ratings history on Carrizo Oil & Gas click here. For more ratings news on Carrizo Oil & Gas click here.

Shares of Carrizo Oil & Gas closed at $37.20 yesterday.

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