Carrizo Oil & Gas (CRZO) Est. Q3 Crude Production Outpaces Prior Guidance
Carrizo Oil & Gas (NASDAQ: CRZO) provided an operational update, which included the following highlights:
- Estimated third quarter crude oil production of 23,573 Bbls/d, 4% above the high-end of the guidance range
- Raising 2015 crude oil production growth target to 21%
- Added 8,000 Bbls/d of swaps for 2016 at a weighted average price of approximately $60/Bbl
Production volumes during the third quarter of 2015 are estimated to be 35,948 Boe/d. This represents an increase of 7% versus the third quarter of 2014 and exceeds the high-end of the Company's guidance range of 33,133-34,300 Boe/d. Oil production during the third quarter of 2015 is estimated to be 23,573 Bbls/d, an increase of 18% versus the third quarter of 2014; natural gas and NGL production are estimated at 51,710 Mcf/d and 3,757 Bbls/d, respectively, for the third quarter of 2015.
Given the continued strong performance from the Company's primary operating areas, Carrizo is increasing its 2015 oil production guidance to 22,750-22,850 Bbls/d from 22,350-22,500 Bbls/d. Using the midpoint of this range, the Company's 2015 oil production growth guidance increases to 21% from 19% previously. For natural gas and NGLs, the Company is increasing its 2015 guidance to 56-57 MMcf/d and 3,500-3,600 Bbls/d, respectively, from 54-56 MMcf/d and 3,250-3,350 Bbls/d.
Since June 30, 2015, the Company has added additional crude oil hedges covering calendar 2016 volumes. For 2016, Carrizo now has hedges covering approximately 13,500 Bbls/d of crude oil (comprised of 8,000 Bbls/d of swaps at an average price of $60.03/Bbl and 5,492 Bbls/d of collars with a weighted average floor price of $50.97/Bbl and a weighted average ceiling price of $74.73/Bbl). Additionally, Carrizo will continue to get the benefit from the offsetting hedge transactions it entered into during the first quarter of 2015; these transactions locked in an additional $44.8 million of cash flow that will be realized during 2016. (Please refer to the following table for a detailed summary of the Company's hedging activity since June 30, 2015.)
| Weighted | ||||
| Weighted | Average | |||
| Average | Ceiling | |||
| Volumes | Floor Price | Price | ||
| Period | Type of Contract | (in Bbls/d) | ($/Bbl) | ($/Bbl) |
| 2016 | Fixed Price Swaps | 8,000 | $60.03 | |
| 2017 | Sold Call Options | 2,500 | $60.00 | |
| 2018 | Sold Call Options | 2,888 | $60.00 | |
| 2019 | Sold Call Options | 3,375 | $62.50 | |
| 2020 | Sold Call Options | 4,075 | $65.00 |