Carrizo Oil and Gas
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| - | Here is where some info about '''Carrizo Oil and Gas''' should go. | + | [[Image:carrizo2.gif|center|frame|<div align="center">'''Cowfer #1 well at Osceola Mills, Centre Co., PA - 2009'''<br>Photo courtesy of [http://www.carrizo.cc/ Carrizo Oil and Gas]</div>]] |
| - | This article is still a stub and needs your attention. It does | + | Houston, Texas-based '''Carrizo Oil and Gas, Inc.''' (NASDAQ GS: CRZO) (aka ''Carrizo Marcellus LLC'') is an oil and gas exploration and production company. According to a February, 2010 company update, Carrizo's Pennsylvania [[Marcellus shale]] leasehold, 50% owned by partner ''Avista Capital'', was 235,000 acres. |
| - | not have a template and contains minimal information. Please dive | + | |
| - | in and help it grow! | + | |
| - | Houston, Texas-based '''Carrizo Oil and Gas''' (NASDAQ GS: CRZO) is an oil and gas exploration and production company. | + | === Latest Company Developments === |
| - | In August, 2008 Carrizo announced that its [[Marcellus shale]] leasehold consisted of leases and options amounting to 80,000 net acres. | + | It was announced in August, 2010 that Carrizo had entered into an agreement with a unit of ''Reliance Industries Ltd.'' to form a joint venture. According to the terms of the agreement, Reliance was to acquire a 20% interest in 52,200 net ares owned by Carrizo in the Pennsylvania portion of the Marcellus shale fairway. Reliance was to pay $13 million cash up front with a $52 million carry for Carrizo's drilling, completion, and [[seismic testing|seismic]] expenses. |
| - | By November, 2008 Carrizo released news of a joint venture with the private equity firm, ''Avista Capital Partners'', named ''ACP II Marcellus LLC''. The two companies planned to invest $150 million in acquiring and developing Marcellus shale acreage in its leasehold. By March, 2009, the company's leasehold had gone over 200,000 net acres. The partners' participating interests in developing this acreage was to be on a 50/50 basis. | + | The deal was to close in mid-September, 2010. Carrizo's other joint venture partner, ''Avista Capital Partners'' sold out its interest in Pennsylvania to Reliance for $327 million. Avista had also owned 52,200 net acres in Pennsylvania that were to be transferred to Reliance along with the aforementioned 20% interest in Carrizo's 52,200 net acre holdings. |
| - | A January, 2009 report indicated Carrizo had drilled two Marcellus wells by the end of 2008. It also had applied for permits to drill seven more Marcellus wells. The company is planning to drill a well in March, 2009 in [[Clearfield]], [[Pennsylvania]]. It was announced in March, 2009 the partners were to drill ten vertical Marcellus wells in 2009. | + | Carrizo was also to receive $44 million in cash for its share of the Avista joint venture's Pennsylvania acreage. The new joint venture with Reliance Industries covered approximately 104,400 gross acres in central and northern Pennsylvania. Carrizo was to retain a 40% working interest with Reliance to have 60%. Reliance was to cover 75% of Carrizo's development expenses including its own over the next 2 years until the $52 million carry became exhausted. |
| - | In a May, 2009 update the company announced it was in the process of finishing drilling an 8,600 ft. deep vertical test well in Centre County, PA. Well cores and driling logs were being studied to design a [[Hydro-fracturing|fracture]] stimulation plan. Update: In August, 2009 it was reported that Carrizo had finished the frac on this well. Once the well had been completed, the company intended to test it for an extended period before planning a pipeline route for it. The nearest large pipeline is six miles from the well site. The total cost of the well was to be approximately $2 million. This well had been drilled before all others due to the need to meet a contractual obligation to a partner. Once the well had been drilled, the obligation was met. | + | Carrizo's joint venture with Avista still remained in effect outside of Pennsylvania, but was confined to 140,000 gross acres of Marcellus fairway controlled by the Avista-Carrizo partnership primarily in [[New York|New York State]] and [[West Virginia]]. |
| - | A further report in mid-May, 2009 noted that in December, 2008 Carrizo had been approved by the city council of DuBois in Clearfield County, Pennsylvania to drill Marcellus depth gas wells on the watershed of the Anderson Creek Reservoir located in Union Township, PA. The DuBois council is looking into the possibility of also drilling on the Reservoir itself. | + | === 2008 Development Timeline === |
| - | The company had applied for permits for five vertical wells in Northern [[West Virginia]] to test its acreage there. At the time, it was not pursuing any new Marcellus leasing except in Susquehanna County, Pa. where it owns approximately 12,000 acres with partners. Carrizo was looking into a possible joint venture or [[farm-out]] agreement for its West Virginia acreage. (See updates below). Update: In August, 2009 it was announced that drilling on the five West Virginia wells was scheduled to begin in October, and that the drilling would proceed back-to-back fashion until all five wells were complete. There will be a range of depths for the wells from 4,000 feet to 9,000 feet. The cost was to be $1.5 million per well. | + | In August, 2008 Carrizo announced that its [[Marcellus shale]] leasehold consisted of leases and options amounting to 80,000 net acres. |
| + | ==== Carrizo/Avista joint venture ==== | ||
| + | By November, 2008 Carrizo released news of a joint venture with the private equity firm, ''Avista Capital Partners'', named ''ACP II Marcellus LLC'' (aka ''Carrizo/Avista JV''). The two companies planned to invest $150 million in acquiring and developing Marcellus shale acreage in its leasehold. By March, 2009, the company's leasehold had gone over 200,000 net acres. The partners' participating interests in developing this acreage was to be on a 50/50 basis. | ||
| + | ==== Two wells drilled ==== | ||
| + | A January, 2009 report indicated Carrizo had drilled two Marcellus wells by the end of 2008. It also had applied for permits to drill seven more Marcellus wells. | ||
| + | === 2009 Development Timeline === | ||
| + | The company planned to drill a well in March, 2009 in [[Clearfield|Clearfield County]], [[Pennsylvania]]. It was announced in March, 2009 that the partners were to drill ten vertical Marcellus wells in 2009. | ||
| + | ==== Centre County vertical test well ==== | ||
| + | In a May, 2009 update the company announced it was in the process of finishing the drilling an 8,600 ft. deep vertical test well in [[Centre|Centre County, PA]]. Well cores and [[Drilling log|drilling logs]] were being studied to design a [[Hydro-fracturing|fracture]] stimulation plan. | ||
| - | The company also controls acreage in [[Wayne County]], Pa. and Cuyahoga County, [[New York]]. | + | In August, 2009 it was reported that Carrizo had finished the frac on this well. Once it had been completed, the company intended to test it for an extended period before planning a pipeline route. The nearest large pipeline is six miles from the well site. The total cost of the well was to be approximately $2 million. This well had been drilled before all others due to the need to meet a contractual obligation to a partner. Once the well had been drilled that obligation was met. |
| - | Carrizo planned to drill the five West Virginia wells during the summer months of 2009. The locations selected were based upon well control and 2-d [[seismic testing]]. The company has acreage in four different counties in West Virginia. [[Horizontal drilling]] awaits the results of the aforementioned vertical well program. However, the same company update also mentioned that the company potentially could go directly to drilling horizontal wells in Susquehanna County, Pa. In that case 3-d seismic would still first be undertaken. The update mentioned that the pipeline infrastructure available to Carrizo was at its best in West Virginia, but still under construction in Susquehanna County, and only just adequate for a couple of vertical wells in Centre County, Pa. | + | ====Watershed drilling in Clearfield County ==== |
| + | A further report in mid-May, 2009 noted that in December, 2008 Carrizo had been approved by the city council of DuBois in [[Clearfield|Clearfield County]], Pennsylvania to drill Marcellus depth gas wells on the watershed of the Anderson Creek Reservoir located in Union Township, PA. The DuBois council was also looking into the possibility of drilling on the Reservoir itself. | ||
| - | Reportedly, by July, 2009, using $71 million of financial partner Avista's capital, Carrizo had expanded its Marcellus leasehold to 212,000 acres. The company had focused on leasing in [[Bradford]] and Susquehanna Counties, PA. It had leased 30,000 acres there and had another 20,000 in negotiation. Carrizo leased 112,000 acres in [[West Virginia]] and held 70,000 acres in the central Pennsylvania counties of Centre, [[Clearfield]], and Clinton. Netting out Avista's 50% share, Carrizo had holdings of 103,000 acres that were prospective for Marcellus shale. Update: In August, 2009 it was announced that Carrizo would defer drilling in northeastern PA until the availability of 3-D [[seismic data]] in 2010. | + | '''''Update:''''' In January, 2010 Carrizo was in the process of leasing 2,000 acres of the Union Twp. watershed belonging to the City of DuBois. A five year lease called for a $500 per acre signing bonus with 15% royalty on the sale of natural gas. It also prohibited Carrizo from using city reservoir water or from drilling water wells there without permission. When available, the city was to sell Carrizo water at the rate of $10 per 1,000 gallons. The area where the well was to be drilled is very sparsely populated, and despite it being watershed, there appeared to be minimal risk of any gas migration or drinking water contamination. The company had drilled one well in 2009 located at Osceola Mills in neighboring Centre County and three others in northeastern Pennsylvania. Carrizo expected to drill in Union Twp. during 2010 once the City of DuBois signed its lease. |
| + | ====Northern West Virginia activity ==== | ||
| + | The company had applied for permits for five vertical wells in northern [[West Virginia]] to test its acreage there. At the time, it was not pursuing any new Marcellus leasing except in Susquehanna County, Pa. where it owns approximately 12,000 acres with partners. Carrizo was looking into a possible joint venture or [[farm-out]] agreement for its West Virginia acreage. | ||
| + | |||
| + | Carrizo planned to drill the five West Virginia wells during the summer months of 2009. The locations selected were based upon well control and 2-d [[seismic testing]]. The company had acreage in four different counties in West Virginia. [[Horizontal drilling]] awaited the results of the aforementioned vertical well program. | ||
| + | |||
| + | By August, 2009 it was announced that drilling on the five West Virginia wells was scheduled to begin in October, and that the drilling was to proceed in back-to-back fashion until all five wells were complete. There was to be a range of depths for the wells from 4,000 feet to 9,000 feet. The cost: $1.5 million per well. | ||
| + | * '''''Update 1:''''' By November, 2009 the Carrizo/Avista JV was reported to have been drilling the Geary #4 which was approaching its total depth. Carrizo also had a second rig there that was in the process of drilling Lee #1. At the same time, well pads were being cleared for Carrizo's next three wells in the area. All three were to spud before the end of 2009. | ||
| + | * '''''Update 2:''''' A February, 2010 company update noted that, as of that time, three of the five West Virginia wells had been drilled, one was still drilling, and the fifth was awaiting permitting. Once drilling finished, these evaluation wells were to be logged and cased for completion at a later date. | ||
| + | ==== 3-d seismic and pipeline issues ==== | ||
| + | However, the same company update also mentioned that the company potentially could go directly to drilling horizontal wells in Susquehanna County, Pa. In that case 3-d [[seismic testing|seismic]] was still to be undertaken first. The update mentioned that pipeline infrastructure available to Carrizo was at its best in West Virginia, but still under construction in Susquehanna County, and only just adequate for a couple of vertical wells in Centre County, Pa. | ||
| + | ==== Northern/Southern Tier Interests ==== | ||
| + | The company also controled acreage in [[Wayne County]], PA and Cuyahoga County, [[New York]]. | ||
| + | ==== Carrizo's leasehold continues growing ==== | ||
| + | Reportedly, by July, 2009, using $71 million of financial partner Avista's capital, Carrizo had expanded its Marcellus leasehold to 212,000 acres. The company had focused on leasing in [[Bradford]] and Susquehanna Counties, PA. It had leased 30,000 acres there and had another 20,000 in negotiation. Carrizo leased 112,000 acres in [[West Virginia]] and held 70,000 acres in the central Pennsylvania counties of Centre, [[Clearfield]], and Clinton. Netting out Avista's 50% share, Carrizo had holdings of 103,000 acres that were prospective for Marcellus shale. | ||
| + | ==== Further drilling in northeast deferred ==== | ||
| + | In August, 2009 it was announced that Carrizo was to defer drilling in northeastern PA until the availability of 3-d [[seismic data]] in 2010. | ||
| According to an August, 2009 report, Carrizo had filed notices with the [[Susquehanna River Basin Commission]] for withdrawal of up to 720,000 gallons per day from Mosquito Creek in Clearfield County, PA. The water was to be used for Marcellus shale and [[Utica shale]] gas drilling. | According to an August, 2009 report, Carrizo had filed notices with the [[Susquehanna River Basin Commission]] for withdrawal of up to 720,000 gallons per day from Mosquito Creek in Clearfield County, PA. The water was to be used for Marcellus shale and [[Utica shale]] gas drilling. | ||
| + | ====Carrizo and Avista partnering with Stone Energy ==== | ||
| + | An October, 2009 Carrizo company update stated that during the third quarter of 2009 the Carrizo/Avista JV worked with [[Stone Energy Corporation|Stone Energy]] to drill two wells in Susquehanna County, PA. | ||
| + | It owned a 12% working interest in each. Stone had drilled and logged the Loomis #1 and Stang #1 wells. The log results had met predrill expectations, and the wells were to be completed and production tested at a later date. | ||
| + | According to a November, 2009 status update, the first [[Horizontal drilling|horizontal]] well Carrizo was to participate in, the Loomis #4h, was being designed and to spud by year-end. It had been located on the basis of [[seismic data]]. A later report clarified that this Loomis well was to spud in April, 2010. | ||
| + | |||
| + | ===2010 Development Timeline=== | ||
| + | A February, 2010 update stated that Carrizo planned to continue drilling pilot wells in selected areas of Marcellus shale. It was also drilling on a developmental basis in Susquehanna County, PA and planned to field one horizontal rig there during the second half of 2010. | ||
| + | |||
| + | ====Leasing In the Shenandoah Valley==== | ||
| + | |||
| + | A news account appeared in early March, 2010 indicating that Carrizo had been leasing drilling rights in Rockingham County, Virginia near the unincorporated community of Bergton. It is located near the western border of Virginia with West Virginia in the Shenandoah Valley region of Virginia. The leasing entity involved was ''Carrizo Marcellus LLC'' (a wholly-owned subsidiary). The prospect of horizontal drilling was specifically mentioned. This area is located considerably to the east of the recognized Marcellus fairway in [[West Virginia]]. | ||
| + | |||
| + | ====Development Plans Prior To Forming Reliance Industries JV==== | ||
| + | |||
| + | In April, the company planned to spud a horizontal Marcellus shale well, called ''Loomis #4'', with operator [[Stone Energy Corporation|Stone Energy]]. It was to be located on the western edge of Susquehanna Co. Carrizo owned a 12% working interest in this well. Along with joint venture partner ''Avista Capital'', Carrizo continued to add to its Marcellus shale leasehold. The company had budgeted $31 million for development during 2010 which included drilling 9 horizontal Marcellus wells. | ||
| + | |||
| + | ===Spotlight Issues=== | ||
| + | |||
| + | * Carrizo working with its partner, Avista, has steadily increased its leasehold to well over 200,000 acres in the Marcellus shale fairway. The August, 2010 JV arrangement with Reliance Industries should give Carrizo the capital it needs to pursue an aggressive Marcellus drilling program in Pennsylvania. | ||
| + | * The company planned to begin drilling in earnest in 2010 with a dozen wells in Pennsylvania. Its earlier efforts had primarily been test wells. | ||
| + | * The company had been making careful use of 2-d and, when justified, 3-d seismic studies to plan its future well locations. | ||
| + | * It has used a strategic partnering strategy to leverage its resources both with Avista Capital and Stone Energy. | ||
| + | * The company has the option to farm out its West Virginia acreage and to focus on drilling in north central and northeastern Pennsylvania. | ||
| + | * The availability of pipeline interconnects continued to be an issue particularly in Pennsylvania. | ||
| + | |||
| + | ===Executive Contacts=== | ||
| * S. P. "Chip" Johnson, IV is President and CEO of Carrizo Oil and Gas. | * S. P. "Chip" Johnson, IV is President and CEO of Carrizo Oil and Gas. | ||
| * Paul F. Boling is Vice President, CFO, Secretary and Treasurer. | * Paul F. Boling is Vice President, CFO, Secretary and Treasurer. | ||
| * J. Bradley Fisher is the company's Vice President and COO. | * J. Bradley Fisher is the company's Vice President and COO. | ||
| * Richard Hunter is Vice President of Investor Relations. | * Richard Hunter is Vice President of Investor Relations. | ||
| + | * Phil Corey is a spokesman for Carrizo in Clearfield County, PA. | ||
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| + | [[Category:E&P Companies]] | ||
| + | [[Category:Active]] [[Category:Public]] [[Category:Listed-NASDAQ GS]] [[Category: Domestic]] [[Category:Pennsylvania]] [[Category:New York]] [[Category:West Virginia]] [[Category:Virginia]] [[Category:Marcellus shale]] [[Category:100,000 to 250,000 acres]] | ||
Current revision
Photo courtesy of Carrizo Oil and Gas
Houston, Texas-based Carrizo Oil and Gas, Inc. (NASDAQ GS: CRZO) (aka Carrizo Marcellus LLC) is an oil and gas exploration and production company. According to a February, 2010 company update, Carrizo's Pennsylvania Marcellus shale leasehold, 50% owned by partner Avista Capital, was 235,000 acres.
Latest Company Developments
It was announced in August, 2010 that Carrizo had entered into an agreement with a unit of Reliance Industries Ltd. to form a joint venture. According to the terms of the agreement, Reliance was to acquire a 20% interest in 52,200 net ares owned by Carrizo in the Pennsylvania portion of the Marcellus shale fairway. Reliance was to pay $13 million cash up front with a $52 million carry for Carrizo's drilling, completion, and seismic expenses.
The deal was to close in mid-September, 2010. Carrizo's other joint venture partner, Avista Capital Partners sold out its interest in Pennsylvania to Reliance for $327 million. Avista had also owned 52,200 net acres in Pennsylvania that were to be transferred to Reliance along with the aforementioned 20% interest in Carrizo's 52,200 net acre holdings.
Carrizo was also to receive $44 million in cash for its share of the Avista joint venture's Pennsylvania acreage. The new joint venture with Reliance Industries covered approximately 104,400 gross acres in central and northern Pennsylvania. Carrizo was to retain a 40% working interest with Reliance to have 60%. Reliance was to cover 75% of Carrizo's development expenses including its own over the next 2 years until the $52 million carry became exhausted.
Carrizo's joint venture with Avista still remained in effect outside of Pennsylvania, but was confined to 140,000 gross acres of Marcellus fairway controlled by the Avista-Carrizo partnership primarily in New York State and West Virginia.
2008 Development Timeline
In August, 2008 Carrizo announced that its Marcellus shale leasehold consisted of leases and options amounting to 80,000 net acres.
Carrizo/Avista joint venture
By November, 2008 Carrizo released news of a joint venture with the private equity firm, Avista Capital Partners, named ACP II Marcellus LLC (aka Carrizo/Avista JV). The two companies planned to invest $150 million in acquiring and developing Marcellus shale acreage in its leasehold. By March, 2009, the company's leasehold had gone over 200,000 net acres. The partners' participating interests in developing this acreage was to be on a 50/50 basis.
Two wells drilled
A January, 2009 report indicated Carrizo had drilled two Marcellus wells by the end of 2008. It also had applied for permits to drill seven more Marcellus wells.
2009 Development Timeline
The company planned to drill a well in March, 2009 in Clearfield County, Pennsylvania. It was announced in March, 2009 that the partners were to drill ten vertical Marcellus wells in 2009.
Centre County vertical test well
In a May, 2009 update the company announced it was in the process of finishing the drilling an 8,600 ft. deep vertical test well in Centre County, PA. Well cores and drilling logs were being studied to design a fracture stimulation plan.
In August, 2009 it was reported that Carrizo had finished the frac on this well. Once it had been completed, the company intended to test it for an extended period before planning a pipeline route. The nearest large pipeline is six miles from the well site. The total cost of the well was to be approximately $2 million. This well had been drilled before all others due to the need to meet a contractual obligation to a partner. Once the well had been drilled that obligation was met.
Watershed drilling in Clearfield County
A further report in mid-May, 2009 noted that in December, 2008 Carrizo had been approved by the city council of DuBois in Clearfield County, Pennsylvania to drill Marcellus depth gas wells on the watershed of the Anderson Creek Reservoir located in Union Township, PA. The DuBois council was also looking into the possibility of drilling on the Reservoir itself.
Update: In January, 2010 Carrizo was in the process of leasing 2,000 acres of the Union Twp. watershed belonging to the City of DuBois. A five year lease called for a $500 per acre signing bonus with 15% royalty on the sale of natural gas. It also prohibited Carrizo from using city reservoir water or from drilling water wells there without permission. When available, the city was to sell Carrizo water at the rate of $10 per 1,000 gallons. The area where the well was to be drilled is very sparsely populated, and despite it being watershed, there appeared to be minimal risk of any gas migration or drinking water contamination. The company had drilled one well in 2009 located at Osceola Mills in neighboring Centre County and three others in northeastern Pennsylvania. Carrizo expected to drill in Union Twp. during 2010 once the City of DuBois signed its lease.
Northern West Virginia activity
The company had applied for permits for five vertical wells in northern West Virginia to test its acreage there. At the time, it was not pursuing any new Marcellus leasing except in Susquehanna County, Pa. where it owns approximately 12,000 acres with partners. Carrizo was looking into a possible joint venture or farm-out agreement for its West Virginia acreage.
Carrizo planned to drill the five West Virginia wells during the summer months of 2009. The locations selected were based upon well control and 2-d seismic testing. The company had acreage in four different counties in West Virginia. Horizontal drilling awaited the results of the aforementioned vertical well program.
By August, 2009 it was announced that drilling on the five West Virginia wells was scheduled to begin in October, and that the drilling was to proceed in back-to-back fashion until all five wells were complete. There was to be a range of depths for the wells from 4,000 feet to 9,000 feet. The cost: $1.5 million per well.
- Update 1: By November, 2009 the Carrizo/Avista JV was reported to have been drilling the Geary #4 which was approaching its total depth. Carrizo also had a second rig there that was in the process of drilling Lee #1. At the same time, well pads were being cleared for Carrizo's next three wells in the area. All three were to spud before the end of 2009.
- Update 2: A February, 2010 company update noted that, as of that time, three of the five West Virginia wells had been drilled, one was still drilling, and the fifth was awaiting permitting. Once drilling finished, these evaluation wells were to be logged and cased for completion at a later date.
3-d seismic and pipeline issues
However, the same company update also mentioned that the company potentially could go directly to drilling horizontal wells in Susquehanna County, Pa. In that case 3-d seismic was still to be undertaken first. The update mentioned that pipeline infrastructure available to Carrizo was at its best in West Virginia, but still under construction in Susquehanna County, and only just adequate for a couple of vertical wells in Centre County, Pa.
Northern/Southern Tier Interests
The company also controled acreage in Wayne County, PA and Cuyahoga County, New York.
Carrizo's leasehold continues growing
Reportedly, by July, 2009, using $71 million of financial partner Avista's capital, Carrizo had expanded its Marcellus leasehold to 212,000 acres. The company had focused on leasing in Bradford and Susquehanna Counties, PA. It had leased 30,000 acres there and had another 20,000 in negotiation. Carrizo leased 112,000 acres in West Virginia and held 70,000 acres in the central Pennsylvania counties of Centre, Clearfield, and Clinton. Netting out Avista's 50% share, Carrizo had holdings of 103,000 acres that were prospective for Marcellus shale.
Further drilling in northeast deferred
In August, 2009 it was announced that Carrizo was to defer drilling in northeastern PA until the availability of 3-d seismic data in 2010.
According to an August, 2009 report, Carrizo had filed notices with the Susquehanna River Basin Commission for withdrawal of up to 720,000 gallons per day from Mosquito Creek in Clearfield County, PA. The water was to be used for Marcellus shale and Utica shale gas drilling.
Carrizo and Avista partnering with Stone Energy
An October, 2009 Carrizo company update stated that during the third quarter of 2009 the Carrizo/Avista JV worked with Stone Energy to drill two wells in Susquehanna County, PA. It owned a 12% working interest in each. Stone had drilled and logged the Loomis #1 and Stang #1 wells. The log results had met predrill expectations, and the wells were to be completed and production tested at a later date.
According to a November, 2009 status update, the first horizontal well Carrizo was to participate in, the Loomis #4h, was being designed and to spud by year-end. It had been located on the basis of seismic data. A later report clarified that this Loomis well was to spud in April, 2010.
2010 Development Timeline
A February, 2010 update stated that Carrizo planned to continue drilling pilot wells in selected areas of Marcellus shale. It was also drilling on a developmental basis in Susquehanna County, PA and planned to field one horizontal rig there during the second half of 2010.
Leasing In the Shenandoah Valley
A news account appeared in early March, 2010 indicating that Carrizo had been leasing drilling rights in Rockingham County, Virginia near the unincorporated community of Bergton. It is located near the western border of Virginia with West Virginia in the Shenandoah Valley region of Virginia. The leasing entity involved was Carrizo Marcellus LLC (a wholly-owned subsidiary). The prospect of horizontal drilling was specifically mentioned. This area is located considerably to the east of the recognized Marcellus fairway in West Virginia.
Development Plans Prior To Forming Reliance Industries JV
In April, the company planned to spud a horizontal Marcellus shale well, called Loomis #4, with operator Stone Energy. It was to be located on the western edge of Susquehanna Co. Carrizo owned a 12% working interest in this well. Along with joint venture partner Avista Capital, Carrizo continued to add to its Marcellus shale leasehold. The company had budgeted $31 million for development during 2010 which included drilling 9 horizontal Marcellus wells.
Spotlight Issues
- Carrizo working with its partner, Avista, has steadily increased its leasehold to well over 200,000 acres in the Marcellus shale fairway. The August, 2010 JV arrangement with Reliance Industries should give Carrizo the capital it needs to pursue an aggressive Marcellus drilling program in Pennsylvania.
- The company planned to begin drilling in earnest in 2010 with a dozen wells in Pennsylvania. Its earlier efforts had primarily been test wells.
- The company had been making careful use of 2-d and, when justified, 3-d seismic studies to plan its future well locations.
- It has used a strategic partnering strategy to leverage its resources both with Avista Capital and Stone Energy.
- The company has the option to farm out its West Virginia acreage and to focus on drilling in north central and northeastern Pennsylvania.
- The availability of pipeline interconnects continued to be an issue particularly in Pennsylvania.
Executive Contacts
- S. P. "Chip" Johnson, IV is President and CEO of Carrizo Oil and Gas.
- Paul F. Boling is Vice President, CFO, Secretary and Treasurer.
- J. Bradley Fisher is the company's Vice President and COO.
- Richard Hunter is Vice President of Investor Relations.
- Phil Corey is a spokesman for Carrizo in Clearfield County, PA.
