SOURCE: Carrizo Oil & Gas, Inc.
HOUSTON, TX--(Marketwire - Oct 15, 2012) - Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) today announced the closing of the sale of the majority of its mineral lease position in the northern portion of the Utica Shale play to an unrelated third party for net cash proceeds of $43 million. Immediately preceding the property sale, Carrizo elected to exercise a mineral lease purchase option to increase its ownership from a 10% to a 50% undivided interest in the same properties from a subsidiary of its financial partner, Avista Capital Holdings, L.P. The mineral leases are located in Mercer and Crawford Counties in Pennsylvania and Trumbull County in Ohio. The net cash proceeds realized by Carrizo from these transactions are subject to customary post-sale adjustments. Other assets included in the sale are an existing drilling pad and approved well drilling permits associated with the leases.
Carrizo will continue to own a 10% undivided interest, along with a similar option to increase its ownership to 50%, in nearly 26,000 additional gross acres located in the southern portion of the play, primarily in Guernsey County, Ohio, in proximity to recent encouraging industry drilling results.
Borrowing Base Redetermination
Carrizo announced today that its banking syndicate has agreed to increase the Company's borrowing base under its senior credit facility from $325 million to $365 million as part of a regularly scheduled borrowing base review with an effective date of September 27, 2012. The new borrowing base takes into consideration the effect of the recent sale of Gulf Coast properties and the Niobrara joint venture agreement. The credit facility is currently undrawn.
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas primarily in the United States and United Kingdom. Our current operations are principally focused in proven, producing oil and gas plays primarily in the Eagle Ford Shale in South Texas, the Niobrara Formation in Colorado, the Barnett Shale in North Texas, the Marcellus Shale in Pennsylvania, New York and West Virginia, and the U.K. North Sea where our Huntington Field project is currently under development.
Statements in this news release that are not historical facts, including but not limited to those related to impact under the credit facility, borrowing base, the sales transaction (including effects thereof), the Company's or management's intentions, beliefs, expectations, hopes, projections, assessment of risks, estimations, plans or predictions for the future, results of the Company's strategies and other statements that are not historical facts are forward-looking statements that are based on current expectations. Although Carrizo believes that its expectations are based on reasonable assumptions, it can give no assurance that these expectations will prove correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements include purchase price adjustments, actions by the purchaser, title adjustments and other actions by governmental authorities, joint venture partners, industry partners, lenders and other third parties, market and other conditions, capital needs and uses, commodity price changes, effects of the global economy on exploration activity, results of and dependence on exploratory drilling activities, operating risks, right-of-way and other land issues, availability of capital and equipment, weather, and other risks described in Carrizo's Form 10-K for the year ended December 31, 2011 and its other filings with the Securities and Exchange Commission.