CARRIZO OIL & GAS INC

31 Mar 2011financial restatement▼ BadMajor

On March 30, 2011 Carrizo said its third-quarter 2010 results should no longer be relied on. The $20.8 million it received from the Avista-affiliated ACP II Marcellus investment should reduce the cost of its oil and gas properties rather than count as income. The restatement cuts previously reported net income and shareholders' equity by $11.5 million for the three and nine months to September 30, 2010 (a $0.32 and $0.34 per share reduction). The company says it does not affect cash, liquidity or its credit-facility covenant compliance or borrowing capacity. This is a further accounting correction following the 2009 restatement.

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2 Feb 2011material agreement termination▲ GoodMajor

On January 27, 2011 Carrizo signed a new bank credit facility with BNP Paribas as agent: up to $750 million (initial borrowing base $350 million), maturing January 27, 2016, and it borrowed $112 million to repay the old 2006 credit agreement in full. This delivers the amend-and-restate flagged earlier, with maturity extended to 2016 rather than 2015. On January 28 it also signed a separate limited-recourse facility for its UK Huntington Field share: a $55 million term loan, $6.5 million cost-overrun loan and $22.5 million post-completion facility, after a roughly $19 million equity contribution; the company must fund any cost overruns beyond those sources. This resolves the open Huntington financing thread.

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13 Dec 2010material agreement● NeutralMajor

Carrizo agreed on December 9, 2010 to sell 3,500,000 new common shares to Credit Suisse at $28.90 per share to the company, and the underwriter's option for 475,000 more shares was exercised in full. It plans to repay revolving credit facility borrowings with the proceeds and then use the freed capacity for its 2011 Eagle Ford and Niobrara spending. This issuance adds to the share count, and closing was expected December 15, 2010.

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9 Dec 2010drilling progress report● NeutralMajor

Carrizo reported early Eagle Ford results: its first two wells produce about 1,260 barrels of oil a day combined, and a third well flowed 1,035 barrels of oil a day in a 24-hour test. Its Niobrara drilling is proceeding, with first results expected before year-end. Fourth-quarter production is now estimated at 114 Mmcfe/d, about 5% below prior guidance, due to continued Barnett connection delays, though the roughly 127 Mmcfe/d year-end exit rate is still expected if hookups are on schedule. The company also expects the lenders to be advised to cut the $350 million borrowing base, and says the UK government approved the Huntington Field development, with first production expected in Q1 2012 and about $50 million of 2011 spending.

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2 Nov 2010debt financing● NeutralMajor

Carrizo closed a $400 million sale of 8.625% Senior Notes due 2018 on November 2, 2010, with expected net proceeds of about $387.7 million. It plans to repay the bank credit facility in full, then use the rest, plus bank borrowings, to fund the tender offer for up to $300 million of its 4.375% convertible notes, or otherwise to fund its expanded capital programme (including Eagle Ford and Niobrara) and general purposes. This carries out the financing flagged in the October 25 filing, replacing bank debt and convertible debt with fixed-rate notes that pay interest twice yearly from April 15, 2011.

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25 Oct 2010material agreement● NeutralMajor

Carrizo amended its credit agreement a fourteenth time to allow up to $425 million of new senior notes and a tender offer for its 4.375% convertible notes due 2028 (the tender offer is allowed only if at least $200 million is raised from the notes). Once notes are issued, the bank debt must be repaid in full, and the borrowing base is reduced when convertible notes are bought. The filing also raises the 2010 capital plan to $280 million (from $225 million), estimates 2010 production at about 38 Bcfe, and says fourth-quarter production should average about 120 Mmcfe/d, with Barnett pipeline connection delays holding back new output. Carrizo also says it intends to amend and restate the credit facility to extend maturity to 2015 by the end of April 2011.

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