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Carrizo Oil & Gas Announces Proved Reserves Increase 45% to a Record Level of 503 Bcfe, Replacing 705 Percent of 2008 Production; Quarterly and Annual Production Reach Record Levels

Posted on: Wednesday, 25 February 2009, 05:30 CST

HOUSTON, Feb. 25 /PRNewswire-FirstCall/ -- Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today announced record 2008 year-end proved reserves and record production for the fourth quarter and full year 2008.

(Logo: http://www.newscom.com/cgi-bin/prnh/20030523/CRZOLOGO)

Reserves

Year-end proved reserves were a record 502.6 Bcfe based on reports from Carrizo's third-party reserve engineers. This is an increase of approximately 45 percent (net of 2008 production of 25.6 Bcfe) over the year-end 2007 proved reserves of 347.6 Bcfe. Year-end PV-10 value of our proved reserves was $595.9 million, based upon year-end average spot prices for natural gas of $4.99 per Mcf and year-end average posted prices for oil of $40.12 per Bbl.

These additions resulted in the Company replacing 705 percent of 2008 production.

From year-end 2007 to 2008, our Barnett Shale reserves increased 156.1 Bcfe, or 57 percent, to 432.1 Bcfe; our Gulf Coast reserves decreased 2.4 Bcfe from 23.7 Bcfe to 21.3 Bcfe; and our Camp Hill reserves increased 1.3 Bcfe, from 47.9 Bcfe to 49.2 Bcfe.

Production

Production during the fourth quarter of 2008 was a record 7.21 Bcfe (78.4 MMcfe/d), or 28 percent above the 5.64 Bcfe (61.3 MMcfe/d) of production in the fourth quarter 2007 and 17 percent above the third quarter 2008 production. Annual production for 2008 reached a record level of 25.6 Bcfe (70.0 MMcfe/d), or 46.6 percent higher than the 17.5 Bcfe (47.9 MMcfe/d) of production in 2007. Approximately 96 percent of fourth quarter production was natural gas, and 96 percent of total 2008 production was natural gas.

There are currently 33.8 net horizontal wells in the Barnett Shale already drilled but waiting on completion and/or pipeline connection.

Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, exploitation, and production of oil and natural gas primarily in the Barnett Shale in North Texas and in proven onshore trends along the Texas and Louisiana Gulf Coast regions. Carrizo controls significant prospective acreage blocks and utilizes advanced 3-D seismic techniques to identify potential oil and gas reserves and drilling opportunities. Carrizo also controls large acreage positions in other productive shale resource plays including the Fayetteville and Marcellus.

Statements in this news release, including but not limited to those relating to reserves, the Company's or management's intentions, beliefs, expectations, hopes, projections, assessment of risks, estimations, plans or predictions for the future including, timing of completion and drilling of wells, completion and pipeline connections and other statements that are not historical facts are forward looking statements that are based on current expectations. Although the Company 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 market and other conditions, capital needs and uses, commodity price changes, effects of the global financial crisis on exploration activity, and dependence on exploratory drilling activities, operating risks, land issues, availability of capital and equipment, weather and other risks described in the Company's Form 10-K for the year ended December 31, 2007, and its other filings with the Securities and Exchange Commission.

Note Regarding Reserve Replacement Ratio and PV-10

Management uses the reserve replacement ratio as an indicator of the Company's ability to replenish annual production volumes and grow its reserves, thereby providing some information on the sources of future production. Management believes reserve replacement information is frequently used by analysts, investors and others in the industry to evaluate the performance of companies like Carrizo. The reserve replacement ratio is calculated by dividing the sum of reserve additions from all sources (revisions, extensions, discoveries, and other additions and acquisitions) by the actual production for the corresponding period. The Company does not use unproved reserve quantities in calculating the reserve replacement ratio. It should be noted that the reserve replacement ratio is a statistical indicator that has limitations. As an annual measure, the ratio is limited because it typically varies widely based on the extent and timing of new discoveries and property acquisitions. Its predictive and comparative value is also limited for the same reasons. In addition, since the ratio does not take into consideration the cost or timing of future production of new reserves, it cannot be used as a measure of value creation. The ratio does not distinguish between changes in reserve quantities that are producing and those that will require additional time and funding to begin producing. In that regard, it might be noted that the percentage of the Company's proved developed reserves increased from approximately 47 percent in 2007 to approximately 52 percent in 2008. The reserve replacement ratio for 2007 was 887 percent.

Contact: Carrizo Oil & Gas, Inc. Richard Hunter, Vice President of Investor Relations Paul F. Boling, Chief Financial Officer (713) 328-1000

SOURCE Carrizo Oil & Gas, Inc.

Source: PR Newswire

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