RBC CAPITAL MARKETS 2014 GLOBAL ENERGY AND POWER CONFERENCE UTICA SHALE PANEL. Carrizo Oil & Gas, Inc. June 2-3, 2014

Transcription

1 RBC CAPITAL MARKETS 2014 GLOBAL ENERGY AND POWER CONFERENCE UTICA SHALE PANEL Carrizo Oil & Gas, Inc. June 2-3, 2014

2 2 Forward Looking Statements / Note Regarding Reserves The statements contained in all parts of this presentation, including, but not limited to, those relating to our schedule, targets, estimates or results of future drilling, including the number, timing and results of wells, budgeted wells, increases in wells, the timing and risk involved in drilling follow-up wells, pending transactions, expected working or net revenue interests, planned expenditures, prospects budgeted and other future capital expenditures, risk profile of oil and natural gas exploration, acquisition of 3-D seismic data (including number, timing and size of projects), planned evaluation of prospects, probability of prospects having oil and natural gas, expected production or reserves, increases in reserves, acreage, working capital requirements, hedging activities, the ability of expected sources of liquidity to implement the Company s business strategy, future exploration activity, production rates, 2014 drilling program, growth in production, development of new drilling programs, hedging of production, estimated ultimate recovery, gas marketing strategy and exploration and development expenditures and all and any other statements regarding future operations, financial results, business plans, internal rate of return, net present value and cash needs and other statements that are not historical facts are forward looking statements. When used in this presentation, the word current refers to the date printed on the cover of the presentation. When used in this presentation, the words anticipate, estimate, expect, may, project, believe and similar expressions are intended to be among the statements that identify forward looking statements. Such statements involve risks and uncertainties, including, but not limited to, those relating to the Company's dependence on its exploratory drilling activities, the volatility of oil and natural gas prices, the ability to adhere to our drilling schedule, the need to replace reserves depleted by production, operating risks of oil and natural gas operations, the Company's dependence on its key personnel, factors that affect the Company's ability to manage its growth and achieve its business strategy, technological changes, significant capital requirements of the Company, the potential impact of government regulations, litigation, competition, the uncertainty of reserve information and future net revenue estimates, property acquisition risks, availability of equipment, weather, availability of financing, adverse market conditions, risks associated with the trend towards increased anti-development activity and assessments and other factors detailed in the Risk Factors and other sections of the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and other filings with the Securities and Exchange Commission ( SEC ). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forwardlooking statements. Each forward-looking statement speaks only as of the date of the particular statement and the Company undertakes no obligation to update or revise any forward-looking statement. We use certain terms in this presentation such as Potential, Potential Reserves, Potential Exposure, Unrisked Exploration Potential and Unrisked Reserve Potential, Recoverable and similar terms that the SEC s guidelines strictly prohibit us from including in filings with the SEC. Our Probable (2P) and Possible (3P) reserves do not meet SEC rules and Guidelines (including those relating to pricing) for such reserves. These terms include reserves with substantially less certainty, and no discount or other adjustment is included in the presentation of such reserve numbers. U.S. investors are urged to consider closely the disclosure in our Form 10-K for the year ended December 31, 2013, File No , and in our other filings with the SEC, available from us at 500 Dallas, Suite 2300, Houston, Texas, These forms can also be obtained from the SEC by calling SEC-0330.

3 High-Rate, Rich-Condensate Focus Area 3 ~25,700 net acres focused on condensate window ~15,000 net acres at 100% W.I. ~10,700 net acres in 50/50 JV with Avista (Carrizo operated) Current acreage has potential for ~140 net wells at 150-acre spacing (6,500 laterals spaced at 1,000 ) Initial well (Rector #1H) tested at a peak rate of 1,680 BCPD Prior to being shut-in awaiting midstream infrastructure, production averaged >500 BCPD for 113 days on a small choke Competitor activity validates acreage quality; majority of acreage near other high rate condensate wells Mostly year and HBP leases 2014 Operated Activity 1-rig program Drill 9 gross / 7 net wells Frac 9 gross / 7 net wells

4 Utica and Point Pleasant Stratigraphy 4 General The lithologic properties of the Utica and Point Pleasant are generally consistent and change predictably across Carrizo s leasehold Utica across Carrizo s position The Utica porosity is very low, ranging from 1% to 3% Relatively low hydrocarbon storage capacity The Utica at 40% to 50% clay is much more clay rich than the Point Pleasant at 20% to 30% May provide a better frac barrier to south and is a better pressure seal Point Pleasant across Carrizo s position Thickness and porosity is comparable to other areas with announced high rate wells The Point Pleasant at ~40% carbonate is much more carbonate rich than the Utica at 15%...less ductile and fracs better Very high hydrocarbon saturation; generally in excess of 80% High TOC is conducive to increased organic porosity development and oil generation

5 Cross Section over Acreage (North to South) N S Carrizo Acreage Line of Section 30 mi. Utica Point Pleasant Porosity (> 3%) Trenton Stratigraphy and log characteristics highly predictable across acreage position 5

6 Point Pleasant Geology Point Pleasant Porosity Point Pleasant Thickness Acreage is well positioned from a Point Pleasant porosity and thickness standpoint (Generally, log porosities between 8.5% & 10.5% and thicknesses between 100 & 130 ) 6

7 Point Pleasant Drill Depth Structure 7 Lyons Boy Scout Acreage located on gentle NW to SE dip Highly predictable depths Structurally benign with very few faults Detweiler Groh Structural setting and lack of faults will permit drilling of long lateral wells Depths and other offset well results indicate bulk of acreage in the rich condensate window Rector Acreage on trend with multiple other high rate condensate wells Miley

8 Rector #1H Flow Test Summary 8 Brought well on January 5 Collected surface and flowing bottom-hole pressures throughout Progressively increased choke sizes to 24/64 Peak rate = 2,816 Boe/d Condensate = 1,680 Bbl/d Gas = 5.2 MMcf/d (residue) NGLs = 266 Bbl/d (ethane rej.) BTU s = 1,248 BTUs/scf Shrink = 7% 40 ft Performed extended flow test for 113 days (116 including down time) on chokes ranging from 14-16/64 Rector #1H produced >57 MBbl of condensate, or >500 BCPD during the extended flow test

9 Rector Production History 9

10 Type Curve Economics Type Curve Total Well Cost $10.1 MM EUR 1 F&D Cost IRR & NPV 2 Gross Condensate Only Net $100 NYMEX Oil $85 NYMEX Oil $70 NYMEX Oil Undiscounted $85 NYMEX Oil 1,348 Mboe 455 Mbo 1,092 Mboe $9.25 / Boe IRR 85% NPV $14.1 MM IRR 62% NPV $11.0 MM IRR 43% NPV 1.6 years $7.8 MM (1) IP rate of 6 MMcf/d; CGR of 100 Bbls/MMcf and NGLs of 50 Bbls/MMcf; EUR is 34% condensate, 17% NGLs and 49% dry gas (2) Economics includes 90% NYMEX for condensate, 50% NYMEX oil for NGL mix assumes ethane rejection, and 97% NYMEX for gas ($3.50 NYMEX in all cases) Rate (Bopd) Month Daily Condensate (Bopd) Rector Daily Condensate (Bopd) Cum. Condensate (MBbls) Rector Cum. Condensate (MBbls) 100 Cumulative (MBbls) 10 10

11 Midstream Infrastructure 11 Heart of Carrizo s core acreage is transected by both BLUEracer and MarkWest Should allow for expedited hook-up Potential for different solutions in North Guernsey and South Guernsey Compact/blocky acreage reduces extent of gathering systems Targeting signing up a midstream partner by end of Q2 BLUEracer Midstream JV between Dominion Resources & Caiman Energy 550 miles of gathering up to 30 Gas ultimately could ultimately flow in to DTI, TETCo or REX NGLs at Natrium or Berne (600 mmcf/d by Q4 2014) Fractionation at Natrium with pipe, rail, barge and truck options; flow in to ATEX March 2014 and eventual access to Mariner East MarkWest Energy Partners Dominant in Marcellus wet gas and leveraging infrastructure in to Utica Utica & Marcellus fractionation are connected Gas could ultimately flow in to DTI, TETCo or REX NGLs at Cadiz (N) and Seneca (S) Cadiz & Seneca connected w/ C2 & C3 pipe ~1 Bcf/d by end of 2014 Fractionation at Hopedale 10 miles northeast of Cadiz

12 Key Takeaways 12 Rector well has confirmed our geologic model Pleased with the stability of flow demonstrated by the Rector #1H well Rector #1H appears to be one of the best wells in the condensate window of the play 2014 program is geared towards acreage appraisal and preparation for 2015 Pad sites prioritized and multiple sites engineered and ready to permit Selection of midstream partner expected soon