Carrizo Oil & Gas, Inc. (ticker: CRZO) announced today that it entered into an agreement to divest a portion of its assets in the Eagle Ford shale for $245 million in cash.
The divested assets include approximately 24,500 net acres, located primarily in the downdip area of the volatile oil window, and had associated net production during the third quarter of 2017 of approximately 3,400 BOEPD (63% oil, 19% gas, 18% NGLs). This equates to $10,000 per acre and $72,058 per flowing BOEPD.
The effective date of the transaction is October 1, 2017, and the transaction is currently expected to close by the end of January 2018. The production associated with the divestiture accounts for less than 10% of the company’s total in the Eagle Ford Shale. Following the close of the transaction, Carrizo will hold approximately 78,500 net acres in the Eagle Ford Shale, exclusively located within the core volatile oil fairway.
Carrizo President and CEO S.P. “Chip” Johnson, IV, commented, “Our activity in the Eagle Ford Shale is expected to be focused on the updip volatile oil window of the play. Given this, we believe it made sense to bring the value of these assets forward and use the proceeds to further strengthen our balance sheet by retiring additional debt. Combined with our previously-announced, non-core divestitures, this transaction brings the total announced proceeds from our divestiture program to approximately $530 million.”
