Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today provided the
following statement in response to the public filing of a schedule 13D
by Kimmeridge Energy Management.
Carrizo welcomes open communications with its shareholders and seriously
considers all ideas that may lead to the creation of shareholder value.
While it is the Company’s policy not to comment on specific discussions
with shareholders, members of Carrizo’s management team and Board of
Directors have had ongoing discussions with Kimmeridge since it acquired
a material stake in the Company’s stock during late 2017.
While we expect communication with Kimmeridge to continue, the Company
is focused on creating value for all of its shareholders by continuing
to execute on its corporate strategy of generating prudent, high-return
production growth while reducing leverage, with the goal of being able
to run a free cash flow positive development program in the future. Over
the past several quarters, the Company has high-graded its portfolio by
divesting its assets in Appalachia and the DJ Basin, as well as its
downdip assets in the Eagle Ford Shale, and acquiring a core position in
the Delaware Basin. As a result, the Company believes it currently has a
deep inventory of core locations in two of the highest-return plays in
North America. The Company has also used the proceeds from its
divestiture program to help retire $520 million of its long-term debt
and preferred stock, which, combined with increased EBITDA, has led to a
significant reduction in the Company’s leverage ratio since mid-2017.
Carrizo agrees with Kimmeridge’s assessment that its assets are
currently undervalued relative to peer companies with similar-quality
acreage, but believes that executing on its development programs in the
Eagle Ford Shale and Delaware Basin while continuing to strengthen its
balance sheet will reduce the current discount valuation in its shares
and create significant value for shareholders. While the Company expects
to continue to supplement its development program by evaluating other
opportunities in the market, it will only pursue any of these if it
deems them to be accretive to, and in the best interest of, all
shareholders.
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively
engaged in the exploration, development, and production of oil and gas
from resource plays located in the United States. Our current operations
are principally focused in proven, producing oil and gas plays primarily
in the Eagle Ford Shale in South Texas and the Permian Basin in West
Texas.
Statements in this news release, including but not limited to those
relating to the response to 13D filing, corporate strategy, goals,
effect of executing on and supplementing programs, strengthening balance
sheet, expectation of continuing communication, focus on creating value,
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 actions and
responses by shareholders and potential transaction parties, results of
operations, market conditions, capital needs and uses, well costs,
results of wells and testing, failure of actual production to meet
expectations, performance of rig operators, availability of gathering
systems, costs of oilfield services, actions by governmental
authorities, joint venture partners, industry partners, lenders and
other third parties, actions by purchasers or sellers of properties,
integration and other risks and effects of acquisitions and
dispositions, risks regarding financing, 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 and uncertainties, some of which are
beyond Carrizo's control, including those described in Carrizo's Form
10-K for the year ended December 31, 2017 and in its other filings with
the Securities and Exchange Commission. Any forward-looking statement
speaks only as of the date on which such statement is made, and Carrizo
undertakes no obligation to correct or update forward-looking
information.
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