Bolstered by growth in its Eagle Ford shale operations, Carrizo Oil & Gas, a Houston-based exploration and production firm, boosted Monday its projections for how much crude it expects to produce this year and how much money it will spend on drilling.
CEO Chip Johnson said the company is aggressively pursuing more opportunities to expand its acreage in south Texas and it is planning to start drilling its first well in the Utica shale in Ohio next month.
“We have land men in the courthouses trying to find every expiring lease,” Johnson said in an interview.
Except for a small presence in the United Kingdom portion of the North Sea, where Carrizo helps other companies find drilling prospects, Carrizo is content being known for its on-shore operations, Johnson said, adding that there is no current plan to venture more into offshore opportunities. He wouldn’t discuss whether the company might pursue an acquisition, or be open to being acquired by another company, to grow the business.
“Right now we have a 10-year drilling inventory at our current drilling pace,” Johnson said. “We are in pretty good shape.”
The company said it expects second-quarter oil production of 10,800 barrels per day to 11,200 barrels per day, up from earlier guidance of 9,600 barrels per day to 10,000 barrels per day.
For the year, Carrizo now is targeting total production growth of 10 percent, compared to previous expectations of 6 percent. For natural gas and natural gas liquids, Carrizo said it expects production to be near the high end of previous guidance of 90 million cubic feet equivalent per day to 94 million cubic feet equivalent per day.
Carrizo said its results in the Eagle Ford shale in south Texas have exceeded management’s expectations, with oil production averaging roughly 9,500 barrels per day through the first two months of the quarter, which ends June 30. Less well downtime than expected is one of the reasons for the good results, the company said.
Texas boom: Eagle Ford oil output rises 77%
Carrizo is involved in the exploration, development and production of oil and gas, mainly in the United States. Besides the Eagle Ford and Utica shales, it has operations in the Niobrara formation in Colorado, the Barnett shale in North Texas, and the Marcellus shale in Pennsylvania, New York and West Virginia.
The company said it will spend $530 million to $540 million this year on drilling and completion capital expenses, up from earlier guidance of $500 million. The revised plan is based on three operated rigs in the Eagle Ford Shale, two in the Niobrara, and one in the Marcellus.
Johnson said Carrizo is always looking for more acreage, but it can be tough because of competition. He said looking for open acreage is a “very significant part of our land work.”