Carrizo Oil & Gas releases $500 million spending plan

Carrizo Oil & Gas plans to spend $500 million chasing the domestic shale trail in 2013, the company said Tuesday.

The Houston-based exploration and production company has released its 2013 drilling and completion program, which focuses on tight oil in the domestic shales in order to meet its goal of increasing oil production 28 percent in 2013.

The plan includes $385 million for the Eagle Ford shale in South Texas, where Carrizo will continue to have three rigs. It has also allocated $70 million for the Marcellus shale in the Pennsylvania region, where it has one rig, $35 million for the Niobrara shale in Colorado, where it has two rigs and $10 million for other drilling activities.

Carrizo Oil & Gas, like many of the independent oil and gas companies, has shifted its strategy away from natural gas, as a glut of supply have continued to drag on natural gas prices, which closed Tuesday at $3.41 per million British thermal units. The company estimates its natural gas production will drop three percent in 2013.

The company also has allocated $124 million for land, seismic and related activities, much of which will be focused on the Utica shale, where Carrizo is investing in new opportunities.

“Our land acquisition costs are expected to be heavily front-end loaded and includes the cost to exercise our southern Utica acreage option with Avista Capital,” said Carrizo CEO Chip Johnson. “Based on very encouraging drilling results in the southern Utica shale play, yesterday we elected to exercise our land purchase option with Avista Capital for approximately $63 million.”