CRZO Carrizo Oil & Gas sale of assets positive for shares, says Wells Fargo Outperform rating
CRZO Carrizo Oil & Gas sale of assets positive for shares, says Wells Fargo
Wells Fargo views the sale of Carrizo's North Sea assets as positive for shares given recent concern that a deal may not get done. The firm keeps an Outperform rating on the stock.
CRZO: Positive Agrees To Sell North Sea Assets (Finally)
• Summary. After a long marketing process and a rocky road to first production, Carrizo has agreed to sell its North Sea assets for $184 million with net proceeds expected to be approximately $116 million after repayment of project financing, etc. The field is expected to reach first production in Q1 2013 after additional delays. The expected net production of 4,500 Boe/d was not included in 2013 guidance and the company previously reported about 6 million BOE of proved reserves (87% crude) associated with the assets. That would equate to a very positive $31/boe on proved reserves. The company was awarded leases in the U.K. in 2003, after an internal geologist with experience in the North Sea brought the prospect to management. Following various promote deals to drill exploration wells, CRZO retained a 15% interest in the projects. The proceeds from the sale will be used to fund a portion of the 2013 capital budget, but could also be partially applied to recently discussed potential acreage acquisitions in the Eagle Ford and the DJ Basin.
Yes that would be great if they bought properties in the Eagle Ford formation or DJ Basin...They are so much like EOG..both have properites in the exact same formation in the Niobrara..the best location in the Niobrara..and Strong Eagle Ford properties
Eagle Ford Shale Exposure is very attractive.........
I like the Eagle Ford Shale, as recent studies have indicated strengths in oily wells could challenge other top oily shales in the country. Although its investments in the Bakken Shale is well known, EOG Resources Inc (EOG) has a very strong presence in the Eagle Ford Shale formation as well. Recent Q3 2012 results indicated crude oil production rose 45% while natural gas revenue was reduced by 26%, further solidifying EOG's commitment to shifting to oil production. I will be watching this company for an opportunity to buy if shares happen to dip slightly lower from here. EOG and CRZO are both very attractive!
CRZO has strong positions in the Eagle Ford: Oil production is comprised of 7,200 net BOPD from the Eagle Ford, 1,050 net BOPD from the Niobrara and 150 net BOPD in other locations.