Carrizo Oil & Gas, Inc. Announces Record Oil Production,

Carrizo Oil & Gas, Inc. Announces Record Oil Production, Revenue, and
EBITDA in Third Quarter 2012 Financial Results 
HOUSTON, TX -- (Marketwire) -- 11/06/12 --   Carrizo Oil & Gas, Inc.
(NASDAQ: CRZO) today announced the Company's record financial results
for the third quarter of 2012, which included the following
highlights: 
Results for the third quarter of 2012- 


 
--  Record Oil Production of 8,652 Bbls/d, a 14% sequential increase over
    the second quarter of 2012 and a 257% increase over the third quarter
    of 2011
    
    
--  Natural Gas and NGL Production of 101,576 Mcfe/d
    
    
--  Total Production of 2,354 Mboe, or 25,587 Boe/d
    
    
--  Record Oil Revenue of $76.9 million, amounting to 80% of total
    revenue, a 12% sequential increase over the second quarter of 2012 and
    a 286% increase over the third quarter of 2011
    
    
--  Record Revenue of $96.2 million, or adjusted revenue of $105.9
    million, including the impact of realized hedges, a 15% sequential
    increase over the second quarter of 2012
    
    
--  Net Loss of $0.9 million, $0.02 per diluted share, primarily
    attributable to a $24.7 million unrealized loss on derivatives, or
    Adjusted Net Income, (as defined below) of $17.8 million, $0.44 per
    diluted share
    
    
--  Record EBITDA, (as defined below) of $86.5 million, a 25% sequential
    increase over the second quarter of 2012 and a 108% increase over the
    third quarter of 2011

  
Production volumes during the third quarter of 2012 were 2,354 Mboe, a
decrease of 39 Mboe, or 2%, from second quarter of 2012 production of
2,393 Mboe. The 2% sequential decrease in production from the second
quarter of 2012 to the third quarter of 2012 was primarily due to the
sale of Barnett Shale production to Atlas Resource Partners, L.P.
("Atlas") on May 1, 2012, offset by new wells brought on during the
quarter primarily in the Eagle Ford Shale and Niobrara Formation.  
Adjusted revenues were $105.9 million for the third quarter of 2012,
which includes oil and gas revenues of $96.2 million and realized
hedge gains of $9.7 million, compared to $58.7 million for the third
quarter of 2011, which includes oil and gas revenues of $51.7 million
and realized hedge gains of $7.0 million. The increase in adjusted
revenues was primarily driven by increased oil production and prices
partially offset by lower gas production and prices. Including the
impact of realized hedges, the Company's average realized oil price
increased 7% to $97.56 per barrel for the third quarter of 2012
compared to $91.38 per barrel for the third quarter of 2011 and the
average realized gas price decreased 21% to $2.93 per Mcf for the
third quarter of 2012 compared to $3.73 per Mcf for the third quarter
of 2011. Revenues excluding the impact of realized hedges are
presented in the table below. 
Adjusted net income, which excludes certain non-cash items described
in the statements of operations included below ("Adjusted Net
Income"), was $17.8 million, or $0.45 and $0.44 per basic and diluted
share, respectively, during the third quarter of 2012, as compared to
$9.3 million, or $0.24 per basic and diluted share during the third
quarter of 2011. The Company reported a net loss of $0.9 million, or
$(0.02) per basic and diluted share for the three months ended
September 30, 2012, primarily attributable to a $24.7 million
unrealized loss on derivatives, as compared to net income of $21.6
million, or $0.56 and $0.55 per basic and diluted share,
respectively, for the third quarter of 2011. 
Earnings before interest, income tax, depreciation, and depletion and
amortization, as described in the statements of operations included
below ("EBITDA"), was $86.5 million, or $2.18 and $2.16 per basic and
diluted share, respectively, during the third quarter of 2012, as
compared to $41.6 million, or $1.07 and $1.06 per basic and diluted
share, respectively, during the third quarter of 2011.  
Lease operating expenses were $7.1 million ($3.04 per Boe) for the
three months ended September 30, 2012 as compared to lease operating
expenses of $7.3 million ($3.89 per Boe) for the same period in 2011.
The $0.2 million decrease in lease operating expenses is primarily
due to the Atlas sale partially offset by increased production. The
decrease in operating cost per Boe is primarily due to the Atlas sale
(which were higher operating cost per Boe properties as compared to
our remaining Barnett Shale properties) partially offset by the
higher operating cost per Boe associated with oil production. 
Production taxes were $3.4 million (or 3.6% of oil and gas revenues)
for the three months ended September 30, 2012 as compared to $1.3
million (or 2.6% of oil and gas revenues) for the same period in
2011. The increase in production taxes is due primarily to increased
oil production. The increase in production taxes as a percentage of
oil and gas revenues was primarily due to increased oil production,
which has a higher effective production tax rate as compared to our
natural gas production. 
Ad valorem taxes increased to $2.3 million ($0.99 per Boe) for the
three months ended September 30, 2012 from $1.0 million ($0.55 per
Boe) for the same period in 2011. The increase in ad valorem taxes is
due primarily to new oil wells drilled in 2012. The increase in ad
valorem taxes per Boe is due primarily to new oil wells drilled in
2012, which have higher property tax valuations as compared to our
natural gas wells. 
General and administrative expense was $6.5 million during the third
quarter of 2012 as compared to $7.4 million during the same period in
2011. The decrease was primarily due to decreased compensation costs
attributable to the 2011 annual bonuses to senior management, which
were paid during the second quarter of 2012, while the 2010 annual
bonuses to senior management were paid during the third quarter of
2011, slightly offset by an increase in personnel in the third
quarter of 2012 as compared to the same period of 2011. 
Depreciation, depletion and amortization ("DD&A") expense for the
third quarter of 2012 increased $26.2 million to $46.5 million
($19.76 per Boe) from the DD&A expense for the third quarter of 2011
of $20.3 million ($10.84 per Boe). The $26.2 million increase in DD&A
is attributable to both the increase in production and an increase in
the DD&A rate per Boe. The increase in the DD&A rate per Boe is
largely due to the impact of the significant decrease in natural gas
reserves in the Barnett Shale as result of the Atlas sale as well as
the significant increase in crude oil reserves in the Eagle Ford
Shale that were added in 2011 and 2012, which have a higher finding
cost per Boe than our natural gas reserves. 
Cash interest expense, net of amounts capitalized, increased to $11.0
million for the third quarter of 2012 as compared to $6.6 million for
the third quarter of 2011. The increase was primarily attributable to
interest on the $200 million aggregate principal amount of our 8.625%
Senior Notes issued in the fourth quarter of 2011 as well as interest
on the $300 million aggregate principal amount of our 7.5% Senior
Notes issued in the third quarter of 2012. 
An unrealized loss on derivatives of $24.7 million was recorded for
the third quarter of 2012 as compared to an unrealized gain on
derivatives of $18.4 million for the third quarter of 2011 due to the
change in fair value of our open derivative positions during those
periods. 
Non-cash, stock-based compensation expense of $5.1 million was
recorded for the three months ended September 30, 2012 as compared to
a benefit of $4.1 million for the third quarter of 2011. The increase
in stock-based compensation expense was primarily driven by an
increase in the fair value of cash-settled stock appreciation rights
("CSARs") as well as an increase in the number of CSARs outstanding
during the third quarter of 2012 as compared to the same period of
2011. The benefit recognized during the third quarter of 2011 was
attributable to a decrease in stock price during that period. 
The estimated annual effective income tax rates (which are used for
purposes of computing Adjusted Net Income) for the three months ended
September 30, 2012 and 2011 were 38.1% and 36.4%, respectively. The
benefit recognized during the third quarter of 2012 was due to the
pre-tax loss incurred and the foreign tax benefit of our U.K.
Huntington field development project. The actual effective income tax
rate for the third quarter of 2011 was 38.6% which was higher than
the estimated annual effective income tax rate due to revisions of
prior period estimates of state income taxes. 
Results for the Nine Months Ended September 30, 2012- 


 
--  Record Oil Production of 7,409 Bbls/d, an increase of 293% over the
    same period of 2011
    
    
--  Record Total Production of 7,056 Mboe, or 25,752 Boe/d an increase of
    28% over the same period of 2011
    
    
--  Record Oil Revenue of $204.9 million, amounting to 79% of total
    revenue
    
    
--  Record Revenue of $260.7 million, or adjusted revenue of $289.5
    million, including the impact of realized hedges
    
    
--  Net Income of $37.0 million, $0.93 per diluted share, or Adjusted Net
    Income of $45.8 million, $0.24 per diluted share
    
    
--  Record EBITDA of $226.0 million

  
Production volumes during the nine months ended September 30, 2012 were
7,056 Mboe, an increase of 1,536 Mboe, or 28%, compared to production
of 5,520 Mboe during the nine months ended September 30, 2011. The
increase in production was primarily due to increased production from
new wells, partially offset by normal production decline and the
Atlas and KKR sales. 
Adjusted revenues were $289.5 million for the nine months ended
September 30, 2012, which includes oil and gas revenues of $260.7
million and realized hedge gains of $28.8 million, compared to $165.6
million for the same period of 2011, which includes oil and gas
revenues of $146.4 million and realized hedge gains of $19.2 million.
The increase in adjusted revenues was primarily driven by increased
oil production and prices partially offset by lower gas prices.
Including the impact of realized hedges, the Company's average
realized oil price increased 10% to $100.93 per barrel for the nine
months ended September 30, 2012 compared to $91.50 per barrel for the
nine months ended September 30, 2011 and the average realized gas
price decreased 29% to $2.69 per Mcf for the nine months ended
September 30, 2012 compared to $3.79 per Mcf for the nine months
ended September 30, 2011. Revenues excluding the impact of realized
hedges are presented in the table below. 
Adjusted Net Income was $45.8 million, or $1.16 and $1.15 per basic
and diluted share, respectively, during the nine months ended
September 30, 2012, as compared to $29.6 million, or $0.76 and $0.75
per basic and diluted share, respectively, during the nine months
ended September 30, 2011. The Company reported net income of $37.0
million, or $0.94 and $0.93 per basic and diluted share,
respectively, for the nine months ended September 30, 2012, as
compared to net income of $30.1 million, or $0.77 and $0.76 per basic
and diluted share for the same period of 2011. 
EBITDA was $226.0 million, or $5.71 and $5.65 per basic and diluted
share, respectively, during the nine months ended September 30, 2012,
as compared to $123.0 million, or $3.16 and $3.12 per basic and
diluted share, respectively, for the same period of 2011.  
Lease operating expenses were $22.6 million ($3.20 per Boe) for the
nine months ended September 30, 2012 as compared to lease operating
expenses of $21.4 million ($3.87 per Boe) for the nine months ended
September 30, 2011. Lease operating expenses increased $1.2 million
primarily due to increased production from new wells partially offset
by the Atlas sale and the sale of substantially all of our non-core
area Barnett Shale properties to KKR Natural Resources ("KKR") in May
2011. The decrease in operating cost per Boe is due to the Atlas and
KKR sales (which were higher operating cost per Boe properties as
compared to our remaining Barnett Shale properties) partially offset
by the higher operating cost per Boe associated with oil production. 
Production taxes were $9.7 million (or 3.7% of oil and gas revenues)
for the nine months ended September 30, 2012 as compared to $3.7
million (or 2.5% of oil and gas revenues) for the nine months ended
September 30, 2011. The increase in production taxes is due primarily
to increased oil production. The increase in production taxes as a
percentage of oil and gas revenues was primarily due to increased oil
production, which has a higher effective production tax rate as
compared to our natural gas production. 
Ad valorem taxes increased to $8.2 million ($1.17 per Boe) for the
nine months ended September 30, 2012 from $2.7 million ($0.49 per
Boe) for the same period of 2011. The increase in ad valorem taxes is
due primarily to new oil wells drilled in 2012 and the Commonwealth
of Pennsylvania's February 2012 enactment of an "impact fee" on the
drilling of unconventional natural gas wells. Because of the
retroactive nature of the impact fee, approximately $1.2 million of
ad valorem taxes recognized during the first nine months of 2012 is
attributable to wells drilled prior to 2012. The increase in ad
valorem taxes per Boe is due primarily to new oil wells drilled in
2012, which have higher property tax valuations as compared to our
natural gas wells, as well as the recognition of the impact fee in
2012. 
General and administrative expense was $23.2 million during the nine
months ended September 30, 2012 as compared to $18.1 million during
the nine months ended September 30, 2011. The increase was primarily
due to increased compensation costs related to an increase in
personnel in the nine months ended September 30, 2012 as compared to
the same period of 2011. 
DD&A expense for the nine months ended September 30, 2012 increased
$63.9 million to $121.5 million ($17.21 per Boe) from the DD&A
expense for the nine months ended September 30, 2011 of $57.6 million
($10.43 per Boe). The $63.9 million increase in DD&A is attributable
to both the increase in production and an increase in the DD&A rate
per Boe. The increase in the DD&A rate per Boe is largely due to the
impact of the significant decrease in natural gas reserves in the
Barnett Shale as a result of the Atlas and KKR sales as well as the
increase in crude oil reserves in the Eagle Ford Shale that have been
added during 2011 and 2012, which have a higher finding cost per Boe
than our natural gas reserves. 
Cash interest expense, net of amounts capitalized, increased to $30.1
million for the nine months ended September 30, 2012 compared to
$18.7 million for the same period of 2011. The increase was primarily
attributable to interest on the $200 million aggregate principal
amount of our 8.625% Senior Notes issued in the fourth quarter of
2011. 
An unrealized loss on derivatives of $2.8 million was recorded for
the nine months ended September 30, 2012 as compared to an unrealized
gain on derivatives of $17.1 million for the same period of 2011 due
to the change in fair value of our open derivative positions during
those periods.  
Non-cash, stock-based compensation expense of $10.6 million was
recorded for the nine months ended September 30, 2012 as compared to
$6.6 million for the same period of 2011. The increase in stock-based
compensation expense was primarily due to a higher number of
restricted stock awards outstanding at higher prices during 2012 as
compared to the same period of 2011. 
The estimated annual effective income tax rates (which are used for
purposes of computing Adjusted Net Income) for the nine months ended
September 30, 2012 and 2011 were 38.1% and 36.4%, respectively. The
actual effective income tax rate for the nine months ended September
30, 2012 was 31.4%, which was lower than the estimated annual
effective income tax rate due to the foreign tax benefit of our U.K.
Huntington field development project. The actual effective income tax
rate for the nine months ended September 30, 2011 was 37.7%, which
was higher than the estimated annual effective income tax rate due to
revisions of prior period estimates of state income taxes.  
S.P. "Chip" Johnson, IV, President and CEO of Carrizo, commented on
the quarter's results, "We continue to make significant progress in
shifting our production mix towards oil and in strengthening our
balance sheet. We are very pleased to have exceeded our internal
targets and guidance for both production and costs while reducing our
capital expenditures incurred in the quarter. Not only did our oil
production set another record, averaging over 8,600 barrels per day,
our total revenue grew over 80% from the same quarter last year. Our
operations are becoming increasingly efficient; our EBITDA for the
quarter was over $36.70 per Boe of production, reflecting the effect
of our improvement in costs per unit of production and the benefit of
our oilier production mix. We believe these metrics should compare
very favorably to our peer group and represent our success in growing
our production while continuing to hold our costs down.  
"We announced a number of transactions over the last two months, all
of which bolstered our liquidity: In early September, we issued $300
million of 7.5% coupon notes due in 2020, and during October we
announced over $172 million in cash and drilling carries from (1) the
sale of our legacy onshore Gulf Coast properties, (2) the sale of a
portion of our Utica acreage, and (3) the entry into two joint
ventures covering our position in the Niobrara. We paid off the
outstanding balance on our revolver late in the third quarter and
currently have approximately $70 million in cash which should cover a
significant portion of our expected fourth quarter spending before
any contribution from operating cash flow. Our activity forecast for
the fourth quarter is to continue at the same pace as the third
quarter; drilling with three rigs in the Eagle Ford Shale, one rig in
the Marcellus Shale in northern Pennsylvania, and one rig in the
Niobrara with plans to add another Niobrara rig early in the first
quarter of next year.  
"The Eagle Ford Shale continues to be the focus of our investing; we
have recently added approximately 2,000 tuck-in acres in La Salle
County, bringing our total to approximately 48,000 net acres. In
addition, we have finalized our plans to drill our first Pearsall
Shale test to spud later this month on one of our acreage blocks in
southern Frio County. In the last five days, ten of our fourteen
drilled and completed wells in the Marcellus Shale of Wyoming County,
Pennsylvania have been brought on line. Natural gas production from
the ten wells is approximately 50 MMcf/day gross, 15 MMcf/day net
while cleaning up and is flowing north on the new southern Laser
Pipeline to an interconnect with the Tennessee Interstate gas
transmission line. The remaining four wells are expected to come on
line at the end of November. 
"Our effort to sell our interest in the Huntington Development
Project in the U.K. North Sea is proceeding, with the potential buyer
finalizing the completion of the necessary financing." 
The Company will hold a conference call to discuss 2012 third quarter
financial results on Tuesday, November 6, 2012 at 10:00 AM Central
Standard Time. To participate in the call, please dial (800) 709-0218
ten minutes before the call is scheduled to begin. A replay of the
call will be available through Tuesday, November 13, 2012 at 11:59 AM
Central Standard Time at (800) 633-8284. The reservation number for
the replay is 21608245. 
A simultaneous webcast of the call may be accessed over the internet
at http://www.investorcalendar.com/IC/CEPage.asp?ID=169980 or by
visiting our website at http://www.crzo.net, clicking on "Investor
Relations" and then clicking on "2012 Third Quarter Conference Call
Webcast." To listen, please go to either website in time to register
and install any necessary software. The webcast will be archived for
replay on the Carrizo website for 15 days. 
Carrizo Oil & Gas, Inc. is a Houston-based energy company actively
engaged in the exploration, development, and production of oil and
gas in the United States and United Kingdom. Our current operations
are principally focused in proven, producing oil and gas plays
primarily in the Eagle Ford Shale in South Texas, the Niobrara
Formation in Colorado, the Barnett Shale in North Texas, the
Marcellus Shale in Pennsylvania and West Virginia, and the U.K. North
Sea where our Huntington Field project is currently under
development. 
Statements in this news release that are not historical facts,
including but not limited to those related to capital requirements,
spending plans, production rate target guidance for the quarter, sale
of Utica acreage including timing and price thereof, timing and
levels of production, drilling and completion, production mix,
development plans, growth, use of proceeds, oil and gas sales, the
Company's or management's intentions, beliefs, expectations, hopes,
projections, assessment of risks, estimations, plans or predictions
for the future, results of the Company's strategies, timing of
completion and drilling of wells, completion and pipeline
connections, expected income tax rates and deferral of income taxes
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 results of wells and production testing,
performance of rig operators and gathering systems, actions by
governmental authorities, joint venture partners, industry partners,
lenders and other third parties, ability to reach agreement and close
on pending transactions, purchasers obtaining financing, satisfaction
of closing conditions, market and other conditions, availability of
well connects, capital needs and uses, 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 described in Carrizo's Form 10-K
for the year ended December 31, 2011 and its other filings with the
Securities and Exchange Commission. There can be no assurance any
financing matter or transaction described in this press release will
occur on the terms or timing described, or at all. 
(Financial Highlights to Follow) 


 
                                                                            
                          CARRIZO OIL & GAS, INC.                           
                          STATEMENTS OF OPERATIONS                          
                  (In thousands, except per share amounts)                  
                                (unaudited)                                 
                                                                            
                                  Three Months Ended     Nine Months Ended  
                                     September 30,         September 30,    
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011   
                                 ---------  ---------  ---------  --------- 
Revenues:                                                                   
  Oil and condensate             $  76,945  $  19,924  $ 204,890  $  47,284 
  Natural gas                       17,027     29,687     49,178     90,538 
  NGLs                               2,225      2,057      6,662      8,576 
                                 ---------  ---------  ---------  --------- 
Total oil and gas revenues          96,197     51,668    260,730    146,398 
Realized gain on derivatives,                                               
 net (1), (2)                        9,681      7,012     28,785     19,193 
                                 ---------  ---------  ---------  --------- 
Adjusted revenues                  105,878     58,680    289,515    165,591 
                                 ---------  ---------  ---------  --------- 
                                                                            
Costs and expenses:                                                         
  Lease operating                    7,145      7,292     22,599     21,385 
  Production taxes                   3,449      1,325      9,676      3,732 
  Ad valorem taxes                   2,327      1,026      8,238      2,698 
  General and administrative         6,512      7,445     23,211     18,148 
                                 ---------  ---------  ---------  --------- 
Total costs and expenses            19,433     17,088     63,724     45,963 
                                 ---------  ---------  ---------  --------- 
                                                                            
Other items of income (expense)                                             
 included in EBITDA, as defined:                                            
  Cash Distributions-Related                                                
   Party                                --         --         --      3,333 
  Other income, net                     13         23        225         79 
                                 ---------  ---------  ---------  --------- 
EBITDA, as defined               $  86,458  $  41,615  $ 226,016  $ 123,040 
                                 =========  =========  =========  ========= 
EBITDA per common share-Basic    $    2.18  $    1.07  $    5.71  $    3.16 
                                 =========  =========  =========  ========= 
EBITDA per common share-Diluted  $    2.16  $    1.06  $    5.65  $    3.12 
                                 =========  =========  =========  ========= 
                                                                            
Other items of income (expense)                                             
 included in adjusted net                                                   
 income, as defined:                                                        
  Depreciation, depletion and                                               
   amortization expense          $ (46,518) $ (20,325) $(121,459) $ (57,596)
  Cash interest expense            (17,001)   (11,907)   (48,261)   (33,678)
  Cash interest capitalized          5,988      5,356     18,150     14,984 
  Accretion expense related to                                              
   asset retirement obligations       (190)       (71)      (538)      (215)
  Interest income                        7          9         29         11 
                                 ---------  ---------  ---------  --------- 
Adjusted income before income                                               
 taxes                              28,744     14,677     73,937     46,546 
Adjusted income tax expense        (10,937)    (5,342)   (28,133)   (16,943)
                                 ---------  ---------  ---------  --------- 
ADJUSTED net income, as defined  $  17,807  $   9,335  $  45,804  $  29,603 
                                 =========  =========  =========  ========= 
ADJUSTED net income per common                                              
 share-Basic                     $    0.45  $    0.24  $    1.16  $    0.76 
                                 =========  =========  =========  ========= 
ADJUSTED net income per common                                              
 share-Diluted                   $    0.44  $    0.24  $    1.15  $    0.75 
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
Other non-cash items of income                                              
 (expense) included in net                                                  
 income:                                                                    
  Unrealized gain (loss) on                                                 
   derivatives, net (2), (3)     $ (24,736) $  18,432  $  (2,838) $  17,095 
  Stock-based compensation                                                  
   (expense) benefit                (5,091)     4,059    (10,623)    (6,596)
  Other non-cash general and                                                
   administrative expenses (4)        (607)    (1,115)    (2,725)    (2,062)
  Non-cash interest expense         (1,944)    (1,480)    (5,706)    (4,324)
  Non-cash interest capitalized        800        673      2,470      1,954 
  Non-cash reclassification of                                              
   Cash Distributions-Related                                               
   Party to oil and gas property                                            
   costs                                --         --         --     (3,333)
  Loss on extinguishment of debt        --         --         --       (897)
  Foreign currency transaction                                              
   gain (loss)                           6        (13)      (588)       (12)
                                 ---------  ---------  ---------  --------- 
Income (loss) before income                                                 
 taxes                              (2,828)    35,233     53,927     48,371 
Income tax (expense) benefit         1,898    (13,590)   (16,930)   (18,252)
                                 ---------  ---------  ---------  --------- 
Net income (loss)                $    (930) $  21,643  $  36,997  $  30,119 
                                 =========  =========  =========  ========= 
Net income (loss) per common                                                
 share-Basic                     $   (0.02) $    0.56  $    0.94  $    0.77 
                                 =========  =========  =========  ========= 
Net income (loss) per common                                                
 share-Diluted (5)               $   (0.02) $    0.55  $    0.93  $    0.76 
                                 =========  =========  =========  ========= 
                                                                            
Weighted average common shares                                              
 outstanding-Basic                  39,634     38,914     39,559     38,927 
                                 ---------  ---------  ---------  --------- 
Weighted average common shares                                              
 outstanding-Diluted                40,037     39,368     39,992     39,483 
                                 ---------  ---------  ---------  --------- 
                                                                            
NOTES:                                                                      
(1) Includes reclassifications of approximately $0.1 million and $0.0       
 million for the three months ended September 30, 2012 and 2011,            
 respectively, and $0.3 million and $0.6 million for the nine months ended  
 September 30, 2012 and 2011, respectively, from general and administrative 
 to realized gain on derivatives, net, related to agency fees paid to enter 
 into certain derivative positions.                                         
                                                                            
(2) Includes reclassifications of approximately $0.5 million and $1.6       
 million for the three months ended September 30, 2012 and 2011,            
 respectively, and $1.2 million and $3.7 million for the nine months ended  
 September 30, 2012 and 2011, respectively, from unrealized gain on         
 derivatives, net, to realized gain on derivatives, net, for cash received  
 from the optimization of certain hedge positions that settle in future     
 periods. Amounts for cash received are offset by the related non-cash      
 amortization during the period in which such hedge positions settle.       
                                                                            
(3) Includes reclassifications of approximately $0.1 and $0.2 million for   
 the three months ended September 30, 2012 and 2011, respectively, and $0.2 
 million and $0.6 million for the nine months ended September 30, 2012 and  
 2011, respectively, from general and administrative to unrealized          
 gain/loss on derivatives, net, related to accrued agency fees incurred to  
 enter into certain derivative positions.                                   
                                                                            
(4) Other non-cash general and administrative expenses include non-cash     
 contribution expense, rent expense, and allowance for doubtful accounts.   
                                                                            
(5) Due to the net loss for the three months ended September 30, 2012,      
 basic and diluted net income per share are computed using the basic        
 weighted average shares outstanding.                                       
                                                                            
                                                                            
                                                                            
                           CARRIZO OIL & GAS, INC.                          
                          CONDENSED BALANCE SHEETS                          
                               (In thousands)                               
                                 (unaudited)                                
                                                                            
                                                                            
                                      September 30, 2012   December 31, 2011
ASSETS                                                                      
  Cash and cash equivalents           $           14,288  $           28,112
  Fair value of derivative                                                  
   instruments                                    23,120              27,877
  Other current assets                           133,638              64,408
                                      ------------------  ------------------
    Total current assets                         171,046             120,397
  Investment                                       2,523               2,523
  Fair value of derivative                                                  
   instruments                                    12,093               9,617
  Deferred income taxes                           40,135              59,755
  Property and equipment, net                  1,604,015           1,310,514
  Other assets                                    26,884              24,874
                                      ------------------  ------------------
TOTAL ASSETS                          $        1,856,696  $        1,527,680
                                      ==================  ==================
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
  Accounts payable and accrued                                              
   liabilities                        $          257,087  $          261,151
  Current maturities of Huntington                                          
   Facility due June 30, 2013                     21,150                  --
  Deferred income taxes                            7,399               9,685
  Other current liabilities                        1,655                 484
                                      ------------------  ------------------
    Total current liabilities                    287,291             271,320
  Long-term debt, net of current                                            
   maturities and debt discount                  992,813             729,300
  Other liabilities                               14,828              17,196
  Fair value of derivative                                                  
   instruments                                       140                   9
  Shareholders' equity                           561,624             509,855
                                      ------------------  ------------------
TOTAL LIABILITIES AND SHAREHOLDERS'                                         
 EQUITY                               $        1,856,696  $        1,527,680
                                      ==================  ==================
                                                                            
                                                                            
                                                                            
                           CARRIZO OIL & GAS, INC.                          
                        PRODUCTION VOLUMES AND PRICES                       
                                 (unaudited)                                
                                                                            
                                                                            
                                      Three Months Ended   Nine Months Ended
                                         September 30,       September 30,  
                                      ------------------  ------------------
                                        2012      2011      2012      2011  
                                      --------  --------  --------  --------
Production volumes-                                                         
                                                                            
  Oil and condensate (MBbls)               796       223     2,030       515
  NGLs (Mboe)                               78        36       191       175
  Natural gas (MMcf)                     8,877     9,695    29,011    28,977
                                      --------  --------  --------  --------
    Total Natural gas and NGLs                                              
     (MMcfe)                             9,345     9,911    30,157    30,027
                                      --------  --------  --------  --------
  Total barrels equivalent (Mboe)        2,354     1,875     7,056     5,520
                                      ========  ========  ========  ========
                                                                            
Production volumes per day-                                                 
                                                                            
  Oil and condensate per day (Bbls/d)    8,652     2,424     7,409     1,886
  NGLs per day (Boe/d)                     848       391       697       641
  Natural gas per day (Mcf/d)           96,489   105,380   105,880   106,143
                                      --------  --------  --------  --------
    Total Natural gas and NGLs per                                          
     day (Mcfe/d)                      101,576   107,728   110,062   109,989
                                      --------  --------  --------  --------
  Total barrels equivalent per day                                          
   (Boe/d)                              25,587    20,380    25,752    20,220
                                      ========  ========  ========  ========
                                                                            
Average sales prices-                                                       
                                                                            
  Oil and condensate ($ per Bbl)         96.66     89.17    100.93     91.76
  Oil and condensate ($ per Bbl) -                                          
   with hedge impact                     97.56     91.38    100.93     91.50
  NGLs ($ per Boe)                       28.53     57.06     34.88     49.08
  Natural gas ($ per Mcf)                 1.92      3.06      1.70      3.12
  Natural gas ($ per Mcf) - with                                            
   hedge impact                           2.93      3.73      2.69      3.79

  
Contact:
Carrizo Oil & Gas, Inc.
Richard Hunter
Vice President of Investor Relations
Paul F. Boling
Chief Financial Officer
(713) 328-1000