Carrizo Oil & Gas Production Slowed by Gathering and Service Delays

Carrizo Oil & Gas wells in the Eagle Ford continue to meet or exceed expectations, but delays in bringing on the company’s gathering system held gas production levels below their potential. Service company equipment problems also led to delays.

Even with third quarter delays, Carrizo is poised for strong Eagle Ford growth in the fourth quarter. The company has a corporate wide objective of reaching 5,000 bbls/d of oil by year-end. That’s roughly double the company’s average in the third quarter. South Texas wells will play an integral part in the company reaching that target.

The Gas Authority of India, Limited (GAIL) is a 20% working interest partner with Carrizo across over 20,000 net acres in the Eagle Ford. The Carrizo – Gail JV was announced at the end of September, 2011.

Production performance from new and recently completed wells in all our areas of operation continues to meet or exceed our expectations, as we brought on five gross Eagle Ford Shale, two Niobrara Formation and eight Barnett Shale wells in the third quarter. The largest contributor to our short-fall came from lower than forecasted production from our non-operated Barnett Shale properties and a steeper than anticipated decline in our approximately 10 Mmcfe per day of Gulf Coast production. Delays in the completion of gas gathering systems in the Eagle Ford and Marcellus Shales also negatively impacted our gas levels. Oil was within the range of our expectations despite delayed Eagle Ford Shale completions caused by a service company’s equipment problems.

“Our expectation for the fourth quarter calls for a large increase in Eagle Ford Shale production as 13 gross new wells are scheduled to come on. Our first operated Marcellus production began from two gross wells in mid-October and gas production should benefit from the addition of three gross wells in December, all from Susquehanna County. Niobrara contribution should increase with the addition of two gross new wells that came on the last day of the third quarter and one additional gross well that should come on in December. The combined effect of these new wells, offset by the volumes associated with the interest in the Eagle Ford Shale properties transferred to GAIL (INDIA) LIMITED in our recently announced joint venture, leads to our guidance for in the quarter to range between 137 and 143 Mmcfe per day. We continue to believe that we will achieve our previous goal of 5,000 net barrels per day of oil production before the end of the quarter.”

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R.T. Dukes

R.T. Dukes

Managing Editor at
R.T. is the managing editor of In prior roles, he advised major oil companies on strategy, the macro business environment, and opportunity screening. 2503 Robinhood, Houston, TX, 77005, U.S.A. | Telephone: 832.429.4790

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