Carrizo Oil & Gas Inc. Q2 2009 Earnings Call

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2009-08-10 13:09:14.0

Tags: Well, Earnings, Carrizo Oil & Gas Inc., Capital Structures, Sales Strategy, Semiconductors, Network Technology, Finance, Sales, Hardware, Networking, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of David Heikkinen with Tudor, Pickering and Holt.

David Heikkinen - Tudor, Pickering and Holt

Just thinking about the Marcellus capital program, can you walk us through how much you spent on leasing and then what you spent for the first vertical well, any coring, and then your plans for the five vertical wells as you go forward?

Chip Johnson

Nearly all of the money has been spent on leasing. We have drilled some wells with partners in Northeast Pennsylvania and in Southeast New York, but our interest was small in all of those. The vertical well and the Marcellus will, probably including frac be about $2 million, because we ran every log, every kind of tracer log, took cores, did every kind of analysis we could. So, we think the costs will come down in the future once we go in to full development.

In the West Virginia wells, we have a range of depths I think from about 4,000 feet to 9,000 feet. So we're assuming the average cost will probably be about $1.5 million per well.

David Heikkinen - Tudor Pickering and Holt

Can you bracket or ballpark what you'd consider good results or encouraging results for vertical wells in each of those areas?

Chip Johnson

We're hoping to get vertical wells that are similar to the frac stages that Exco got in their wells and the EOG vertical well in Clearfield County, which is pretty close to us and anything over $1 million a day, $1 million to $1.5 million a day would be very profitable in our opinion.

We would like to get some bigger rates, maybe like the [Atlas] Wells in Southern Pennsylvania, but we're not sure that we have enough frac barriers in the well to get those kind of rates.

David Heikkinen - Tudor Pickering and Holt

Okay. These wells are close enough to pipeline that you'll put them to sales or will they just be flared while you're testing them and that's it.

Chip Johnson

They will be flared while we're testing them. We're probably eight miles from the nearest big pipeline or LDC that we think we could sell into, so we need a lot more data before we start planning sales.

Operator

Our next question comes from the line of David Tameron with Wells Fargo.

David Tameron - Wells Fargo Securities

 

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