Thursday, March 22, 2012

Carrizo Oil and Gas Heading to 80% Oil

This stock was crushed today, down over 5% at the close. On top of that Carrizo Oil & Gas (CRZO) is down over 33% from last years high. The main issue is that the market still sees it as a natural gas play, but clearly the company has already moved to mainly oil.

Per the interview below on Mad Money, the CEO reconfirms that the company is already 60% oil and will hit 80% oil by the end of the year.

The most interesting part of the interview was the prediction that 2013 revenues could hit $750M with the current rig count. Incredible considering analysts forecast something in the $600M range and considering the company just sold a large chunk of Barnett Shale production.

Also worth noting is that the company will be throwing off cash in 2013 though the CEO wants to add rigs once the company reaches that level. All in all very positive news about a stock I was becoming concerned about.

Considering the oil focused stocks have recently hit new highs and especially trade above the 2011 levels one has to wonder when Carrizo gets that respect.


Check the video below:






Disclosure: Long CRZO. Please review the disclaimer page for more details. 


Stone Fox Capital holds an allocation of 9.1% in $CRZO in his Opportunistic Arbitrage Investment Model

1 comment:

Mark Holder said...

Interesting that Cramer covered CRZO again in his No Huddle Offense segment last night. The repeat discussion should help the momentum next week. Oddly though he made a reference to the company being 70% oil next year even though the CEO suggested 80% on his vary show.

Any new investor needs to understand the North Sea oil project should come on line later this year. This will dramatically help the oil %.