Carrizo Oil & Gas, Inc. announced a farm-out agreement in the Delaware Basin and plans to begin an operated drilling program later this year.
Delaware Basin Update
Carrizo recently signed a farm-out agreement with a larger operator providing it the right to earn approximately 2,800 net acres in eastern Culberson County. This brings the Company's acreage position in the play to more than 20,000 net acres. The new acreage offsets Carrizo's existing position in eastern Culberson County, allowing the Company to build a contiguous nine-section unit where it has the potential to drill approximately 30 long-lateral wells on 1,000 ft. spacing in the Upper Wolfcamp zone.
Carrizo now plans to bring a rig into the play during the third quarter and drill three horizontal wells during 2015. Due to the timing of completion and hook-up for the wells, the Company does not currently expect material production from the play during 2015. Carrizo will be the operator of these wells and expects to have an average working interest of at least 80% in them. As part of the acreage acquisition cost, Carrizo will carry its partner on these wells.