Carrizo Oil & Gas is a Houston-based driller that concentrates on U.S. shale plays. They have active drilling operations in the Eagle Ford and Barnett (TX), the Niobrara (CO), and in both the Marcellus and Utica Shale region in the northeast (PA & OH). In reviewing today’s Carrizo 2Q13 update, it’s obvious the company has decided to scale back in the Marcellus/Utica for now, in favor of putting their effort into the other plays. Carrizo’s average daily gas production in the Marcellus decreased from 38 million cubic feet per day (Mmcf/d) in 1Q13 to 33.9 Mmcf/d in 2Q13. Why? They’ve “shut-in” a number of their wells in Wyoming County, PA, waiting for the price of Marcellus gas to go up before they sell more.
Gas prices in the very-productive Marcellus are typically some of the lowest in the country. More supply than demand at this point. For example, yesterday the average sale price for natural gas along pipelines in the northeast Marcellus was $1.89 Mmcf according to NGI’s Shale Daily. The average sale price for gas yesterday in the Barnett Shale was $3.36 Mmcf! You can see why Carrizo is cooling their heals in the Marcellus. Here’s the portion of today’s Carrizo update dealing with their drilling program in the Marcellus/Utica: