Intrinsic value of Carrizo Oil&Gas - CRZO

Previous Close

$23.58

  Intrinsic Value

$1.13

stock screener

  Rating & Target

str. sell

-95%

Previous close

$23.58

 
Intrinsic value

$1.13

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of CRZO stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  58.60
  53.24
  48.42
  44.07
  40.17
  36.65
  33.49
  30.64
  28.07
  25.77
  23.69
  21.82
  20.14
  18.62
  17.26
  16.04
  14.93
  13.94
  13.05
  12.24
  11.52
  10.86
  10.28
  9.75
  9.28
  8.85
  8.46
  8.12
  7.81
  7.52
Revenue, $m
  1,183
  1,813
  2,690
  3,876
  5,433
  7,425
  9,911
  12,947
  16,582
  20,854
  25,794
  31,423
  37,751
  44,781
  52,512
  60,932
  70,031
  79,792
  90,201
  101,242
  112,902
  125,169
  138,034
  151,493
  165,545
  180,192
  195,442
  211,305
  227,798
  244,939
Variable operating expenses, $m
  2,772
  4,247
  6,304
  9,082
  12,730
  17,396
  23,221
  30,335
  38,851
  48,861
  60,436
  73,623
  88,450
  104,923
  123,035
  142,764
  164,082
  186,953
  211,341
  237,211
  264,529
  293,270
  323,413
  354,948
  387,871
  422,189
  457,920
  495,088
  533,731
  573,892
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,772
  4,247
  6,304
  9,082
  12,730
  17,396
  23,221
  30,335
  38,851
  48,861
  60,436
  73,623
  88,450
  104,923
  123,035
  142,764
  164,082
  186,953
  211,341
  237,211
  264,529
  293,270
  323,413
  354,948
  387,871
  422,189
  457,920
  495,088
  533,731
  573,892
Operating income, $m
  -1,589
  -2,435
  -3,613
  -5,206
  -7,297
  -9,971
  -13,310
  -17,388
  -22,269
  -28,007
  -34,642
  -42,201
  -50,699
  -60,141
  -70,523
  -81,832
  -94,051
  -107,161
  -121,140
  -135,968
  -151,627
  -168,101
  -185,379
  -203,455
  -222,326
  -241,998
  -262,478
  -283,783
  -305,933
  -328,953
EBITDA, $m
  -1,174
  -1,799
  -2,671
  -3,848
  -5,393
  -7,370
  -9,838
  -12,852
  -16,459
  -20,700
  -25,604
  -31,191
  -37,472
  -44,451
  -52,124
  -60,483
  -69,514
  -79,204
  -89,536
  -100,496
  -112,069
  -124,245
  -137,016
  -150,376
  -164,324
  -178,863
  -194,000
  -209,747
  -226,118
  -243,133
Interest expense (income), $m
  75
  90
  167
  279
  434
  644
  920
  1,273
  1,714
  2,252
  2,897
  3,654
  4,530
  5,527
  6,649
  7,895
  9,266
  10,759
  12,371
  14,102
  15,947
  17,904
  19,971
  22,146
  24,426
  26,812
  29,303
  31,899
  34,603
  37,415
  40,338
Earnings before tax, $m
  -1,678
  -2,601
  -3,892
  -5,640
  -7,941
  -10,892
  -14,583
  -19,102
  -24,522
  -30,904
  -38,296
  -46,730
  -56,226
  -66,791
  -78,418
  -91,098
  -104,810
  -119,532
  -135,242
  -151,915
  -169,531
  -188,072
  -207,525
  -227,881
  -249,138
  -271,300
  -294,378
  -318,386
  -343,348
  -369,291
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -1,678
  -2,601
  -3,892
  -5,640
  -7,941
  -10,892
  -14,583
  -19,102
  -24,522
  -30,904
  -38,296
  -46,730
  -56,226
  -66,791
  -78,418
  -91,098
  -104,810
  -119,532
  -135,242
  -151,915
  -169,531
  -188,072
  -207,525
  -227,881
  -249,138
  -271,300
  -294,378
  -318,386
  -343,348
  -369,291

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,398
  6,739
  10,002
  14,410
  20,198
  27,601
  36,843
  48,130
  61,642
  77,524
  95,889
  116,813
  140,337
  166,474
  195,210
  226,514
  260,337
  296,625
  335,320
  376,365
  419,710
  465,310
  513,137
  563,170
  615,407
  669,858
  726,549
  785,522
  846,833
  910,554
Adjusted assets (=assets-cash), $m
  4,398
  6,739
  10,002
  14,410
  20,198
  27,601
  36,843
  48,130
  61,642
  77,524
  95,889
  116,813
  140,337
  166,474
  195,210
  226,514
  260,337
  296,625
  335,320
  376,365
  419,710
  465,310
  513,137
  563,170
  615,407
  669,858
  726,549
  785,522
  846,833
  910,554
Revenue / Adjusted assets
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
  0.269
Average production assets, $m
  3,316
  5,081
  7,541
  10,865
  15,229
  20,811
  27,780
  36,291
  46,478
  58,454
  72,301
  88,078
  105,815
  125,522
  147,190
  170,793
  196,296
  223,658
  252,834
  283,782
  316,464
  350,847
  386,909
  424,634
  464,021
  505,078
  547,823
  592,289
  638,518
  686,564
Working capital, $m
  -412
  -631
  -936
  -1,349
  -1,891
  -2,584
  -3,449
  -4,506
  -5,770
  -7,257
  -8,976
  -10,935
  -13,137
  -15,584
  -18,274
  -21,204
  -24,371
  -27,768
  -31,390
  -35,232
  -39,290
  -43,559
  -48,036
  -52,720
  -57,609
  -62,707
  -68,014
  -73,534
  -79,274
  -85,239
Total debt, $m
  3,035
  5,065
  7,893
  11,715
  16,734
  23,152
  31,165
  40,951
  52,665
  66,436
  82,358
  100,498
  120,894
  143,554
  168,469
  195,609
  224,934
  256,396
  289,945
  325,531
  363,110
  402,646
  444,111
  487,491
  532,780
  579,989
  629,140
  680,269
  733,426
  788,672
Total liabilities, $m
  3,813
  5,843
  8,672
  12,493
  17,512
  23,930
  31,943
  41,729
  53,444
  67,214
  83,136
  101,277
  121,672
  144,333
  169,247
  196,387
  225,712
  257,174
  290,723
  326,309
  363,888
  403,424
  444,890
  488,269
  533,558
  580,767
  629,918
  681,047
  734,204
  789,450
Total equity, $m
  585
  896
  1,330
  1,917
  2,686
  3,671
  4,900
  6,401
  8,198
  10,311
  12,753
  15,536
  18,665
  22,141
  25,963
  30,126
  34,625
  39,451
  44,598
  50,057
  55,821
  61,886
  68,247
  74,902
  81,849
  89,091
  96,631
  104,474
  112,629
  121,104
Total liabilities and equity, $m
  4,398
  6,739
  10,002
  14,410
  20,198
  27,601
  36,843
  48,130
  61,642
  77,525
  95,889
  116,813
  140,337
  166,474
  195,210
  226,513
  260,337
  296,625
  335,321
  376,366
  419,709
  465,310
  513,137
  563,171
  615,407
  669,858
  726,549
  785,521
  846,833
  910,554
Debt-to-equity ratio
  5.190
  5.650
  5.930
  6.110
  6.230
  6.310
  6.360
  6.400
  6.420
  6.440
  6.460
  6.470
  6.480
  6.480
  6.490
  6.490
  6.500
  6.500
  6.500
  6.500
  6.500
  6.510
  6.510
  6.510
  6.510
  6.510
  6.510
  6.510
  6.510
  6.510
Adjusted equity ratio
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133
  0.133

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,678
  -2,601
  -3,892
  -5,640
  -7,941
  -10,892
  -14,583
  -19,102
  -24,522
  -30,904
  -38,296
  -46,730
  -56,226
  -66,791
  -78,418
  -91,098
  -104,810
  -119,532
  -135,242
  -151,915
  -169,531
  -188,072
  -207,525
  -227,881
  -249,138
  -271,300
  -294,378
  -318,386
  -343,348
  -369,291
Depreciation, amort., depletion, $m
  414
  635
  943
  1,358
  1,904
  2,601
  3,472
  4,536
  5,810
  7,307
  9,038
  11,010
  13,227
  15,690
  18,399
  21,349
  24,537
  27,957
  31,604
  35,473
  39,558
  43,856
  48,364
  53,079
  58,003
  63,135
  68,478
  74,036
  79,815
  85,820
Funds from operations, $m
  -1,264
  -1,966
  -2,949
  -4,282
  -6,038
  -8,290
  -11,111
  -14,566
  -18,712
  -23,597
  -29,258
  -35,721
  -43,000
  -51,100
  -60,020
  -69,749
  -80,273
  -91,575
  -103,638
  -116,443
  -129,973
  -144,216
  -159,161
  -174,802
  -191,136
  -208,166
  -225,900
  -244,350
  -263,533
  -283,471
Change in working capital, $m
  -152
  -219
  -305
  -413
  -542
  -693
  -865
  -1,057
  -1,265
  -1,487
  -1,719
  -1,959
  -2,202
  -2,447
  -2,690
  -2,930
  -3,166
  -3,397
  -3,622
  -3,842
  -4,058
  -4,269
  -4,477
  -4,684
  -4,890
  -5,097
  -5,307
  -5,521
  -5,739
  -5,965
Cash from operations, $m
  -1,112
  -1,747
  -2,644
  -3,869
  -5,496
  -7,597
  -10,246
  -13,509
  -17,447
  -22,110
  -27,539
  -33,762
  -40,797
  -48,654
  -57,330
  -66,818
  -77,106
  -88,178
  -100,015
  -112,600
  -125,916
  -139,948
  -154,684
  -170,118
  -186,246
  -203,069
  -220,593
  -238,829
  -257,793
  -277,506
Maintenance CAPEX, $m
  -261
  -414
  -635
  -943
  -1,358
  -1,904
  -2,601
  -3,472
  -4,536
  -5,810
  -7,307
  -9,038
  -11,010
  -13,227
  -15,690
  -18,399
  -21,349
  -24,537
  -27,957
  -31,604
  -35,473
  -39,558
  -43,856
  -48,364
  -53,079
  -58,003
  -63,135
  -68,478
  -74,036
  -79,815
New CAPEX, $m
  -1,225
  -1,765
  -2,460
  -3,324
  -4,364
  -5,582
  -6,969
  -8,511
  -10,188
  -11,976
  -13,847
  -15,776
  -17,737
  -19,707
  -21,668
  -23,603
  -25,503
  -27,362
  -29,176
  -30,948
  -32,682
  -34,383
  -36,061
  -37,726
  -39,387
  -41,056
  -42,745
  -44,466
  -46,229
  -48,046
Cash from investing activities, $m
  -1,486
  -2,179
  -3,095
  -4,267
  -5,722
  -7,486
  -9,570
  -11,983
  -14,724
  -17,786
  -21,154
  -24,814
  -28,747
  -32,934
  -37,358
  -42,002
  -46,852
  -51,899
  -57,133
  -62,552
  -68,155
  -73,941
  -79,917
  -86,090
  -92,466
  -99,059
  -105,880
  -112,944
  -120,265
  -127,861
Free cash flow, $m
  -2,598
  -3,927
  -5,739
  -8,136
  -11,218
  -15,083
  -19,816
  -25,492
  -32,171
  -39,895
  -48,693
  -58,576
  -69,544
  -81,588
  -94,688
  -108,820
  -123,959
  -140,077
  -157,149
  -175,153
  -194,070
  -213,889
  -234,602
  -256,207
  -278,712
  -302,127
  -326,473
  -351,773
  -378,058
  -405,367
Issuance/(repayment) of debt, $m
  1,405
  2,030
  2,829
  3,822
  5,018
  6,418
  8,013
  9,786
  11,715
  13,770
  15,922
  18,141
  20,395
  22,661
  24,915
  27,140
  29,325
  31,462
  33,549
  35,586
  37,579
  39,536
  41,465
  43,379
  45,289
  47,209
  49,151
  51,129
  53,157
  55,246
Issuance/(repurchase) of shares, $m
  1,892
  2,913
  4,326
  6,226
  8,711
  11,876
  15,813
  20,603
  26,319
  33,016
  40,738
  49,513
  59,355
  70,267
  82,240
  95,261
  109,308
  124,359
  140,388
  157,374
  175,296
  194,137
  213,886
  234,535
  256,086
  278,542
  301,917
  326,229
  351,502
  377,766
Cash from financing (excl. dividends), $m  
  3,297
  4,943
  7,155
  10,048
  13,729
  18,294
  23,826
  30,389
  38,034
  46,786
  56,660
  67,654
  79,750
  92,928
  107,155
  122,401
  138,633
  155,821
  173,937
  192,960
  212,875
  233,673
  255,351
  277,914
  301,375
  325,751
  351,068
  377,358
  404,659
  433,012
Total cash flow (excl. dividends), $m
  700
  1,016
  1,416
  1,913
  2,511
  3,212
  4,010
  4,897
  5,862
  6,891
  7,968
  9,078
  10,206
  11,340
  12,468
  13,581
  14,674
  15,744
  16,788
  17,808
  18,805
  19,784
  20,750
  21,707
  22,663
  23,624
  24,596
  25,586
  26,600
  27,646
Retained Cash Flow (-), $m
  -1,892
  -2,913
  -4,326
  -6,226
  -8,711
  -11,876
  -15,813
  -20,603
  -26,319
  -33,016
  -40,738
  -49,513
  -59,355
  -70,267
  -82,240
  -95,261
  -109,308
  -124,359
  -140,388
  -157,374
  -175,296
  -194,137
  -213,886
  -234,535
  -256,086
  -278,542
  -301,917
  -326,229
  -351,502
  -377,766
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -1,193
  -1,897
  -2,910
  -4,314
  -6,200
  -8,664
  -11,803
  -15,706
  -20,456
  -26,125
  -32,770
  -40,435
  -49,149
  -58,927
  -69,773
  -81,680
  -94,634
  -108,615
  -123,600
  -139,567
  -156,491
  -174,353
  -193,136
  -212,828
  -233,423
  -254,919
  -277,322
  -300,643
  -324,902
  -350,121
Discount rate, %
  10.00
  10.50
  11.03
  11.58
  12.16
  12.76
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.07
  25.27
  26.53
  27.86
  29.25
  30.72
  32.25
  33.86
  35.56
  37.33
  39.20
  41.16
PV of cash for distribution, $m
  -1,084
  -1,554
  -2,127
  -2,783
  -3,494
  -4,214
  -4,894
  -5,479
  -5,919
  -6,176
  -6,231
  -6,080
  -5,742
  -5,248
  -4,644
  -3,978
  -3,298
  -2,646
  -2,054
  -1,541
  -1,117
  -782
  -528
  -344
  -215
  -130
  -75
  -42
  -22
  -11
Current shareholders' claim on cash, %
  50.6
  25.9
  13.4
  7.1
  3.8
  2.1
  1.1
  0.6
  0.3
  0.2
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Carrizo Oil & Gas, Inc. is an energy company. The Company is engaged in the exploration, development and production of oil and gas from resource plays located in the United States. Its operations are focused in proven, producing oil and gas plays in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Utica Shale in Ohio, the Niobrara Formation in Colorado, and the Marcellus Shale in Pennsylvania. As of December 31, 2016, the Company's proved reserves of 200 million barrels of oil equivalent (MMBoe) were 64% crude oil, 12% natural gas liquids (NGLs) and 24% natural gas. As of December 31, 2016, it operated approximately 94% of the wells in Eagle Ford in which it held an interest. As of December 31, 2016, it held an average interest of approximately 85% in these operated wells. As of December 31, 2016, it owned leases covering approximately 309,200 gross (179,179 net) acres in the Eagle Ford, Niobrara, Utica and the Delaware Basin areas.

FINANCIAL RATIOS  of  Carrizo Oil&Gas (CRZO)

Valuation Ratios
P/E Ratio -2.3
Price to Sales 3.5
Price to Book 66.8
Price to Tangible Book
Price to Cash Flow 5.6
Price to Free Cash Flow -7.4
Growth Rates
Sales Growth Rate 3.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.8%
Cap. Spend. - 3 Yr. Gr. Rate -9.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 5760.9%
Total Debt to Equity 5760.9%
Interest Coverage -8
Management Effectiveness
Return On Assets -33%
Ret/ On Assets - 3 Yr. Avg. -22.3%
Return On Total Capital -44.6%
Ret/ On T. Cap. - 3 Yr. Avg. -29.9%
Return On Equity -289.1%
Return On Equity - 3 Yr. Avg. -138.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 72.1%
Gross Margin - 3 Yr. Avg. 76.3%
EBITDA Margin -86.9%
EBITDA Margin - 3 Yr. Avg. -67.9%
Operating Margin -122.7%
Oper. Margin - 3 Yr. Avg. -133.8%
Pre-Tax Margin -152%
Pre-Tax Margin - 3 Yr. Avg. -135.2%
Net Profit Margin -152%
Net Profit Margin - 3 Yr. Avg. -129.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 15.8%
Payout Ratio 0%

CRZO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CRZO stock intrinsic value calculation we used $745.888 million for the last fiscal year's total revenue generated by Carrizo Oil&Gas. The default revenue input number comes from 0001 income statement of Carrizo Oil&Gas. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CRZO stock valuation model: a) initial revenue growth rate of 58.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10%, whose default value for CRZO is calculated based on our internal credit rating of Carrizo Oil&Gas, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Carrizo Oil&Gas.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CRZO stock the variable cost ratio is equal to 234.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CRZO stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.5% for Carrizo Oil&Gas.

Corporate tax rate of 27% is the nominal tax rate for Carrizo Oil&Gas. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CRZO stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CRZO are equal to 280.3%.

Life of production assets of 8 years is the average useful life of capital assets used in Carrizo Oil&Gas operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CRZO is equal to -34.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $370.897 million for Carrizo Oil&Gas - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 82.114 million for Carrizo Oil&Gas is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Carrizo Oil&Gas at the current share price and the inputted number of shares is $1.9 billion.

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COMPANY NEWS

▶ 5 things to know in Texas energy this week   [Aug-20-18 09:59AM  American City Business Journals]
▶ Devon Energy selling Delaware Basin properties to Houston co. for $215M   [Aug-15-18 09:31AM  American City Business Journals]
▶ Carrizo Oil & Gas Prices Public Offering of Common Stock   [Aug-14-18 08:30PM  Business Wire]
▶ Buy the Dip With These ETFs and Stocks   [07:15AM  InvestorPlace]
▶ 3 Stocks to Inflation-Proof Your Portfolio   [Aug-11-18 02:00PM  TheStreet.com]
▶ Carrizo Oil & Gas, Inc. to Host Earnings Call   [Aug-07-18 09:00AM  ACCESSWIRE]
▶ Carrizo: 2Q Earnings Snapshot   [04:13PM  Associated Press]
▶ Cramer's Exec Cut: Business is bigger in Texas   [Jul-13-18 06:00PM  CNBC Videos]
▶ OPECs Agreement Sends Oil Prices Soaring   [03:30PM  Oilprice.com]
▶ Cramer Remix: Go ahead, Chinasell your U.S. Treasurys!   [Jun-19-18 07:07PM  CNBC Videos]
▶ These Colorado companies are making deeper inroads into Texas's Eagle Ford Shale   [May-30-18 08:12AM  American City Business Journals]
▶ OPEC Adds U.S. Exit From Iran Nuclear Deal To 'Disruptive Concerns'   [May-14-18 09:51AM  Investor's Business Daily]
▶ Why Carrizo Oil & Gas Inc's Stock Is Soaring Today   [May-08-18 02:33PM  Motley Fool]
▶ Carrizo: 1Q Earnings Snapshot   [May-07-18 04:26PM  Associated Press]
▶ Why Oil Stocks Are Rocketing Today   [Apr-18-18 05:24PM  Motley Fool]
▶ Edited Transcript of CRZO presentation 7-Mar-17 4:35pm GMT   [01:26PM  Thomson Reuters StreetEvents]
▶ [$$] Activist Investors Try to Wake Up a Slumbering Energy Sector   [Apr-05-18 11:57PM  The Wall Street Journal]
▶ New Strong Buy Stocks for February 14th   [Feb-14-18 09:54AM  Zacks]
▶ Will the US Dollar and Inventories Impact Crude Oil Futures?   [Jan-25-18 08:03AM  Market Realist]
▶ These Oil-Weighted Stocks Are Gaining More than US Crude Oil   [Jan-18-18 09:28AM  Market Realist]
▶ Which Oil-Weighted Stocks Are Outdoing Oils Gains?   [Jan-11-18 12:01PM  Market Realist]
▶ What Drove Carrizo Oil & Gass Return on Equity Last Year?   [Jan-10-18 09:40AM  Market Realist]

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