Houston- based Carrizo Oil & Gas (NASDAQ:CRZO) was originally formed to explore and develop natural gas fields in the Barnett shale formation of Northwest Texas.
But now, Carrizo is moving away from natural gas in favor of what CEO and President, Chip Johnson, calls "premier oil and liquids-rich plays."
In other words, the company is going to be concentrating more of its efforts on oil.
To that end, Carrizo announced last week that it would be selling off large portions of its natural gas interests in the Barnett and Marcellus regions. The parcels will deliver a total of $268 million to company coffers.
And that's just the latest in a series of moves to transform the company.
Indeed, Carrizo first announced its plans to move into oil-focused horizontal drilling in the Eagle Ford shale formation in South Texas back in 2010.
Since that time, the company has been aggressively accumulating acreage and starting new well projects.
Carrizo now controls more than 53,000 net acres in Eagle Ford - one of the most prolific shale plays in the country.
In 2012, the Eagle Ford produced 52,000 barrels of oil per day. And its reserves are estimated at 3 billion barrels of oil.
Carrizo's strategy is to expand its capacity in the region with an increasing expertise in "complex extended reach horizontal wells," utilizing sophisticated 3-D seismic controlled horizontal drilling and completion technology.
Carrizo has taken this expertise and parlayed it to become one of the most productive drillers in the region.
In fact, the company has been successful in 100% of the wells it's sunk, churning up some impressive production numbers.
According to the Texas Railroad Commission - the state agency that regulates the oil-and-gas industry - Carrizo is one of the fastest-growing and most productive outfits in the region, taking more than 3 million barrels of oil from Eagle Ford in the first six months of this year alone.
But that's not all.
In addition to increasing its presence in Eagle Ford, the sale of its natural gas assets will allow it to focus increased attention on three other oil projects: the Niobrara Formation in the Denver-Julesburg Basin in Colorado, its Huntington field discovery in the North Sea, and the emerging Utica Shale in eastern Ohio.
Carrizo's strategy seems to be paying off.
The company posted earnings of $0.61 per share for this past quarter, beating analysts' estimates by a healthy $0.06.
Revenue rose 60% to more than $134 million.
And it's not stopping there. Carrizo is increasing its projected production range for 2013 to between 11,100 and 11,500 barrels per day.
That won the approval of analysts, which have set price targets as high as $45 and $50 per share - a 47% jump from current levels.
Indeed, Carrizo is making the right moves at the right time.
The infusion of cash from the sale of its gas properties will help the company expand production at a time of rising oil prices and pay down some of its debt.
No doubt, Carrizo could make a nice addition to your portfolio.
And "the chase" continues,
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.