Carrizo Oil & Gas (CRZO -3%) is cut to Hold from Buy at KeyBanc, which views CRZO's lack of...

Carrizo Oil & Gas (CRZO -3%) is cut to Hold from Buy at KeyBanc, which views CRZO's lack of capital discipline as harmful to value creation and the resulting free cash flow deficits it forecasts through 2014 exposing it to excess risk in the event of a depressed commodity price environment given an already over-leveraged balance sheet.

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Comments (2)
  • Stone Fox Capital
    , contributor
    Comments (9367) | Send Message
    more the same non-sense. Company just sold a bunch of assets but analysts prefer that no transactions take place.
    23 Jan 2013, 03:30 PM Reply Like
  • indytom01
    , contributor
    Comments (51) | Send Message
    More of the same nonsense indeed. Did the CEO not just state in the last earnings conference call that by Q4 they expected to be cash flow positive thereby reducing the need for future asset sales & JV's? Are the asset sales not the company's effort to fund their drilling program in a more balanced way that reduces balance sheet leverage? Ideally the company could keep all these producing wells and earnings would be significantly greater, but the leverage to the balance sheet would be significantly greater as well. In the final analysis you have a company growing earnings at roughly 30% selling at forward P/E in the 9-10 area, with an improving balance sheet moving forward. Industry peers sell at significantly greater multiples. The timing of these recent analyst downgrades over leverage concerns is bewildering as they come just as the outlook for the cash flow situation & leverage should be improving. Where were these concerns previously? Nonsense indeed.
    23 Jan 2013, 04:00 PM Reply Like
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