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Carrizo Oil & Gas - Cash Burn?

|Includes: Carrizo Oil & Gas, Inc. (CRZO)

Looking thru Carrizo Oil & Gas 2016 Annual Report (released 27 Feb 2017), I noticed that cash on hand went from $42.9 million down to $4.19 million from the prior (2015) year.

I've been watching the stock, down from a high of just under $44 on 1 Dec 2016 to today's close at $25.33, a drop of just over 42% in 3+ months.

The price of West Texas Intermediate crude ($WTIC) dipped only slightly, from a close of $51.06 to $50.71 in the same time period.

Looking at some other metrics, the company has a current market cap of $1.5 billion (59,932,000 shares x $25.33), and carries total debt of $1.325 billion.

I calculated a price per flowing barrel using the formula:

Market Cap + Debt - cash / Production barrels per day =

1.518B + 1.325B - 4.19M / 42276 BOE/day = $67,161

This is not a bad metric, using a benchmark of $100,000 per barrel of flowing oil; the cash burn bothers me though, and I concluded either that the stock is a) currently oversold or b) someone knows something I don't.

I may scale into it and start a position if it dips under $25 a share.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in CRZO over the next 72 hours.