TEXT-S&P rates Carrizo Oil & Gas notes 'B'

Wed Sep 5, 2012 3:06pm EDT

Sept 5 - Standard & Poor's Ratings Services said today that it assigned its
'B' issue-level rating to Carrizo Oil & Gas Inc.'s proposed $250
million senior unsecured notes due 2020. The recovery rating on the notes is
'4', indicating our expectation of average (30% to 50%) recovery in the event of
a payment default. The 'B' corporate credit rating on Carrizo and stable outlook
are unaffected. 

Carrizo intends to use the net proceeds from the proposed offering to repay 
borrowings outstanding under the company's revolving credit facility and for 
general corporate purposes. 

The ratings on Carrizo continue to reflect our view of the company's 
"aggressive" financial risk and "vulnerable" business risk. These assessments 
reflect Carrizo's exposure to weak natural gas, which remains the company's 
principal product, the company's modest-sized reserve and its high spending 
levels in excess of projected operating cash flows to develop its Eagle Ford 
acreage. The ratings also reflect the company's increasing exposure to robust 
crude oil prices and our expectation that leverage will remain within an 
acceptable range for the rating, because sustained production growth of oil 
and liquids and a conservative hedging policy should support future cash flow 
generation. 

RELATED RESEARCH AND CRITERIA
     -- Assumptions: Revised Assumptions For Assigning Recovery Ratings To The 
Debt Of U.S. Oil And Gas Exploration And Production Companies, Sept. 30, 2010
     -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009.
     -- Corporate Ratings Criteria 2008, published April 15, 2008.


RATINGS LIST
Carrizo Oil & Gas Inc.
 Corporate credit rating                      B/Stable/--

New Rating
 Proposed $250 mil sr unsecd nts due 2020     B
  Recovery rating                             4
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