Form 8-K 07.28.06
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): July 28, 2006
CARRIZO OIL & GAS, INC.
(Exact name of registrant as specified in its charter)
Texas
| 000-29187-87
| 76-0415919
|
(State or other jurisdiction of
| (Commission
| (I.R.S. Employer
|
incorporation)
| File Number)
| Identification No.)
|
1000 Louisiana Street Suite 1500 Houston, Texas
| 77002
|
(Address of principal executive offices)
| (Zip code)
|
| | |
Registrant’s telephone number, including area code: (713) 328-1000
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01. Entry
into a Material Definitive Agreement.
On
July
28, 2006, Carrizo Oil & Gas, Inc., a Texas corporation (the “Company” or
“we”) announced that it had received commitments to purchase an aggregate of
1.35 million shares of the Company’s common stock, par value $0.01 per share
(“Common Stock”), to institutional investors (the “Investors”) at a price of
$26.00 per share in a private placement (the “Private Placement”). The number of
shares to be sold is approximately 5.4% of the fully diluted shares outstanding
before the offering. The net proceeds of the Private Placement, after deducting
placement agents’ fees but before paying offering expenses, are expected to be
approximately $33,696,000. We intend to use substantially
all of
these proceeds to fund in part our capital expenditure program for 2006,
including our drilling programs in the Barnett Shale and onshore Gulf Coast
areas, and for other corporate purposes.
In
connection with the Private Placement, we entered into a Placement Agent
Agreement (the “Placement Agent Agreement”) with a third party (the “Placement
Agent”), pursuant to which the Company engaged the Placement Agent as its
managing placement agent in the Private Placement. In consideration of the
Placement Agent’s services under the Placement Agent Agreement, the Placement
Agent is entitled to a fee equal to four percent of the gross proceeds of
the
Private Placement and reimbursement of up to $35,000 of its expenses in
connection with the Private Placement. In certain situations, we are required
to
indemnify the Placement Agent, including without limitation, for certain
liabilities under the Securities Act of 1933, as amended (the “Securities
Act”).
Also
in
connection with the Private Placement, the Company entered into Subscription
and
Registration Rights Agreements (the “Subscription and Registration Rights
Agreements”) with the Investors. The Subscription and Registration Rights
Agreements provide registration rights with respect to the shares purchased
in
the Private Placement. We are generally required to file a resale shelf
registration statement to register the resale of such shares under the
Securities Act within 30 days of the closing of the Private Placement and
to
have the registration statement declared effective by the SEC within 120
days
after it is filed. We are generally subject to specified penalties in the
event
the registration statement is not timely filed or declared effective or if
we do
not maintain the effectiveness of the registration statement. We are subject
to
certain covenants under the terms of the Subscription and Registration Rights
Agreement, including the requirement that the registration statement be kept
effective for resale of shares for two years. In certain situations, we are
required to indemnify the Investors, including without limitation, for certain
liabilities under the Securities Act.
Any
securities described in this report that have been offered or are to be offered
have not been registered under the Securities Act and may not be offered
or sold
in the United States absent registration or an applicable exemption from
registration requirements.
On
July
28, 2006, the Company issued a press release regarding the Private Placement
which is attached hereto as Exhibit 99.1. In connection with the Private
Placement we disclosed the following:
thereto,
and CCBM, Inc., as guarantor. The credit facility provides for a revolving
credit facility up to the lesser of the borrowing base and $200 million.
The
credit facility matures on May 25, 2010. It is secured by substantially all
of
our assets and is guaranteed by two of our subsidiaries. The liens securing
the
credit facility are first in priority to the liens securing our existing
second
lien credit facility. The initial borrowing base is $40 million, and a special
redetermination is scheduled to occur on August 1, 2006. The borrowing base
will
be redetermined by the lenders at least semi-annually on each May 1 and
November 1, beginning November 1, 2006. Since
May
25, 2006, we have drawn an aggregate of $20.0 million under the credit facility,
approximately $7.5 million of which was used to repay in full existing
indebtedness under our prior first lien credit agreement with CapitalOne
Southcoast and Union Bank of California, N.A.
and to
pay associated transaction costs. The remaining proceeds are expected to
be used
to fund a portion of our ongoing capital expenditures program and for other
general corporate purposes.
On
June
30, 2006,
Jack
Bayless, Vice President of Land, terminated his employment agreement dated
January 27, 2006 with us and left the Company.
Since
May
2006, we
acquired
certain oil and gas leases (totaling approximately 36,297 acres) from Steven
A.
Webster, our chairman. The acquisition was made pursuant to a land option
agreement between Mr. Webster and us dated January 25, 2006. Under the option
agreement, Mr. Webster agreed to acquire oil and gas leases in areas where
we
are actively leasing or that we deem prospective. On or before the
90th
day from
the date that Mr. Webster acquires any lease in these areas, we have the
option
to acquire these leases from Mr. Webster for 110% of Mr. Webster’s purchase
price or, on the 90th
day, pay
a non-refundable 10% option extension fee to add a second 90-day option period.
On or before the end of this second 90-day option period, we have the option
to
pay Mr. Webster 110% of his original purchase price to acquire the lease.
If, at
the end of the second option period, we have not exercised its purchase option,
Mr. Webster will retain ownership of the oil and gas leases. In addition
to the
cash payments described above, we will assign a one-half of one percent of
8/8ths overriding royalty interest (proportionally reduced to the actual
net
interest in any given lease acquired) on any lease we acquire from Mr. Webster
in the first 90-day option period and a one percent of 8/8ths overriding
royalty
interest (also proportionally reduced) on any lease acquired from Mr. Webster
in
the second 90-day option period. The terms and conditions of this leasing
arrangement with Mr. Webster are consistent with leasing arrangements the
Company has entered into with other third parties. Since the effective date
of
the option agreement, Mr. Webster has acquired oil and gas leases (totaling
approximately 49,926 acres) for $3,956,403, and we have made option extension
payments of an aggregate $48,345 to Mr. Webster. We plan to acquire additional
leases from Mr. Webster pursuant to the option agreement.
_______________________________
Certain
statements in this Current Report, including without limitation those relating
to the use of the proceeds of the borrowing base redetermination, refinancing
our debt, future financings, land option transactions, effects of our Private
Placement, closing of offering and other statements, that are not historical
facts are forward looking statements that are based on current expectations.
Although the Company believes that its expectations are based on reasonable
assumptions, it can give no assurance that these expectations will prove
correct. Important factors that could cause actual results to differ materially
from those in the forward
looking
statements include the completion of the closing of the Private Placement,
our
results of operations, market conditions, issues regarding timing and
effectiveness of our registration statement and other risks described in the
Company’s Form 10-K/A for the year ended December 31, 2005 and its other filings
with the Securities and Exchange Commission.
Item
9.01. Financial Statements and Exhibits
(d) Exhibits.
|
Exhibit
Number
|
Description
|
| |
|
|
99.1
|
|
| |
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
CARRIZO
OIL & GAS, INC.
By:
/s/
Paul F. Boling
Name: Paul
F.
Boling
Title: Vice
President and Chief Financial Officer
Date:
July 28, 2006