HOUSTON--(BUSINESS WIRE)-- Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today announced that it has agreed to acquire Delaware Basin properties from Devon Energy Corporation (Devon) for $215 million in cash, subject to customary closing adjustments. Subject to market conditions, the Company plans to fund the purchase price with net proceeds from an equity offering announced concurrently with this release.

Acquisition Highlights

• Approximately 10,600 gross (9,600 net) acres located in the Delaware Basin in Reeves and Ward counties, with the majority of the position adjacent to the Company's existing acreage
• High degree of operational control with more than 90% of net acreage operated
• Minimal near-term drilling obligations as 94% of the acreage is held by production
• Low average royalty of approximately 20%
• Net production of approximately 2,500 Boe/d (60% oil)
• More than 100 net potential de-risked drilling locations identified across the Wolfcamp A and B based on 7,000-ft. laterals, with significant upside potential from additional zones, further delineation, and future downspacing
• Includes salt-water disposal wells that can be integrated into the Company's system
• Significant opportunities to generate efficiencies from increased scale, extension of lateral lengths, and integration of infrastructure

The acquisition is currently expected to close during the fourth quarter of 2018 and increases the Company's acreage position in the Delaware Basin to approximately 46,000 net acres on a pro forma basis.

S.P. “Chip” Johnson, IV, Carrizo's President and CEO, commented on the acquisition, “This acquisition is an excellent fit with our existing Phantom-area acreage and meaningfully increases our scale in the area. Upon completion of the transaction, we will hold approximately 26,300 net acres in our Phantom area and 46,000 net acres in the Delaware Basin. The acquisition materially increases our inventory of de-risked drilling locations in the area as well as offers significant upside potential from delineating the entire position and testing additional zones. The acreage also has a high degree of operational control and minimal near-term drilling obligations. As a result, we expect to seamlessly integrate these assets into our existing development plan for the area, which currently assumes a ramp-up in activity in the second half of 2019 as Permian pipeline takeaway is forecast to increase. Over time, we see the potential to achieve meaningful efficiencies through optimizing future large-scale pad development, drilling longer-lateral wells, and integrating the existing infrastructure within our system.”

Carrizo has posted a presentation to its website at http://www.carrizo.com that provides maps and additional details on the properties to be acquired. The presentation can be found by clicking on “Investor Relations” and then “Presentations.”