The following article is on a company with a market cap of $1.84 billion and was originally published by TheStreet.
NEW YORK () -- Houston-based Carrizo Oil and Gas () is a small energy company with a market cap of $1.8 billion in and production of mainly unconventional oil and gas. The company owns acreage in Eagle Ford Shale, the Niobrara Formation, the Marcellus Shale and the Utica Shale. The business has reported impressive growth over the last couple of years due to an increase in oil production, a trend also evident in its previous quarterly results released a week ago.
The company is now eying considerable growth in production volumes in 2014. However, the recent weakness in oil prices can have an adverse impact on Carrizo's ambitions. Investors should look into the oil prices before betting on Carrizo's rally.
The investment at Utica will not yield any meaningful impact in the short term, as Carrizo has no prior experience of working in this region, but it goes well with its strategy to significantly increase its oil output in the long run.
Due to this pro-oil strategy, crude is now making a considerably bigger contribution to the company's revenue mix. In the previous quarter, Carrizo earned more than 80% of its revenues from oil, a significant shift from just 10% in FY2010. Similarly, in terms of production volume, crude's contribution to the company's production mix has risen from 34% in Q3 2012 to more than 40% in Q3 2013. With the strong levels of inventory (discussed below), this trend will continue in the future.