1040593--4/10/2006--CARRIZO_OIL_&_GAS

related topics

{gas, price, oil}

{loss, insurance, financial}

{cost, operation, labor}

{debt, indebtedness, cash}

{control, financial, internal}

{tax, income, asset}

{operation, natural, condition}

{cost, regulation, environmental}

{personnel, key, retain}

{product, market, service}

Natural gas and oil drilling is a speculative activity and involves numerous risks and substantial and uncertain costs that could adversely affect us. We may not adhere to our proposed drilling schedule. Our reserve data and estimated discounted future net cash flows are estimates based on assumptions that may be inaccurate and are based on existing economic and operating conditions that may change in the future. We depend on successful exploration, development and acquisitions to maintain reserves and revenue in the future. Natural gas and oil prices are highly volatile, and lower prices will negatively affect our financial results. We face strong competition from other natural gas and oil companies. We may not be able to keep pace with technological developments in our industry. As of December 31, 2005, we had a material weakness in our internal control, and our internal control over financial reporting was not effective as of that date. If we fail to maintain an effective system of internal controls, we may not be able to provide timely and accurate financial statements. We could face adverse consequences as a result of our late Form 10-K filing. We are subject to various governmental regulations and environmental risks. We are subject to various operating and other casualty risks that could result in liability exposure or the loss of production and revenues. We may not have enough insurance to cover all of the risks we face. We cannot control the activities on properties we do not operate and are unable to ensure their proper operation and profitability. The marketability of our natural gas production depends on facilities that we typically do not own or control, which could result in a curtailment of production and revenues. Our future acquisitions may yield revenues or production that varies significantly from our projections. Our business may suffer if we lose key personnel. We may experience difficulty in achieving and managing future growth. We may continue to enter into derivative transactions to manage the price risks associated with our production. Our derivative transactions may result in our making cash payments or prevent us from benefiting to the fullest extent possible from increases in prices for natural gas and oil. We have substantial capital requirements that, if not met, may hinder operations. High demand for field services and equipment and the ability of suppliers to meet that demand may limit our ability to drill and produce our oil and natural gas properties. Our credit facilities contain operating restrictions and financial covenants, and we may have difficulty obtaining additional credit. We may record ceiling limitation write-downs that would reduce our shareholders equity. We participate in oil and natural gas leases with third parties. We may incur losses as a result of title deficiencies. The threat and impact of terrorist attacks or similar hostilities may adversely impact our operations.

Full 10-K form ▸

1040593--4/10/2006--CARRIZO_OIL_&_GAS_INC