8-K

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): March 15, 2007

CARRIZO OIL & GAS, INC.

(Exact name of registrant as specified in its charter)

Texas	000-22915	76-0415919
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer 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

Not applicable
(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:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Press Release dated March 15, 2007
Press Release dated March 20, 2007

Item 2.02. Results of Operations and Financial Condition.

     The press release dated March 15, 2007 announcing reserve, production and other operational results of Carrizo Oil & Gas, Inc. (the “Company”) for the fourth quarter and full year 2006, furnished as Exhibit 99.1 to this report, is incorporated by reference herein.

     The press release by the Company dated March 20, 2007 concerning financial results for the quarter and year ended December 31, 2006, furnished as Exhibit 99.2 to this report, is incorporated by reference herein. The press release contains measures which may be deemed “non-GAAP financial measures” as defined in Item 10 of Regulation S-K of the Securities Exchange Act of 1934, as amended. We discuss EBITDA, as defined in the press release, on a total and a per share basis for the quarters ended December 31, 2005 and 2006 and the years ended December 31, 2005 and 2006. We believe that EBITDA, as defined, may provide additional information about our ability to meet our future requirements for debt service, capital expenditures and working capital. EBITDA, as defined, is a financial measure commonly used in the oil and natural gas industry and should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating activities or any other measure of financial performance presented in accordance with generally accepted accounting principles or as a measure of a company’s profitability or liquidity. Because EBITDA, as defined, excludes some, but not all, items that affect net income, the EBITDA presented in the press release may not be comparable to similarly titled measures of other companies. We discuss net income excluding the non-cash after-tax items mark-to-market unrealized gain on derivatives, stock compensation expense and bad debt expense on a total and a per share basis for the quarter ended December 31, 2006. We also discuss net income excluding the non-cash after-tax items mark-to-market unrealized gain, stock compensation expense, loss on early extinguishment of debt and bad debt expense on a total and a per share basis for the year ended December 31, 2006. We believe that this information will help investors compare results between periods and identify operating trends that would otherwise be masked by the non-cash after-tax items. The most comparable GAAP financial measure, net income, and information reconciling the GAAP and non-GAAP measures were also included in the press release.

     None of the information furnished in Item 2.02 and the accompanying exhibits will be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor will it be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Company, that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

2

Exhibit Number	Description
99.1	Press Release dated March 15, 2007 Announcing Operational Results for the Fourth Quarter and Full Year 2006.
99.2	Press Release dated March 20, 2007 Announcing Financial Results for the Fourth Quarter and Full Year 2006.

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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: March 19, 2007

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EXHIBIT INDEX

99.1	Press Release dated March 15, 2007 Announcing Operational Results for the Fourth Quarter and Full Year 2006.
99.2	Press Release dated March 20, 2007 Announcing Financial Results for the Fourth Quarter and Full Year 2006.

EX-99.1

Exhibit 99.1

CARRIZO OIL & GAS, INC. News

PRESS RELEASE Contact: Carrizo Oil & Gas, Inc.
B. Allen Connell, Director of Investor Relations
Paul F. Boling, Chief Financial Officer
(713) 328-1000

CARRIZO OIL & GAS ANNOUNCES RESERVES REACH RECORD 210 BCFE, REPLACING 607 PERCENT OF 2006 PRODUCTION; QUARTERLY AND ANNUAL PRODUCTION REACH RECORD LEVELS

HOUSTON, March 15, 2007 — Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today announced the 2006 year-end reserves and production for the fourth quarter and full year 2006.

Reserves

Year-end proved reserves were a record 210 Bcfe based on reports from Carrizo’s third-party reserve engineers. This is an increase of 39 percent (net of 2006 production of 11.7 Bcfe) over the year-end 2005 proved reserves of 150.6 Bcfe. Year-end PV-10 value was $394 million, based upon average posted prices for natural gas and oil of $5.40 per MMBtu and $59.25 per Bbl, respectively.

These additions resulted in the Company replacing 607 percent of 2006 production.

Barnett Shale reserves increased 64.5 Bcfe, or 79 percent, to 146.6 Bcfe. Gulf Coast reserves decreased slightly from 26.0 Bcfe to 25.8 Bcfe, almost replacing its production of 7.3 Bcfe. Camp Hill reserves decreased 5.0 Bcfe, or 12 percent, from 42.5 Bcfe to 37.5 Bcfe, primarily due to a small reduction in the net acreage under lease. Efforts are underway to reacquire these leases.

Production

Production during the fourth quarter of 2006 was a record 3.66 Bcfe (39.7 MMcfe/d), or 33.7 percent above the 2.73 Bcfe (29.7 MMcfe/d) of production in the fourth quarter 2005 and 28.0 percent above the third quarter 2006 production. Estimated annual production for 2006 reached a record level of 11.7 Bcfe (32.1 MMcfe/d), or 21.8 percent higher than the 9.6 Bcfe (26.3 MMcfe/d) of production in 2005. The Company estimates that fourth quarter 2006 sales prices, including the effect of hedging activities, averaged approximately $6.76 per Mcf and $59.15 per barrel. The natural gas sales price was benefited $0.59 per Mcf by hedging activities. The oil sales price was benefited $0.06 per Bbl by hedging activities. Approximately 88 percent of fourth quarter production was natural gas, with 87 percent of total 2006 production being natural gas.

Carrizo Oil & Gas, Inc., is a Houston-based energy company actively engaged in the exploration, development, exploitation and production of oil and natural gas primarily in proven onshore trends along the Texas and Louisiana Gulf Coast regions and the Barnett Shale area in North Texas. Carrizo controls significant prospective acreage blocks and utilizes advanced 3-D seismic techniques to identify potential oil and gas reserves and drilling opportunities.

Statements in this news release, including but not limited to those relating to reserves, sales, the Company’s or management’s intentions, beliefs, expectations, hopes, projections, assessment of risks, estimations, plans or predictions for the future including potential effects or timing, timing of completion and drilling of wells 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 delays and uncertainties that may be encountered in connection with the results and dependence on exploratory drilling activities, operating risks, oil and gas price levels, land issues, availability of equipment, weather 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.

Note Regarding Reserve Replacement Ratio

Management uses the reserve replacement ratio as an indicator of the Company’s ability to replenish annual production volumes and grow its reserves, thereby providing some information on the sources of future production. Management believes reserve replacement information is frequently used by analysts, investors and others in the industry to evaluate the performance of companies like Carrizo. The reserve replacement ratio is calculated by dividing the sum of reserve additions from all sources (revisions, extensions, discoveries, and other additions and acquisitions) by the actual production for the corresponding period. The Company does not use unproved reserve quantities in calculating the reserve replacement ratio. It should be noted that the reserve replacement ratio is a statistical indicator that has limitations. As an annual measure, the ratio is limited because it typically varies widely based on the extent and timing of new discoveries and property acquisitions. Its predictive and comparative value is also limited for the same reasons. In addition, since the ratio does not take into consideration the cost or timing of future production of new reserves, it cannot be used as a measure of value creation. The ratio does not distinguish between changes in reserve quantities that are producing and those that will require additional time and funding to begin producing. In that regard, it might be noted that the percentage of the Company’s proved developed reserves increased from approximately 35 percent in 2005 to approximately 40 percent in 2006. The reserve replacement ratio for 2005 was 530 percent.

EX-99.2

Exhibit 99.2

PRESS RELEASE	Contact:	Carrizo Oil & Gas, Inc.
		B. Allen Connell, Director of Investor Relations
		Paul F. Boling, Chief Financial Officer (713) 328-1000

CARRIZO OIL & GAS, INC. ANNOUNCES FOURTH QUARTER AND ANNUAL 2006 FINANCIAL RESULTS.

HOUSTON, March 20, 2007 — Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) today reported the Company’s financial results for the fourth quarter of 2006, which included the following highlights:

Results for the Fourth Quarter 2006 —

• Record Production of 3.66 Bcfe, or 39,740 Mcfe/d.

• Revenue of $24.2 million.

• Net Income of $4.3 million.

• EBITDA, as defined below, of $19.5 million.

Production volumes during the three months ended December 31, 2006 were 3.66 Bcfe, 34 percent higher compared to 2.73 Bcfe during the fourth quarter of 2005. The increase was largely due to new production contributions from the Galloway Gas Unit II, well #1 and increased production from the Barnett Shale play. Revenues for the three months ended December 31, 2006 were $24.2 million, as compared to $28.1 million during the quarter ended December 31, 2005. The decrease in revenues was primarily driven by lower realized natural gas prices partially offset by higher production. Carrizo’s average oil sales price increased five percent to $59.09 per barrel compared to $56.43 per barrel during the fourth quarter of 2005, while the average natural gas sales price decreased 41 percent to $6.17 per Mcf compared to $10.40 per Mcf in the fourth quarter of 2005. The above prices exclude the cash effect of hedging activities. Prices that include the cash effect of hedges are presented in the table below.

The Company reported net income of $4.3 million, or $0.17 and $0.16 per basic and diluted share, respectively, for the three months ended December 31, 2006, as compared to $13.5 million, or $0.56 and $0.54 per basic and diluted share for the same quarter during 2005. Excluding $0.5 million of non-cash, after-tax expenses, comprised of the mark-to-market unrealized gain of $1.0 million on derivatives, the stock compensation expense of $0.6 million and the bad debt expense of $0.9 million, net income for the quarter ended December 31, 2006 was $4.8 million, or $0.19 and $0.18 per basic and diluted share, respectively.

EBITDA (earnings before interest, income tax, depreciation and amortization expenses, and certain other non-cash items) during the fourth quarter of 2006 was $19.5 million, or $0.76 and $0.74 per basic and diluted share, respectively, as compared to $20.4 million, or $0.84 and $0.82 per basic and diluted share, respectively, during the fourth quarter of 2005.

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Lease operating expenses (excluding production taxes) increased to $4.8 million during the three months ended December 31, 2006 as compared to $2.2 million for the fourth quarter of 2005, largely due to the increased well count of Barnett Shale wells, increased production from other wells drilled in 2006, higher workover expense, increased ad valorem taxes and the rising costs of oilfield services.

Depreciation, depletion and amortization expenses (“DD&A”) were $9.5 million during the three months ended December 31, 2006 ($2.60 per Mcfe) as compared to $7.0 million ($2.55 per Mcfe) during the fourth quarter of 2005. The increase in DD&A expense was due primarily to increased production.

General and administrative expenses (“G&A”) decreased to $2.1 million during the three months ended December 31, 2006 from $2.6 million during the same quarter of 2005 due largely to the decrease in contract labor costs that were associated with our integrated software migration project which is now largely complete.

During the fourth quarter of 2006, the Company recorded $1.4 million in bad debt expense largely attributable to an outside operator who filed for Chapter 11 bankruptcy in fourth quarter 2006. Accordingly, the Company has reserved a majority of its receivable due from the operator for October production and for certain cash advances on near-term drilling projects.

Non-cash stock-based compensation expense was $0.9 million ($0.6 million after tax) for the three months ended December 31, 2006.

The net gain on derivatives was $4.4 million during the three months ended December 31, 2006, comprised of (1) $1.5 million ($1.0 million after tax) for the unrealized mark-to-market, non-cash gain on derivatives ($2.4 million gain on oil and gas derivatives and $0.9 million loss on interest rate swaps) and (2) $2.9 million gain for cash settled derivatives ($2.0 million gain on oil and gas derivatives, $0.3 million gain on interest rate swaps and $0.6 million gain on the sell down of the interest rate swaps as a result of the amendment to the Company’s second lien credit facility in December 2006).

Interest expense, net of amounts capitalized, was $2.6 million for the three months ended December 31, 2006 compared to $2.2 million for the three months ended December 31, 2005. The increase is primarily attributable to the borrowings under the Company’s senior secured credit facility beginning in May 2006.

Results for the Year Ended 2006 —

• Record production of 11.7 Bcfe.

• Record revenue of $82.9 million.

• Record Net Income of $18.2 million.

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• EBITDA, as defined below, of $63.4 million.

Production volumes for the year ended December 31, 2006 were a record 11.7 Bcfe, 22 percent higher compared to 9.6 Bcfe during the same period of 2005. Revenues for the year ended December 31, 2006 were $82.9 million, an increase of 6.1 percent from 2005 revenues of $78.2 million. The increase in revenues was primarily driven by higher production. Carrizo’s average natural gas sales price for 2006 decreased 17 percent to $6.56 compared to $7.91 per Mcf in 2005, and the average oil sales price for 2006 increased 13 percent to $63.62 per barrel from $56.36 per barrel in 2005. The above prices exclude the cash effect of hedging activities. Prices that include cash effect of hedges are presented in the table below.

The Company reported net income of $18.2 million, or $0.74 and $0.71 per basic and diluted share, respectively, for the year ended December 31, 2006, as compared to $10.6 million, or $0.45 and $0.44 per basic and diluted share for the same period during 2005. Excluding a $3 million non-cash, after-tax benefit, comprised of the mark-to-market unrealized gain of $6.0 million on derivatives, the stock compensation expense of $1.9 million, the loss on early extinguishment of debt of $0.2 million, and the bad debt expense of $0.9 million, net income for the year ended December 31, 2006 was $15.2 million, or $0.61 and $0.60, respectively, per basic and diluted share.

EBITDA (earnings before interest, income tax, depreciation and amortization expenses, and certain other non-cash items) for 2006 was $63.4 million, or $2.55 and $2.48 per basic and diluted share, respectively, as compared to $56.2 million, or $2.39 and $2.31 per basic and diluted share, respectively, during 2005.

Lease operating expenses (excluding production taxes) increased to $13.0 million during the year ended 2006 as compared to $6.3 million for the same period of 2005 largely due to the increased well count of Barnett Shale wells, increased production, higher workover expenses, rising costs of oilfield services and higher ad valorem taxes.

Depreciation, depletion and amortization expenses (“DD&A”) were $31.1 million for 2006 ($2.66 per Mcfe) as compared to $21.4 million ($2.22 per Mcfe) during the same period of 2005. The increase in DD&A expense was due to increased production and an increase in the DD&A rate primarily due to additions to the proved property cost base.

General and administrative expenses (“G&A”) increased to $10.6 million during 2006 from $8.8 million during 2005. The increase in G&A was due primarily to higher incentive compensation and base salary costs of $0.1 million; increased contract labor costs of $1.1 million to cover certain accounting staff vacancies and to support the continued phase-in of our new integrated software system; and $0.2 million in higher audit fees primarily related to the Company’s 2005 financial restatement for mark-to-market accounting of derivatives.

Non-cash stock-based compensation expense was $2.9 million ($1.9 million after tax) for the year ended December 31, 2006 compared to $2.5 million for the prior year.

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The net gain on derivatives was $16.5 million for the year ended December 31, 2006, comprised of (1) $9.3 million ($6.0 million after tax) for the unrealized mark-to-market, non-cash gain on derivatives ($9.9 million gain on oil and gas derivatives and $0.6 million loss on interest rate swaps) and (2) $7.2 million for realized derivative gains ($5.6 million gain for oil and gas derivatives, $1.0 million gain on interest rate swaps and $0.6 million gain on the sell down of the interest rate swaps as a result of the amendment to the Company’s second lien credit facility in December 2006).

Loss on the early extinguishment of debt was $0.3 million ($0.2 million after tax) in connection with the Company’s refinancing of its first lien credit facility in May 2006. The Company’s borrowing base availability under its senior secured credit facility was $65.0 million with $41.0 million drawn and outstanding at December 31, 2006.

Interest expense, net of amounts capitalized, was $9.1 million for the year ended December 31, 2006 compared to $5.2 million for the same period in 2005. The increase was attributable to the higher debt level following the Company’s July 2005 refinancing and to borrowings under the Company’s senior secured credit facility beginning in May 2006.

S.P. Johnson IV, Carrizo’s President and Chief Executive Officer, commented, “Carrizo completed one of its best operational quarters on record, including record production of 39.7 MMcfe/d. We also continue to grow our Barnett Shale production which is currently about 21 MMcfe/d with several expected high rate wells waiting on pipeline hook-up.”

“We continue to define the Company’s upside potential with Barnett Shale downspacing. We have successfully completed the frac and have begun flow testing a horizontal Barnett Shale well drilled in ‘Tier 2’ Erath County, Texas. Two of our high potential ‘core’ wells in southeast Tarrant County, Texas tested with initial flowback rates of 4.2 MMcf/d and 6 MMcf/d which were still increasing when shut-in to run tubing. First production from these wells is expected in April.”

“We remain focused on expanding our acreage position in our other Shale plays, in which we now have over 240,000 net acres. In the Floyd Shale in Mississippi, where we have leased over 134,000 net acres, we have completed processing the data on our 3-D survey and recently spudded our first Floyd Shale well.”

“In the Gulf Coast, we successfully drilled our Doberman prospect in Liberty County, Texas, where we retained a 71 percent working interest, encountering 57 feet of pay. First production is expected in May 2007. In Harris County, the Baby Ruth discovery well went online to sales March 16^th. The production rate is currently up to 6.5 MMcfe/d, and we expect it to be up to 10 MMcfe/d within three days. In Matagorda County, our company-operated Mega-Mata well has been logged and an initial flow test is scheduled later in March 2007.”

Carrizo Oil & Gas, Inc. is a Houston-based energy company actively engaged in the exploration, development, exploitation and production of oil and natural gas primarily in proven onshore trends along the Texas and Louisiana Gulf Coast regions and the Barnett Shale area in North

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Texas. Carrizo controls significant prospective acreage blocks and utilizes advanced 3-D seismic techniques to identify potential oil and gas reserves and drilling opportunities.

Statements in this news release, including but not limited to those relating to the Company’s or management’s intentions, beliefs, expectations, hopes, projections, assessment of risks, estimations, plans or predictions for the future, including high potential wells, production rate of Barnett Shale wells awaiting hook-up, timing of production from the wells in the “Tier 2” Erath County, Texas and in the Doberman prospect, production rate of the Baby Ruth discovery well, potential effects or timing, cash flow, the expected timing of drilling of additional wells, 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 results and dependence on exploratory drilling activities, operating risks, oil and gas price levels, land issues, availability of equipment, weather 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.

(Financial Highlights to Follow)

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CARRIZO OIL & GAS, INC.
STATEMENTS OF OPERATIONS
(unaudited)

	THREE MONTHS ENDED						YEAR ENDED
	DECEMBER 31,						DECEMBER 31,
	2006			2005			2006			2005
Oil and natural gas revenues	$	24,218,311		$	28,113,229		$	82,945,234		$	78,155,286
Costs and expenses:
Lease operating expenses		4,762,486			2,183,394			12,956,496			6,337,168
Production tax		684,792			1,184,865			3,470,338			4,100,067
Depreciation, depletion and amortization		9,498,613			6,983,562			31,128,925			21,374,051
General and administrative expenses		2,124,393			2,556,567			10,594,460			8,789,003
Bad debt expense		1,385,911			—			1,385,911			—
Accretion expense related to asset retirement obligations		259,605			17,531			496,774			70,121
Stock-based compensation expense		930,755			(491,506	)		2,929,620			2,453,598
Total costs and expenses		19,646,555			12,434,413			62,962,524			43,124,008
Operating income		4,571,756			15,678,816			19,982,710			35,031,278
Mark-to-market gain (loss) on derivatives, net		1,523,184			7,883,849			9,257,035			(3,610,346	)
Realized gain (loss) on derivatives, net		2,847,342			(1,583,660	)		7,200,577			(2,272,579	)
Gain on asset retirement obligation		196,476			—			196,476			—
Equity in income (loss) on Pinnacle Gas Resources, Inc.		—			631,496			34,914			(2,541,935	)
Loss on extinguishment of debt		—			—			(294,094	)		(3,721,021	)
Other income and expenses, net		29,203			(165,126	)		231,517			(457,169	)
Interest income		126,211			383,743			969,176			904,407
Interest expense, net of amounts capitalized		(2,577,496	)		(2,249,393	)		(9,095,923	)		(5,198,852	)
Income before income taxes		6,716,676			20,579,725			28,482,388			18,133,783
Income tax expense (benefit)		2,440,675			7,047,839			10,233,752			7,500,332
Net income available to common shares	$	4,276,001		$	13,531,886		$	18,248,636		$	10,633,451
EBITDA (see table below)	$	19,523,185		$	20,439,617		$	63,356,034		$	56,199,299
Basic net income per common share	$	0.17		$	0.56		$	0.74		$	0.45
Diluted net income per common share	$	0.16		$	0.54		$	0.71		$	0.44
Basic weighted average common shares outstanding		25,650,503			24,251,430			24,826,673			23,491,976
Diluted weighted average common shares outstanding		26,433,762			25,047,409			25,564,502			24,361,453

(A) Interest expense, net of amounts capitalized, consists of the following:

Gross interest expense	$	(5,318,540	)	$	(4,198,011	)	$	(19,070,792	)	$	(11,043,498	)
Capitalized interest		2,741,044			1,948,618			9,974,869			5,844,646

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CARRIZO OIL & GAS, INC.
CONDENSED BALANCE SHEETS

	12/31/06		12/31/05
	(unaudited)
ASSETS:
Cash and cash equivalents	$	5,407,502	$	28,724,993
Fair value of derivative financial instruments		5,737,056		—
Other current assets		29,912,455		31,459,236
Property and equipment, net		445,447,054		314,074,507
Other assets		5,519,325		6,156,559
Investment in Pinnacle Gas Resources, Inc.		2,771,266		2,687,199
TOTAL ASSETS	$	494,794,658	$	383,102,494
LIABILITIES AND EQUITY:
Accounts payable and accrued liabilities	$	54,554,607	$	46,778,992
Fair value of derivative financial instruments		—		1,563,059
Current maturities of long-term debt		1,507,931		1,534,989
Long-term notes payable		187,250,744		147,759,355
Deferred income taxes		33,832,471		24,550,569
Other liabilities		4,462,001		5,530,801
Equity		213,186,904		155,384,729
TOTAL LIABILITIES AND EQUITY	$	494,794,658	$	383,102,494

Income tax expense for the year ended December 31, 2006 and 2005 includes a $9,828,973 and $7,236,502, respectively, provision for deferred income taxes and a $404,779 and $263,830, respectively, provision for currently payable franchise taxes.

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CARRIZO OIL & GAS, INC.
NON-GAAP DISCLOSURES
(unaudited)

	THREE MONTHS ENDED						YEAR ENDED
Reconciliation of Net Income to EBITDA	DECEMBER 31,						DECEMBER 31,
	2006			2005			2006			2005
Net Income	$	4,276,001		$	13,531,886		$	18,248,636		$	10,633,451
Adjustments:
Depreciation, depletion and amortization		9,498,613			6,983,562			31,128,925			21,374,051
Unrealized mark-to-market (gain) loss on derivatives		(1,523,184	)		(7,883,849	)		(9,257,035	)		3,610,346
Gain on asset retirement obligation		(196,476	)		—			(196,476	)		—
Loss on extinguishment of debt		—			—			294,094			3,721,021
Interest expense, net of amounts capitalized and interest income		2,451,285			1,865,650			8,126,747			4,294,445
Income tax expense		2,440,675			7,047,839			10,233,752			7,500,332
Equity in Pinnacle Gas Resources, Inc.		—			(631,496	)		(34,914	)		2,541,935
Stock based compensation expense		930,755			(491,506	)		2,929,620			2,453,598
Bad debt expense		1,385,911			—			1,385,911			—
Accretion expense related to asset retirement obligations		259,605			17,531			496,774			70,121
EBITDA, as defined	$	19,523,185		$	20,439,617		$	63,356,034		$	56,199,299
EBITDA per basic common share	$	0.76		$	0.84		$	2.55		$	2.39
EBITDA per diluted common share	$	0.74		$	0.82		$	2.48		$	2.31

CARRIZO OIL & GAS, INC.
PRODUCTION VOLUMES AND PRICES
(unaudited)

Production volumes-
Oil and condensate (Bbls)		75,882		55,809		254,901		234,287
Natural gas (Mcf)		3,200,801		2,399,239		10,176,091		8,206,457
Natural gas equivalent (Mcfe)		3,656,093		2,734,093		11,705,497		9,612,179
Average sales prices-
Oil and condensate (per Bbl)	$	59.09	$	56.43	$	63.62	$	56.36
Oil and condensate (per Bbl) — with hedge impact	$	59.15	$	56.43	$	63.21	$	55.94
Natural gas (per Mcf)	$	6.17	$	10.40	$	6.56	$	7.91
Natural gas (per Mcf) — with hedge impact	$	6.76	$	9.74	$	7.11	$	7.65
Natural gas equivalent (per Mcfe)	$	6.62	$	10.28	$	7.09	$	8.13

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