Shareholders' Equity

6 Months Ended

Jun. 30, 2011

Shareholders' Equity

Shareholders' Equity

8. SHAREHOLDERS' EQUITY

On November 24, 2009, the Company entered into a Land Agreement, as amended (the "Land Agreement"), with an unrelated third party and its affiliate. The Land Agreement expired pursuant to its terms on May 31, 2011. Under the Land Agreement, the Company was able to acquire up to $20 million of oil, gas and mineral interests/leases in certain specified areas in the Barnett Shale from such third party. In consideration for the Company's receipt of an option to purchase the leases acquired by the third party, each time the third party purchased a lease group under the Land Agreement the Company agreed to issue to the third party's affiliate warrants to purchase a number of shares of the Company's common stock with an exercise price of $22.09 and an expiration date of August 21, 2017. In addition, under certain circumstances where the Company reached surface casing point on an initial well in one of the areas covered by the Land Agreement but has not achieved a specified lease up threshold for acreage in such area, the Company agreed to issue additional warrants. The warrants are subject to antidilution adjustments and may be exercised on a "cashless" basis.

Under the Land Agreement, the Company issued warrants to purchase 57,461 shares of common stock in 2010 and warrants to purchase 18,608 shares of common stock onduring the first quarter of 2011. No Warrants were issued in the second quarter of 2011. During the third quarter of 2011, we expect to issue approximately 5,000 additional warrants to the third party's affiliate for leases acquired prior to the expiration of the Land Agreement.

During the second quarter of 2011, we contributed $1.0 million in common stock to the Carrizo Oil & Gas, Inc endowed scholarship fund at the University of Texas at Arlington ("UTA") where we are producing natural gas from a number of wells in the Barnett Shale play.