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_________________________________________________

For the quarterly period ended March 31, 2016

For the transition period from             to             

Commission File Number: 000-29187-87

_________________________________________________

(Exact name of registrant as specified in its charter)

_________________________________________________

(713) 328-1000

(Registrant's telephone number)

 ____________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    YES   x     NO   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES   x     NO   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES   ¨     NO   x

The number of shares outstanding of the registrant's common stock, par value $0.01 per share, as of April 29, 2016 was 58,778,280 .

TABLE OF CONTENTS

Part I. Financial Information

Item 1. Consolidated Financial Statements (Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

CARRIZO OIL & GAS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

CARRIZO OIL & GAS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

CARRIZO OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

Nature of Operations

Carrizo Oil & Gas, Inc. is a Houston-based energy company which, together with its subsidiaries (collectively, the "Company"), is actively engaged in the exploration, development, and production of oil and gas primarily from resource plays located in the United States. The Company's current operations are principally focused in proven, producing oil and gas plays primarily in the Eagle Ford Shale in South Texas, the Delaware Basin in West Texas, the Niobrara Formation in Colorado, the Utica Shale in Ohio, and the Marcellus Shale in Pennsylvania.

Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements include the accounts of the Company after elimination of intercompany transactions and balances and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and therefore do not include all disclosures required for financial statements prepared in conformity with accounting principles generally accepted in the U.S. ("GAAP"). In the opinion of management, these financial statements include all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly, in all material respects, the Company's interim financial position, results of operations and cash flows. However, the results of operations for the periods presented are not necessarily indicative of the results of operations that may be expected for the full year. These financial statements and related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company's audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 ("2015 Annual Report"). Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Such reclassifications had no material impact on prior period amounts.

2. Summary of Significant Accounting Policies

The Company has provided a discussion of significant accounting policies, estimates, and judgments in "Note 2. Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements in its 2015 Annual Report. There have been no changes to the Company's significant accounting policies since December 31, 2015 , other than the recently adopted accounting pronouncements described below.

Recently Adopted Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes ("Update 2015-17"). Update 2015-17 requires that all deferred tax liabilities and assets, as well as any related valuation allowance, be classified in the balance sheet as noncurrent. For public entities, Update 2015-17 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 31, 2016 and may be applied prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented with early adoption permitted. The Company elected to early adopt Update 2015-17 in the first quarter of 2016 with prospective application. As the Company elected a prospective application, there was no impact to prior period amounts.

In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("Update 2015-03"). The objective of Update 2015-03 is to simplify the presentation of debt issuance costs in financial statements by presenting such costs in the balance sheet as a direct deduction from the related debt rather than as an asset. In August 2015, the FASB issued Accounting Standards Update No. 2015-15, Interest-Imputation of Interest (Subtopic 835-30) ("Update 2015-15"), which allows debt issuance costs associated with line-of-credit agreements to be deferred and presented as an asset in the balance sheet, subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. For public entities, these Updates are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and applied retrospectively with early adoption permitted. As a result of the adoption of Update 2015-03 and Update 2015-15 in the first quarter of 2016, the Company reclassified $19.7 million of debt issuance costs related to the Company's senior notes from long-term assets to long-term debt in the Company's consolidated balance sheet as of December 31, 2015. The Company elected to continue to present the debt issuance costs associated with its revolving credit facility as long-term assets in the consolidated balance sheets.

Recently Issued Accounting Pronouncements

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("Update 2016-09"), which seeks to simplify several aspects of the accounting for share-based payment award transactions, including income tax consequences, classification of awards as either

equity or liabilities, and classification on the statement of cash flows. For public entities, Update 2016-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of the adoption of Update 2016-09 on its consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("Update 2016-02"), which seeks to increase transparency and comparability among organizations by, among other things, recognizing lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous GAAP and disclosing key information about leasing arrangements. For public entities, Update 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 and must be applied using a modified retrospective transition with early adoption permitted. The Company is currently evaluating the impact of the adoption of Update 2016-02 on its consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("Update 2014-09"), which supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and industry specific guidance in Subtopic 932-605, Extractive Activities- Oil and Gas- Revenue Recognition. Update 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods and services. Update 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period for public entities. In March 2016, the FASB released certain implementation guidance through ASU 2016-08 to clarify principal versus agent considerations. The Company is currently evaluating the impact of the adoption of Update 2014-09 and the subsequently issued clarification updates on its consolidated financial statements.

3. Property and Equipment, Net

As of March 31, 2016 and December 31, 2015 , total property and equipment, net consisted of the following:

Capitalized oil and gas property costs within a cost center are amortized on an equivalent unit-of-production method, converting natural gas to barrels of oil equivalent at the ratio of six thousand cubic feet of natural gas to one barrel of crude oil, which represents their approximate relative energy content. Average depreciation, depletion and amortization ("DD&A") per Boe of proved properties was $15.22 and $23.43 for the three months ended March 31, 2016 and 2015 , respectively.

The Company capitalized internal costs of employee compensation and benefits, including stock-based compensation, directly associated with acquisition, exploration and development activities totaling $4.4 million and $5.8 million for the three months ended March 31, 2016 and 2015 , respectively.

Unproved properties, not being amortized, include unevaluated leasehold and seismic costs associated with specific unevaluated properties, the cost of exploratory wells in progress and related capitalized interest. The Company capitalized interest costs associated with its unevaluated leasehold and seismic costs and exploratory well costs totaling $5.6 million and $9.7 million for the three months ended March 31, 2016 and 2015 , respectively.

Full Cost Ceiling Test Impairment

In the first quarter of 2016 , the Company recorded an after-tax impairment in the carrying value of proved oil and gas properties of $178.4 million ( $274.4 million pre-tax) due primarily to a 9% decrease in the average realized price for sales of crude oil on the first calendar day of each month during the preceding 12-month period prior to March 31, 2016 as compared to the preceding 12-month period prior to December 31, 2015. There were no impairments of proved oil and gas properties for the three months ended March 31, 2015 .

The Company expects to record an impairment in the carrying value of proved oil and gas properties in the second quarter of 2016 , due primarily to a forecasted average realized price for sales of crude oil on the first calendar day of each month during the preceding 12-month period prior to June 30, 2016 of $39.21 compared to the preceding 12-month period prior to March 31, 2016 of $43.14 , a 9% decrease. This forecasted average realized price was based on the average realized price for sales of crude oil on the first calendar day of each month for the first 11 months and an estimate for the twelfth month based on a quoted forward price. Further impairments in subsequent quarters may occur if the trailing 12-month commodity prices continue to be lower than the comparable trailing 12-month commodity prices discussed above.

4. Income Taxes

The Company's estimated annual effective income tax rates are used to allocate expected annual income tax expense or benefit to interim periods. The rates are the ratio of estimated annual income tax expense or benefit to estimated annual income or loss before income taxes by taxing jurisdiction, except for discrete items, which are significant, unusual or infrequent items for which income taxes are computed and recorded in the interim period in which the discrete item occurs. The estimated annual effective income tax rates are applied to the year-to-date income or loss before income taxes by taxing jurisdiction to determine the income tax expense or benefit allocated to the interim period. The Company updates its estimated annual effective income tax rates at the end of each quarterly period considering the geographic mix of income based on the tax jurisdictions in which the Company operates. Actual results that are different from the assumptions used in estimating the annual effective income tax rates will impact future income tax expense or benefit.

The Company's income tax (expense) benefit from continuing operations differs from the income tax (expense) benefit computed by applying the U.S. federal statutory corporate income tax rate of 35% to loss from continuing operations before income taxes as follows:

Deferred Tax Asset Valuation Allowance

Deferred tax assets are recorded for net operating losses and temporary differences between the book and tax basis of assets and

liabilities expected to produce tax deductions in future periods. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those deferred tax assets would be deductible. The Company assesses the realizability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company considers all available evidence (both positive and negative) when determining whether a valuation allowance is required. In making this assessment, the Company evaluated possible sources of taxable income that may be available to realize the deferred tax assets, including projected future taxable income, the reversal of existing temporary differences, taxable income in carryback years and available tax planning strategies.

A significant item of objective negative evidence considered was the cumulative historical three year pre-tax loss and a net deferred tax asset position at March 31, 2016 , driven primarily by the full cost ceiling test impairments recognized during the second half of 2015 and the first quarter of 2016 , which limits the ability to consider other subjective evidence such as the Company's potential for future growth. The Company has concluded that it is more likely than not the deferred tax assets will not be realized and recorded additional valuation allowance totaling $110.7 million against the net deferred tax asset as of March 31, 2016 , reducing the net deferred tax assets to zero .

The Company will continue to evaluate whether the valuation allowance is needed in future reporting periods. The valuation allowance will remain until the Company can determine that the net deferred tax assets are more likely than not to be realized. Future events or new evidence which may lead the Company to conclude that it is more likely than not its net deferred tax assets will be realized include, but are not limited to, cumulative historical pre-tax earnings, improvements in crude oil prices, and taxable events that could result from one or more transactions. The valuation allowance does not prevent future utilization of the tax attributes if the Company recognizes taxable income. As long as the Company concludes that the valuation allowance against its net deferred tax assets is necessary, the Company likely will not have any additional deferred income tax expense or benefit.

5. Long-Term Debt

Long-term debt consisted of the following as of March 31, 2016 and December 31, 2015 :

Senior Secured Revolving Credit Facility

The Company has a senior secured revolving credit facility with a syndicate of banks that, as of March 31, 2016 , had a borrowing base of $685.0 million , with $30.6 million of borrowings outstanding with a weighted average interest rate of 2.01% . As of March 31, 2016 , the Company also had $0.6 million in letters of credit outstanding, which reduce the amounts available under the revolving credit facility. The credit agreement governing the revolving credit facility provides for interest-only payments until July 2, 2018, when the credit agreement matures and any outstanding borrowings are due. The borrowing base under the credit agreement is subject to regular redeterminations in the Spring and Fall of each year, as well as special redeterminations described in the credit agreement, in each case which may reduce the amount of the borrowing base. The amount the Company is able to borrow with respect to the borrowing base is subject to compliance with the financial covenants and other provisions of the credit agreement governing the revolving credit facility.

The obligations of the Company under the credit agreement are guaranteed by the Company's material domestic subsidiaries and are secured by liens on substantially all of the Company's assets, including a mortgage lien on oil and gas properties having at least 80% of the proved reserve value of the oil and gas properties included in the determination of the borrowing base.

Amounts outstanding under the credit agreement bear interest at the Company's option at either (i) a base rate for a base rate loan plus the margin set forth in the table below, where the base rate is defined as the greatest of the prime rate, the federal funds rate plus 0.50% and the adjusted LIBO rate plus 1.00% , or (ii) an adjusted LIBO rate for a Eurodollar loan plus the margin set forth in the table below. The Company also incurs commitment fees as set forth in the table below on the unused portion of lender commitments, which are included as a component of interest expense, net.

As of March 31, 2016, the Company was subject to certain covenants under the terms of the credit agreement, which include the maintenance of the following financial covenants determined as of the last day of each quarter: (1) a ratio of Total Debt to EBITDA of not more than 4.75 to 1.00 through December 31, 2016, reducing to 4.375 to 1.00 through December 31, 2017, and to 4.00 to 1.00 thereafter; and (2) a Current Ratio of not less than 1.00 to 1.00. As defined in the credit agreement, Total Debt excludes debt discounts, premiums, and debt issuance costs and is net of cash and cash equivalents, EBITDA includes the last four quarters after

giving pro forma effect to EBITDA for material acquisitions and dispositions of oil and gas properties, and the Current Ratio includes an add back of the unused portion of lender commitments. As of March 31, 2016 , the ratio of Total Debt to EBITDA was 2.89 to 1.00 and the Current Ratio was 4.14 to 1.00. Because the financial covenants are determined as of the last day of each quarter, the ratios can fluctuate significantly period to period as the amounts outstanding under the credit agreement are dependent on the timing of cash flows from operations, capital expenditures, acquisitions and dispositions of oil and gas properties and securities offerings. Each of the capitalized terms used but not defined in this paragraph shall have the meaning given to such terms in the credit agreement governing the Company's revolving credit facility.

The credit agreement also places restrictions on the Company and certain of its subsidiaries with respect to additional indebtedness, liens, dividends and other payments to shareholders, repurchases or redemptions of the Company's common stock, redemptions of senior notes, investments, acquisitions, mergers, asset dispositions, transactions with affiliates, hedging transactions and other matters.

The credit agreement is subject to customary events of default, including in connection with a change in control. If an event of default occurs and is continuing, the lenders may elect to accelerate amounts due under the credit agreement (except in the case of a bankruptcy event of default, in which case such amounts will automatically become due and payable).

On May 3, 2016, the Company entered into an amendment to the credit agreement governing the revolving credit facility. See "Note 13. Subsequent Events" for further details of this amendment. As a result of the Spring 2016 borrowing base redetermination, the Company's borrowing base was reduced from $685.0 million to $600.0 million .

6. Commitments and Contingencies

From time to time, the Company is party to certain legal actions and claims arising in the ordinary course of business. While the outcome of these events cannot be predicted with certainty, management does not currently expect these matters to have a materially adverse effect on the financial position or results of operations of the Company.

The results of operations and financial position of the Company continue to be affected from time to time in varying degrees by domestic and foreign political developments as well as legislation and regulations pertaining to restrictions on crude oil and natural gas production, imports and exports, natural gas regulation, tax increases, environmental regulations and cancellation of contract rights. Both the likelihood and overall effect of such occurrences on the Company vary greatly and are not predictable.

7. Shareholders' Equity

Stock-Based Compensation Expense

The Company recognized the following stock-based compensation expense, net for the periods indicated which is reflected as "General and administrative, net" in the consolidated statements of operations:

8. Earnings Per Share

Basic loss from continuing operations per common share is based on the weighted average number of shares of common stock outstanding during the period. Diluted loss from continuing operations per common share is based on the weighted average number of common shares and all potentially dilutive common shares outstanding during the period which include restricted stock awards and units, performance share awards, stock options and warrants. The Company excludes the number of awards, units, options and warrants from the calculation of diluted weighted average shares outstanding when the grant date or exercise prices are greater than the average market prices of the Company's common stock for the period as the effect would be anti-dilutive to the computation. The Company includes the number of performance share awards in the calculation of diluted weighted average common shares outstanding based on the number of shares, if any, that would be issuable as if the end of the period was the end of the performance

period. When a loss from continuing operations exists, all potentially dilutive common shares outstanding are anti-dilutive and therefore excluded from the calculation of diluted weighted average shares outstanding.

Supplemental loss from continuing operations per common share information is provided below:

For the three months ended March 31, 2016 and 2015 , the Company reported a loss from continuing operations. As a result, the calculation of diluted weighted average common shares outstanding excluded the anti-dilutive effect of 0.6 million and 0.8 million shares of restricted stock awards and units and performance share awards for the three months ended March 31, 2016 and 2015, respectively. For the three months ended March 31, 2015 , the calculation of diluted weighted average common shares outstanding also excluded the anti-dilutive effect of an insignificant number of shares of stock options and warrants due to the loss from continuing operations for the period.

9. Derivative Instruments

The Company uses commodity derivative instruments to reduce its exposure to commodity price volatility for a substantial, but varying, portion of its forecasted crude oil and natural gas production and thereby achieve a more predictable level of cash flows to support the Company's drilling and completion capital expenditure program. The Company does not enter into derivative instruments for speculative or trading purposes. As of March 31, 2016 , the Company's commodity derivative instruments consisted of fixed price swaps, costless collars, and purchased and sold call options, which are described below.

Fixed Price Swaps: The Company receives a fixed price and pays a variable market price to the counterparties over specified periods for contracted volumes.

Costless Collars: A collar is a combination of options including a purchased put option (fixed floor price) and a sold call option (fixed ceiling price) and allows the Company to benefit from increases in commodity prices up to the fixed ceiling price and protect the Company from decreases in commodity prices below the fixed floor price. At settlement, if the market price is below the fixed floor price or is above the fixed ceiling price, the Company receives the fixed price and pays the market price. If the market price is between the fixed floor price and fixed ceiling price, no payments are due from either party. These contracts were executed contemporaneously with the same counterparties and were premium neutral such that no premiums were paid to or received from the counterparties.

Sold Call Options : These contracts give the counterparties the right, but not the obligation, to buy contracted volumes from the Company over specified periods and prices in the future. At settlement, if the market price exceeds the fixed price of the call option, the Company pays the counterparty the excess. If the market price settles below the fixed price of the call option, no payment is due from either party.

Purchased Call Options : These contracts give the Company the right, but not the obligation, to buy contracted volumes from the counterparties over specified periods and prices in the future. At settlement, if the market price exceeds the fixed price of the call option, the counterparties pay the Company the excess. If the market price settles below the fixed price of the call option, no payment is due from either party. The Company nets its purchased call options with its sold call options for the years 2018 through 2020 in the open crude oil derivative positions table below.

The following sets forth a summary of the Company's open crude oil derivative positions at average NYMEX prices as of March 31, 2016 :

The following sets forth a summary of the Company's open natural gas derivative positions at average NYMEX prices as of March 31, 2016 :

In February 2015, the Company entered into derivative transactions offsetting its then existing crude oil derivative positions covering the periods from March 2015 through December 2016. As a result of the offsetting derivative transactions, the Company locked in $166.4 million of cash flows, of which $18.3 million was received due to contract settlements during the three months ended March 31, 2016 , and is included in the gain on derivatives, net in the consolidated statements of operations. As of March 31, 2016 , the fair value of the remaining locked in cash flows is $29.1 million , all of which is a current asset and is classified as "Derivative assets" in the consolidated balance sheets. The derivative assets associated with the offsetting derivative transactions are not subject to price risk and the locked in cash flows will be received as the applicable contracts settle. The offsetting derivative transactions are not included in the table above.

In February 2016, the Company sold out-of-the-money natural gas call options for the years 2017 through 2020 and used the associated premium value to obtain a higher weighted average fixed price of $50.27 per Bbl on 6,000 Bbls/d of newly executed crude oil fixed price swaps for the first half of 2017. These out-of-the-money natural gas call options and in-the-money crude oil fixed price swaps were executed contemporaneously with the same counterparty, therefore, no cash premiums were paid to or received from the counterparty as the premium value associated with the natural gas call options was immediately applied to the crude oil fixed price swaps.

In March 2016, the Company sold 6,000 Bbls/d of in-the-money crude oil fixed price swaps for the first half of the year 2017 at a weighted average fixed price of $50.00 per Bbl. In order to obtain this higher weighted average fixed price, the Company incurred net premiums of approximately $5.6 million , which the Company will pay in two equal payments at the end of the second and third quarters of 2016. In addition to these premiums, during the fourth quarter of 2015, the Company incurred net premiums of approximately $5.0 million related to the simultaneous purchase and sale of out-of-the-money crude oil call options, the payment of which is deferred until settlement. For further discussion of this fourth quarter of 2015 transaction, see "Note 13. Derivative Instruments" of the Notes to Consolidated Financial Statements in the Company's 2015 Annual Report.

For the three months ended March 31, 2016 and 2015 , the Company recorded in the consolidated statements of operations a gain on derivatives, net of $10.6 million and $26.4 million , respectively.

The Company typically has numerous hedge positions that span several time periods and often result in both fair value asset and liability positions held with that counterparty, which positions are all offset to a single fair value asset or liability at the end of each reporting period, including the deferred premiums associated with its hedge positions. The Company nets its derivative instrument fair values executed with the same counterparty pursuant to ISDA master agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract. The fair value of derivative instruments where the Company is in a net asset position with its counterparties as of March 31, 2016 and December 31, 2015 totaled $78.9 million and $119.6 million , respectively, and is summarized by counterparty in the table below:

The counterparties to the Company's derivative instruments are also lenders under the Company's credit agreement which allows the Company to satisfy any need for margin obligations associated with derivatives liabilities with the collateral securing the credit agreement, thus eliminating the need for independent collateral posting.

Because each of the counterparties have investment grade credit ratings, the Company believes it does not have significant credit risk and accordingly does not currently require its counterparties to post collateral to support the net asset positions of its derivative instruments. As such, the Company is exposed to credit risk to the extent of nonperformance by the counterparties to its derivative instruments. Although the Company does not currently anticipate such nonperformance, it continues to monitor the credit ratings of its counterparties.

10. Fair Value Measurements

Accounting guidelines for measuring fair value establish a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows:

Level 1 – Observable inputs such as quoted prices in active markets at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Other inputs that are observable directly or indirectly such as quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Unobservable inputs for which there is little or no market data and which the Company makes its own assumptions about how market participants would price the assets and liabilities.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables summarize the location and amounts of the Company's assets and liabilities measured at fair value on a recurring basis as presented in the consolidated balance sheets as of March 31, 2016 and December 31, 2015 . All items included in the tables below are Level 2 inputs within the fair value hierarchy:

The fair values of the Company's derivative assets and liabilities are based on a third-party industry-standard pricing model that uses market data obtained from third-party sources, including quoted forward prices for crude oil and natural gas, discount rates and volatility factors. The fair values are also compared to the values provided by the counterparties for reasonableness and are adjusted for the counterparties' credit quality for derivative assets and the Company's credit quality for derivative liabilities. To date, adjustments for credit quality have not had a material impact on the fair values.

The derivative asset and liability fair values reported in the consolidated balance sheets that pertain to the Company's derivative instruments are as of a particular point in time and subsequently change as these estimates are revised to reflect actual results, changes in market conditions and other factors. However, the fair value of the net derivative asset attributable to the offsetting crude oil derivative transactions are not subject to price risk as changes in the fair value of the original positions are offset by changes in the fair value of the offsetting positions. The Company typically has numerous hedge positions that span several time periods and often result in both derivative assets and liabilities with the same counterparty, which positions are all offset to a single derivative asset or liability in the consolidated balance sheets, including the deferred premiums associated with its hedge positions. The Company nets the fair values of its derivative assets and liabilities associated with derivative instruments executed with the same counterparty pursuant to ISDA master agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract. The Company had no transfers into Level 1 and no transfers into or out of Level 2 for the three months ended March 31, 2016 and 2015 .

Fair Value of Other Financial Instruments

The Company's other financial instruments consist of cash and cash equivalents, receivables, payables and long-term debt, which are classified as Level 1 under the fair value hierarchy. The carrying amounts of cash and cash equivalents, receivables, and payables approximate fair value due to the highly liquid or short-term nature of these instruments. The carrying amount of long-term debt under the Company's revolving credit facility approximates fair value as borrowings bear interest at variable rates. The following table presents the carrying amounts of the Company's senior notes and other long-term debt, net of debt premiums and debt issuance costs, with the fair values of each based on quoted market prices.

11. Condensed Consolidating Financial Information

The rules of the SEC require that condensed consolidating financial information be provided for a subsidiary that has guaranteed the debt of a registrant issued in a public offering, where the guarantee is full, unconditional and joint and several and where the voting interest of the subsidiary is 100% owned by the registrant. The Company is, therefore, presenting condensed consolidating financial information on a parent company, combined guarantor subsidiaries, combined non-guarantor subsidiaries and consolidated basis and should be read in conjunction with the consolidated financial statements. The financial information may not necessarily be indicative of results of operations, cash flows, or financial position had such guarantor subsidiaries operated as independent entities.

CARRIZO OIL & GAS, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(In thousands)

(Unaudited)

CARRIZO OIL & GAS, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

CARRIZO OIL & GAS, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

12. Supplemental Cash Flow Information

Supplemental disclosures to the consolidated statements of cash flows are presented below:

13. Subsequent Events

On May 3, 2016, the Company entered into an amendment to the credit agreement governing the revolving credit facility (the "Eighth Amendment") to, among other things (i) replace the Total Debt to EBITDA ratio covenant with a Total Secured Debt to EBITDA ratio covenant that requires such ratio not to exceed 2.00 to 1.00, (ii) add a covenant requiring a minimum EBITDA to Interest Expense ratio of at least 2.50 to 1.00, (iii) reduce the Borrowing Base under the credit facility from $685.0 million to $600.0 million until the next redetermination thereof, (iv) increase the required mortgage coverage on the total value of the oil and gas properties included in the Company's most recent reserve report from 80% to 90% , (v) require that the Company's deposit accounts and securities accounts (subject to certain exclusions) become subject to control agreements, (vi) limit the amount of additional senior notes that can be issued by the Company to $400.0 million , (vii) restrict the Company from making borrowings under the credit facility if the Company has or, after giving effect to the borrowing, will have a Consolidated Cash Balance in excess of $50.0 million , (viii) require mandatory prepayment of borrowings to the extent the Consolidated Cash Balance exceeds $50.0 million if either (a) the Company's ratio of Total Debt to EBITDA exceeds 3.50 to 1.00 or (b) the availability under the credit facility is equal to or less than 20% of the then effective Borrowing Base, (ix) increase the margin on all loans by 0.50% , and (x) increase the commitment fee from 0.375% to 0.50% when utilization of lender commitments is less than 50% . Each of the capitalized terms used but not defined in this note to the consolidated financial statements shall have the meaning given to such terms in the credit agreement governing the Company's revolving credit facility.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is management's discussion and analysis of the significant factors that affected the financial position and results of operations of Carrizo Oil & Gas, Inc. and its subsidiaries (collectively, the "Company") during the periods included in the accompanying unaudited consolidated financial statements. You should read this in conjunction with the unaudited interim consolidated financial statements included in this Quarterly Report on Form 10-Q and the discussion under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2015 ("2015 Annual Report").

General Overview

Production, Commodity Prices and Revenue . Total production for the three months ended March 31, 2016 increased 21% from the three months ended March 31, 2015 to 42,025 Boe/d, of which 74% was in the Eagle Ford. Crude oil production for the three months ended March 31, 2016 was 25,806 Bbls/d, an increase of 21% from the three months ended March 31, 2015 , primarily driven by strong performance from our wells in the Eagle Ford, which averaged 22,769 Bbls/d. Driven primarily by the 33% decrease in average realized crude oil prices, revenues for the first quarter of 2016 decreased to $81.3 million . For further discussion of production, commodity prices and revenue, see "-Results of Operations" below.

Operational Highlights . See the table below for details of our operated drilling and completion activity by region:

Financing Activities. On May 3, 2016, we entered into an amendment to the credit agreement governing the revolving credit facility (the "Eighth Amendment") which, among other things, (i) replaces the Total Debt to EBITDA ratio covenant with a Total Secured Debt to EBITDA ratio covenant that requires such ratio not to exceed 2.00 to 1.00, (ii) adds a covenant requiring a minimum EBITDA to Interest Expense ratio of at least 2.50 to 1.00, and (iii) reduces the Borrowing Base under the credit facility from $685.0 million to $600.0 million until the next redetermination thereof. See "- Financing Arrangements-Senior Secured Revolving Credit Facility" for additional details.

2016 Capital Expenditure Plan. Our current 2016 drilling and completion capital expenditure plan remains unchanged at $270.0 million to $290.0 million for drilling and completion and our 2016 leasehold and seismic capital expenditure plan is increased to $20.0 million from $15.0 million as a result of our outlook for continued bolt-on acquisitions. Approximately 85% of our first quarter 2016 drilling and completion capital expenditures were in the Eagle Ford. Approximately 90% of the 2016 drilling and completion capital expenditure plan is allocated to the continued development of the Eagle Ford. See "-Liquidity and Capital Resources- 2016 Capital Expenditure Plan and Funding Strategy" for additional details.

Results of Operations

Three Months Ended March 31, 2016 , Compared to the Three Months Ended March 31, 2015