Carrizo Oil & Gas Inc. (NASDAQ:CRZO) Q1 2018 Earnings Conference Call - Preliminary Transcript
May 08, 2018 • 11:00 am ET
Ladies and gentlemen, thank you for standing by. Welcome to the Carrizo Oil and Gas First Quarter 2018 Earnings Call. During the presentation, all participants will be in a listen only mode. Afterwards, we will conduct a question-and-session. (Operator Instructions) As a reminder, this conference is being recorded Tuesday, May 8, 2018.
It is now my pleasure to turn the conference over to Mr. Jeff Hayden, -- Vice President of Investor Relations. Please go ahead, sir.
Jeff P. Hayden
Thank you, Shauna, and thanks, everyone, for joining us today. Before we begin, I'd like to remind you that today's remarks include forward-looking statements as well as non-GAAP measures. Please refer to yesterday's press release for the cautionary language about any forward-looking statements or reconciliations to most directly comparable GAAP measures. We have posted slides to go along with the webcast today. The slides can be found on the Investor Relations section of our website at www.carrizo.com.Joining me on the call this morning are Chip Johnson, President and CEO; David Pitts, VP and CFO; Brad Fisher, VP and COO; and other members of Carrizo's Senior Management Team.
And with that, I'll turn the call over to Chip.
SP Chip Johnson
Thank you, Jeff. First quarter was an excellent start to the year for Carrizo as we delivered results that exceeded expectations and executed on our operational initiatives. Our total production during the first quarter was 51,257 Boe per day, which exceeded the high-end of our guidance range. Our crude oil production of 34,136 barrels of oil per day also exceeded expectations, and accounted for 67% of our total production during the quarter. We also delivered solid cost control with total unit operating expenses coming in below the guidance. Our adjusted EBITDA margin remained strong during the first quarter as our Eagle Ford Shale production continued to benefit from strong LLS pricing. As a result of these items, we were again able to deliver adjusted earnings per share and EBITDA that exceeded the analyst consensus estimates.
During the quarter, we completed the divestitures of our DJ Basin, and downdip Eagle Ford assets and used the proceeds to help retire $370 million of debt and preferred stock. This leaves us with a portfolio focused on two high-quality assets that provide us with more than a decade's worth of drilling location from just the proven geological layers. We believe the assets are highly complementary as the Eagle Ford provides a higher-return free cash flow positive asset that helps fund the growth we expect to generate from our Delaware Basin position. Additionally, the co-development of two positions allows us to maximize our returns while minimizing our risk. Their geographical proximity and operational similarities allow us to easily shift equipment and capital between the plays in order to avoid potential bottlenecks, take advantage of market opportunities or optimize development activity.
By focusing on the synergistic development of these assets, we believe we can deliver double-digit production growth, while improving our return on capital employed and moving toward a free cash flow positive program.