Summary of Reserve Report of DeGolyer and MacNaughton as of December 31, 2005

Scope of Investigation This report presents an appraisal, as of December 31, 2005, of the extent and value of the proved condensate and natural gas reserves of certain properties owned by Carrizo Oil & Gas, Inc. (Carrizo). The reserves estimated in this report are located in the Barnett Shale play in North Texas. The properties appraised are listed in detail in the appendix bound with this report.

Reserves estimated in this report are expressed as gross and net reserves. Gross reserves are defined as the total estimated petroleum to be produced from these properties after December 31, 2005. Net reserves are defined as that portion of the gross reserves attributable to the interests owned by Carrizo after deducting royalties and interests owned by others.

This report also presents values for proved reserves using initial prices and costs provided by Carrizo. In general, a Houston Ship Channel (HSC) index gas price of $7.785 per million British thermal units (MMBtu) was held constant for the life of the properties. Operating expenses and capital costs were not escalated for inflation. A detailed explanation of the future price and cost assumptions is included in the Valuation of Reserves section of this report.

Values of proved reserves in this report are expressed in terms of estimated future gross revenue, future net revenue, and present worth. Future gross revenue is that revenue which will accrue to the appraised interests from the production and sale of the estimated net reserves. Future net revenue is calculated by deducting estimated production taxes, ad valorem taxes, operating expenses, and capital costs from the future gross revenue. Operating expenses include field operating expenses, compression charges, transportation charges, and the estimated expenses of direct supervision, but do not include that portion of general administrative expenses sometimes allocated to production. Future income tax expenses were not taken into account in the preparation of these estimates. Present worth is defined as future net revenue discounted at a specified arbitrary discount rate compounded monthly over the expected period of realization. In this report, present worth values using a discount rate of 10 percent are reported in detail and values using discount rates of 5, 9, 12, 15, 20, 25, and 30 percent are reported as totals in the appendix bound with this report.

Estimates of condensate and gas reserves and future net revenue should be regarded only as estimates that may change as further production history and additional information become available. Not only are such reserves and revenue estimates based on that information which is currently available, but such estimates are also subject to the uncertainties inherent in the application of judgmental factors in interpreting such information.

Authority This report was prepared at the request of Mr. Andy Agosto, Vice President Business Development, Carrizo.

Source of Information Data used in the preparation of this report were obtained from Carrizo, and from public sources. Additionally, this information includes data supplied by Petroleum Information/Dwights LLC; Copyright 2006 Petroleum Information/Dwights LLC. In the preparation of this report we have relied, without independent verification, upon information furnished by Carrizo with respect to its property interests, production from such properties, current costs of operation and development, current prices for production, agreements relating to current and future operations and sale of production, and various other information and data that were accepted as represented. A field examination of the properties was not considered necessary for the purposes of this report.

Petroleum reserves included in this report are classified as proved and are judged to be economically producible in future years from known reservoirs under existing economic and operating conditions and assuming continuation of current regulatory practices using conventional production methods and equipment. In the analyses of production-decline curves, reserves were estimated only to the limits of economic production under existing economic and operating conditions using prices and costs as of the date the estimate is made, including consideration of changes in existing prices provided only by contractual arrangements but not including escalations based upon future conditions. The petroleum reserves are classified as follows:

Proved – Reserves that have been proved to a high degree of certainty by analysis of the producing history of a reservoir and/or by volumetric analysis of adequate geological and engineering data. Commercial productivity has been established by actual production, successful testing, or in certain cases by favorable core analyses and electrical-log interpretation when the producing characteristics of the formation are known from nearby fields. Volumetrically, the structure, areal extent, volume, and characteristics of the reservoir are well defined by a reasonable interpretation of adequate subsurface well control and by known continuity of hydrocarbon-saturated material above known fluid contacts, if any, or above the lowest known structural occurrence of hydrocarbons.

Developed – Reserves that are recoverable from existing wells with current operating methods and expenses.

Developed reserves include both producing and nonproducing reserves. Estimates of producing reserves assume recovery by existing wells producing from present completion intervals with normal operating methods and expenses. Developed nonproducing reserves are in reservoirs behind the casing or at minor depths below the producing zone and are considered proved by production from other wells in the field, by successful drill-stem tests, or by core analyses from the particular zones. Nonproducing reserves require only moderate expense to be brought into production.

Undeveloped – Reserves that are recoverable from additional wells yet to be drilled.

Undeveloped reserves are those considered proved for production by reasonable geological interpretation of adequate subsurface control in reservoirs that are producing or proved by other wells but are not recoverable from existing wells. This classification of reserves requires drilling of additional wells, major deepening of existing wells, or installation of enhanced recovery or other facilities.

Reserves recoverable by enhanced recovery methods, such as injection of external fluids to provide energy not inherent in the reservoirs, may be classified as proved developed or proved undeveloped reserves depending upon the extent to which such enhanced recovery methods are in operation. These reserves are considered to be proved only in cases where a successful fluid-injection program is in operation, a pilot program indicates successful fluid injection, or information is available concerning the successful application of such methods in the same reservoir and it is reasonably certain that the program will be implemented.

Estimates of reserves were prepared by the use of standard geological and engineering methods generally accepted by the petroleum industry. The method or combination of methods used in the analysis of each reservoir was tempered by experience with similar reservoirs, stage of development, quality and completeness of basic data, and production history.

All of the properties evaluated in this report produce from the Barnett Shale. The Barnett Shale has low porosity and permeability. Gas production from this depletion-drive reservoir is a function of both the natural fractures and the hydraulically induced fractures. The production-decline curves for the Barnett Shale wells in Denton, Hood, Parker, Tarrant, and Wise Counties, Texas, were analyzed to determine the shape and final decline of a typical well producing from this reservoir in the various areas.

Proved developed producing reserves were estimated by extrapolation of historical production trends using a hyperbolic curve with a 6-percent exponential tail that was terminated at an economic limit based on current economic conditions.

Proved developed producing reserves were also estimated for the refracturing of certain Barnett Shale wells based on analogy with other wells that have been refractured and have established decline rates.

Proved undeveloped reserves were estimated for undrilled locations by analogy using producing offset wells. Future rates of production from these wells were estimated using the type curve previously discussed.

Gas volumes estimated herein are expressed as wet gas and sales gas. Wet gas is defined as the total gas to be produced before reductions for volume loss due to fuel and flare consumption and reduction for plant processing. Sales gas is defined as the total gas to be produced after deduction for fuel usage and shrinkage resulting from field separation and plant processing. Gross gas volumes are reported as wet gas. Net gas volumes are reported as sales gas. All gas volumes are expressed at a temperature base of 60 degrees Fahrenheit (°F) and at a pressure base of 14.65 pounds per square inch

absolute (psia). Condensate reserves estimated herein are those to be recovered by conventional lease separation.

In the preparation of this report, as of December 31, 2005, gross production estimated through December 31, 2005, was deducted from gross ultimate recovery to arrive at the estimates of gross reserves. For certain properties this required that the production rates be estimated for up to 3 months, since production data from these properties were available only through September 2005. Data available from wells drilled through December 31, 2005, were used in this report.

The table below presents estimates of the proved reserves, as of December 31, 2005, of the properties appraised, expressed in thousands of barrels (Mbbl) or millions of cubic feet (MMcf):

This report has been prepared using initial prices and costs specified by Carrizo. Future prices were estimated using guidelines established by the United States Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB).

Revenue values in this report were estimated using prices, differentials, and costs provided by Carrizo. The following assumptions were used for estimating future prices and costs:

A condensate price of $55.00 per barrel was held constant for the lives of the properties.

A HSC natural gas index price of $7.785 per MMBtu was used for all properties and held constant for the lives of the properties. This price was adjusted in accordance with the marketing agreements for each lease to arrive at a wellhead price. The weighted average price over the lives of the properties was $7.80 per thousand cubic feet.

Current operating expenses and capital costs were provided by Carrizo and were used in estimating future expenditures required to operate the properties. In certain cases, future expenditures, either higher or lower than current expenditures, may have been used because of anticipated changes in operating conditions. Operating expenses and capital costs were not escalated for inflation.

The estimated future revenue to be derived from the production and sale of the proved reserves, as of December 31, 2005, of the properties appraised are as follows:

Timing of capital expenditures and the resulting development of production were based on a development plan provided by Carrizo.

The appendix bound with this report includes (i) summary projections of proved reserves and revenue by reserves classification, (ii) tabulations of proved reserves and revenue by area, reserves classification, and lease, (iii) projections of proved reserves and revenue by area, reserves classification, and lease, and (iv) plots of historical production and future rates of production for proved developed producing properties by area and lease.

In our opinion, the information relating to estimated proved reserves, estimated future net revenue from proved reserves, and present worth of estimated future net revenue from proved reserves of condensate and natural gas contained in this report has been prepared in accordance with Paragraphs 10–13, 15, and 30(a)–(b) of Statement of Financial Accounting Standards No. 69 (November 1982) of the FASB and Rules 4–10(a) (1)–(13) of Regulation S–X and Rule 302(b) of Regulation S–K of the SEC; provided, however, (i) certain estimated data have not been provided with respect to changes in reserves information and (ii) future income tax expenses have not been taken into account in estimating the future net revenue and present worth values set forth herein.

To the extent the above-enumerated rules, regulations, and statements require determinations of an accounting or legal nature or information beyond the scope of our report, we are necessarily unable to express an opinion as to whether the above-described information is in accordance therewith or sufficient therefor.

Carrizo owns working interests in certain properties located in the Barnett Shale play of North Texas. The estimated net proved reserves, as of December 31, 2005, of the properties appraised are summarized as follows, expressed in thousands of barrels (Mbbl) or millions of cubic feet (MMcf).

Estimated revenue and costs attributable to Carrizo’s interests in the proved reserves, as of December 31, 2005, of the properties appraised under the aforementioned assumptions concerning future prices and costs are summarized as follows:

All gas reserves in this report are expressed at a temperature base of 60 °F and a pressure base of 14.65 psia.

James Terracio, P.E.

Senior Vice President

DeGolyer and MacNaughton


	Gross Reserves
	Condensate (Mbbl)	Wet Gas (MMcf)
Proved
Developed Producing	23	56,093
Developed Nonproducing	3	23,065
Undeveloped	3	119,384

Total Proved	29	198,542

	Net Reserves
	Condensate (Mbbl)	Sales Gas (MMcf)
Proved
Developed Producing	7	17,462
Developed Nonproducing	1	11,163
Undeveloped	1	53,434

Total Proved	9	82,059


	Proved
	Developed Producing	Developed Nonproducing	Undeveloped	Total Proved
Future Gross Revenue, M$	130,394	89,456	420,476	640,326
Production and Ad Valorem Taxes, M$	11,326	5,276	23,367	39,969
Operating Expenses, M$	29,578	13,556	69,239	112,373
Capital Costs, M$	1,920	4,659	118,804	125,383
Future Net Revenue*, M$	87,570	65,965	209,066	362,601
Present Worth at 10 Percent*, M$	50,638	36,553	71,843	159,034


	Net Reserves
	Condensate (Mbbl)	Sales Gas (MMcf)
Proved
Developed Producing	7	17,462
Developed Nonproducing	1	11,163
Undeveloped	1	53,434

Total Proved	9	82,059


	Proved
	Developed Producing	Developed Nonproducing	Undeveloped	Total Proved
Future Gross Revenue, M$	130,394	89,456	420,476	640,326
Production and Ad Valorem Taxes, M$	11,326	5,276	23,367	39,969
Operating Expenses, M$	29,578	13,556	69,239	112,373
Capital Costs, M$	1,920	4,659	118,804	125,383
Future Net Revenue*, M$	87,570	65,965	209,066	362,601
Present Worth at 10 Percent*, M$	50,638	36,553	71,843	159,034


		Page
FOREWORD		1
Scope of Investigation		1
Authority		2
Source of Information		2
CLASSIFICATION of RESERVES		4
ESTIMATION of RESERVES		6
VALUATION of RESERVES		8
SUMMARY and CONCLUSIONS		10
APPENDIX