HOUSTON, TX -- (MARKET WIRE) -- 08/05/2010 -- Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) today announced that it has agreed to enter into a joint venture with a subsidiary of Reliance Industries Limited ("Reliance"). In connection with the joint venture, Reliance will acquire a 20% interest in approximately 52,200 net Carrizo acres in Pennsylvania considered highly prospective for Marcellus Shale natural gas for total consideration of $65 million. Reliance will pay $13 million in cash to Carrizo and will pay an additional $52 million to carry Carrizo's share of future drilling, completion, and seismic costs ("development carry"), subject to customary purchase price adjustments. Closing is expected by mid-September 2010.

Simultaneous with this transaction, an affiliate of Carrizo's already existing joint venture partner, Avista Capital Partners ("Avista"), will sell its entire interest in the same properties to Reliance for approximately $327 million. Under the terms of Carrizo's current joint venture agreement with Avista, Carrizo expects to receive approximately $44 million in cash based on the sale of Avista's approximately 52,200 net acres (please refer to separate press release by Avista Capital Partners).

The new Carrizo/Reliance joint venture agreement covers approximately 104,400 gross acres in northern and central Pennsylvania. Under the terms of the agreement, Carrizo retains a 40% working interest in the acreage and Reliance will own 60%. In addition to funding its own share of future development obligations, Reliance will fund 75% of Carrizo's portion of these costs over the next two years or until the earlier full utilization of the $52 million development carry, subject to certain conditions and extensions. Carrizo will continue as operator with Reliance having the right to assume operations in certain parts of Central Pennsylvania after one year.

Carrizo's joint venture with Avista Capital will continue, and now covers approximately 140,000 gross Marcellus acres primarily in the states of West Virginia and New York.

S.P. "Chip" Johnson IV, Carrizo's President and Chief Executive Officer, commented, "We are extremely pleased to be able to announce this agreement with Reliance and the benefit from the sale of Avista's Pennsylvania Marcellus interests. This transaction provides the capital to execute a more aggressive development drilling program in Pennsylvania than we would be able to pursue otherwise. Reliance brings regional Marcellus experience, technical expertise, and a strong balance sheet to the partnership. We look forward to working closely with them as we set our development plan in action.

"We excluded our extensive acreage outside of Pennsylvania from this new joint venture to allow us to retain the benefit from current and future appraisal activities which will be conducted during the course of the year."

All results and benefits from this transaction are preliminary and subject to change pending the close of the transaction and normal and customary post-closing adjustments.

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 the Barnett Shale in North Texas, the Marcellus Shale in Appalachia, the Niobrara Formation in Colorado, the Eagleford Shale in South Texas, and in proven onshore trends along the Texas and Louisiana Gulf Coast regions. Carrizo controls significant prospective acreage blocks and utilizes advanced 3-D seismic techniques to identify potential oil and gas reserves and drilling opportunities. Carrizo also controls large acreage positions in other productive shale resource plays.

Reliance Industries (RIL) is the largest private sector company in India with a current market capitalization of over $71 billion. It is a global energy leader and one of the largest refining and petrochemical producers in the world. For the year ended March 31, 2010, RIL reported revenues in excess of US$ 44.6 billion, cash profit of US$ 6.2 billion, net earnings of US$ 3.6 billion and net worth of US$ 30.6 billion. RIL is the first private sector company from India to feature in the Fortune Global 500 list of 'World's Largest Corporations' and ranks 100th amongst the world's Top 200 companies in terms of profits. RIL ranks 75th in the Financial Times FT Global 500 list of the world's largest companies. For more information, please visit RIL's website at www.ril.com.

Avista Capital Partners is a leading private equity firm with offices in New York, Houston, and London. Founded in 2005, Avista's strategy is to make controlling or influential minority investments primarily in growth-oriented healthcare, energy, and media companies. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with exceptional management teams to invest in and add value to well-positioned businesses. For more information, visit www.avistacap.com.

Statements about the new and existing joint ventures and the sales transaction (including the benefits, results, effects, closing and timing of the foregoing), and all other statements in this release other than historical facts are forward-looking statements. These statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are; the failure to obtain certain bank and lease consents, the existence of title defects, the concurrent closing of the Avista sale, failure to otherwise satisfy conditions to the closing of the transactions, actions by joint venture partners, delays, costs and difficulties relating to the purchase and joint venture transactions, results of exploration activities, commodity price changes, capital needs and uses and other factors described in risk factors and elsewhere in the Company's Annual Report on Form 10-K for the twelve months ended December 31, 2009, and in its other filings with the SEC.