Carrizo Oil & Gas Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Carrizo Oil & Gas (NAS: CRZO) popped 10% at the start of trading today on news the company was selling some assets.

So what: GAIL India Ltd. is buying a 20% stake in a shale gas play in the Eagle Ford shale from Carrizo for $95 million, including $63.7 million in cash and $31.3 million in future costs. The company expects to invest $300 million in U.S. shale gas assets over the next five years.

Now what: The market applauded the move for the first few minutes of trading, but shares fell quickly after the opening bell. GAIL also expects to partner with Carrizo to explore shale gas plays in India and other countries, so this could be a long-term partnership. With a forward P/E of 5.4, Carrizo looks to be priced right, and this deal will help reduce risk and provide opportunities for the future.

Interested in more info on Carrizo Oil & Gas? Add it to your watchlist byclicking here.

At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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