Comstock Resources is a growing independent energy company engaged in the acquisition, development, production and exploration of oil and natural gas properties. As of December 31, 2014, the company owned interests in nearly 1,600 producing wells with an estimated 620 BCFE in proven reserves. In recent months, the substantial decline of oil and natural gas prices has resulted in a considerable decline in revenues for the entire industry, with major players such as Exxon Mobil Corporation (NYSE: XOM) and Chevron Corporation (NYSE: CVX) reporting year-over-year earnings decreases of more than 50 percent for the first six months of 2015. However, Comstock’s strong production figures during the first half of the year – including approximately 1.96 million barrels of oil and 19.3 billion cubic feet of natural gas – continue to demonstrate the company’s immense growth potential when commodity prices begin to recover.
In 2014, Comstock’s Eagle Ford shale horizontal well drilling program in East Texas served as a driver for the company’s considerable production growth. In total, the company successfully increased its oil production figures by 86 percent, adding 5.1 million barrels of oil and 5 billion cubic feet of natural gas to its proven reserves. During the second quarter of 2015, Comstock prepared to build on this progress through the completion of four additional horizontal wells on the property, effectively increasing its production capacity ahead of forecast rises in oil and natural gas prices in the months to come.
In July, the company took steps toward securing the financial flexibility needed to continue developing its most promising properties. In particular, Comstock entered into a definitive purchase and sale agreement to sell its properties in and around Burleson County, Texas, for approximately $115 million. Upon closing, this transfer will provide the company with the fiscal means to fund additional drilling programs at its Eagle Ford property while maintaining the flexibility required to capitalize on additional strategic opportunities.
“This sale strengthens our balance sheet by providing us with an opportunity to further improve our liquidity during a period of low oil and natural gas prices,” M. Jay Allison, chief executive officer of Comstock, stated in a news release.
Despite less-than-favorable market conditions, Comstock has made strong progress in recent months toward preparing for future growth. Look for the company to continue focusing primarily on site development work moving forward, providing a strong platform upon which to capitalize on recovering commodity prices in the future.
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