comstock resources inc (CRK) Key Developments
Comstock Resources Inc. Revised Capital Expenditure Guidance for the Fiscal 2015; Provides Operating Guidance for the Fiscal 2015; Provides Update on Haynesville Shale Program
Mar 23 15
Comstock Resources Inc. announced that it will reduce its 2015 capital spending plan by approximately 22% to $248 million, a savings of over $69 million versus its previously announced budget on December 18, 2014. In addition to seeing improving drilling and completion costs, the recent success of the company's first Haynesville shale refrac will allow the company to release one of its operated rigs drilling in the Haynesville shale at the end of March. As a result, the company now plans to spend $95 million and drill nine (8.3 net) long lateral new wells in the Haynesville shale during 2015. The company now plans to spend $23 million on 14 Haynesville refracs. There are no other significant changes to the 2015 capital program. The company will incur a $2.4 million early termination fee on the released rig.
Comstock's first refrac well in the Haynesville, the Pace #33, is currently flowing at 4 million cubic feet per day (MMcf/d) of natural gas on a 22/64-inch choke. Before the refrac, the well had been flowing at 0.5 MMcf/d. Following the refrac, the well experienced an eight-fold increase in flowrate and a three-fold increase in flowing pressure. Total cost for the refrac of the well was approximately $2 million. The company expects to achieve cost reductions on future refrac projects of 10% to 15% below the costs for the Pace #33, and estimates internal rates of return of 40% to 69% on the refrac program assuming natural gas prices of $3.00 to $3.50 per 1000 cubic feet. The company has identified approximately 185 future Haynesville refrac candidates. Comstock is also studying potential oil well refrac candidates on its Eagle Ford shale properties in South Texas. In the new Haynesville shale extended lateral drilling program, comstock has reached total depth for the first three wells, the Pyle #6-7, Shahan #5-8, and Boggess #5-8, and has recently spudded the Horn 8-17 #2. Completion operations on the Pyle #6-7 will begin this week. Completed well costs for the first four wells are expected to be below $11 million with further cost reductions expected later this year.
Based on the new capital budget, the company now estimates that 2015 natural gas production will average between 130 to 155 MMcf/d. 2015 oil production is still expected to average between 9,500 to 10,500 barrels per day.
Comstock Resources Inc. Announces Pricing of $700 Million of 10% Secured Notes Due 2020
Mar 5 15
Comstock Resources, Inc. announced that it has priced $700 million in aggregate principal amount of its 10% senior secured notes due 2020 to be sold to purchasers in a private offering. The notes and the related subsidiary guarantees will be secured by a first priority lien on substantially all of the company's and its subsidiaries' assets, subject to payment priority in favor of the lenders under a new credit facility described below. Comstock intends to use the net proceeds of the proposed offering to retire its existing bank credit facility, with remaining proceeds for general corporate purposes. Comstock expects to close the sale of the notes on March 13, 2015, subject to the satisfaction of customary closing conditions. In connection with the pricing of the notes, the Company has entered into a new $50 million bank revolving credit facility.
Comstock Resources, Inc. Intends to Offer $700 Million in Aggregate Principal Amount of Senior Secured Notes Due 2020
Feb 25 15
Comstock Resources Inc. announced that it intends to offer $700 million in aggregate principal amount of senior secured notes due 2020 in a private offering, subject to market and other conditions. The notes will be guaranteed by each of Comstock's subsidiaries. The notes and the guarantees will be secured by a first priority lien on substantially all of the company's and its subsidiaries' assets, subject to payment priority in favor of the lenders under a new credit facility described below. Comstock intends to use the net proceeds of the proposed offering to retire its bank credit facility, with remaining proceeds for general corporate purposes. In connection with the offering, the company intends to enter into a new $50 million bank revolving credit facility.
Comstock Resources, Inc. Announces Executive Changes
Feb 17 15
Comstock Resources Inc. announced the appointment of Mr. Mack D. Good as Chief Operating Officer. Mr. Good is returning to Comstock after a brief retirement. Mack previously served as Chief Operating Officer from 2004 through March 2011 and served the Company in various other capacities from 1997 through 2004. The company also announced that Mark A. Williams, the Company's current Chief Operating Officer, and Mr. Gerry L. Blackshear, the company's current Vice President of Exploration, are leaving the company to pursue other interests.
Comstock Resources Inc. Temporarily Suspends Quarterly Dividend
Feb 13 15
Comstock Resources Inc. announced that its Board of Directors has determined that its quarterly dividend will be temporarily suspended.