Comstock Rscs with Big Upside

During the first nine months of 2008, Comstock Resources (CRK - Analyst Report) drilled a total of 112 wells, with a success rate of 98%. The company drilled 96 successful wells in its East Texas/North Louisiana operating region, which were tested at average per well production rates of approximately 2.7 MMcfe/d.

Comstock's third-quarter 2008 results came in better-than-expected on the back of significantly higher production and improved realizations. We continue to like the company for its growing volumes (volumes for the first nine months of 2008 were up 36%) and attractive valuation.

Additionally, the Bois d'Arc sale to Stone Energy (SGY - Analyst Report) is expected to streamline Comstock's operations and position it to function as a pure play onshore natural gas producer. The Haynesville Shale play offers significant long-term reserve-add potential going forward. Comstock's drilling success in the Cotton Valley formation is another catalyst for future production growth.

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