Comstock’s Positive Update

Yesterday, oil and natural gas firm Comstock Resources Inc. (CRK - Analyst Report) provided an operational update about its recently completed third quarter. 

Average production was up 9% sequentially to about 184 million cubic feet equivalent per day (MMcfe/d), reflecting the success of Comstock’s enhanced onshore drilling programs. The company drilled a total of 9 wells during the quarter, with a 100% success rate. 

This year, Comstock’s drilling programs are focused on developing its Haynesville shale properties in East Texas and North Louisiana . As part of that effort, the company drilled 7 successful wells in DeSoto Parish , North Louisiana during the third quarter (3 wells are in Toledo Bend North field, 3 in the Logansport field and one is in the Mansfield field), which had an average per well initial production rate of approximately 15.6 MMcfe/d. These results were up 23% from the 7 wells that were reported with the second quarter results. Comstock is currently drilling 6 operated horizontal Haynesville Shale wells. 

The company plans to report its third quarter financial results on November 2, 2009.
 
In a separate development, Comstock announced yesterday that it plans to offer $200 million principal amount of senior notes due 2017. The company intends to use the proceeds from the offering to pay back debt under its bank credit facility and for other general corporate purposes.
 
Frisco, Texas-based Comstock Resources Inc. is an independent oil and gas exploration and production company engaged in the acquisition, exploration, and development of oil and gas properties. The company’s operations are concentrated primarily in four regions in the U.S. : the Gulf of Mexico, East Texas/North Louisiana, Mississippi , and South Texas . 

We currently rate Comstock shares as Neutral.