Domestic energy explorer, Comstock Resources Inc. (CRK - Free Report) has signed contracts with undisclosed parties for leasing 53,000 net acres in the prospective oil assets of Louisiana and Mississippi. Per the agreement, Comstock is expected to invest roughly $54.5 million.
One of the primary motives of Comstock behind the lease contract is to enter and explore the Tuscaloosa Marine shale, a promising oil play in Louisiana and Mississippi.
The deal is anticipated to close by the fourth quarter depending on some customary closing arrangements. Moreover, Comstock is looking to lease other acreages in Tuscaloosa Marine shale and also in another potential oil property.
Owing to consistently weak pricing for natural gas, Comstock is now focusing more on oil rich plays. The current contracts have already strengthened this view. Moreover, the company has put operations on hold in the Haynesville shale, a natural gas play, waiting for favorable gas pricing. Comstock believes that substantial backlog of new oil rich assets will give it a higher leverage to continuously drive oil output and reserve base in the near future.
Frisco, Texas-based Comstock 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 two regions in the U.S.: East Texas/North Louisiana and South Texas.
Comstock currently holds a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better performing energy firms like VOC Energy Trust , SM Energy Company (SM - Free Report) and Matador Resources Company (MTDR - Free Report) that offer value. All the stocks sport a Zacks Rank #1 (Strong Buy).