Comstock's Proved Reserves Grow

Zacks

Domestic energy explorer Comstock Resources Inc. (CRK) has provided an update of its proved oil and gas reserves. As reported by the company, total reserves (from continuing operations) reached 584.5 billion cubic feet of gas equivalent (Bcfe) at the end of 2013, against 550.8 Bcfe as of Dec 31, 2012. This reflects a 6.1% annual increase in Comstock’s total reserves.

Comstock added that 73.0% of the total reserves reported on Dec 31, 2013 are proved developed, implying that the reserves will be recovered using the present operating methods.

During 2013, Comstock’s total output from continuing operations stood at 69.6 Bcfe, of which only 20.0% was crude oil. The company produced 2.3 million barrels of oil in 2013, reflecting a year-over-year increase of 29.0%. However, gas output in 2013 totaled 55.7 billion cubic feet (Bcf), representing a 32.0% yearly decrease. Moreover, during fourth-quarter 2013, Comstock generated 7,598.0 barrels of crude oil per day, demonstrating an 11% sequential hike.

Comstock believes that the successful drilling activities in the South Texas area of Eagle Ford shale were the principal reasons for the growth of oil output and reserve in 2013. In 2013, the Eagle Ford operations added roughly 5.3 million barrels of oil as well as 5.0 Bcf of natural gas to proved reserves.

During 2013, Comstock invested roughly $344.0 million in drilling operations. The company intends to focus only on oil developments in 2014. Comstock is also expected to spend roughly $450.0 million for drilling and completion activities in 2014. Following the drilling plan, the company projects oil output in 2014 in the range of 4.1– 4.6 million barrels, significantly higher than the 2013 level. However, natural gas production in 2014 is expected to lie in the range of 40.0 – 44.0 Bcf, lower than the 2013 production level.

Frisco, Texas-based Comstock currently retains 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-ranked players in the oil and gas exploration and production sector like Athlon Energy Inc. (ATHL), Linn Co LLC (LNCO) and Warren Resources Inc. (WRES). All the stocks sport a Zacks Rank #1 (Strong Buy).
 

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