Comstock to Sell West Texas Assets - Analyst Blog
19 Marzo 2013 - 7:25PM
Zacks
Domestic energy explorer Comstock Resources
Inc. (CRK) has entered into an agreement to sell off its
oil and gas properties in Reeves and Gaines counties in West Texas.
The assets were sold to Houston-based oil and natural gas producer
Rosetta Resources Inc. (ROSE) for $768
million.
The sale – with an effective date of Jan 1, 2013 – is likely to
close on May 15. Comstock plans to use the proceeds to pay off its
outstanding debt and to increase its 2013 drilling fund for the
Eagle Ford shale.
Comstock also revised its capital spending budget for 2013 to
reflect the above divestiture and an increase in drilling activity
in its Eagle Ford shale in South Texas. This year, Comstock plans
to spend $422 million, which includes $410 million on drilling
activities and $12 million on exploratory leasehold.
Comstock will drill 82 wells in its current operations in South
Texas and East Texas/North Louisiana for about $347 million. Of
this, Comstock will spend $312 million in the Eagle Ford shale,
where it plans to drill 72 wells. The remainder will be used for
Comstock’s natural gas properties mainly in East Texas and North
Louisiana.
Comstock further informed that it is increasing the number of rigs
to be drilled to 6 from 3 in South Texas during the second half of
2013.
Comstock carries a Zacks Rank #4 (Sell), implying that it is
expected to underperform the broader U.S. equity market over the
next 1 to 3 months.
Comstock’s high natural gas exposure raises its sensitivity to gas
price fluctuations, compared to its more-diversified independent
peers with a balanced oil/gas production profile. The company,
which derives bulk of its reserves/production from natural gas, has
seen its sales and income drop drastically in recent quarters on
the back of a sharp drop in gas prices.
Following Comstock’s debt-financed acquisition of producing
properties and acreage in the Delaware Basin, we remain worried
about its incremental leverage and reduction of liquidity.
However, there are certain other energy explorers like EPL
Oil & Gas, Inc. (EPL) and Range Resources
Corp. (RRC) that offer tremendous value and are worth
buying now. Both these entities sport a Zacks Rank #1 (Strong
Buy).
COMSTOCK RESOUR (CRK): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
ROSETTA RESRCS (ROSE): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Grafico Azioni Energy Partners (NYSE:EPL)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Energy Partners (NYSE:EPL)
Storico
Da Lug 2023 a Lug 2024
Notizie in Tempo Reale relative a Epl Oil & Gas (Borsa di New York (NYSE)): 0 articoli recenti
Più Energy Partners Articoli Notizie