Comstock to Pay 12.5-Cent Dividend - Analyst Blog
20 Maggio 2013 - 8:40PM
Zacks
Domestic energy explorer
Comstock Resources Inc. (CRK) has announced it
will start paying out a portion of its earnings in the form of
shareholder dividends. The Frisco, Texas-based company initiated
its quarterly dividend at the rate of 12.5 cents per share, making
the annualized dividend payout 50 cents per share. The first
installment is payable on Jun 15, to shareholders of record as of
May 31, 2013.
Comstock, which recently sold its oil and gas properties in Reeves
and Gaines counties in West Texas to Rosetta Resources
Inc. (ROSE) for $808 million in net proceeds, has
bolstered its long-term earnings and cash flow visibility on the
back of high returns from the promising Eagle Ford shale assets in
South Texas.
Comstock has also announced plans to buy back up to $100 million of
its common stock.
We believe that the dividend start-up and the share repurchase
program not only highlights Comstock’s commitment to create value
for shareholders but also underlines the oil and gas finder’s
healthy financial condition and confidence in its business going
forward.
Comstock’s large acreage position in the prolific
Haynesville/Bossier Shale play provides a multi-year inventory of
low-risk development drilling opportunities. Supplemented with a
low cost structure, Comstock remains well positioned to maintain a
strong growth trajectory in the near- to medium-term.
However, the company’s highly gas-weighted reserves/production
profile, along with its geographically concentrated asset base,
offset these strengths and is the key area of concern, in our
view.
As a result, Comstock currently carries 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.
However, there are domestic upstream energy operators like
EPL Oil & Gas Inc. (EPL) and Abraxas
Petroleum Corp. (AXAS) that offer tremendous value and are
worth buying now. Both these companies sport a Zacks Rank #1
(Strong Buy).
ABRAXAS PETE/NV (AXAS): Free Stock Analysis Report
COMSTOCK RESOUR (CRK): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
ROSETTA RESRCS (ROSE): Free Stock Analysis Report
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