Upstream energy firm Comstock Resources Inc. CRK has announced the sale of its Burleson County properties. The company has also revised its 2015 production guidance considering the effects of the asset sale. Shares of the company tanked over 20% following the announcement.
Comstock stated that it has sold oil and natural gas assets around the Burleson County, TX for about $115 million. The sale was made to an undisclosed private firm. The deal is expected to close this month and will have an effective date of May 1, 2015. Comstock expects to incur a pre-tax loss of $100–$110 million owing to this sale.
The company added that it intends to use the proceeds from this sale to finance its drilling program this year. The funds would also increase its liquidity position and support its general corporate needs.
The assets under sale produce about 1,900 barrels of oil per day and 5.5 million cubic feet (MMcf) per day of natural gas. Comstock further added that these assets comprise about 3.7 million barrels of oil and 3.9 billion cubic feet of natural gas of the company’s total proved reserves, as of Dec 31, 2014.
Comstock said that it now expects 2015 oil production in the range of 9,000–9,500 barrels per day, down from its previous guidance of 9,500–10,500 barrels per day. Natural gas production guidance has also fallen to 125–150 MMcf per day from 130–155 MMcf per day.
However, Comstock announced that it has hedged about 10 MMcf per day of natural gas at $3.20 per MMcf for a year, starting Jul 1, 2015.
Frisco, TX-based Comstock Resources is an independent oil and gas exploration and production company engaged in the acquisition, exploration, and development of oil and gas properties.
Currently, Comstock Resources carries a Zacks Rank #3 (Hold).
Better-ranked players from the same industry include Goodrich Petroleum Corp. GDP, LRR Energy, L.P. LRE and Rex Energy Corporation REXX. All these stocks sport a Zacks Rank #1 (Strong Buy).
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