Domestic energy explorer Comstock Resources Inc. (CRK) offered a glimpse of its capital spending plans for drilling and completion operations in 2014. The Frisco, Texas-based upstream operator has allocated roughly $450.0 million for those activities. However, the allotted capital will not be utilized for drilling natural gas wells. A further $28 million will go towards leasing activities.
Out of the total budget, the company is expected to invest $80.0 million to complete the drilling of 29 wells in the South Texas-based Eagle Ford shale. Comstock started drilling those wells in 2013. Moreover, Comstock will allocate $264.0 million to drill 59 wells at South Texas located Eagle Ford shale.
Another $50.0 million will be used for drilling 10 wells at East Texas-based Eagle Ford shale. Additionally, $27.0 million will likely be spent to drill 2 wells at the Tuscaloosa Marine shale. The remaining $29.0 million will be utilized for other capital developments.
Comstock reveals that it will operate 5 rigs for its 2014 drilling activities. The company also stated that it will likely finance the drilling program with operating cash flow, subject to oil and gas price in 2014.
Management expects the company to produce 4.1 to 4.6 million barrels of oil on increased drilling activities in 2014, reflecting 75% to 95% growth from 2013.
On the flipside, with no plan to drill natural gas wells in 2014, Comstock projects its natural gas output to fall to 40-44 billion cubic feet. However, with the pricing environment of natural gas now improving, Comstock might resume its drilling operations in Haynesville and Bossier natural gas shale plays in North Louisiana.
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.
Meanwhile, one can look at better-ranked energy players in the exploration and production sectors like Abraxas Petroleum Corp. (AXAS), Harvest Natural Resources Inc. (HNR) and VOC Energy Trust (VOC). All the stocks sport a Zacks Rank #1 (Strong Buy).
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