Comstock Resources, Inc. ("Comstock" or the
"Company") CRK announced today that it will reduce its 2015 capital
spending plan by approximately 22% to $248 million, a savings of over $69
million versus its previously announced budget on December 18, 2014. In
addition to seeing improving drilling and completion costs, the recent success
of the Company'cess of the Company'apos;s first Haynesville shale refrac will
allow the Company to release one of its operated rigs drilling in the
Haynesville shale at the end of March. As a result, the Company now plans to
spend $95 million and drill nine (8.3 net) long latera
new wells in the Haynesville shale during 2015. Comstock is also increasing
capital allocated toward the Haynesville shale refrac program. The Company
now plans to spend $23 million on 14 Haynesville refracs. There are no other
significant changes to the 2015 capital program. The Company will incur a
$2.4 million early termination fee on the released rig.
Comstock's first refrac well in the Haynesville, the Pace #33, is currently
flowing at 4 million cubic feet per day ("MMcf/d") of natural gas on a
22/64-inch choke. Before the refrac, the well had been flowing at 0.5
MMcf/d. Following the refrac, the well experienced an eight-fold increase in
flowrate and a three-fold increase in flowing pressure. Total cost for the
refrac of the well was approximately $2 million. The Company expects to
achieve cost reductions on future refrac projects of 10% to 15% below the
costs for the Pace #33, and estimates internal rates of return of 40% to 69%
on the refrac program assuming natural gas prices of $3.00 to $3.50 per
thousand cubic feet. The Company has identified approximately 185 future
Haynesville refrac candidates. Comstock is also studying potential oil well
refrac candidates on its Eagle Ford shale properties in South Texas.
In the new Haynesville shale extended lateral drilling program, Comstock has
reached total depth for the first three wells, the Pyle #6-7, Shahan #5-8, and
Boggess #5-8, and has recently spudded the Horn 8-17 #2. Completion
operations on the Pyle #6-7 will begin this week. Completed well costs for
the first four wells are expected to be below $11 million with further cost
reductions expected later this year.
Based on the new capital budget, Comstock now estimates that 2015 natural gas
production will average between 130 to 155 MMcf/d. 2015 oil production is
still expected to average between 9,500 to 10,500 barrels per day.
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