Comstock Resources Inc. said it and USG Properties Haynesville LLC have struck a joint development agreement for acreage prospective for the Haynesville Shale in Louisiana and Texas. The acreage was recently acquired by USG.
Frisco, TX-based Comstock will operate the wells to be drilled and will manage the drilling program. It will receive a 12.5% working interest in the acreage and can acquire an additional 12.5% working interest in each well drilled by reimbursing USG for the related acreage costs of the well being drilled.
Initially, USG is contributing 3,315 net acres to the venture. Comstock estimates that a minimum of 20 wells will be drilled and plans to add a third operated drilling rig in April to drill the joint venture wells. Comstock also said it intends to work with USG to acquire additional acreage for the joint development venture.
Last November, Comstock said it was essentially writing off its investment in the Tuscaloosa Marine Shale. Executives said the company's Haynesville acres were "more important than they've ever been to us..." The company's Eagle Ford drilling program has been paused amid low crude prices. It was just over two years ago that the company said it was turning back to the gas-rich Haynesville because of low crude oil prices. In recent months, the Haynesville rig count has been slowly climbing out of the basement amid rising interest in the legacy shale gas play.
With the addition of the Haynesville joint development venture, Comstock has revised its capital budget for 2017 to $168.5 million and anticipates drilling 24 (18.9 net) Haynesville wells this year.
Comstock also said it has continued to add to its hedging program for 2017 with the continued improvement in natural gas prices. Currently, it has, in the aggregate, hedged 65 MMcf/d of its 2017 natural gas production at $3.37/MMBtu.