Comstock Resources Inc. announced Monday that it plans to spend about $420 million on exploration and development activities in 2013, with a drilling program focused on its oil-weighted holdings in South and West Texas — in the Eagle Ford Shale and Wolfbone and Wolfcamp formations in the Permian Basin, respectively.
The Frisco, TX-based company said it plans to develop and delineate its properties in the Eagle Ford and Wolfbone with three operated drilling rigs in each play, for a total of six rigs. But it expects only minimal drilling in its East Texas/North Louisiana region, which is mostly dry natural gas in the Haynesville/Bossier Shale.
Comstock said its 2013 drilling plan calls for drilling a total 85 gross (58.1 net) wells. Of those, 42 gross (27.3 net) wells will drilled horizontally to target the Eagle Ford, 25 gross (19.9 net) wells will be drilled vertically to target the Wolfbone formation, and eight gross (7.3 net) wells will be drilled horizontally to target the Wolfcamp formation.
The company said its drilling plan also calls for drilling 10 gross (3.6 net) wells in the Haynesville/Bossier Shale, in order to fulfill requirements to hold its acreage there.
Monday’s announcement means that for the third consecutive year, Comstock plans to train its resources on oil instead of dry natural gas. In 2011, the company moved two rigs from the Haynesville to the Eagle Ford and released an additional three rigs (see Shale Daily, Jan. 31, 2012). Comstock’s $458 million plans for exploration and development in 2012 also focused on oil targets in South and West Texas.
Last November, CEO M. Jay Allison said the company wouldn’t consider returning rigs to the Haynesville Shale unless dry natural gas prices rebounded to $5/Mcf (see Shale Daily, Nov. 1, 2012).
According to company reports, Comstock holds about 95,000 gross (81,000 net) acres in its East Texas/North Louisiana region, areas prospective to the Haynesville/Bossier Shale. It owns an interest in 1,010 producing wells in the region, but had only drilled seven gross (3.2 net) wells as of November due to low natural gas prices.
In South Texas, Comstock holds 35,000 gross (28,000 net) acres in the Eagle Ford Shale, owns an interest on 240 producing wells, and has drilled 20 gross (13.9 net) horizontal wells in the play as of November, with initial production (IP) averaging 662 boe/d per well. The company has completed 41 gross (35.5 net) horizontal wells in the play, with IP averaging 705 boe/d per well.
Comstock and Kohlberg Kravis Roberts & Co LP and affiliates (KKR) have a joint venture (JV) in the Eagle Ford (see Shale Daily, Aug. 1, 2012). The JV agreement — which applies to wells spud on or after March 31, 2012 for 100 wells selected by Comstock — allows KKR to obtain a one-third working interest (WI) on wells drilled in exchange for paying a $25,000/acre drilling carry for the net acreage being acquired. KKR also earns a one-third WI on an 80-acre proration unit assigned to each well drilled.
In West Texas, Comstock holds 91,000 gross (57,000 net) acres. The company drilled 29 gross (21.1 net) wells during 3Q2012, 28 of which were vertical wells targeting the Wolfbone formation and one was a horizontal well targeting the Wolfcamp formation, with average IP totaling 370 boe/d per well. Comstock in November operated 40 vertical Wolfbone wells and one horizontal Wolfcamp well, with average IP totaling 322/boe/d per well.
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