Comstock Resources allies with USG to jointly develop Haynesville acreage

US company Comstock Resources has entered a joint development agreement with USG Properties Haynesville (USG) to develop Haynesville acreage.

Under the agreement, both companies would collectively develop certain acreage prospective in the Haynesville shale, which has been recently acquired by USG located within the states of Louisiana and Texas.

Comstock Resources will be managing the drilling programme to commence at the site and operate the wells. As consideration of serving as an operator, Comstock will receive 12.5% interest in this acreage.

It can acquire a further 12.5% working interest in each well to be drilled by paying USG the incurred acreage costs of the well being drilled.

At the initial stage, USG would be contributing 3,315 net acres to the joint development venture (JDV).

Comstock estimates that a minimum of 20 wells will be drilled in this area and it also intends to add a third operated drilling rig in April this year to spud joint venture wells.

It has also stated its intention to work with USG to purchase further acreage under the JDV.

After the addition of the JDV, Comstock has re-evaluated its capital budget for this year that escalated to $168.5m.

Comstock expects to drill 24 (18.9 net) Haynesville shale wells this year.

It has also announced that it has continued to increase its hedging programme this year as the prices of natural gas improved.

Comstock has currently hedged 65 million cubic feet per day of its 2017 natural gas production in an aggregate at $3.37 per million British thermal units.

Based in Frisco, Texas, Comstock Resources focuses on oil and gas acquisitions, exploration and development mainly in Texas and Louisiana.