Comstock Resources to reduce spending by 22%
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The company now plans to spend $23 million on 14 Haynesville refracs.
As a result, the company now plans to spend $95 million and drill nine (8.3 net) long lateral 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. ■