Energy Sector Review: Comstock Drilling, Oil Prices Going Up
Comstock Resources, Inc. (NYSE:CRK): With the continued weakness of natural gas prices which have worsened in January, Comstock has re-evaluated its drilling plans in 2012 to further de-emphasize natural gas drilling and to reduce overall drilling expenditures in 2012. In December 2011, Comstock was down to two rigs drilling for natural gas in its North Louisiana Haynesville shale drilling program. In 2010 Comstock had seven operated rigs drilling in North Louisiana. During 2011 Comstock moved two rigs to its oil focused Eagle Ford shale drilling program and released three rigs. Comstock plans to move the remaining two natural gas directed rigs to its newly acquired properties in West Texas in February and in early March 2012. Comstock now plans to spend approximately $458M in 2012 for drilling and completion activities. Comstock plans to drill 84 wells, or 60.6 net, as well as complete an additional 29 wells, or 19.1 net, drilled in 2011. Comstock plans to spend $158.3M to drill 43 wells, or 33.8 net, on its new Delaware Basin properties in West Texas and to complete four wells, or 2.5 net, that were drilled before Comstock completed the acquisition. Comstock also plans to spend $165.2M in its South Texas region to drill 24, or 21.7 net, Eagle Ford shale horizontal wells in 2012 and $27.7M to complete four wells, or 3.2 net, drilled in 2011. In addition, Comstock plans to spend $45.4 million in its East Texas/North Louisiana operating region to drill 17 wells, or 5.1 net, all of which will be Haynesville or Bossier shale wells. Only three of these wells will be drilled by Comstock, with the remainder being drilled by other operators. Comstock will also spend $61.4M to complete 20 wells, or 13.3 net, Haynesville or Bossier shale wells in 2011. Under the revised 2012 drilling plan 92% of the net wells drilled in 2012 will be oil wells and 77% of the budget will be spent on oil projects.
The shares closed at $12.96, up $0.62, or 5.02%, on the day. Its market capitalization is $617.48 million.
Basic Energy Services (NYSE:BAS): Citadel Advisors reported a 6.5% passive stake in Basic Energy.
The shares closed at $18.35, up $0.65, or 3.67%, on the day. Its market capitalization is $779.79 million.
YPF SA (NYSE:YPF): Shares of YPF SA (NYSE:YPF) trading in New York tumbled after Spanish language newspaper Pagina/12 reported that Argentine officials discussed re-nationalizing the company that was bought by Repsol YPF (REPYY) in 1999, reported Bloomberg. The source of the report was not identified, Bloomberg noted.
The shares closed at $35.86, down $4.02, or 10.08%, on the day. Its market capitalization is $14.10 billion.
Sinopec Shanghai (NYSE:SHI): Chinese energy company Sinopec (NYSE:SHI) said on Friday that it had signed a deal to buy 7.6M tons of natural gas each year from Australia Pacific LNG, according to Xinhua. Sinopec had previously planned to buy 4.3M tons per year of gas from Australia Pacific, the news service added.
The shares closed at $35.23, down $2.01, or 5.4%, on the day. Its market capitalization is $2.54 billion.
Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX): Oil prices will increase as a result of the E.U.’s decision to stop importing Iranian oil starting next July 1, according to Reuters, OPEC’s secretary general said, according to Reuters. However, there’s no shortage of oil, the official added.
XOM shares closed at $85.49, down $0.34, or 0.4%, on the day. Its market capitalization is $409.77 billion.
CVX shares closed at $103.41, down $0.55, or 0.53%, on the day. Its market capitalization is $205.94 billion.
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