I spent yesterday afternoon and this morning working on an updated profile / forecast for CRK. I believe it will be a BIG WINNER for us over the next few months. I have a VERY HIGH level of confidence in my forecast model for this one and the company gives excellent guidance.
CRK's oil production is going up and natural gas production is going down. Year-over-year top line revenue growth is on-track to exceed 40%. They are completing a lot of high rate Eagle Ford wells in Q3. Q2 crude oil production was 12,220 bbls per day and it looks like they will exit 2014 with ~15,000 bbls of crude oil per day.
CRK uses the "Successful Efforts" method of accounting, which is more conservative than the Full Cost Method. Ignore their reported GAAP earnings per share. They are rapidly growing oil production, proven reserves and cash flows from operations (all of which are much more important than EPS).
CRK's operating cash flows per share are on-track to over $9.00/share in 2014 and over $11.00/share in 2015. First Call's CFPS forecast for 2014 is actually slightly higher than my forecast. Therefore, CRK is now trading at less than 3X CFPS. That is ridiculously low for a company with this much running room. Their balance sheet is in good shape and they pay a small dividend on the common stock.
Take a look at their updated presentation. I will be sending out an updated profile this afternoon. My Fair Value Estimate is $40.15/share.
Comstock Resources (CRK)
Comstock Resources (CRK)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group