CRK is a Haynesville Shale company. The Haynesville is "Dry Gas" with very little NGLs. The good news is that Haynesville wells come online at extremely high rates, over 20,000 mcf per day and payout quickly with gas at $3.00.
It is not up to Comstock. They can't control the mix that comes out of ground.
AR, EQT and RRC have a lot of leasehold in the "Wet Gas" area of the Marcellus Shale. Natural gas that is produced by oil wells in the Permian Basin, DJ Basin and Williston Basin also is wet gas with lots of liquids.
Sweet 16 Update - June 12
Re: Sweet 16 Update - June 12
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Sweet 16 Update - June 12
They don't produce LNG as their gas is dry. They wouldifthey could.
The advantage that CRK has is their proximity to Henry Hub and the distance from their well's to markets.
Someone in North Dakota or Canada has a longer distance to ship the product.
They have some debt and higher prices helps the tremendously
The advantage that CRK has is their proximity to Henry Hub and the distance from their well's to markets.
Someone in North Dakota or Canada has a longer distance to ship the product.
They have some debt and higher prices helps the tremendously
Re: Sweet 16 Update - June 12
CRK's debt is not a problem because (a) the Company is generating over $300 million of free cash flow from operations this year and (b) the owner of the Dallas Cowboys has a lot banker friends.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Sweet 16 Update - June 12
Hello Dan...
For my own knowledge, in your pricing models to arrive at your "Target Price" how come you add the current year forecast Cashflow per share (before CapEx) "twice" + 2022, then divide by 3 x multiple.
Regarding CRK: I contacted Ron Mills per above on the non-core assets:
In the Bakken, they don’t have any acreage, since their ownership there consists only of wellbore interests, all of which are non-operated and in run off mode.
In the Eagle Ford, they have interests in ~7,950 net acres, which are not currently in development.
In terms of monetizing non-core assets, that is definitely something they do look at to further accelerate deleveraging. Given the higher cost structure of those properties, their potential market value is sensitive to commodity prices. Through much of 2020 when oil prices were much lower, the amount a third party might have been willing to pay probably wouldn’t have been very attractive. Now that oil prices have moved up to current levels, there is a greater possibility that buyers could be willing to pay a higher, more attractive price.
Bottom-line: they would consider non-core asset sales outside of the Haynesville.
For my own knowledge, in your pricing models to arrive at your "Target Price" how come you add the current year forecast Cashflow per share (before CapEx) "twice" + 2022, then divide by 3 x multiple.
Regarding CRK: I contacted Ron Mills per above on the non-core assets:
In the Bakken, they don’t have any acreage, since their ownership there consists only of wellbore interests, all of which are non-operated and in run off mode.
In the Eagle Ford, they have interests in ~7,950 net acres, which are not currently in development.
In terms of monetizing non-core assets, that is definitely something they do look at to further accelerate deleveraging. Given the higher cost structure of those properties, their potential market value is sensitive to commodity prices. Through much of 2020 when oil prices were much lower, the amount a third party might have been willing to pay probably wouldn’t have been very attractive. Now that oil prices have moved up to current levels, there is a greater possibility that buyers could be willing to pay a higher, more attractive price.
Bottom-line: they would consider non-core asset sales outside of the Haynesville.
Re: Sweet 16 Update - June 12
I double value the 2021 operating cash flow in all of my valuations. Just because there is more risk to the 2022 forecast and a dollar today is worth more than a dollar a year from now.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group