Comstock Resources, Inc. (NYSE: CRK) has set its sights on Western Haynesville as a key growth driver in 2025, following signs of rising natural gas prices. In its Q4 2024 earnings report, the company outlined its expansion strategy in the play, highlighting increased drilling activity and infrastructure investment.
Western Haynesville: A Growth Engine for Comstock
Comstock has been aggressively expanding its footprint in the Western Haynesville, adding 64,000 net acres in 2024. This brings its total position in the Haynesville play to a dominant 518,000 net acres. The company has been testing the productivity of the region, with six new wells turned to sales in Q4 2024, averaging an impressive 40 MMcf/d per well.
With high initial production (IP) rates and strong well performance, Western Haynesville is shaping up to be a critical asset for Comstock’s future. The company’s strategy aligns with expectations for improving natural gas prices, which are driving an increase in drilling activity for 2025.
Rising Natural Gas Prices: A Catalyst for Increased Drilling
The biggest shift in Comstock’s 2025 strategy is the decision to increase its rig count from five to seven, primarily targeting Western Haynesville. This move is in response to stronger natural gas prices, which have been on an upward trajectory after a challenging 2024.
Comstock noted that its SEC price assumption for year-end reserves was just $1.84/Mcf, significantly lower than the NYMEX forward curve pricing of $3.26/Mcf. If market prices hold at higher levels, the company believes its proved reserves could expand from 3.8 Tcfe to 7.0 Tcfe.
This potential value unlock has prompted Comstock to allocate a significant portion of its 2025 budget to Western Haynesville:
- $1.0B – $1.1B in drilling and development
- $130M – $150M for midstream infrastructure, funded by a midstream partnership
By expanding drilling efforts, Comstock aims to take advantage of rising prices while further delineating its Western Haynesville acreage.
Infrastructure Investments to Support Growth
To accommodate the anticipated production increase, Comstock is also investing in its Western Haynesville midstream system. The company expects midstream infrastructure spending of up to $150 million, which will be supported through its midstream partnership. This investment will ensure efficient gathering, processing, and transportation of natural gas from the play.
What’s Next for Comstock?
With natural gas prices showing signs of strength, Comstock’s decision to ramp up drilling in Western Haynesville signals confidence in long-term demand growth. The company’s higher rig count, increased acreage, and midstream investments position it to capitalize on improved market conditions in 2025.
As the industry watches natural gas prices and demand trends, Comstock’s Western Haynesville strategy will be one to follow closely. If gas prices remain above $3.00/Mcf, the company could see significant upside in reserves, production, and cash flow.
