Global Hunter Securities Downgrades Comstock Resources (CRK) to Neutral; Capex and Growth Concerns Due to Cheap Gas & Limited Liquidity
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Price: $14.06 --0%
Rating Summary:
9 Buy, 16 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 11 | New: 17
Rating Summary:
9 Buy, 16 Hold, 6 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 11 | New: 17
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Global Hunter Securities downgraded Comstock Resources (NYSE: CRK) from Accumulate to Neutral, price target cut from $30 to $20.
Global analyst said, "In December, we applauded CRK’s $332.7 million acquisition that brought this historically gassy name 44,000 net acres and 935 potential drilling locations in the oily Permian Basin. Along with the 28,000 acres CRK has in the Eagle Ford, the company now possessed two solid oil basins to shift capital into, a welcomed departure from indefinitely drilling dry gas wells in the Haynesville. However, CRK entered 2012 with its gas production completely unhedged (96% of Q3 production was gas) and sporting a borrowing base that pro forma for the Eagle deal appears close to being tapped out (we estimate $100MM of availability on the $700MM line at year-end). In a sub $2.50/MMBtu gas world, such conditions throw a serious wrench in the aggressive development plans of these newly acquired oily assets and tempers our enthusiasm in regards to the company’s growth profile over the next two years."
For an analyst ratings summary and ratings history on Comstock Resources click here. For more ratings news on Comstock Resources click here.
Shares of Comstock Resources closed at $13.14 yesterday.
Global analyst said, "In December, we applauded CRK’s $332.7 million acquisition that brought this historically gassy name 44,000 net acres and 935 potential drilling locations in the oily Permian Basin. Along with the 28,000 acres CRK has in the Eagle Ford, the company now possessed two solid oil basins to shift capital into, a welcomed departure from indefinitely drilling dry gas wells in the Haynesville. However, CRK entered 2012 with its gas production completely unhedged (96% of Q3 production was gas) and sporting a borrowing base that pro forma for the Eagle deal appears close to being tapped out (we estimate $100MM of availability on the $700MM line at year-end). In a sub $2.50/MMBtu gas world, such conditions throw a serious wrench in the aggressive development plans of these newly acquired oily assets and tempers our enthusiasm in regards to the company’s growth profile over the next two years."
For an analyst ratings summary and ratings history on Comstock Resources click here. For more ratings news on Comstock Resources click here.
Shares of Comstock Resources closed at $13.14 yesterday.
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