Comstock Resources Inc

(CRK)

Comstock Resources is an independent oil and gas company that operates primarily in the Southern United States and offshore Gulf of Mexico; it has a proved reserve split of 77% natural gas and 23% oil, with 60% of its hydrocarbons coming from onshore reserves in the Southern United States, and the rest coming from the Gulf of Mexico.

Comstock operates in the Gulf through the separately traded company, Bois D'Arc Energy (BDE), in which it holds a controlling stake. Recently, rising oil and gas prices have been highly beneficial to the company; in a commodity-like market, higher product prices push up profits. On the flip side, higher prices will lead to increased production, eventually causing prices to fall. Comstock's bet on deepwater oil exploration, realized through Bois D'Arc, depends on a continued state of high oil prices, as deepwater technology is very risky and very expensive. With prices currently high and shallow-water production declining, the company will benefit from successful deepwater attempts, but a fall in the price level could make Bois D'Arc's business much less profitable. Comstock's competitors include Anadarko Petroleum, EnCana, Apache, and Cabot Oil & Gas.