Why Comstock Resources' Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Comstock Resources (NYSE: CRK  ) jumped as much as 18% today after announcing an asset sale.

So what: Comstock is selling 53,306 net acres in the West Texas Permian Basin to Rosetta Resources (NASDAQ: ROSE  ) for $768 million. The money will be used to pay off debt and increase its drilling program in the Eagle Ford shale.

Now what: Capital expenditures are now expected to be $410 million for drilling activities, of which $312 million will be spent in Eagle Ford. I think the move to reduce debt and improve liquidity will be a positive for shareholders going forward. Still, I'd like to see consistent profits before jumping in, especially at this elevated price.

Interested in more info on Comstock Resources? Add it to your watchlist by clicking here.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2316354, ~/Articles/ArticleHandler.aspx, 11/22/2014 9:07:53 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement