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Comstock Resources, USG Properties Haynesville expand joint venture

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Comstock Resources, USG Properties Haynesville expand joint venture

Comstock Resources Inc. expanded its joint development venture with USG Properties Haynesville LLC, according to an Oct. 11 news release.

The joint development program initially focused in Caddo Parish, La., where USG had acquired 6,821 net acres targeting the Haynesville shale, allowing the companies to drill 34 extended lateral wells. Comstock and USG have drilled three 10,000-foot lateral wells and are drilling a fourth in the area. The completion operations of the wells are scheduled to begin in November.

Comstock has the right to participate for a 25% working interest in the wells on USG's acreage, with the option to increase working interest participation in future wells.

USG will pay Comstock for participation rights for 50% of Comstock's working interest in four wells being drilled in Comstock's Sabine Parish, La., acreage targeting the Bossier formation. USG will pay Comstock a current value for each location for acreage and infrastructure related to the well location, plus additional payments for each well that exceeds Comstock's production target.

Comstock also earned a lease on an additional 640 acres adjacent to its Toledo Bend field and gained a 25% royalty reduction on these wells along with an additional 12.5% working interest in the wells, aided by USG's participation.

USG also recently agreed to participate in a drilling program on certain of Comstock's acreage in Harrison County, Texas, in which Comstock has about 4,000 net acres in its Waskom field. The company has 34 Haynesville shale locations in the area and is pursuing add-on acreage for extended lateral wells. Comstock will be able to acquire additional complementing acreage through USG's participation, resulting in more drilling locations. Comstock will also be paid a current value for each location for acreage and infrastructure related to the well location plus additional payments for each well that exceeds production target.