Comstock Resources Inc. has formed a partnership to fund its midstream build-out to support Western Haynesville acreage development.
As part of a deal with Quantum Capital Solutions (QCS), an affiliate of Quantum Capital Group, Comstock will contribute its Pinnacle gathering and treating system—comprised of a 145-mile high pressure pipeline and the Bethel natural gas processing plant—to the partnership in exchange for 100% of the capital required (up to $300 million) to fund the future build-out of the Western Haynesville midstream system over the next 5 years, Comstock said as part of its third-quarter earnings.
Comstock will operate the midstream system and direct its activities and said the partnership will reduce capital outlays that would be required in 2024 to support the expected growth in production from the area. In this year’s fourth quarter, Comstock expects its production to come in at 1,450-1,550 MMcfed.
For the quarter, Comstock had adjusted net income of $11.7 million compared with $326 million for the same quarter in 2022. Continued weak natural gas prices weighed heavily on the third quarter results, the operator said.
Comstock drilled 13 (10.2 net) operated horizontal Haynesville-Bossier shale wells in third-quarter 2023 which had an average lateral length of 11,644 ft. The company turned 21 (18.1 net) operated wells to sales in the quarter. The wells had initial daily production rates that averaged 29 MMcfd.