Comstock Shares Rise On 3Q Production Growth

NEW YORK (AP) — Shares of oil and gas company Comstock Resources Inc. rose on Tuesday, a day after the company reported a rise of 9 percent in third-quarter production from second-quarter levels.

Comstock shares gained $1.83, or 4.6 percent, to $41.40 in morning trading.

On Monday the Frisco, Texas-based company said third-quarter production climbed to 184 million cubic feet per day, compared with 169 cubic feet a day in the second quarter.

During the first nine months of 2009, Comstock said it successfully drilled 38 wells. Since its second-quarter operational update in August, the company completed seven successful operated Haynesville shale horizontal wells in North Louisiana. The company said the wells had an average initial production rate of 15.6 million cubic feet a day, a 23 percent boost from the seven wells reported with second-quarter results.

Stifel Nicolas & Co analyst Amir Arif upgraded his rating for the stock to "Buy" from "Hold," with a price target of $45.

"In our view Comstock has strong company drivers predominantly related to the Haynesville Shale, where well costs have trended lower," Arif said, adding that the stock is positioned to gain from a gas price recovery as its 2010 production is mostly unhedged.

KeyBanc Capital Markets analyst Jack Aydin reaffirmed his "Buy" rating and price target of $55 per share, citing the company's 71,000 net acres in the Haynesville Shale play, giving it significant exposure the areas resources.