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Comstock Resources (NYSE:CRK) is in a “swing basin”. Those kinds of basins are generally the higher cost but still competitive dry gas-producing basins. That means the basin is generally the first to idle rigs whenever costs are unfavorable. But this company has a few “aces” that many competitor basins do not have. As I wrote a few years back, management bought acreage when there were few or even no buyers around. It is kind of hard to overpay when you are the only one “on the other side of the table”. That means the company has a low location cost for its wells that is equivalent to a competitive moat compared to the latecomers.
Swing Basin
The Haynesville dry gas production is now heading towards a decline. But as shown below, that has yet to happen.
Antero Resources Presentation Of Rig Activity Decline Related To Natural Gas Production (Antero Resources Natural Gas Price Fundamentals Update November 2023)
As Antero…
