NGI The Weekly Gas Market Report / NGI All News Access

Comstock Buys 120 Bcfe of Proved Gulf Coast Reserves

Comstock Resources Inc. said it bought about 120 Bcfe of gas (57%) and oil reserves in Louisiana, East Texas and Mississippi from EnSight Energy Partners LP for $192.5 million. The transaction provides about 20 MMcfe/d of production from 240 active wells, 90 of which Comstock will operate. The deal is expected to close in May.

"The purchase from EnSight meets all of our criteria for an acquisition," stated Comstock CEO M. Jay Allison. "The transaction is in our core operating area, is primarily operated and has substantial upside from the 96 proved undeveloped drilling locations and the 328 probable and possible drilling locations in East Texas and North Louisiana."

About 37% of the proved reserves are in the proved developed category, the company said. The undeveloped reserves primarily relate to 96 proved undeveloped locations to be drilled. Future development costs related to the properties are estimated to be 67 cents/Mcfe of gas. In addition to the proved reserves, Comstock estimates that the properties being acquired have probable reserves of 85.6 Bcfe, which relate to an additional 133 drilling locations not included in the proved reserves.

The wells Comstock will operate include 79 wells currently operated by EnSight in 16 separate fields in Louisiana, Texas and Mississippi and 12 wells in two fields in Louisiana that are currently operated by Comstock. The nonoperated properties include 149 wells in 27 fields in Louisiana, Texas and Mississippi.

Comstock said it will launch a public offering of $120.5 million common shares, and use the proceeds to pay debt and fund the acquisition. The company also will fund the acquisition through proceeds from a previously announced refinancing of debt owed to Comstock by Bois d'Arc Energy LLC.

©Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus