Acquisition of the Haynesville producer will make the merged company the largest to operate in the region
Jerry Jones, owner of the football team Dallas Cowboys, recently expanded the position of his company Comstock Resources in one of the largest U.S. natural gas basins, after striking a deal worth $1.1 billion to acquire Covey Park Energy LLC.
Reportedly, the transaction is expected to be a cash-and-stock deal that will triple the position of Comstock in the Haynesville Basin in Louisiana and make the combined entity the largest to operate in the region.
According to the US Energy Information Administration, Haynesville’s natural gas output, located in Eastern Texas and in Northern Louisiana, is anticipated to be the second fastest growing shale basin this month.
According to reliable sources, Jones shall infuse $475 million of additional amount in Comstock, bringing his investment to a total of $1.1 billion. Apparently, he had first invested in Comstock last year in April.
With a stake of 75%, Jones will remain the largest shareholder of Comstock while Denham Capital, a private firm that is focused on energy investments, will stand second with a share of 16%, sources informed.
As per the company’s statement, equity owners of Covey Park will secure $700 million in cash, 28.8 million new shares of Comstock with per share value of $6.00, as well as newly issued preferred stock worth $210 million. The deal is reportedly expected to close by 31 July, generating more than $25 million in annual administrative and general savings.
Bloomberg had reported in October that Comstock was interested in buying Covey Park. With addition of the debt, the deal at the enterprise value reportedly comes up to $2.2 billion.
It has been reported that the board will expand for including co-CEO of Covey Park, John Jacobi and Jordan Marye, Capital Managing Partner at Denham, while the partnered company will be led by Jay Allison, Comstock’s Chief Executive Officer.