Comstock Resources, Inc. (NYSE: CRK) headed skyward, after the company disclosed a deal to buy oil & gas properties in North Dakota from Arkoma, Williston Drilling for about $620 million. The company also announced withdrawal of tender offers for outstanding secured notes.
The company said it was in negotiation with Dallas Cowboys owner Jerry Jones, to make a substantial investment in the Company. Under a letter of intent entered into by the Company and Arkoma Drilling L.P. and Williston Drilling, L.P. Comstock will acquire interests in certain oil and gas properties located in North Dakota in exchange for common stock in the Company.
There is no debt associated with the properties. Arkoma will receive approximately 88.6 million newly issued shares of Comstock common stock based on an agreed upon share price of $7.00 per share. Upon completion of the transaction, Arkoma will own approximately 84% of the Company's pro forma outstanding shares.
The properties are currently producing 10,500 barrels of oil per day and 20 MMcf of natural gas per day and have proved reserves as estimated by Comstock's independent reserve engineers of 22.5 million barrels of oil and 48.5 billion cubic feet of natural gas.
Comstock shares ballooned $2.42, or 50.8%, to $7.18.
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