COMSTOCK RESOURCES, INC. ANNOUNCES $100.5 MILLION INVESTMENT BY MAJORITY SHAREHOLDER

Rhea-AI Summary

Comstock Resources, Inc. announces a $100.45 million equity investment by majority shareholder Jerry Jones, acquiring 12.5 million shares at $8.036 per share. The investment will increase Jones' ownership to 67% of the company's common shares. Proceeds will be used to pay down bank debt and fund recent acquisitions.

Financial Analyst

The additional equity investment by Jerry Jones in Comstock Resources is a notable development, particularly with regard to the company's capital structure and liquidity. The infusion of over $100 million in equity capital can be seen as a positive signal to the market, suggesting a strong vote of confidence from the majority shareholder. This move is likely to improve the company's balance sheet by reducing leverage, as the proceeds are earmarked for debt repayment.

However, investors should be aware of the potential for dilution given the issuance of new shares. The transaction price of $8.036 per share, based on a recent average, may also be scrutinized in terms of fairness and market value. The increase in Jones' ownership stake to approximately 67% further consolidates control, which could have implications for minority shareholders in terms of corporate governance and future strategic decisions.

Market Research Analyst

From a market perspective, Comstock's strategic move to pay down bank debt with the equity investment aligns with prudent financial management practices, particularly in the capital-intensive oil and gas industry. The acquisition of undeveloped acres in the Western Haynesville play is indicative of Comstock's growth-oriented strategy. The company's ability to expand its asset base while simultaneously de-leveraging could be viewed favorably by investors seeking stability and growth potential.

It is important for stakeholders to consider the long-term implications of this investment, including the company's prospects in the Western Haynesville region. The success of these newly acquired assets in contributing to Comstock's production and revenue will be a critical factor in evaluating the long-term benefits of this transaction.

Energy Sector Analyst

Comstock's decision to use the proceeds from the equity investment to pay down debt related to recent acquisitions provides insight into the company's strategic priorities within the energy sector. The Western Haynesville play is a significant natural gas resource and Comstock's investment in undeveloped acres there reflects a commitment to securing a competitive position in this region.

Investors should consider the potential impact of natural gas prices on Comstock's financial performance, as well as the operational challenges and environmental considerations inherent in developing new acreage. The company's approach to managing these factors will be important in realizing the value from its investment in the Western Haynesville play.

FRISCO, TX, March 20, 2024 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. (“Comstock” or the “Company”) (NYSE: CRK) announces that its majority shareholder, Jerry Jones, has agreed to make an additional $100,450,000 equity investment in the Company through two entities he controls. The Jones entities will acquire 12,500,000 shares of common stock in the private placement at a price of $8.036 per share, which represents the average of the closing prices for the five trading days ended March 20, 2024. Closing of the transaction is subject to customary closing conditions. Following the equity investment, Jerry Jones will own approximately 67% of the Company’s common shares outstanding, up from 65% before this equity investment.

Comstock will use the proceeds from the equity investment to pay down bank debt which was partially incurred to fund several recently completed acquisitions of 200,000 net undeveloped acres in Comstock’s Western Haynesville play for $58.7 million.

About Comstock Resources:

Comstock Resources is a leading independent natural gas producer with operations focused on the development of the Haynesville Shale in North Louisiana and East Texas.

This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The shares of common stock to be sold in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or under any state securities laws and, unless so registered may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein. Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct. Information concerning the assumptions, uncertainties and risks that may affect the actual results can be found in the Company's filings with the Securities and Exchange Commission ("SEC") available on the Company's website or the SEC's website at sec.gov.

What is the ticker symbol for Comstock Resources, Inc.?

The ticker symbol for Comstock Resources, Inc. is CRK.

How much is Jerry Jones investing in Comstock Resources, Inc.?

Jerry Jones is making an additional $100,450,000 equity investment in Comstock Resources, Inc.

How many shares will Jerry Jones acquire through the investment?

Jerry Jones will acquire 12,500,000 shares of common stock in Comstock Resources, Inc.

At what price will the shares be acquired?

The shares will be acquired at a price of $8.036 per share.

What percentage of the company's common shares will Jerry Jones own after the investment?

Jerry Jones will own approximately 67% of the company's common shares.

What will the proceeds from the equity investment be used for?

The proceeds will be used to pay down bank debt and fund recent acquisitions of net undeveloped acres in Comstock's Western Haynesville play.

What were the recent acquisitions funded by the bank debt?

The recent acquisitions were of 200,000 net undeveloped acres in Comstock's Western Haynesville play for $58.7 million.