North Dakota Connection To The Jerry Jones-Comstock Deal -- September 6, 2019

From The WSJ, June 12, 2019:

U.S. natural gas prices have fallen to three-year lows at a time of year when they should be rising. Shares of gas producers are in the pits.

But Jerry Jones, the owner of the Dallas Cowboys, has bet more than $1 billion on the fuel. Mr. Jones said this week that he was putting up $475 million of his own money to help Comstock Resources Inc. buy a larger shale-gas rival, Covey Park Energy, for about $1.6 billion.

The deal follows another last year in which Mr. Jones sold Comstock North Dakota oil wells valued at more than $600 million in exchange for a controlling stake in the public company. The latest deal brings to about $1.1 billion his wager on the prolific Haynesville Shale in Louisiana and East Texas where Comstock and Covey both drill.

So, now down the rabbit hole, as one of my readers would say.

• Comstock Resources announces 109% growth in proved oil reserves, February 4, 2019
• billionaire Dallas Cowboys owner Jerry Jones makes big bet on Comstock Resources, Forbes, April 26, 2018

Under a letter of intent signed with Jones' oil and gas companies, Arkoma Drilling and Williston Drilling, Frisco, Texas-based Comstock will buy interests in oil and gas properties in North Dakota for $620 million in stock (there's no debt associated with the assets).

• same story, Hart Energy, April 26, 2018 
• after deal with Jerry Jones, a Frisco oil company could hit $1.8 billion in proved reserves, Dallas Business Journal, February 5, 2019

So, was Comstock Resources named after Comstock, ND, or Comstock, TX, or something else? With Comstock, ND, nowhere near the oil-producing Williston Basin, I can guarantee that the company was not named after the ND community. The same can probably be said about Comstock, TX.

NDIC well search suggests that Comstock Resources owns minerals in North Dakota but is not an operator.

From the company's website:

The Bakken Shale Properties that we acquired from Jerry Jones include 348 producing wells, 85 drilled but uncompleted wells and 7 undrilled locations.

Reserves attributable to these properties were estimated at 22.8 million barrels of oil and 49.3 billion cubic feet of natural gas. These properties generated $155.1 million of revenues in excess of operating costs, excluding depletion, depreciation and amortization in 2017.

On August 14, 2018 we closed our agreement with Jerry Jones, Dallas businessman and owner of the Dallas Cowboys Football Club Ltd., under which he contributed oil and gas properties in North Dakota in exchange for common stock in the Company.

The contribution provides us with substantial cash flow to invest in our high return Haynesville shale drilling program and the capital to further grow our drilling prospect inventory through acquisitions of new leases and producing properties.

Natural gas? Connect this dot, posted yesterday, "Texas wind not enough. Next-day power prices at the ERCOT North hub soared from $130 per megawatt hour for Wednesday to an all-time high to f$973.75 for Thursday."

By the way, look at that last item in the company's website link posted above:

The contribution provides us with substantial cash flow to invest in our high return Haynesville shale drilling program and the capital to further grow our drilling prospect inventory through acquisitions of new leases and producing properties. 

Oasis is doing the same thing: using free cash flow from the Bakken to fuel its Permian expansion.