Comstock Resources Inc. (CRK) said July 1 it entered into an agreement with a private company to sell oil and gas properties in the Eagle Ford Shale in and around Burleson County, Texas, for about $115 million.
The properties being sold are producing about 1,900 barrels per day (bbl/d) of oil and 5.5 million cubic feet per day (MMcf/d) of natural gas. Proved reserves included about 3.7 MMbbl of oil and 3.9 Bcf of natural gas at year-end 2014.
Comstock, based in Frisco, Texas, intends to use proceeds to fund its 2015 drilling program and to enhance the company's liquidity as well as for other corporate purposes.
"This sale strengthens our balance sheet by providing us with an opportunity to further improve our liquidity during a period of low oil and natural gas prices", stated M. Jay Allison, CEO of Comstock, in the release.
The company said it expects to realize a pre-tax loss on the divestiture ranging from $100- to $110 million. Taking the divestiture into account, Comstock revised its 2015 oil production guidance to 9,000 to 9,500 bbl/d and its natural gas production guidance to 125 to 150 MMcf/d.
Additionally, the company announced that it has recently added about 10 MMcf/d of natural gas hedges at $3.20 per MMcf for the 12 months beginning on July 1. The company said it currently intends to continue to add additional hedges as opportunities develop.
BMO Capital Markets was exclusive financial adviser and Locke Lord LLP was legal adviser to Comstock on the transaction.
The sale, which is subject to customary closing conditions, is expected to close in July and will have an effective date of May 1.
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