Jerry Jones Just Made a $2.2 Billion Deal for a Dallas Energy Company

Dallas Cowboys owner Jerry Jones’ oil and gas company, Comstock Resources, is making a $2.2 billion acquisition that will make it the leading producer in one of the nation’s largest natural gas basins.The cash-and-stock deal for Covey Park Energy is expected to advance Frisco-based Comstock’s position in the Haynesville Shale in East Texas and northwest Louisiana. The Haynesville region is the third-largest natural gas producer in the U.S., according to the U.S. Energy Information Administration.Jones will put in $475 million for 50 million new shares of Comstock stock to finance the deal, upping his total Comstock investment to $1.1 billion. Jones is also buying $175 million of stock that can be converted later to common shares. He’s the company’s biggest investor.Comstock’s production will more than double to 1.1 billion cubic feet equivalent per day with Covey Park’s assets. And it will gain more than 1,000 drilling locations, bringing its total to 2,000.“We continue to see the need for additional industry consolidation of the basin to gain meaningful scale,” analysts at Tudor, Pickering, Holt & Co said in a note to investors.Dallas-based Covey Park Energy, a private natural gas company, was founded in 2013 and operates exclusively in the Haynesville Basin. Its Haynesville assets are near Comstock’s, making the merger a strategic move, executives said in a Monday conference call.Chesapeake Energy first discovered gas in the Haynesville Basin back in 2008. Since then, companies have flocked to the region.The U.S. Geological Survey estimates there are 304 trillion cubic feet of recoverable natural gas in the Haynesville Shale. That’s up from the 61.4 trillion cubic feet estimated in 2010.  Continue reading...