Comstock Resources (CRK) Update - May 14
Posted: Thu May 14, 2020 8:28 am
Cowboys Owner Jones’ Shale Driller Selling Shares; Stock Tumbles
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(Bloomberg) -- Comstock Resources Inc., the shale driller controlled by Dallas Cowboys owner Jerry Jones, plans to sell at least 40 million shares of common stock to redeem preferred convertible stock and reduce debt.
The offering announced late Wednesday would represent a 21% dilution to current investors; that expands to 24% if underwriters exercise the full option to purchase an additional 6 million shares. The stock tumbled 15% in after-hours trading.
The Frisco, Texas-based explorer offered to sell the new shares for $5 to $6 apiece, according to a person familiar with the matter, who asked not to be identified because they are not authorized to speak about it. That would represent a discount of as much 23% to Wednesday’s $6.50 closing price. The offering comes just a week after Comstock’s lenders lowered the driller’s borrowing base by 11% to $1.4 billion.
As recently as November, Jones said he was keen to expand his holdings in the natural gas-rich Haynesville shale region of Louisiana. Comstock’s output is 98% gas, which has insulated the company from the worst ravages of the unprecedented collapse in crude prices.
BUY THIS DIP
(Bloomberg) -- Comstock Resources Inc., the shale driller controlled by Dallas Cowboys owner Jerry Jones, plans to sell at least 40 million shares of common stock to redeem preferred convertible stock and reduce debt.
The offering announced late Wednesday would represent a 21% dilution to current investors; that expands to 24% if underwriters exercise the full option to purchase an additional 6 million shares. The stock tumbled 15% in after-hours trading.
The Frisco, Texas-based explorer offered to sell the new shares for $5 to $6 apiece, according to a person familiar with the matter, who asked not to be identified because they are not authorized to speak about it. That would represent a discount of as much 23% to Wednesday’s $6.50 closing price. The offering comes just a week after Comstock’s lenders lowered the driller’s borrowing base by 11% to $1.4 billion.
As recently as November, Jones said he was keen to expand his holdings in the natural gas-rich Haynesville shale region of Louisiana. Comstock’s output is 98% gas, which has insulated the company from the worst ravages of the unprecedented collapse in crude prices.