Comstock in talks to buy Chesapeake's Haynesville assets - Reuters

Nov. 13, 2019 7:27 AM ET|About: Comstock Resources, Inc. (CRK)|By: Carl Surran, SA News Editor

Comstock Resources (NYSE:CRK) is in late-stage discussions to buy Chesapeake Energy's (NYSE:CHK) Haynesville shale assets in Louisiana in a deal that could be worth more than $1B, Reuters reports.

The companies have settled on a structure for the deal and hope to reach an agreement by the end of the year, according to the report.

CHK has been reducing its activity in the Haynesville region and said last week it was releasing its rigs and completion crews for the rest of the year.

CRK became the largest operator in Haynesville after buying privately held Covey Park in a $1.1B deal in June.

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WOW!  I hope Comstock doesn't buy all of the Chesapeake grief and can survive low natural gas prices.  best of luck!

Don't bet against Jerry.  CHK stock is at 67 cents a share the last I looked.  Buying at the right price is crucial to weathering protracted depressed natural gas prices.

obviously, this is great news

Ain't a done deal quite yet.  Fingers crossed.

Skip:  I hope it works out for Jerry and his shareholders

I hope it works out for CHK mineral lessors and to the benefit of all mineral and royalty interests in  the Haynesville Basin and for the benefit of those in all other gassy basins.  The only avenue out of this over production maze is through consolidation.  That's where Jerry is headed.  The larger the operator, the lower the cost to produce an mcf.  Economies of scale and ability to get the lowest service and material costs.  Less debt service and more free cash flow.  Easier access to credit through better management and more stable prices.  Equity investors get a better return and operating companies and mineral lessors get an improved price on their natural gas.  Supply better balanced to demand. 

yes agreed.

Hi Skip, Do you know of anyone needing to buy my 10 acres? Petty Lane Bossier City  Louisiana ? or Gas?

thanks,

Lorrie

Not at this time.  That might change in the future if the 18 North townships in west Caddo Parish turn out to be economic.  The area west of and including the western half of Cross Lake will see new version horizontal wells in the near future.  That might, and it's a strong "might", influence interest in the 18 North townships in Bossier Parish.  We will have to wait patiently and see how the step out efforts in Caddo turn out.

Exclusive: Comstock in talks to buy Chesapeake's Haynesville assets - sources

Arathy S Nair reuters.com

 (Reuters) - Dallas Cowboys owner Jerry Jones’ Comstock Resources is in talks to buy Chesapeake Energy Corp’s Haynesville shale assets in Louisiana, according to two people familiar with the matter.

A deal could be worth more than $1 billion, one of the people said, adding that the companies have settled on a structure for the deal and hope to reach an agreement by the end of the year.

The people declined to be identified because the talks are confidential. They said there was no guarantee the talks would be concluded successfully and that the deal could still be subject to change.

Comstock and Chesapeake did not respond to emails, phone calls and messages requesting comment on the deal.

Debt-laden Chesapeake, once the second-largest U.S. natural gas producer, warned last week it may not be able to continue as a going concern as it struggles with falling prices for natural gas.

Shares in the company have fallen for six straight sessions since and, after they fell another 17% on Tuesday, the company issued a statement saying it was pursuing “strategic levers to reduce debt, including asset sales, capital markets transactions, and focus on cost discipline.”

Shares of the Oklahoma City-based company are now worth around 67 cents, compared to a peak of just below $70 in 2008. It has about $9.7 billion in total net debt and warned it may breach covenants if commodity prices do not rebound next year.

A deal with Comstock would see Chesapeake depart from the shale region that it helped bring to prominence in 2008 with discoveries that led it to claim the area could hold 20 trillion cubic feet equivalent of potential reserves.

Chesapeake has been reducing its activity in the Haynesville region and last week said it was releasing its rigs and completion crews for the rest of the year. In the third quarter ended Sept. 30 it said production from the field was 694 million cubic feet of gas per day.

Jones’ Comstock became the largest operator in Haynesville after buying privately held Covey Park in a $1.1 billion deal in June.

Comstock shares have risen 52% so far this year, while Chesapeake shares have fallen 68%.

Comstock / Jerry Jones playing long ball on all these natural gas assets. Their Eagle Ford S Tx assets will kick in sufficient liquid cash flow to add $$ to their coffers.

Based on what I understand about JJ, I would not be surprised to end up finding out that he has cut some major LNG deals to take gas international - at a hedged positive premium.

I read that BP has a 20-year contract with Freeport to liquefy nat gas and BP has invested in 5 tankers to export to foreign markets.  I've also heard there are other plants coming on line, maybe as early as 2020. If that is the case, wouldn't these plants coming on line be a game changer?

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