Comstock and Bois d'Arc form Offshore Exploration Joint Venture
Comstock Resources, Inc. announced that on July 31, 2001 Comstock entered into a new exploration agreement with Bois d'Arc Offshore, Ltd. which replaces the earlier exploration agreement from 1997.
The 2001 Exploration Agreement establishes a joint exploration venture between Comstock and Bois d'Arc covering the state coastal waters of Louisiana and Texas and corresponding federal offshore waters in the Gulf of Mexico. The new venture is effective April 1, 2001 and will end on December 31, 2006. Under the joint venture, Bois d'Arc will generate exploration prospects in the Gulf of Mexico utilizing 3-D seismic data and their extensive geological expertise in this region. Comstock will advance funds for the acquisition of 3-D seismic data and leases as needed. After a prospect is identified, Comstock will be reimbursed for the costs that were advanced and will be entitled to a 40% non-promoted working interest in each prospect. Bois d'Arc will have the opportunity to earn warrants to purchase up to 1,620,000 shares of the common stock of Comstock. Warrants to purchase 60,000 shares are earned by Bois d'Arc for each prospect which results in a successful discovery. The exercise price on the new warrants will be determined based on the current market price for Comstock's common stock on a semiannual basis each year that the venture is in operation.
Since Comstock began its exploration program with Bois d'Arc in early
1998, Comstock and Bois d'Arc have drilled 39 offshore wells. Of the 39 wells drilled to date with Bois d'Arc, 26 were successful for a 67% success rate. In 2001 alone, Comstock has drilled nine successful wells under the exploration program with Bois d'Arc out of eleven wells for a success rate of 82%.