Comstock Resources to Acquire Assets from EnSight Energy
Comstock Resources has agreed to purchase certain oil and gas properties and related assets from EnSight Energy for $192.5 million, subject to adjustment. The transaction will be effective April 1, 2005 and is expected to close in May 2005. With the acquisition, Comstock will acquire producing properties in East Texas, Louisiana and Mississippi. Comstock estimates that the properties being acquired have proved reserves of approximately 120.2 billion cubic feet of gas equivalent. These reserves are 57% natural gas and 43% oil. Approximately 37% of the proved reserves are in the proved developed category. The undeveloped reserves primarily relate to 96 proved undeveloped locations to be drilled. Future development costs related to the properties are estimated to be 67 cents per thousand cubic feet of natural gas equivalent. In addition to the proved reserves, Comstock estimates that the properties being acquired have probable reserves of 85.6 Bcfe which relate to an additional 133 drilling locations not included in the proved reserves.
The properties being acquired include 240 active wells which are currently producing approximately 20 million cubic feet of natural gas equivalent per day. Comstock will operate 91 of these wells. The operated wells include 79 wells currently operated by EnSight in 16 separate fields in Louisiana, Texas and Mississippi and 12 wells in two fields in Louisiana currently operated by Comstock. The non-operated properties include 149 wells in 27 fields in Louisiana, Texas and Mississippi. The operated properties represent 92% of the proved reserves being acquired.
"The purchase from EnSight meets all of our criteria for an acquisition," stated M. Jay Allison, President and Chief Executive Officer of Comstock. "The transaction is in our core operating area, is primarily operated and has substantial upside from the 96 proved undeveloped drilling locations and the 328 probable and possible drilling locations in East Texas and North Louisiana."
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