Comstock Resources has agreed to purchase certain oil and gas properties from SWEPI LP, an affiliate of Shell Exploration & Production for $170.0 million, effective October 1, 2007. With the acquisition, Comstock will acquire producing properties in the Dinn Ranch, Fandango, Rosita, and Rosita East fields in Duval and Zapata counties in South Texas on 11,500 (7,600 net) acres. The properties being acquired include 70 (43.3 net) producing wells that are currently producing approximately 21.9 million cubic feet of natural gas per day. Comstock estimates that these properties have net proved reserves of approximately 57.8 billion cubic feet ("Bcf") of natural gas. All of the proved reserves are in the developed category. In addition to the proved reserves, Comstock estimates that the properties could yield an additional 90 Bcf of resources potential from future exploitation. The transaction is expected to close in December 2007 and will be funded with borrowings under Comstock's $600.0 million bank credit facility.
"This transaction expands our presence in our South Texas operating region, which is making a substantial contribution to our onshore production and reserve growth this year," stated M. Jay Allison, President and Chief Executive Officer of Comstock.