Daily News: July 17, 2019

BMO Agents $2.5B Revolver for Comstock Resources


Comstock Resources closed the acquisition of Covey Park Energy in a cash and stock merger valued at approximately $2.2 billion.

As part of this transaction Jerry Jones, owner of the Dallas Cowboys Football Club, invested $475 million in the company in exchange for 50 million newly issued shares of Comstock common stock valued at $6.00 per share and $175.0 million of newly issued shares of convertible preferred stock of Comstock. This equity investment brings Jones’ total investment in Comstock to approximately $1.1 billion.

Comstock also assumed Covey Park’s existing $625 million 7.5% senior notes, retired $380 million outstanding under Covey Park’s bank credit facility and redeemed all outstanding previously issued Covey Park preferred equity for $153.4 million.

The company also entered into a new $2.5 billion revolving credit facility with 18 banks. Bank of Montreal is serving as administrative agent for the five-year revolving credit facility which has an initial borrowing base of $1.575 billion. The company elected to set the committed borrowing base at $1.5 billion. The merger transaction was funded with the proceeds from the equity contribution from Jones and borrowings under the new bank credit facility.

Wells Fargo Securities acted as lead financial advisor to Comstock and BMO Capital Markets also acted as a financial advisor to Comstock and arranged the new bank credit facility. Locke Lord acted as legal advisor to Comstock. BofA Merrill Lynch and Barclays acted as lead financial advisors to Covey Park. Citigroup Global Markets and Goldman Sachs also provided financial advice to Covey Park. Vinson & Elkins acted as legal advisor to Covey Park.

Comstock is a growing independent energy company engaged in the acquisition, development, production and exploration of oil and gas properties primarily in Texas, Louisiana and North Dakota.