Business Context and Reporting Period
Comstock Resources, Inc. filed this Form 8-K on May 16, 1995, to report a material acquisition. The Company entered into a purchase and sale agreement with Sonat Exploration Company, a subsidiary of Sonat Inc., to acquire producing oil and gas properties and natural gas gathering systems in East Texas and North Louisiana.
Key Financial Metrics and Transaction Details
- Total Consideration: $51.25 million.
- Asset Breakdown: $49.75 million for 330 oil and gas wells (180 net) and $1.5 million for interests in the Crosstex Pipeline System and gathering systems.
- Production Capacity: Properties produce 50 million cubic feet of gas per day (20 million net) and 510 barrels of oil per day (233 net).
- Reserves: Estimated proved reserves as of March 1, 1995, include approximately 102 billion cubic feet of natural gas and 848,000 barrels of oil.
- Operations: Comstock will operate 248 of the acquired wells.
Material Changes and Closing Conditions
The acquisition represents a significant expansion of the Company's asset base. Closing is anticipated on or about July 31, 1995. The transaction is subject to governmental approvals and Board of Directors' approval by both Comstock Resources, Inc. and Sonat Inc.
Guidance, Outlook, and Financial Statements
The filing states that it is impracticable to file the required financial statements and pro forma financial information at this time. These documents will be filed by amendment to this Report on Form 8-K as soon as practicable. No specific guidance or management commentary regarding future earnings or cash flow impacts was provided in this text.
Investor Verification Checklist
- Verify the receipt of the amended Form 8-K containing the required financial statements and pro forma information.
- Confirm the final closing date and the receipt of all necessary governmental and Board approvals.
- Review the detailed terms of the Purchase and Sale Agreement (Exhibit 2(a)) for any contingencies or earn-out provisions.
- Assess the impact of the $51.25 million expenditure on the Company's current liquidity and debt capacity.