Comstock Resources, Inc. · NYSE:CRK
Comstock Resources — Merger or Acquisition (June 2019)
17 slides from Comstock Resources's merger presentation, Jun 10, 2019
Slide 1: Acquisition of Covey Park Energy Creates Haynesville Basin Leader
NYSE:CRK June 10, 2019 Acquisition of Covey Park Energy Creates Haynesville Basin Leader Exhibit 99.1
Slide 2: Disclaimer
Disclaimer This presentation may contain certain “forward-looking statements”, including certain plans, expectations, goals, projections, and statements about the benefits of the proposed transaction, Comstock Resources’ plans, objectives, expectations and intentions, the expected timing of completi
Slide 3: Transformational Haynesville Shale Acquisition
Transformational Haynesville Shale Acquisition Combination creates the basin leader in the Haynesville, a premier natural gas basin with superior economics and geographic proximity to Gulf Coast Industry leading margins and well economics that support growth and debt reduction Conservative operating
Slide 4: Covey Park Acquisition Overview
Covey Park Acquisition Overview Cash and stock transaction valued at ~$2.2 billion Covey Park’s equity owners will receive: $700 million cash $210 million of newly issued perpetual convertible preferred stock 28.8 million shares of newly issued CRK common stock Transaction Structure and Consideratio
Slide 5: Comstock Becomes Basin Leader
Comstock Becomes Basin Leader Substantial Scale in the Haynesville Robust Combined Inventory Industry-Leading Margins Low-Cost Flexible Gas Marketing Significant Synergies Improving Balance Sheet Over 1.1 Bcfe/d of net production EBITDAX of $935 million ¹ 5.4 Tcfe of SEC proved reserves 290,000 net
Slide 6: Complementary Haynesville Shale Acreage
Complementary Haynesville Shale Acreage Comstock Covey Park Haynesville Bossier Combined, over 94% of the acreage is held by production with an average working interest of 77% Haynesville / Bossier Acreage Robertson County
Slide 7: Creating the Largest Producer in the Haynesville with Significant Scale
Creating the Largest Producer in the Haynesville with Significant Scale Pro Forma proved reserves as of 12/31/18 based on 3rd party engineering; based on weighted-average adjusted prices of $61.23 / bbl and $2.92 / Mcf for oil and natural gas, respectively
Slide 8: Combination Materially Enhances Comstock's Financial, Operational and Credit Metrics
Combination Materially Enhances Comstock’s Financial, Operational and Credit Metrics Actual 1Q’19 PF 1Q’19 Daily Production (MMcfe/d) LQA Adjusted EBITDAX ($MM) PV-10 ($MM) Proved Reserves (Tcfe) ³ Lifting Costs ($/Mcfe) 2 Proved Net Asset Value Per Share 1 Total Debt to LTA Adjusted EBITDAX Debt to
Slide 9: Robust Combined Inventory of De-Risked, High-Return Drilling Locations
Robust Combined Inventory of De-Risked, High-Return Drilling Locations Combined Operated Wells Drilled Since 2015 Significant inventory of extended lateral wells combined with strong EBITDAX margins support overall capital efficiency efforts and drive improved corporate returns Combined Haynesville
Slide 10: Limited Basis Risk Due to Proximity to Henry Hub
Limited basis risk due to close proximity to Henry Hub Lowest in-basin gathering, treating and transport costs of 26¢ per Mcfe Extensive gathering and transportation pipeline network with ample capacity to handle incremental volumes No unmet minimum volume commitments Insignificant exposure to legac
Slide 11: Low Cost Structure and High EBITDAX Margin
Low Cost Structure and High EBITDAX Margin Best-In-Class Cost Structure of Gas Producers Leading Margins Compare Favorably to Both Permian and Gas-Weighted Names Source: Public filings Note: Financial metrics based on Q1’19 reported actuals; Pro forma CRK reflects pro forma estimated G&A savings of
Slide 12: Combined Company Boasts Significant Scale and Resource Depth
Combined Company Boasts Significant Scale and Resource Depth SPE Proved by Category PV-10 $4,112MM 1P Reserves 5,364 Bcfe SEC Reserves ¹ SPE Reserves ¹ SEC Proved by Category PV-10 $4,751MM 1P Reserves 7,576 Bcfe Note: Reserves calculated based on weighted-average adjusted prices of $61.23 / bbl and
Slide 13: Drilling Plan and Production Guidance
Drilling Plan and Production Guidance 2019E and 2020E Drilling Plan Management Guidance Assumes forecast of $55.00/bbl WTI and $2.60/Mcf natural gas 2020E capital program targets generating free cash flow of $75 - $100 million ¹
Slide 14: Pro Forma Capitalization
($ in millions) As of 3/31/19 Pro Forma Cash and cash equivalents $29 $29 Revolving Credit Facility $470 $1,268 7¾% Senior Notes due 2025 - 625 9¾% Senior Notes due 2026 850 850 Total Debt (at face amount ) $1,320 $2,743 Preferred Equity $ - $385 Common Equity 570 1,015 Total Equity $570 $1,400 Tota
Slide 15: Perpetual Convertible Preferred Equity Rationale
Perpetual Convertible Preferred Equity Rationale Flexible, balance sheet friendly acquisition financing Additional investment from Jerry Jones Ongoing commitment from Denham Capital, a leading energy focused private equity firm Terms $210 million provided by Denham Capital (Series A) $175 million pr
Slide 16: Comstock Financial Strategy
Comstock Financial Strategy Drill within operating cash flow and emphasize free cash flow generation Targeting a leverage ratio of ~2.0x by 2021 Best-in-class cost structure and EBITDAX margins combined with disciplined capital program allows us to de-lever even in low natural gas price environment
Slide 17: Combined Oil and Gas Hedging Program
Combined Oil and Gas Hedging Program Comstock targets having 50% to 60% of its future twelve months oil and gas production hedged Natural Gas Hedges (Mcfe/d) Oil Hedges (Boe/d) Contracts are per MMbtu at an index price based on the NYMEX-Henry Hub monthly future prices Average floor price - $2.25 to
Comstock Resources — Merger or Acquisition (June 2019) on 6ix