CRK - Comstock Resources: Increasing Liquidity Through Additional Notes And Equity Investments

2024-04-21 11:26:16 ET

Summary

• Comstock received an equity investment of just over $100 million from Jerry Jones.
• The backing of the Jones family reduces Comstock's debt risk, but also can result in dilution at relatively low share prices.
• Comstock also issued $400 million in 6.75% unsecured notes due 2029 at 93% of par.
• I now estimate Comstock's value at $10.25 per share.
• Comstock's unsecured notes are yielding over 8% to maturity and appear to have decent potential.

Comstock Resources ( CRK ) received an equity investment of just over $100 million from Jerry Jones and also issued $400 million in 6.75% unsecured notes due 2029 at 93% of par. These moves help maintain Comstock's liquidity (clearing out the majority of its credit facility borrowings) at a time when low natural gas prices are leading to near-term cash burn....

For further details see: