Dallas Cowboys owner Jerry Jones on Monday purchased a Texas energy company for $2.2 billion, making his oil and natural gas firm a leading producer in one of the largest natural gas basins in the U.S.
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Jones’ company, Comstock Resources, struck a $1.1 billion cash-and-stock deal to acquire Covey Park Energy that includes the billionaire putting in $475 million for 50 million new Comstock shares at an agreed price of $6 per share, according to a news release. He is also purchasing $175 million of stock that can be later turned into common shares.
"At closing, Comstock will assume Covey Park's existing $625 million 7.5 percent senior notes, retire amounts outstanding under Covey Park's credit facility, and redeem all outstanding previously issued Covey Park preferred units," according to Comstock Resources.
Jones, who began doing business in the oil industry in the 1970s, compared purchasing the energy company to when he bought the Dallas Cowboys for $150 million in 1989, Forbes reported. Now, 30 years later, the football team is worth about $5 billion and considered the National Football League’s most valuable franchise by Forbes.
“I bought it [the team] when everything was down and out,” Jones said in a conference call, per Bloomberg. “This is opportune times, especially when you can deal with a world-class asset located where it is.”
The purchase will advance Comstock Resources’ position in Haynesville Shale, located in northeastern Texas and Louisiana and is the nation’s third-largest natural gas producer, U.S. Energy Information Administration reported.
Jones will remain Comstock’s biggest investor when the deal is completed. He agreed to take a majority stake in the firm last year for $620 million in stock when it bought his shares in Arkoma Drilling LP. Denham Capital, the private equity firm that invests in Covey Park, will hold a 16 percent stake.
"I am excited to provide the funding and to team up with Denham Capital to combine the two companies to create the basin leader in the Haynesville shale. This combination is another step toward completing my vision to create an industry leading natural gas company,” Jones said in an online statement.
The deal, expected to close on or before July 31, will double Comstock’s production and add another 1,000 drilling locations.