FRISCO, TX - Comstock Resources, Inc. (NYSE: NYSE:CRK), a prominent natural gas producer, announced its intention to offer $375 million in senior notes with a 6.75% interest rate, due in 2029. The offering, which is dependent on market conditions, is aimed at eligible purchasers through a private placement.
The new debt issuance, termed as the New Notes, will be similar to the company's existing 6.75% senior notes due in 2029, of which there is currently $1,223.9 million in aggregate principal amount outstanding. Despite their similarity, the New Notes will have their own CUSIP number and be issued under a different indenture compared to the Original Notes.
Comstock's strategy for the proceeds from the sale of the New Notes is to repay a portion of its outstanding borrowings under the company's bank credit facility and to cover the related fees and expenses.
These New Notes have not been registered under the Securities Act of 1933 or any state securities laws. Consequently, they may not be offered or sold within the United States absent registration or an applicable exemption from such registration requirements. The offering is expected to be made available to qualified institutional buyers and non-U.S. persons in accordance with Rule 144A and Regulation S, respectively.
Comstock Resources is recognized for its focus on the Haynesville shale in North Louisiana and East Texas. The information in this press release is based on a press release statement and includes forward-looking statements that are subject to various risks and uncertainties.
InvestingPro Insights
As Comstock Resources (NYSE: CRK) maneuvers through the financial markets with its latest senior notes offering, investors are closely monitoring the company's financial health. The natural gas producer's current market capitalization stands at approximately $2.72 billion USD, reflecting investor sentiment and market valuation of the company's stock.
InvestingPro data reveals a Price to Earnings (P/E) ratio of 12.23, which offers a glimpse into how the market values each dollar of CRK's earnings. A more nuanced picture is painted by the adjusted P/E ratio for the last twelve months as of Q4 2023, which is slightly higher at 12.88. This could suggest that investors are expecting stable future earnings relative to the company’s share price. Additionally, Comstock's Price to Book (P/B) ratio during the same period is 1.15, indicating that the stock is trading close to its net asset value.
However, two InvestingPro Tips raise concerns for potential investors. Comstock Resources is flagged for operating with a significant debt burden and for quickly burning through cash. These insights are particularly relevant given the context of the company's intention to issue more debt. The company's short-term obligations exceeding its liquid assets could further strain its financial flexibility.
For those considering an investment in Comstock Resources or seeking a deeper understanding of its financial position, there are additional InvestingPro Tips available. These include details on analyst earnings revisions, stock technicals like the Relative Strength Index (RSI), and projections about the company's profitability. With a total of 7 more InvestingPro Tips accessible, investors can gain a comprehensive view of the company's financial standing.
To explore these insights further and to assist in making a more informed investment decision, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.