Comstock Resources Inc. issued common stock on May 13 in what a RS Energy Group analyst described as a “rare public offering.”

The offering, comprised of 40 million shares, was priced to the public at $5 per share. Not including a 6 million-share greenshoe option, about $190.4 million of proceeds is expected from the issuance.

Initial plans for the proceeds included redeeming the $210 million of preferred shares owned by Denham Capital Management LP and the reduction of $1.25 billion outstanding on Comstock’s credit facility.

Denham had acquired the preferred shares as part of the sale of its portfolio company Covey Park Energy to Comstock last year. The cash and stock transaction, estimated to be worth roughly $2.2 billion, included the assumption of outstanding debt and retirement of existing preferred units.

The deal also included an investment from its shareholder and Dallas Cowboys owner Jerry Jones that resulted in Jones owning roughly 75% in the Frisco, Texas-based energy company focused primarily in the Haynesville shale gas play.

The issuance by Comstock creates an opportunity for equity exposure in the Haynesville Shale, which, according to RS Energy Group senior associate Jimmy McNamara, had been difficult after the Covey Park acquisition resulted in Jones and Denham gaining combined ownership of roughly 85% of Comstock stock.

“We believe [Comstock Resources] is attractive relative to gas peers based on its high-quality acreage, operatorship, inventory life and position to take advantage of strong gas pricing from late 2020 to late 2021,” McNamara wrote in a May 13 research note.

Comstock’s equity offering is expected to close on or about May 18, according to the company press release.

Citigroup, BMO Capital Markets, Mizuho Securities and Wells Fargo Securities are joint book-running managers for the offering with Citigroup acting as representative of the underwriters.

Co-managers of the offering include Fifth Third Securities, Regions Securities LLC, KeyBanc Capital Markets, Barclays, Capital One Securities Inc., Natixis, Citizens Capital Markets, CIT Capital Securities, Credit Agricole CIB, Goldman Sachs & Co. LLC, Huntington Capital Markets, Johnson Rice & Co. LLC, Société Générale SA, Tuohy Brothers, U.S. Capital Advisors and Hancock Whitney Investment Services Inc.

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