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Comstock 2016 South Texas Conventional Gas Divestiture
$1.50
$1.70
$1.90
$2.10
$2.30
$2.50
$2.70
$2.90
$3.10
$3.30
$3.50
($100)
$0
$100
$200
$300
$400
$500
$600
$700
$800
Jan-
15
Feb-
15
Mar
-15
Apr-1
5
May
-15
Jun-
15
Jul-1
5
Aug-
15
Sep-
15
Oct
-15
Nov
-15
Dec
-15
Jan-
16
Feb-
16
Mar
-16
Apr-1
6
Henry H
ub ($/mm
btu)
Mon
thly
Net
Ope
ratin
g C
ash
Flow
($M
)
Fandango Javelina Las HermanitasRosita Other Henry Hub
Opportunity Overview Complete exit from region for Comstock Long-life, shallow decline, legacy natural gas assets located primarily in
Duval, Hidalgo, Kenedy, McMullen, and Zapata counties, Texas Located in the heart of the Tertiary-aged Wilcox and Vicksburg plays Multi-zone, stacked pay potential Major operated fields include the prolific Fandango, Rosita, Javelina, and
Las Hermanitas, which have cumulatively produced over 1 tcfe 9,903 net acres (20,552 gross acres) – 100% HBP Estimated April 2016 net production of ~10.6 mmcfe/d from ~120 gross
producing wells with a PDP R/P of ~14 years 9% next 12-month decline ~109 bcfe proved reserves
Quantified opportunities include large inventory of low-risk workovers, uphole recompletions, and new drilling locations Unquantified opportunities include additional recompletions and
operational improvements
Estimated April CF: $291 m
January LOS coming soon
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Comstock 2016 South Texas Conventional Gas Divestiture
Property Summary
Note: NYMEX Henry Hub gas price (as of 07-Apr-16) of $2.31/$2.80/$2.88/$2.94/$3.06 per mmbtu for 2016/2017/2018/2019/2020. NYMEX WTI oil price (as of 07-Apr-16) of $39.77/$42.60/$44.57/$46.17/$47.52 per bbl for 2016/2017/2018/2019/2020. Oil and gas prices escalating 5% each year from 2021-2025 and held flat thereafter. 1. Effective working interest calculated by dividing net acres by gross acres.2. PDP NRI is the weighted average NRI (based on gross gas equivalent reserves).
April '16E Net
Field County Operator Gross Acres
Net Acres
Effective WI(1)
PDP NRI(2)
PDP Well
CountProduction Cash Flow Net Proved
ReservesNet Proved
PV-10
(%) (%) (mcfe/d) ($/month) (bcfe) ($mm)
Operated
Fandango Zapata Comstock 3,520 3,520 100% 78% 16 4,960 $187,362 61.0 $35.5
Rosita Duval Comstock 4,516 2,450 54% 41% 22 1,979 $23,216 28.8 $12.9
Javelina Hidalgo Comstock 966 966 100% 70% 17 1,763 $61,669 9.7 $6.7
Las Hermanitas Duval Comstock 813 813 100% 75% 11 1,097 $14,830 5.0 $2.4
Sub-Total 9,815 7,749 66 9,799 $287,078 104.5 $57.5
Non-Operated
Ball Ranch Kenedy Abaco 4,280 1,023 24% 16% 31 390 $48 1.0 $0.4
Dinn Ranch Duval Bluestone 640 96 15% 11% 6 189 $3,535 1.2 $0.6
Lopeno Zapata Bluestone / XTO 5,336 844 16% 14% 17 158 ($741) 1.8 $1.0
Lorenz Ranch McMullen Abaco 481 192 40% 21% 1 36 $705 0.2 $0.1
Sub-Total 10,737 2,155 55 772 $3,547 4.2 $2.1
Total 20,552 9,903 121 10,572 $290,625 108.7 $59.7
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Comstock 2016 South Texas Conventional Gas Divestiture
Key Investment Highlights – Significant Optimization Opportunities
Regional exit for Comstock
Divestment includes all South Texas conventional assets – all rights, all depths Company remains focused on Haynesville and Eagle Ford
Field staff and contractors available for hire, as needed
Assets undercapitalized
since 2009
Large portion acquired from
Majors
2007 Shell acquisition represents ~2/3 of PDP reserves
A fresh, total field study would likely uncover more upside potential than currently captured in database, as some of the upside analysis is dated
Significant operational
control
93% of net production is operated
Operated fields have very high average working interest (~80% based on net acres)
All lands HBP
Limited contractual requirements Minimal AMI obligations Product marketing contracts are generally evergreen
4
7 9
10
3
-- -- -- -- -- --2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Wel
ls D
rille
d
Company focus shifted to unconventionals
Minimal capital invested
Javelina (Abaco)
Ball Ranch, Lorenz Ranch
(Abaco)
2001 2005 2006 2007
Ball Ranch, Lopeno(DevX)
Las Hermanitas(Denali)
Fandango, Rosita, Dinn Ranch
(Shell)
LegendField
(Seller)
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Comstock 2016 South Texas Conventional Gas Divestiture
Key Investment Highlights – Significant Upside PotentialLow-risk proved upside
Significant workover and recompletion opportunities
Remain cash flow positive while executing low-risk development plan Multi-year, one-rig workover and recompletion program followed by new
drilling
De-risked opportunities
Workovers supported by historical production, wellwork histories, analogworkovers, production logs, well logs, flow-back tests, etc.
Recompletions supported by pay maps, well logs, and historical producers
164 square miles of seismic available to review in Comstock’s office Available to relicense
Drilling opportunities
Drilling opportunities target known pay supported by well control and offset production
Highest value PUD is a low-risk re-drill of a junked wellbore
Operational improvements
Ramp up slickline surveillance to identify acid job and cleanout candidates
Compression consolidation and optimization
Foam lift optimization (continuous injection)
SWD
Product marketing opportunities
Well Summary
Capex vs. Cash Flow
0
5
10
15
2016 2017 2018 2019 2020
Wel
l Cou
nt /
Yea
r
New Drill Recomplete Workover
--
$50
$100
$150
$200
--
$5
$10
$15
$20
2016 2017 2018 2019 2020
Cum
ulat
ive
Cas
h Fl
ow ($
mm
)
Annu
al C
apex
/EB
ITD
A/C
F ($
mm
)Capex EBITDA CF Cum. CF
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Comstock 2016 South Texas Conventional Gas Divestiture
1.5%
98.5%
Oil Gas
10.6 mmcfe/d
77%
21%
2%
Wilcox Vicksburg Other
10.6 mmcfe/d
93%
7%
Operated Non-Operated
10.6 mmcfe/d
47%
19%
17%
10%7%
Fandango RositaJavelina Las HermanitasOther
10.6 mmcfe/d
($0.4)
($0.2)
--
$0.2
$0.4
$0.6
$0.8
--
5
10
15
20
25
30
35
40
Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16
Cas
h Fl
ow ($
mm
)
Prod
uctio
n (m
mcf
e/d)
Total Production Henry Hub Monthly PDP Cash Flow
Ad Val Tax
Last LOS Data31-Dec-16
Effective Date01-Apr-16
Historical Forecast
Key Investment Highlights – Stable Production and Cash Flow HISTORICAL & FORECASTED NET PDP PRODUCTION & CASH FLOW
APRIL 2016E NET PRODUCTION
BY FIELD AREA BY OPERATORSHIP BY COMMODITY BY FORMATION
--
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
Hen
ry H
ub ($
/mm
btu)
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Comstock 2016 South Texas Conventional Gas Divestiture
Geological Overview All of the asset reservoirs are Tertiary-aged
Seven of the eight field areas lie within the highly prolific South Texas Downdip Wilcox and Vicksburg trends Multiple pays in fields due to stratigraphic variation Reservoirs are all over-pressured
Producing zones are all conventional-type reservoir plays
Production is primarily gas
164 square miles of seismic available to review in Comstock’s office
STRAT COLUMN
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Comstock 2016 South Texas Conventional Gas Divestiture
Major Operated FieldsFandango
Largest field by net production and net acreage
Net Production: 5.0 mmcf/d (April 2016E)
16 active producing wells
Produces from the Wilcox formation at a depth of about 14,500’ to 15,500’
3,520 gross acres, 3,520 net acres (100% WI, 80.5% NRI)(1)
Located primarily in Zapata County, Texas
Acquired from Shell in 2007
5 leases operated primarily by Comstock
Field is a rollover anticlinal feature created by a large down-to-the-east listric growth fault lying immediately to the west
Over-pressured and porosities up to 20%
Rosita
Net Production: 2.0 mmcf/d (April 2016E) from multiple Wilcox Sands
22 active producing wells
Produces from the Wilcox formation at depth around 12,500’-13,000’
Located in Duval County, Texas
Acquired from Shell in 2007
4,516 gross acres, 2,138 net acres (54.2% WI, 81.3% 8/8ths NRI)(1)
18 leases operated by Comstock
Soft sediment deformation by smaller synthetic listric faults break up the overall structure into a series of large slump block features
Fine-grained and low perm with high clay content and variable porosities
Javelina
Net Production: 1.8 mmcfe/d (April 2016E)
17 active producing wells
Produces from the Vicksburg formation at a depth of about 10,500’ to 11,500’
Located in Hidalgo County, Texas
966 gross, acres, 966 net acres (100% WI, 84.2% NRI)(1)
Acquired from Abaco in 2005
11 leases operated by Comstock
Over-pressured causing well developed secondary porosity away from major fault planes
Las Hermanitas
Net Production: 1.1 mcfe/d (April 2016E)
11 active producing wells
Produces from the Wilcox formation at depth around 11,000’-12,000’
Located primarily in Duval County, Texas
813 gross acres, 813 net acres (100% WI, 75% NRI)(1)
Acquired from Denali in 2006
5 leases operated primarily by Comstock
1. Based on leases (8/8ths NRI calculated as lease/well NRI divided by associated working interest).
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Comstock 2016 South Texas Conventional Gas Divestiture
Category Count Net Oil Net Gas Net Total Net Capex Net PV-10 Dev. Costs(mbbl) (mmcf) (mmcfe) ($mm) ($mm) ($/mcfe)
PDP 121 119 53,723 54,438 -- $38.5 n.a.
PDNP 9 -- 21,407 21,407 $5.0 $15.1 $0.23
PBP 16 -- 25,391 25,391 $7.9 $5.5 $0.31
PUD 1 -- 7,500 7,500 $10.6 $0.7 $1.41
Total Proved 147 119 108,021 108,736 $23.4 $59.7 $0.43PROB 9 1 15,565 15,569 $8.1 $7.0 $0.52
POS 6 1 7,364 7,369 $3.5 $4.7 $0.48
3P Total 162 121 130,950 131,675 $35.1 $71.4 $0.45
Estimated Net Reserves and Present Value (PV-10) – Total SummaryComstock Reserve Report as of April 1, 2016
NET 3P RESERVES BY PRODUCTNET 3P PV-10 BY CATEGORY NET 3P RESERVES BY FIELD
54%
21%
8%1%
10%6%
PDP PDNP PBPPUD PROB POS
Net 3P PV-10 $71.4 mm
0.6%
99.4%
Oil Gas
Net 3P Reserves 99.4% gas 52%
30%
7%7%4%
Fandango RositaJavelina Las HermanitasNon-Op Fields
Net 3P Reserves 131,675 mmcfe
Note: NYMEX Henry Hub gas price (as of 07-Apr-16) of $2.31/$2.80/$2.88/$2.94/$3.06 per mmbtu for 2016/2017/2018/2019/2020. NYMEX WTI oil price (as of 07-Apr-16) of $39.77/$42.60/$44.57/$46.17/$47.52 per bbl for 2016/2017/2018/2019/2020. Oil and gas prices escalating 5% each year from 2021-2025 and held flat thereafter. Excludes 2 PDNP, 2 PBP, 9 PUD, 15 PROB, and 18 POS upside cases that are not PV-10+ at the current price deck.Marginal PDP wells that are currently cash-flow negative are forced to run for 4 months.
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Comstock 2016 South Texas Conventional Gas Divestiture
Additional Transaction InformationConfidentiality Agreement Download at http://datarooms.bmo.com Email signed copy to [email protected] Materials Reserve and Net LOS data currently available Full evaluation data available week of April 11, 2016 Includes supporting documents such as land, commercial
assumptions, and technical support Comstock Reserve Report in ARIESData Rooms (Houston, TX) Opens April 4, 2016 After executing a Confidentiality Agreement, please contact Chelsea
Neville at [email protected] (713-546-9703) to schedule a Data Room appointment
Additional Questions & Inquiries Submit to [email protected] Offers Due early May Bid Instructions will be provided to participants prior to Bid Date
These materials are confidential and proprietary to, and may not be reproduced, disseminated or referred to, in whole or in part without the prior consent of BMO Capital Markets (“BMO”). These materials have been prepared exclusively for the BMO client or potential client to which such materials are delivered and may not be used for any purpose other than as authorized in writing by BMO. BMO assumes no responsibility for verification of the information in these materials, and no representation or warranty is made as to the accuracy or completeness of such information. BMO assumes no obligation to correct or update these materials. These materials do not contain all information that may be required to evaluate, and do not constitute a recommendation with respect to, any transaction or matter. Any recipient of these materials should conduct its own independent analysis of the matters referred to herein.BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. (member FDIC), Bank of Montreal Ireland p.l.c, and Bank of Montreal (China) Co. Ltd and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC) in the U.S., BMO Nesbitt Burns Inc. (Member Canadian Investor Protection Fund) in Canada and Asia and BMO Capital Markets Limited (authorised and regulated by the Financial Conduct Authority) in Europe and Australia. “Nesbitt Burns” is a registered trademark of BMO Nesbitt Burns Inc., used under license. “BMO Capital Markets” is a trademark of Bank of Montreal, used under license. "BMO (M-Bar roundel symbol)" is a registered trademark of Bank of Montreal, used under license. ® Registered trademark of Bank of Montreal in the United States, Canada and elsewhere. ™ Trademark of Bank of Montreal in the United States and Canada.BMO does not provide tax or legal advice. Any discussion of tax matters in these materials (i) is not intended to be used, and cannot be used or relied upon, for the purposes of avoiding any tax penalties and (ii) may have been written in connection with the “promotion or marketing” of the transaction or matter described herein. Accordingly, the recipient should seek advice based on its particular circumstances from an independent tax advisor.All values in this document are in US$ unless otherwise specified
BMO Capital Markets – Project Team
Disclaimer
Geoff RobertsMD / Head of US A&[email protected]
Dan SchocklingDirector / [email protected]
Howard BarnwellDirector / Transaction [email protected]
Sherri ClarkSenior [email protected]
Eric MonusVP / [email protected]
Bids due early May
Data Room presentations
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MAY 2016
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