Billionaire Jerry Jones is making a mint off of surging natural gas prices precipitated by extreme winter weather conditions in the southern and central United States.
Jones’ company Comstock Resources Inc. has been selling natural gas at premium prices in recent days.
Based in Frisco, Texas, Comstock Resources focuses on exploration and production of oil and natural gas in north Louisiana and east Texas. According to the company’s website, it has approximately 2,000 drilling locations on its Haynesville/Bossier shale locations.
Comstock’s Haynesville Shale wells have continued producing while other natural gas producers have been literally frozen out of busienss. As a result, Jones and Comstock have benefitted from a squeeze on natural gas prices. According to Bloomberg, natural gas prices at the Oneok Gas Transportation Hub in Oklahoma were $1,250 per milion British thermal units, an increase from Tuesday’s price of $999 per million British thermal units. By contrast, prices were only $9 per million British thermal units a week ago. Bloomberg also reports that the Henry Hub in Louisiana had substanial increases, trading natural gas at $20 per unit on Wednesday and $16.13 on Tuesday, compared to only $3.73 a week ago.
Roland Burns, chief financial officer for Comstock, told investors that natural gas from Comstock’s Hayesville Shale wells had been sold for $15 to $179 per thousand cubic feet., or $15.55 to $186 per million British thermal units.
“This week is like hitting the jackpot with some of these incredible prices,” Burns said in an earnings call on Wednesday. “Frankly, we were able to sell at super premium prices for a material amount of production.”
Comstock’s stock price has risen sharply this week, fueled by the natural gas demand. Starting the week in the $5.60 range, Comstock’s stock price rose to the high $5.70 range on Tuesday before vaulting past $6 per share on Wednesday On Thursday, Feb. 18, the stock reached a value of $6.42 per share.
The stock has since fallen to $5.98 as of Friday at 12 p.m.
This comes as the natural gas squeeze has ended with rising temperatures. According to Yahoo! Finance, Oneok Gas Transportation Hub was selling natural gas at $4 per million British thermal units on Thursday. According to FX Empire, natural gas markets have turned downwards past the $3 mark on Friday as energy companies begin ramping up supply.
Jones, the Dallas Cowboys owner and a former Arkansas Razorback, is the largest investor in Comstock at roughly 75 percent, according to Reuters. In 2018, Jones sold the company North Dakota wells for a controlling interest in Comstock, the Wall Street Journal reports.
Comstock paid $1.1 billion in 2019 to buy Covey Park, which tripled Comstock’s production in the Haynesville Shale, according to Reuters.
Image courtesy of Dallas Cowboys