Bois d'Arc Energy Inc., Houston, could sell for some $24 per share "but 12% to 17% upside is not overly enticing given the risk (albeit small) that it doesn't find a buyer," Dan Pickering and team at Tudor, Pickering & Co. Securities Inc. report.

Comstock Resources Inc., Frisco, Texas, holds approximately 50% of BDE shares. Scotia Waterous and Raymond James & Associates are handling Bois d'Arc's strategic-alternatives review. Current expectations are of a sale within a couple of months.

The company's assets are offshore Louisiana and Texas, including interests in 44 oil wells and 67 gas wells. Proved reserves on June 1 were approximately 404 billion cubic feet of gas equivalent, up from some 344 billion equivalent at year-end 2006.

Its recent Gulf of Mexico well news is worth $1 per share alone, Pickering and team report. "Butch Cassidy could be as big as 90-plus billion cubic feet equivalent-$4-plus per share at $3 per thousand cubic feet equivalent-but that will take production and additional wells to confirm.

"We think buyers would be unwilling to pay for this potential, given it won't be appraised or tested until months after the strategic review is over. Bois d'Arc expects to go ahead with their strategic review this year as planned, rather than hold the sale to get additional well results."

The Butch Cassidy well is OCS-G-27155 #1 at South Timbalier 81, drilled to test the ultradeep prospect to a total true vertical depth of 20,029 feet. It encountered commercial pay in the objective reservoir.

Bois d'Arc reports additional drilling may be required to determine the extent of the discovery. Butch Cassidy and the Walleye prospect discoveries add approximately 32 billion cubic feet equivalent of gas to the company's June 1 proved reserves of 404 billion equivalent.

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