PROSPECTUS

                            COMSTOCK RESOURCES, INC.


                          85,687 Shares of Common Stock


     The 85,687 shares of common stock,  par value $.50 per  share (the "Common
Stock"),  of  Comstock  Resources, Inc.  (together  with  its subsidiaries,  the
"Company") covered  by this Prospectus are  being or will be  offered by certain
selling security  holders  (the  "Selling  Security  Holders").    See  "Selling
Security  Holders."  The  shares were  issued in lieu  of cash  dividends on the
Company's  Series 1995  Convertible  Preferred  Stock.   See  "Description of
Capital Stock  - Preferred Stock."  The Company will not receive any proceeds
from the sale of Common Stock offered hereby.

     The Selling Security Holders may offer their shares of Common Stock through
broker transactions or directly to prospective purchasers.  Such shares will  be
offered at the market  price or at prices that may be  negotiated by the Selling
Security Holders.  Brokers or dealers will receive commissions or discounts from
the Selling  Security Holders in amounts  to be negotiated immediately  prior to
sale.  See "Plan of Distribution."

     The Company's  Common Stock is quoted on the Nasdaq  National  Market under
the symbol CMRE. On April 2, 1996,  the last sale price of the Common Stock,  as
reported on the Nasdaq  National  Market,  was $5.1875 per share.  The shares of
Common Stock  offered  hereby  include  preferred  stock  purchase  rights.  See
"Description of Capital Stock - Stockholders' Rights Plan."

     The Company has  agreed to register the shares of  Common Stock offered and
to pay  the expenses of such  registration.  Such expenses,  including legal and
accounting fees,  are estimated to be  $5,000.  The Company intends  to keep the
registration  statement, of which  this Prospectus  is a  part, effective  for a
period of  twenty-four months or,  if earlier,  until all the  shares of  Common
Stock offered  hereby have been sold  or the Company  is no longer  obligated to
maintain such effectiveness.
                                   __________

     PROSPECTIVE PURCHASERS OF THE COMMON  STOCK OFFERED HEREBY SHOULD CAREFULLY
CONSIDER THE MATTERS SET FORTH UNDER "RISK FACTORS" HEREIN. 
                                   __________

     THESE  SECURITIES HAVE NOT BEEN  APPROVED OR DISAPPROVED  BY THE SECURITIES
AND  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES  COMMISSION  NOR  HAS  THE
SECURITIES AND  EXCHANGE COMMISSION OR  ANY STATE  SECURITIES COMMISSION  PASSED
UPON  THE ACCURACY OR  ADEQUACY OF THIS  PROSPECTUS.  ANY  REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
                                   __________

                                 April 3, 1996 


                              AVAILABLE INFORMATION

     The  Company is subject to the informational requirements of the Securities
Exchange Act  of  1934, as  amended  (the "Exchange  Act"), and,  in  accordance
therewith,  files reports and other information with the Securities and Exchange
Commission (the "Commission").  Reports, proxy and/or information statements and
other information filed by the Company may be inspected and copied at the public
reference  facilities maintained by the  Commission in Washington,  D.C., and at
certain  of  the regional  offices  of the  Commission.   The  addresses  of the
facilities  are:  Midwest Regional Office,  500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and New York Regional Office, 7 World Trade Center, New
York, New York 10048.  In addition, copies of such material can be obtained from
the  Public Reference  Section  of  the  Commission,  450  Fifth  Street,  N.W.,
Washington, D.C. 20549, at prescribed rates.

     The  Company  shall provide  without  charge to  each  person to  whom this
Prospectus is delivered, upon written or oral request by such person,  a copy of
any  and  all of  the  information that  is  incorporated by  reference  in this
Prospectus  (not including exhibits to  the information that  is incorporated by
reference unless such  exhibits are specifically incorporated  by reference into
the  information  that  the  Prospectus  incorporates).    These  documents  are
available upon request directed to:  Comstock Resources, Inc., 5005 LBJ Freeway,
Suite 1000,  Dallas, Texas  75244; telephone number  (214) 701-2000,  Attention:
Secretary.


                                TABLE OF CONTENTS

                                                                         PAGE 

Prospectus Summary  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Risk Factors  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Description of Capital Stock   .  . . . . . . . . . . . . . . . . . . . . . 7

Selling Security Holders  . . . . . . . . . . . . . . . . . . . . . . . .  14

Plan of Distribution  . . . . . . . . . . . . . . . . . . . . . . . . . .  16

Incorporation of Certain Information By Reference . . . . . . . . . . . .  16

Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

                                       2




                               PROSPECTUS SUMMARY                               
                                                                                
        The  following  summary is  qualified  in its  entirety by the  detailed
information appearing elsewhere or incorporated by reference in this Prospectus.
                                                                                
The Company                                                                     
                                                                                
     Comstock   Resources,   Inc.  is  primarily  engaged  in  the  acquisition,
development  and  production of oil and gas reserves in the United  States.  The
Company  owns  interests  in oil and gas wells  located  primarily  in Arkansas,
Louisiana (on and offshore), Nebraska, Oklahoma, and Texas.                     
                                                                                
        The Company was originally  organized as a Delaware  corporation in 1919
under the name Comstock  Tunnel and Drainage  Company for the primary purpose of
conducting gold and silver mining  operations in and around the Comstock Lode in
Nevada. In 1983, the Company was  reincorporated  under the laws of the State of
Nevada.  In November 1987, the Company  changed its name to Comstock  Resources,
Inc.                                                                            
                                                                                
        The  executive  offices of the Company are located at 5005 LBJ  Freeway,
Suite 1000, Dallas, Texas 75244 and its telephone number is (214) 701-2000.     
                                                                                
The Offering                                                                    
                                                                                
Common Stock Offered by the Selling Security Holders...........85,687 shares (1)
                                                                                
Common Stock Outstanding at April 2, 1996..................13,120,242 shares (2)
                                                                                
Nasdaq National Market Symbol...............................................CMRE
                                                                                
                                                                                
        (1) Represents  shares issued to the Selling Security Holders in lieu of
the payment of cash dividends on the Company's Series 1995 Convertible Preferred
Stock.                                                                          
                                                                                
        (2) At April 2, 1996, an additional 8,654,950 shares of Common Stock are
reserved for issuance  upon exercise of  outstanding  stock options and warrants
and the  conversion of the Series 1994  Convertible  Preferred  Stock,  the 1994
Series B Convertible  Preferred Stock and the Series 1995 Convertible  Preferred
Stock.                                                                          
                                                                                
                                  RISK FACTORS                                  
                                                                                
        Prior to making an investment  decision,  prospective  investors  should
consider fully, together with the other information contained in or incorporated
into this Prospectus, the following factors:                                    
                                                                                
Risk of Oil and Gas Operations                                                  
                                                                                
        The Company must continually  acquire or explore for and develop new oil
and gas  reserves  to  replace  those  being  depleted  by  production.  Without
acquisitions  or successful  drilling,  the  Company's  assets,  properties  and
revenues will decline over time. The Company's acquisition program assumes that 
                                                                                
                                        3
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
major and independent oil companies and individuals will continue to divest many
of their domestic oil and natural gas properties. There can be no assurance that
such divestitures will continue or that the Company will be able to acquire such
properties  on  acceptable  terms  or  have  capital   available  to  fund  such
acquisitions.  To the extent the Company  engages in drilling  activities,  such
activities carry the risk that no commercially viable oil or gas production will
be  obtained.  The cost of drilling,  completing  and  operating  wells is often
uncertain.  Moreover, drilling may be curtailed, delayed or canceled as a result
of many  factors,  including  weather  conditions  and shortages of or delays in
delivery of equipment.                                                          
                                                                                
        The  availability  of a  ready  market  for  the  Company's  oil and gas
production depends on numerous factors beyond its control,  including the demand
for and supply of oil and gas, the  proximity of the  Company's  gas reserves to
pipelines,  the capacity of such pipelines,  fluctuation in seasonal demand, the
effects of inclement weather and government regulations.                        
                                                                                
        The oil and gas business is subject to numerous  operating  hazards such
as explosions,  blowouts,  oil spills and other  disasters which could result in
substantial loss to the Company.  Offshore oil and gas operations are subject to
the additional  hazards of marine operations,  such as capsizing,  collision and
adverse  weather and seas. Any of these could result in damage or destruction of
drilling  rigs,  oil  and gas  wells  or  producing  facilities,  suspension  of
operations  or damage or injury to property and persons.  As is customary in the
industry,  the Company  maintains  insurance against some, but not all, of these
risks.                                                                          
                                                                                
Volatility of Oil and Natural Gas Prices                                        
                                                                                
        The Company's revenues, cash flow from operations and reserve valuations
are  significantly  affected  by  the  prices  received  for  its  oil  and  gas
production. Historically, the markets for oil and natural gas have been volatile
and are likely to continue  to be  volatile  in the  future.  Prices for oil and
natural gas are subject to wide  fluctuation in response to market  uncertainty,
changes in supply and demand and a variety of additional  factors,  all of which
are  beyond  the  control  of  the  Company.  These  factors  include  political
conditions  in the Middle East,  the foreign  supply of oil and natural gas, the
price of foreign  imports of oil, the level of consumer and  industrial  demand,
weather  conditions,  domestic and foreign government  relations,  the price and
availability of alternative fuels and overall economic conditions. The Company's
ability to acquire oil and gas properties at prices and upon terms acceptable to
the Company is significantly impacted by the recent volatility of prices for oil
and gas.  Generally,  during periods of depressed or falling prices, the Company
encounters  resistance  from  potential  sellers  to sell oil and gas  leases or
interests  at then  prevailing  market  prices.  Conversely,  during  periods of
escalating prices, the Company encounters  increased  competition in its efforts
to  acquire  oil and gas  properties  having  geologic  merit and at  reasonable
prices.                                                                         
                                                                                
Derivative Financial Instruments                                                
                                                                                
        The  Company  has  limited   involvement   with   derivative   financial
instruments and does not use them for trading purposes.  The Company uses energy
price swap agreements to hedge  anticipated  sales of natural gas production and
in its gas marketing activities.                                                
                                                                                
Conflicts of Interest                                                           
                                                                                
     The Company and certain of its affiliates,  including  certain officers and
directors of the Company,                                                       
                                        4                                       
                                                                                
                                                                          
                                                                                
                                                                                
have  historically  participated in various related party  transactions.  To the
extent that the  Company and its  affiliates  continue  to  participate  in such
related  party  transactions  in the  future,  certain  potential  conflicts  of
interest  may arise.  The  Company's  board of  directors  has  adopted a policy
providing that any transactions between the Company and its officers, directors,
principal  shareholders  or affiliates will be on terms no less favorable to the
Company than could have been  obtained  from  unaffiliated  third  parties on an
arms-length basis and such transactions,  if any, will be approved by a majority
of the Company's disinterested directors.                                       
                                                                                
Regulation                                                                      
                                                                                
        The  Company's  operations  are  regulated by certain  federal and state
agencies.  In  particular,  oil and natural gas production and operations are or
have been subject to price  controls,  taxes and other laws  relating to the oil
and natural gas  industry.  The Company  cannot  predict how  existing  laws and
regulations may be interpreted by enforcement agencies or court rulings, whether
additional laws and regulations will be adopted,  or the effect such changes may
have on its business or financial condition.                                    
                                                                                
        The Company's  operations  are subject to extensive  federal,  state and
local  laws and  regulations  relating  to the  generation,  storage,  handling,
emission,  transportation  and  discharge  of  materials  into the  environment.
Permits are required for various of the Company's operations,  and these permits
are subject to  revocation,  modification  and  renewal by issuing  authorities.
Governmental  authorities  have  the  power to  enforce  compliance  with  their
regulations,  and  violations  are subject to fines,  injunctions or both. It is
possible that increasingly  strict requirements will be imposed by environmental
laws and enforcement policies  thereunder.  The Company does not anticipate that
it will be required in the near future to expend  amounts  that are  material to
the  Company's  financial  position  or  results  of  operations  by  reason  of
environmental  laws and  regulations,  but because such laws and regulations are
frequently  changed,  the Company is unable to predict the ultimate cost of such
compliance.                                                                     
                                                                                
        The  Company  believes  that  the oil and gas  industry  may  experience
increasing liabilities and risks under the Comprehensive Environmental Response,
Compensation  and  Liability  Act,  as well as other  federal,  state  and local
environmental  laws, as a result of increased  enforcement of environmental laws
by various  regulatory  agencies.  As an "owner" or "operator" of property where
hazardous  materials  may exist or be  present,  the  Company,  like all  others
engaged  in the oil and gas  industry,  could be liable  for the  release of any
hazardous  substances.  Although  the  Company  has  not  been  subject  to  the
imposition of "clean-up" orders by the government,  the potential for sudden and
unpredictable  liability  for  environmental  problems  is  a  consideration  of
increasing importance to the Company and the oil and gas industry as a whole.   
                                                                                
Provisions Relating to Control of the Company                                   
                                                                                
        Although  not  intended  to  interfere  with bona fide offers to acquire
control of the Company in transactions which would benefit all stockholders, the
Company has in place certain measures which affect the control of the Company.  
These measures are summarized below.                                            
                                                                                
        Classified Board                                                        
                                                                                
        At present,  the  Company's  Board of  Directors  is divided  into three
classes,  with the term of office of one class expiring each year. The existence
of a classified board, which is designed to provide                             
                                                                                
                                        5                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
continuity  and  longer-term  participation  on the  Board of  Directors,  has a
potentially  discouraging  effect on a  takeover  bid since it tends to impair a
bidder's ability to obtain control of the Board of Directors, and ultimately the
management,  in a  relatively  short  period of time.  Because only one class of
directors, which consists of one-third of the total number of directors,  stands
for election at each annual meeting, it would take two annual meetings,  instead
of one,  to change a  majority  of the  directors.  This would be true even if a
stockholder  held more than a  majority  of the  shares  entitled  to vote at an
annual meeting. Since the Company's Common Stock does not have cumulative voting
rights, the holders of a majority of shares voting for the election of directors
can elect all  members  of the class  voted  upon at each  annual  meeting.  The
provisions  of the Company's  Bylaws  creating the  classified  board may not be
amended without the approval of the holders of at least two-thirds of the Common
Stock  outstanding and entitled to vote on any such change.  See "Description of
Capital  Stock -  Preferred  Stock"  for rights of the  holders  of Series  1994
Convertible  Preferred Stock, the 1994 Series B Convertible  Preferred Stock and
the Series 1995  Convertible  Preferred  Stock to elect  directors under limited
circumstances.                                                                  
                                                                                
        Stockholders' Rights Plan                                               
                                                                                
        The Board  adopted a  stockholders'  rights plan (the "Rights  Plan") on
December 4, 1990 in order to deter  coercive or unfair  takeover  tactics and to
prevent a purchaser from gaining control of the Company without  offering a fair
price to all  stockholders.  The Rights  Plan was not adopted in response to any
specific effort to obtain control of the Company.  Although intended to preserve
for the Company's  stockholders  the long-term value of the Company,  the Rights
Plan may make it more difficult for the  stockholders  of the Company to benefit
from  certain  transactions  which  are  opposed  by the  incumbent  board.  See
"Description of Capital Stock - Stockholders' Rights Plan."                     
                                                                                
        Preferred Stock                                                         
                                                                                
        In the event of any  takeover  attempt  of the  Company  through  tender
offer, merger,  proxy contest or otherwise,  the Board could issue shares of its
authorized  preferred  stock  which  could  dilute the voting  power of existing
stockholders.  Moreover,  since the Board may, without stockholder approval, fix
the   voting   powers,   designations   and   preferences   and  other   rights,
qualifications,  limitations  and  restrictions  on its  authorized but unissued
shares of  preferred  stock,  any  preferred  stock issued by the Board could be
structured so as to impede or prevent any proposed undesired takeover. For these
reasons,  the  ability  of the Board of  Directors  of the  Company to cause the
issuance  of one or more series of  preferred  stock  could  discourage  hostile
tender offers, mergers and other business combinations,  proxy contests, and the
removal of incumbent management. The Board's rights to authorize the issuance of
any preferred stock are limited by the terms of the currently outstanding series
of preferred stock. See "Description of Capital Stock - Preferred Stock."       
                                                                                
        Severance Benefits                                                      
                                                                                
        Effective July 1, 1995, the Company entered into  employment  agreements
with M. Jay Allison,  the President and Chief Executive  Officer of the Company,
and Roland O. Burns, Senior Vice President,  Chief Financial Officer,  Secretary
and Treasurer of the Company. Under the agreements, the Company agreed to employ
each of  Messrs.  Allison  and Burns for a period of twelve  months at a minimum
base  rate of  $245,000,  and  $128,000  per  annum,  respectively.  Each of the
agreements  provides for the payment of severance benefits in an amount equal to
three times the  existing  annual base salary of the  employee  upon a change in
control followed by the occurrence of certain specified events, including the   
                                                                                
                                        6                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
assignment of the employee to duties inconsistent with his position  immediately
prior to the change in control, a reduction in the employee's salary,  requiring
the employee to be relocated,  failure of a purchaser to assume the  obligations
of the Company  under the  agreement,  failure of the  Company to  re-elect  the
employee to the offices held by him immediately prior to a change in control and
a breach by the Company (or any  successor) of any  provisions of the agreement.
The severance  benefit  payments are payable in cash in equal payments  (without
interest  over  a  period  not to  exceed  twelve  months).  As  defined  in the
agreements,  a "change in  control" is deemed to have taken place if (a) without
the  approval  or  recommendation  of a majority of the then  existing  Board of
Directors of the Company,  a third person  causes or brings about the removal or
resignation  of the then  existing  members  of the  Board or if a third  person
causes or brings  about an  increase in the size of the Board such that the then
existing  members of the Board  thereafter  represent  a  minority  of the total
number of persons  comprising the entire Board; (b) a third person,  including a
group,  becomes  the  beneficial  owner of shares of any class of the  Company's
stock  having 30 percent  or more of the total  number of votes that may be cast
for the election of directors of the Company; (c) any shares or any class of the
Company's stock are purchased pursuant to a tender or exchange offer (other than
an offer by the Company); or (d) the Company's  stockholders approve a merger or
other  business  combination  of the Company  with or into  another  corporation
pursuant  to which  the  Company  will not  survive  or will  survive  only as a
subsidiary of another  corporation,  or the sale or other  disposition of all or
substantially  all of the  assets  of the  Company,  or any  combination  of the
foregoing.                                                                      
                                                                                
        As a result of the severance  benefit payments that could become payable
to Messrs.  Allison and Burns, and based on the base  compensation  currently in
effect,  a total of  $1,119,000  would  presently be required to be paid to them
upon a change in control followed by one of the events triggering payment of the
severance benefits. Accordingly, the employment agreements would have the effect
of  substantially  increasing  the cost of  acquiring  control  of the  Company,
thereby possibly discouraging any such attempted acquisition of control.        
                                                                                
                          DESCRIPTION OF CAPITAL STOCK                          
                                                                                
        The  authorized  capital  stock of the Company  consists  of  30,000,000
shares of Common Stock and 5,000,000 shares of preferred stock, $10.00 par value
(the "Preferred  Stock").  At April 2, 1996, there were issued and outstanding
13,120,242  shares of Common Stock and 3,100,000  shares of Preferred  Stock, of
which 600,000  shares are  designated as the Series 1994  Convertible  Preferred
Stock,  1,000,000  shares  are  designated  as the  1994  Series  B  Convertible
Preferred  Stock  and  1,500,000  shares  are  designated  as  the  Series  1995
Convertible  Preferred Stock.  Options and warrants to purchase 1,768,307 shares
of Common  Stock were also  outstanding  and  exercisable  at that date.  In the
aggregate,  8,654,950  shares of Common  Stock have been  reserved  for issuance
pursuant to the exercise of stock options and warrants currently outstanding and
the conversion of the Series 1994 Convertible Preferred Stock, the 1994 Series B
Convertible Preferred Stock and the Series 1995 Convertible Preferred Stock.    
                                                                                
Common Stock                                                                    
                                                                                
        Subject to the prior  rights of the Series  1994  Convertible  Preferred
Stock,  the  1994  Series  B  Convertible   Preferred  Stock,  the  Series  1995
Convertible  Preferred Stock and any other shares of Preferred Stock that may be
issued,  and except as otherwise set forth below,  the shares of Common Stock of
the Company (1) are  entitled to such  dividends as may be declared by the Board
of Directors,  in its discretion,  out of funds legally available therefor;  (2)
are entitled to one vote per share on matters voted                             
                                                                                
                                        7                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
upon by the  stockholders  and have no  cumulative  voting  rights;  (3) have no
preemptive  or  conversion  rights;  (4) are not  subject to, or entitled to the
benefits of, any  redemption  or sinking fund  provision;  and (5) are entitled,
upon  liquidation,  to receive  the assets of the  Company  remaining  after the
payment of corporate debts and the  satisfaction of any liquidation  preferences
of the Series 1994  Convertible  Preferred  Stock, the 1994 Series B Convertible
Preferred  Stock,  the Series  1995  Convertible  Preferred  Stock and any other
Preferred Stock, if issued.  Although the Company's Articles of Incorporation do
not deny  preemptive  rights to  stockholders,  under Nevada law no stockholders
have  preemptive  rights  with  respect  to  shares  that,  upon  issuance,  are
registered  under Section 12 of the Securities  Exchange Act of 1934, as amended
(the  "Exchange  Act").  The  Common  Stock is  currently  registered  under the
Exchange Act.                                                                   
                                                                                
        The Common Stock presently issued and outstanding,  including the shares
being offered by the Selling Security Holders, is validly issued, fully paid and
nonassessable.                                                                  
                                                                                
        Because the shares of Common Stock do not have cumulative voting rights,
the holders of a majority of the shares voting for the election of directors can
elect all members of the class of the  Company's  classified  Board of Directors
that are to be elected at a meeting of the  stockholders,  subject to any rights
of the holders of Series 1994  Convertible  Preferred  Stock,  the 1994 Series B
Convertible Preferred Stock and the Series 1995 Convertible Preferred Stock. See
"Description of Capital Stock Preferred Stock."                                 
                                                                                
     The Company's  Common Stock is quoted on the Nasdaq  National Market System
Stock  Market.  The  Transfer  Agent and  Registrar  for the Common Stock of the
Company is American Stock Transfer & Trust Company.
                                                                                
Stockholders' Rights Plan                                                       
                                                                                
        General                                                                 
                                                                                
        As part of its long-term strategy to maximize,  preserve and protect the
long-term value of the Company for the benefit of all stockholders, the Board of
Directors  of the  Company  considered,  and on  December  4, 1990,  adopted,  a
stockholders'  rights  plan.  The  basic  objective  of the  Rights  Plan  is to
encourage  prospective  purchasers to negotiate with the board, whose ability to
negotiate effectively with a potential purchaser, on behalf of all stockholders,
is  significantly  greater than that of the  stockholders  individually.  In the
board's view, some attempted takeovers can pressure  stockholders into disposing
of their equity investment in the Company at less than full value and can result
in the unfair treatment of minority  stockholders,  especially  considering that
prospective  purchasers typically are interested in acquiring targets as cheaply
as they can. The rights are designed to deter abusive takeover tactics,  such as
(i) accumulations of the Company's stock by a prospective  purchaser who through
open market or private purchases may achieve a position of substantial influence
or control  without paying to selling or remaining  stockholders a fair "control
premium",  (ii) coercive two-tier,  front-end loaded or partial offers which may
not offer fair value to all stockholders,  (iii)  accumulations of the Company's
stock by a  prospective  purchaser  who lacks the financing to complete an offer
and is only  interested in putting the Company "in play",  without concern as to
how its activities may affect the business of the Company, and (iv) self-dealing
transactions  by or with  prospective  purchasers  who may seek to  acquire  the
Company  at less  than  full  value or upon  terms  that may be  detrimental  to
minority  stockholders.  Equally  important,  offers left open only a short time
might prevent management and the board from considering all                     
                                                                                
                                        8                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
alternatives to maximize the value of the Company - including, if appropriate, a
search for competing  bidders.  The board  believes  that the specific  benefits
derived by the stockholders of the Company as a result of having the rights plan
in place include:                                                               
                                                                                
o    providing disincentives to potential purchasers who are not willing or able
     to make and complete a fully financed offer to all  stockholders  at a fair
     price;                                                                     
                                                                                
o    providing  the  board  and  management  the  time  to  consider   available
     alternatives and act in the best interests of all stockholders in the event
     of an offer;                                                               
                                                                                
o   protecting against abusive takeover tactics; and                            
                                                                                
o   increasing the bargaining power of the board.                               
                                                                                
        The Rights Plan was not adopted by the board in response to any specific
effort to obtain control of the Company.                                        
                                                                                
        Description of Rights Plan                                              
                                                                                
        On December 4, 1990, the Company declared a dividend distribution of one
preferred share purchase right (a "Right") for each outstanding  share of Common
Stock,  payable on December  17, 1990 (the  "Record  Date") to  stockholders  of
record at that date. Each Right entitles the registered  holder to purchase from
the  Company  one  one-hundredth  of a share of  Series  A Junior  Participating
Preferred Stock, $10.00 par value per share, at an exercise price of $15.00 (the
"Purchase Price") per one  one-hundredth of a share of Preferred Stock,  subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement  (the  "Rights  Agreement")  between the Company  and  American  Stock
Transfer & Trust Company, as successor Rights Agent.                            
                                                                                
        The Rights are initially  evidenced by the Common Stock  certificates as
no separate Rights  Certificates were distributed.  The Rights separate from the
Common  Stock and a  "Distribution  Date" will occur at the close of business on
the earliest of (i) the tenth business day following a public  announcement that
a person or group of affiliated or associated  persons (an  "Acquiring  Person")
has acquired,  or obtained the right to acquire,  beneficial ownership of 20% or
more of the outstanding shares of Common Stock (the "Stock  Acquisition  Date"),
(ii) the tenth  business day (or such later date as may be  determined by action
of the Board of  Directors)  following  the  commencement  of a tender  offer or
exchange offer that would result in a person or group beneficially owning 20% or
more of the  outstanding  shares of Common Stock or (iii) the tenth business day
after the Board of  Directors  of the Company  determines  that any  individual,
firm,  corporation,  partnership  or other entity  (each a  "Person"),  alone or
together with its affiliates and associates,  has become the beneficial owner of
an amount of Common Stock which a majority of the  continuing  directors who are
not officers of the Company  determines to be substantial (which amount shall in
no event be less  than 10% of the  shares of Common  Stock  outstanding)  and at
least a  majority  of the  continuing  directors  who are  not  officers  of the
Company, after reasonable inquiry and investigation, including consultation with
such Person as such directors shall deem  appropriate,  shall determine that (a)
such  beneficial  ownership  by such  Person is intended to cause the Company to
repurchase  the  Common  Stock  beneficially  owned by such  Person  or to cause
pressure on the Company to take action or enter into a transaction  or series of
transactions  intended to provide  such Person with  short-term  financial  gain
under circumstances where such directors determine that the best                
                                                                                
                                        9                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
long-term  interests of the Company and its stockholders  would not be served by
taking such action or entering into such  transaction or series of  transactions
at that time or (b) such beneficial ownership is causing or is reasonably likely
to cause a material impact (an "Adverse Person").                               
                                                                                
        The  Rights are not  exercisable  until the  Distribution  Date and will
expire at the close of business on December 17, 2000, unless earlier redeemed by
the Company.                                                                    
                                                                                
        If (i) a Person becomes the beneficial  owner of 20% or more of the then
outstanding  shares of Common Stock  (except (a) pursuant to certain  offers for
all  outstanding  shares of Common Stock  approved by at least a majority of the
continuing  directors who are not officers of the Company or (b) solely due to a
reduction in the number of shares of Common Stock outstanding as a result of the
repurchase  of  shares  of  Common  Stock by the  Company)  or (ii) the Board of
Directors  determines that a Person is an Adverse Person, each holder of a Right
will thereafter have the right to receive,  upon exercise,  Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a value equal to two times the exercise price of the Right. However,  Rights are
not  exercisable  following the  occurrence of either of the events set forth in
this  paragraph  until such time as the Rights are no longer  redeemable  by the
Company as set forth below. Notwithstanding any of the foregoing,  following the
occurrence of either of the events set forth in this paragraph,  all Rights that
are, or (under certain  circumstances  specified in the Rights  Agreement)  were
beneficially  owned by any Acquiring  Person or Adverse  Person will be null and
void.                                                                           
                                                                                
        If at any time following the Stock  Acquisition Date, (i) the Company is
acquired  in a merger or other  business  combination  transaction  in which the
Company  is not the  surviving  corporation,  or in  which  the  Company  is the
surviving corporation,  but its Common Stock is changed or exchanged (other than
a merger  which  follows an offer  described in clause  (i)(a) of the  preceding
paragraph),  or (ii) more than 50% of the Company's assets, cash flow or earning
power is sold or  transferred,  each  holder  of a Right  (except  Rights  which
previously have been voided as set forth above) shall  thereafter have the right
to receive upon exercise,  Common Stock of the acquiring  company having a value
equal to two times the exercise price of the Right.                             
                                                                                
        At any time  after  the  earlier  to occur  of (i) an  Acquiring  Person
becoming  such or (ii) the date on which the Board of  Directors  of the Company
declares  an Adverse  Person to be such,  the Board of  Directors  may cause the
Company to exchange the Rights (other than Rights owned by the Adverse Person or
Acquiring  Person, as the case may be, which will have become null and void), in
whole or in part,  at an exchange  ratio of one share of Common  Stock per Right
(subject to adjustment).  Notwithstanding the foregoing, no such exchange may be
effected  at any time after any Person  becomes the  beneficial  owner of 50% or
more of the outstanding Common Stock.                                           
                                                                                
        The Purchase Price payable,  and the number of shares of Preferred Stock
or other  securities  or  property  issuable,  upon  exercise  of the Rights are
subject to adjustment from time to time to prevent  dilution (i) in the event of
a stock dividend on, or a subdivision,  combination or reclassification  of, the
Preferred  Stock,  (ii) if holders of the  Preferred  Stock are granted  certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current  market price of the  Preferred  Stock,  or (iii) upon the
distribution  to holders of the Preferred  Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).                                  
                                                                                
                                                                                
                                       10                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
        At any time until the close of  business on the earlier of the tenth day
following  the Stock  Acquisition  Date or the tenth  business day following the
date on which the Board of  Directors  first  declares a person to be an Adverse
Person,  the Company may redeem the Rights in whole, but not in part, at a price
of $0.01  per  Right.  Under  certain  circumstances  set  forth  in the  Rights
Agreement, the decision to redeem shall require the concurrence of a majority of
the continuing directors (as defined in the Rights Agreement).                  
                                                                                
        Until a Right is exercised,  the holder  thereof,  as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.                                                
                                                                                
        The Rights Plan has certain  anti-takeover  effects  including making it
prohibitively  expensive for a raider to try to control or take over the Company
unilaterally  and  without  negotiation  with the Board.  Although  intended  to
preserve for the  stockholders  the long term value of the  Company,  the Rights
Plan may make it more difficult for  stockholders of the Company to benefit from
certain transactions which are opposed by the incumbent board. See "Risk Factors
- - Provisions Relating to Control of the Company."                               
                                                                                
Preferred Stock                                                                 
                                                                                
        The  Board  of  Directors  is   empowered,   without   approval  of  the
stockholders,  to cause shares of its authorized Preferred Stock to be issued in
one or more classes or series,  from time to time,  with the number of shares of
each class or series and the rights,  preferences  and limitations of each class
or  series  to be  determined  by it.  Among the  specific  matters  that may be
determined by the Board of Directors are the rate of dividends,  redemption  and
conversion  prices,  terms and amounts  payable in the event of liquidation  and
voting rights. Shares of Preferred Stock may, in the board's sole determination,
be issued with voting rights greater than one vote per share. Issuance of shares
of Preferred Stock could involve dilution of the equity of the holders of Common
Stock and further restrict the rights of such stockholders to receive dividends.
                                                                                
        On  January  6,  1994,  the Board of  Directors  created a new series of
Preferred  Stock  consisting  of 600,000  shares  designated  as the Series 1994
Convertible  Preferred Stock (the "Series 1994 Preferred").  On January 7, 1994,
the Company  issued and sold  600,000  shares of the Series 1994  Preferred in a
private  placement  for $6 million.  The Series 1994  Preferred was purchased by
certain  investors and investment funds  represented or managed by Trust Company
of the West.                                                                    
                                                                                
        On July 21,  1994,  the  Board of  Directors  created  a new  series  of
Preferred Stock consisting of 1,500,000  shares  designated as the 1994 Series B
Convertible  Preferred Stock (the "1994 Series B Preferred").  On July 22, 1994,
the  Company  exchanged  1,000,000  shares of the 1994  Series B  Preferred  and
$10,150,000  in  cash  to  re-acquire  certain  production  payments  previously
conveyed by the Company to Enron Reserve Acquisition Corp. ("Enron").           
                                                                                
        On June 16,  1995,  the Board of  Directors  created a new series of the
Company's  preferred  stock ($10.00 par value)  consisting  of 1,500,000  shares
designated  as the Series 1995  Convertible  Preferred  Stock (the  "Series 1995
Preferred").  On June 19, 1995, the Company sold  1,500,000  shares in a private
placement for $15 million to certain  investors and investment funds represented
or managed by Trust Company of the West.                                        
                                                                                
                                                                                
                                       11                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
        The Series 1994  Preferred  and the Series 1995  Preferred pay quarterly
dividends at the rate of 22 1/2(cent) on each  outstanding  share and is payable
when,  as and if declared on each March 31, June 30,  September 30, and December
31.  Dividends on the Series 1994  Preferred  and the Series 1995  Preferred are
cumulative from the date of original issue.  Unpaid dividends bear interest at a
rate of 9% per annum, compounded quarterly.  The Company, at its option, can pay
the  dividend in cash or in shares of Common Stock valued at 75%, in the case of
the Series 1994 Preferred,  or 80% in the case of the Series 1995 Preferred,  of
the lower of the Common Stock's 5 day or 30 day average closing price.          
                                                                                
        The 1994 Series B Preferred bears quarterly  dividends at the rate of 15
5/8(cent) on each  outstanding  share and is payable when, as and if declared by
the Board of  Directors  on April 1, July 1,  October 1 and  January  1, of each
year.  Dividends on the 1994 Series B Preferred are cumulative  from the date of
issuance.  The  Company can elect to pay the  dividends  in cash or in shares of
stock. If the dividends are to be paid in shares of stock,  the holder may elect
to receive either  additional  shares of the 1994 Series B Preferred  (valued at
$10.00 per share) or Common  Stock  (valued at 85% of the 15 trading day average
closing price) or a combination thereof.                                        

        On  January  1, 1999 and on each  January 1  thereafter,  so long as any
shares of the Series 1994 Preferred are outstanding, the Company is obligated to
redeem  120,000  shares of the Series  1994  Preferred  at $10.00 per share plus
accrued  and unpaid  dividends  thereon.  On June 30,  2000 and on each June 30,
thereafter,  so long as any shares of the Series 1995 Preferred are outstanding,
the Company is obligated to redeem  300,000  shares of the Series 1995 Preferred
at $10.00 per share plus accrued and unpaid  dividends  thereon.  The  mandatory
redemption price may be paid either in cash or in shares of Common Stock, at the
option of the Company.  If the Company  elects to pay the  mandatory  redemption
price in shares of Common Stock,  the Common Stock will be valued at 75%, in the
case of the  Series  1994  Preferred,  or 80%,  in the case of the  Series  1995
Preferred,  of the lower of the Common  Stock's 5 day or 30 day average  closing
price  (immediately  prior to the  date of  redemption).  There is no  mandatory
redemption required for the 1994 Series B Preferred.                            
                                                                                
        The respective  holders of the Series 1994 Preferred,  the 1994 Series B
Preferred and the Series 1995 Preferred  have the right,  at their option and at
any time, to convert all or any part of such shares into shares of Common Stock.
The initial  Common Stock  conversion  prices are $4.00 per share for the Series
1994  Preferred,  $5.00 per share for the 1994 Series B Preferred  and $5.25 per
share  for  the  Series  1995  Preferred.  If the  holders  of the  Series  1994
Preferred,  1994 Series B Preferred  and the Series  1995  Preferred  elected to
convert all such shares into Common Stock at the initial  conversion prices, the
holders would own approximately 8%, 10% and 15%, respectively,  of the Company's
issued and outstanding shares of Common Stock as of  April 2, 1996.  The Company
has the option to redeem the shares of Series 1994 Preferred and the Series 1995
Preferred  at a price that would  provide the holder  with a  specified  rate of
return on their  original  investment.  The Company has the option to redeem the
shares of 1994 Series B Preferred at any time at the rate of $14.00 per share as
increased by 7 1/2% per annum compounded monthly from the date of issuance.     
                                                                                
        In the event of  dissolution,  liquidation or winding-up of the Company,
the holders of the Series 1994  Preferred,  the 1994 Series B Preferred  and the
Series 1995  Preferred,  after payments of all amounts payable to the holders of
Preferred Stock senior to such series of Preferred  Stock, to receive out of the
assets remaining $10.00 per share,  together with all dividends  thereon accrued
or in arrears, whether or not earned or declared,  before any payment is made or
assets set apart for payment to the holders of the Common Stock.                
                                                                                
                                       12                                       
                                                                                
                                                                          
                                                                                
                                                                                
                                                                                
        The  holders of the Series 1994  Preferred,  the 1994 Series B Preferred
and the Series  1995  Preferred  are each  entitled  to vote with the holders of
Common  Stock on all  matters  submitted  for a vote of the holders of shares of
Common Stock on an "as  converted"  basis.  Upon the  occurrence of an "event of
noncompliance"  with the terms of the Series 1994  Preferred,  the 1994 Series B
Preferred and/or the Series 1995 Preferred as set forth therein,  the holders of
each such series of Preferred Stock have the right (for so long as such event of
noncompliance  continues)  to elect  two  additional  directors  to the Board of
Directors of the Company.  Accordingly,  up to six additional directors could be
elected  pursuant to the terms of the Series 1994  Preferred,  the 1994 Series B
Preferred and the Series 1995 Preferred.  "Events of noncompliance"  include (i)
the failure to pay in the aggregate four quarterly dividends on any such series,
(ii) the failure to redeem any such series in accordance with its terms, (iii) a
default by the Company on certain  indebtedness,  (iv) M. Jay Allison ceasing to
be the chief  executive  officer of the Company,  or (v) a bankruptcy or similar
proceeding  is  commenced  by or against the  Company or any of its  significant
subsidiaries.                                                                   
                                                                                
        The  Company  has the option to convert  the Series  1995  Preferred  to
convertible  subordinated  debt provided that the Company has satisfied  certain
conditions, including obtaining the consent of the banks under the senior credit
facility  and the  holders  of  Series  1994  Preferred  and the  1994  Series B
Preferred  and granting to the holders of the Series 1995  Preferred  additional
demand registration rights.                                                     
                                                                                
        The Company may not,  so long as any of the Series 1994  Preferred,  the
1994 Series B Preferred or the Series 1995 Preferred is  outstanding,  alter any
of the rights, preferences or powers of the Series 1994 Preferred, 1994 Series B
Preferred and the Series 1995  Preferred or issue any shares of stock ranking on
a parity with or senior to each series of outstanding Preferred Stock unless the
requisite  number of the holders have  consented  thereto.  Holders of each such
series of  Preferred  Stock also have the right to  approve  (1) a merger of the
Company where the Company is not the surviving corporation;  (2) the issuance of
more  than 20% of the  Company's  Common  Stock in  connection  with a merger or
acquisition;  (3) the sale or disposition of substantially  all of the Company's
assets; (4) payment of any dividend or distribution, on or for the redemption of
Common  Stock of the Company in excess of $50,000 a year;  or (5) an increase in
the number of shares of Common Stock issuable under the Company's 1991 Long-term
Incentive Plan.                                                                 
                                                                                
     In addition to the Series 1994  Preferred,  the 1994 Series B Preferred and
the Series 1995 Preferred and in connection with the  Stockholders'  Rights Plan
as described under  "Description of Capital Stock - Stockholders'  Rights Plan",
the Company has designated and reserved for issuance 150,000 shares of Preferred
Stock,  $10.00 par value per share,  which, under the Rights Plan, may be issued
in units consisting of one one-hundredth of a share (each, a "Unit"). Each Unit,
if and when  issued,  will be entitled to receive a  cumulative  quarterly  cash
dividend  equal to the  greater  of $0.375  or the  amount  of the  dividend  or
distribution  paid per share of Common Stock for the  applicable  quarter.  Such
Preferred  Stock  dividend  rights are senior to the rights of holders of Common
Stock to receive any dividend or  distribution.  Each Unit,  if and when issued,
will be entitled to one vote,  voting  together  with the Common  Stock,  on all
matters  submitted  to  the  holders  of the  Common  Stock.  Upon  liquidation,
dissolution  or winding up of the Company,  each Unit issued will be entitled to
the greater of $15.00  plus  accrued  but unpaid  dividends  or the amount to be
distributed in respect of each share of Common Stock,  with such Preferred Stock
liquidation rights being senior to those of the holders of the Common Stock. The
Company has the option to redeem,  in whole or in part, the Preferred  Stock, if
issued,  at any time for a per Unit price  equal to the greater of $15.00 or the
current  market  price per share of Common Stock at the time of  redemption,  in
each case together with accrued but unpaid dividends.

                                       13
                                                                                
                                                                          

                                                                                
                            SELLING SECURITY HOLDERS

    The following  table sets forth  certain information as  of April 3, 1996
with  respect to the  Common Stock  beneficially owned  by the  Selling Security
Holders.

                                                                                   
                                              Number of                          Before            After
        Name and Address of                    Shares            Number         Offering         Offering
         Selling Security                    Beneficially      of Shares      Percentage of    Percentage of
              Holder                            Owned          Offered(4)      Common Stock    Common Stock(1)

Trust Company of the West,                    301,620  (2)(3)     5,988            2.25%             2.20%
as Trustee of the TCW Debt and
Royalty Fund IVA 
865 South Figueroa, Suite 1800
Los Angeles, California 90017

Trust Company of the West,                    805,826  (2)(3)    15,997            5.80%             5.68%
as Custodial Agent for TCW Debt
and Royalty Fund IVB 
865 South Figueroa, Suite 1800
Los Angeles, California 90017

Trust Company of the West,                    237,375  (2)(3)      6,912           1.78%             1.73%
as Custodial Agent for TCW Debt
and Royalty Fund IVC 
865 South Figueroa, Suite 1800
Los Angeles, California 90017

Harris Trust and Saving Bank,                 201,081  (2)(3)      3,992           1.51%             1.48%
as Trustee for Delta Master Trust
865 South Figueroa, Suite 1800
Los Angeles, California 90017

The Chase Manhattan Bank                      502,699  (2)(3)      9,980           3.69%             3.62%
as Custodian for 
Leland Stanford Junior University
865 South Figueroa, Suite 1800
Los Angeles, California 90017

Trust Company of the West,                    251,347  (2)(3)      4,990           1.88%             1.84%
as Custodian for Columbia University 
865 South Figueroa, Suite 1800
Los Angeles, California 90017

14 Number of Before After Name and Address of Shares Number Offering Offering Selling Security Beneficially of Shares Percentage of Percentage of Holder Owned Offered(5) Common Stock Common Stock(1) Harris Trust and Savings Bank, 251,347 (2)(3) 4,990 1.88% 1.84% as Custodian for Searle Trusts Limited Partnership X 865 South Figueroa, Suite 1800 Los Angeles, California 90017 Harris Trust and Savings Bank, 100,539 (2)(3) 1,996 .76% .75% as Custodian for John G. Searle Charitable Trusts Partnership 865 South Figueroa, Suite 1800 Los Angeles, California 90017 Trust Company of the West, as 78,334 (2)(3) 2,281 .59% .58% Custodian for the City and County Employee's Retirement System of San Francisco 865 South Figueroa, Suite 1800 Los Angeles, California 90017 Trust Company of the West, as 1,749,222 (2)(3) 28,561 11.80% 11.61% Investment Manager and Custodian for General Mills, Inc. 865 South Figueroa, Suite 1800 Los Angeles, California 90017 --------- --------- 4,479,390 85,687 ========= ========= (1) Assumes the sale by Selling Security Holders of all shares offered hereby. (2) Includes 1,500,000 shares issuable pursuant to conversion of the Series 1994 Preferred. (3) Includes 2,857,143 shares issuable pursuant to conversion of the Series 1995 Preferred. (4) Represents shares issued in lieu of the payment of cash dividends on the Series 1995 Preferred.
Transactions with Selling Security Holders On January 7, 1994, the Company sold 600,000 shares of its Series 1994 Preferred in a private placement for $6 million to certain investors and investment funds managed by Trust Company of the West. On June 19, 1995, the Company sold 1,500,000 shares of its Series 1995 Preferred in a private placement for $15 million to certain investors and investment funds managed by Trust Company of the West, including certain holders of the Series 1994 Preferred. PLAN OF DISTRIBUTION The shares of Common Stock offered hereby are being sold for the respective account of each Selling Security Holder. The shares may be sold from time to time by each Selling Security Holder, or by its pledges, donees, transferees or other successors in interest who acquire such shares pursuant to a non-sale transaction. Sales may be made on the Nasdaq National Market, or otherwise, at prices and at terms then prevailing or at prices related to the then current market price, or in negotiated transactions. The shares may be sold by one or more of the following: (a) a block trade in which the broker or dealer so 15 engaged will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; and (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers. In effecting sales, brokers or dealers engaged by the Selling Security Holders may arrange for other brokers or dealers to participate. Brokers or dealers will receive commissions or discounts from the Selling Security Holders in amounts to be negotiated immediately prior to the sale. Such brokers or dealers and any other participating brokers or dealers may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended, in connection with such sales. In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE The Company hereby incorporates the following documents into this Prospectus by reference: 1. The Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2. The Company's Proxy Statement dated April 25, 1995 in connection with the Annual Meeting of Stockholders of the Company held on May 23, 1995. 3. The Company's Current Report on Form 8-K dated May 16, 1995, as amended pursuant to Form 8-K/A dated August 4, 1995 and Form 8-K/A dated September 22, 1995. 4. The Company's Current Report on Form 8-K dated January 22, 1996. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Common Stock offered hereby shall be deemed to be incorporated by reference into this Prospectus. LEGAL MATTERS The validity of the Common Stock offered hereby will be passed upon for the Company by Locke Purnell Rain Harrell (A Professional Corporation), Dallas, Texas. EXPERTS The consolidated financial statements of the Company as of December 31, 1995 and for the year then ended and the financial statements of the Sonat Acquisition for the three years ended December 31, 1995 incorporated by reference in this Registration Statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are included therein in reliance upon the authority of said firm as experts in accounting and auditing in giving said reports. 16