Comstock Resources, Inc. Reports First Quarter 2013 Financial And Operating Results

FRISCO, Texas, April 29, 2013 /PRNewswire/ -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months ended March 31, 2013. 

Financial Results for the Three Months Ended March 31, 2013

Comstock reported a net loss from continuing operations of $24.5 million or 52¢ per share for the first quarter of 2013 as compared to net income from continuing operations of $1.4 million or 3¢ per diluted share for the three months ended March 31, 2012.  As previously announced, Comstock entered into an agreement on March 14, 2013 to sell its West Texas properties for $768.0 million.  The sale is expected to close on or about May 14, 2013 with an effective date of January 1, 2013.  The West Texas properties have been classified as "Discontinued Operations" as a result of the pending sale.  Including discontinued operations in the first quarter financial results, Comstock reported a net loss of $27.1 million or 58¢ per share for the first quarter of 2013 as compared to net income of $1.4 million or 3¢ per share for the first quarter of 2012.

The first quarter of 2013 results include an unrealized loss from derivative financial instruments of $8.8 million ($5.7 million after tax or 12¢ per share), a gain of $7.9 million ($5.1 million after tax, or 11¢ per share) from sales of marketable securities and an impairment on unevaluated acreage of $2.4 million ($1.6 million after tax or 3¢ per share).  Results for the three months ended March 31, 2012 include an unrealized loss from derivative financial instruments of $10.2 million ($6.6 million after tax or 14¢ per share), a gain on sale of marketable securities of $26.6 million ($17.3 million after tax or 37¢ per share), a gain of $6.7 million ($4.4 million after tax or 9¢ per share) from the sale of oil and gas properties and impairments of unevaluated acreage of $1.3 million ($0.9 million after tax or 2¢ per share).

Comstock's production from continuing operations in the first quarter of 2013 of 432,000 barrels of oil and 15.6 billion cubic feet of natural gas or 18.2 billion cubic feet of natural gas equivalent ("Bcfe") decreased 27% from the 24.9 Bcfe produced in the first quarter of 2012 due to production declines from the Company's Haynesville shale properties and due to divestitures completed in 2012.  Oil production in the first quarter, which averaged 4,800 barrels of oil per day, grew 7% from the 4,500 barrels per day produced in the fourth quarter of 2012. 

Comstock's average realized natural gas price increased 21% to $3.15 per Mcf for the first quarter of 2013 as compared to $2.61 per Mcf realized in the first quarter of 2012.  The Company's average realized oil price, including hedging gains, improved by 9% to $111.19 per barrel for the first quarter of 2013 as compared to $102.06 per barrel for the first quarter of 2012.  Oil and gas sales from continuing operations (including realized gains or losses from hedging) of $97.3 million decreased by 5% as compared to 2012's first quarter sales of $102.4 million.  Operating cash flow from continuing operations (before changes in working capital accounts) was $56.3 million in the first quarter of 2013 as compared to operating cash flow from continuing operations of $61.7 million for the first quarter of 2012.  EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, from continuing operations was $72.5 million in the first quarter of 2013 as compared to EBITDAX from continuing operations of $73.0 million in the first quarter of 2012.

2013 Drilling Results

Comstock reported on the results to date of its 2013 drilling program related to its continuing operations which is focused on developing its Eagle Ford oil shale properties in South Texas.  During the first three months of 2013, Comstock spent $56.1 million on its continuing development and exploration activities and $2.1 million on acreage and other acquisition costs.  Comstock drilled 11 horizontal oil wells (7.2 net) and had three wells (2.3 net) drilling at March 31, 2013.

Since the beginning of 2013, the Company has completed ten (6.4 net) horizontal Eagle Ford shale wells including six (3.8 net) wells drilled in 2012.  The ten Eagle Ford shale wells that were completed had an average per well initial production rate of 854 barrels of oil equivalent ("BOE") per day.  The 2013 completions have an average initial rate that is 32% higher than the average initial rate in 2012.  The four wells with the highest initial production rates were the Swenson A #1H, the Gloria Wheeler C #1H, the Gloria Wheeler A #3H, and the Rancho Tres Hijos B #1H.  These wells are located in McMullen County and had initial production rates of 1,222, 1,032, 978 and 968 BOE per day, respectively.

Comstock has planned a conference call for 9:30 a.m. Central Time on April 30, 2013, to discuss the operational and financial results for the first quarter of 2013.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-877-546-5021 (international dial-in use 857-244-7553) and provide access code 62393735 when prompted.  If you are unable to participate in the original conference call, a web replay will be available approximately 24 hours following the completion of the call on Comstock's website at www.comstockresources.com.  The web replay will be available for approximately one week.  A replay of the conference call will be available beginning at 12:30 p.m. ET April 30, 2013 and will continue until 11:59 p.m. May 7, 2013.  To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US).  The conference call ID number is 62248208.

This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995.  Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein.  Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.

Comstock Resources, Inc. is an independent energy company based in Frisco, Texas and is engaged in oil and gas acquisitions, exploration and development primarily in Texas and Louisiana.  The Company's stock is traded on the New York Stock Exchange under the symbol CRK.

 

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per share amounts)






Three Months Ended March 31, 2013



Three Months Ended March 31, 2012




Continuing Operations



Discontinued Operations



Total



Continuing Operations




Discontinued Operations




Total



























Revenues:

























Oil and gas sales


$

95,020



$

16,299



$

111,319



$

103,772



$

7,917



$

111,689


Gain on sale of oil and gas properties












6,727







6,727


Total revenues



95,020




16,299




111,319




110,499




7,917




118,416



























Operating expenses:

























Production taxes



2,121




693




2,814




3,247




390




3,637


Gathering and transportation



4,202




331




4,533




7,715




177




7,892


Lease operating



13,206




6,308




19,514




13,458




1,291




14,749


Exploration(1)



2,593







2,593




1,353







1,353


Depreciation, depletion and amortization



84,967




8,649




93,616




77,311




1,786




79,097


General and administrative



8,787







8,787




8,798







8,798


Impairment of oil and gas properties












49







49


Total operating expenses



115,876




15,981




131,857




111,931




3,644




115,575



























Operating income (loss)



(20,856)




318




(20,538)




(1,432)




4,273




2,841



























Other income (expenses):

























Gain on sale of marketable securities



7,877







7,877




26,621







26,621


Realized gain (loss) from derivatives



2,320







2,320




(1,354)







(1,354)


Unrealized loss from derivatives



(8,767)







(8,767)




(10,187)







(10,187)


Other income



245







245




239







239


Interest expense



(17,578)




(3,499)




(21,077)

(2)



(12,303)




(934)




(13,237)

(2)

Total other income (expenses)



(15,903)




(3,499)




(19,402)




3,016




(934)




2,082



























Income (loss) before income

taxes



(36,759)




(3,181)




(39,940)




1,584




3,339




4,923


Benefit from (provision for) income taxes



12,242




554




12,796




(167)




(3,381)




(3,548)


Income (loss) from continuing operations



(24,517)







(24,517)




1,417







1,417


Loss from discontinued operations, net of taxes






(2,627)




(2,627)







(42)




(42)


Net income (loss)


$

(24,517)



$

(2,627)



$

(27,144)



$

1,417



$

(42)



$

1,375



























Net income (loss) per share:

























Basic       — income (loss) from continuing operations


$

(0.52)



$



$

(0.52)



$

0.03



$



$

0.03


            — loss from discontinued operations






(0.06)




(0.06)











    — net income (loss)


$

(0.52)



$

(0.06)



$

(0.58)



$

0.03



$



$

0.03


Diluted     — income (loss) from continuing operations


$

(0.52)



$



$

(0.52)



$

0.03



$



$

0.03


                — loss from discontinued operations






(0.06)




(0.06)











    — net income (loss)


$

(0.52)



$

(0.06)



$

(0.58)



$

0.03



$



$

0.03



























Weighted average shares outstanding:























Basic



46,730




46,730




46,730




46,372




46,372




46,372


Diluted



46,730




46,730




46,730




46,372




46,372




46,372



























 

(1)

Includes impairments of unevaluated leases of $2.4 million and $1.3 million in the three months ended March 31, 2013 and 2012, respectively.

(2)

$3.0 million and $5.2 million of interest expense was capitalized for the three months ended March 31, 2013 and 2012, respectively.

 

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)






Three Months Ended March 31,



2013



2012









OPERATING CASH FLOW:
















Net income (loss)


$

(27,144)



$

1,375

Reconciling items: 








Loss from discontinued operations



2,627




42

Deferred income taxes



(12,245)




250

Depreciation, depletion and amortization



84,967




77,311

Impairment of oil and gas properties






49

Dry hole costs and lease impairments



2,443




1,315

Gain on sale of assets



(7,877)




(33,348)

Unrealized loss on derivatives



8,767




10,187

Debt issuance cost and discount amortization



1,587




944

Stock-based compensation



3,218




3,535

Operating cash flow from continuing operations



56,343




61,660

Excess income taxes from stock-based compensation



1,742




1,405

(Increase) decrease in accounts receivable



(19,724)




5,070

Decrease in other current assets



480




110

Increase in accounts payable and accrued expenses



34,981




48,328

Net cash provided by continuing operations



73,822




116,573

Net cash provided by discontinuing operations(1)



23,530




16,607

Net cash provided by operating activities


$

97,352



$

133,180












(1)    $5.5 million and $5.1 million for the three months ended March 31, 2013 and 2012, respectively, excluding working capital changes.









EBITDAX:
















Net income (loss) from continuing operations


$

(24,517)



$

1,417

Interest expense



17,578




12,303

Provision for (benefit from) income taxes



(12,242)




167

Depreciation, depletion and amortization



84,967




77,311

Exploration



2,593




1,353

Impairments of oil and gas properties






49

Gain on sale of assets



(7,877)




(33,348)

Unrealized loss from derivatives



8,767




10,187

Stock-based compensation



3,218




3,535

EBITDAX from continuing operations



72,487




72,974

EBITDAX from discontinued operations



8,967




6,059

Total EBITDAX


$

81,454



$

79,033




















 



As of




March 31, 2013



December 31, 2012











Balance Sheet Data:


















Cash and cash equivalents


$

6,844



$

4,471


Restricted cash



38,400





Marketable securities






12,312


Derivative financial instruments



2,884




11,651


Other current assets



63,144




43,898


Assets of discontinued operations



562,453




518,934


Property and equipment, net



1,929,840




1,958,687


Other



18,942




19,944


Total assets


$

2,622,507



$

2,569,897




















Current liabilities


$

175,335



$

110,139


Liabilities of discontinued operations



50,516




33,280


Long-term debt



1,334,957




1,324,383


Deferred income taxes



140,798




149,901


Other non-current liabilities



19,019




18,660


Stockholders' equity



901,882




933,534


Total liabilities and stockholders' equity


$

2,622,507



$

2,569,897


 

COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)




For the Three Months Ended March 31, 2013



East Texas/ North

Louisiana



South Texas



Other



Continuing Operations




Discontinued Operations




Total

Oil production (Mbbls)



16




410




6




432




174




606

Gas production (MMcf)



13,399




1,781




448




15,628




269




15,897

Total production (MMcfe)



13,495




4,242




484




18,221




1,311




19,532

























Oil sales


$

1,504



$

43,546



$

690



$

45,740



$

14,734



$

60,474

Oil hedging gains(1)












2,320







2,320

Total oil including hedging



1,504




43,546




690




48,060




14,734




62,794

Natural gas sales



41,157




6,471




1,652




49,280




1,565




50,845

Total oil and gas sales and realized gain from derivatives


$

42,661



$

50,017



$

2,342



$

97,340



$

16,299



$

113,639

























Average oil price (per barrel)


$

93.58



$

106.19



$

113.69



$

105.82



$

84.84



$

99.81

Average oil price including hedging (per barrel)


$

93.58



$

106.19



$

113.69



$

111.19



$

84.84



$

103.64

Average gas price (per Mcf)


$

3.07



$

3.63



$

3.69



$

3.15



$

5.82



$

3.20

Average price (per Mcfe)


$

3.16



$

11.79



$

4.84



$

5.21



$

12.43



$

5.70

Average price including hedging (per Mcfe)


$

3.16



$

11.79



$

4.84



$

5.34



$

12.43



$

5.82

























Production taxes


$

(231)



$

2,220



$

132



$

2,121



$

693



$

2,814

Gathering and transportation


$

3,557



$

612



$

33



$

4,202



$

331



$

4,533

Lease operating


$

7,493



$

4,712



$

1,001



$

13,206



$

6,308



$

19,514

























Production taxes (per Mcfe)


$

(0.02)



$

0.52



$

0.27



$

0.12



$

0.53



$

0.14

Gathering and transportation (per Mcfe)


$

0.26



$

0.14



$

0.07



$

0.23



$

0.25



$

0.23

Lease operating (per Mcfe)


$

0.56



$

1.12



$

2.07



$

0.72



$

4.81



$

1.01

























Oil and Gas Capital Expenditures:
























Exploratory leasehold


$



$

1,939



$



$

1,939



$

6,203



$

8,142

Development leasehold






184







184







184

Exploratory drilling


















Development drilling



3,047




50,741







53,788




49,658




103,446

Other development



1,076




1,137




55




2,268




180




2,448

Total


$

4,123



$

54,001

(2)


$

55



$

58,179



$

56,041



$

114,220
























 

(1)

Reported as realized gain from derivatives in operating results.

(2)

Net of reimbursements received of $8.1 million under the Company's Eagle Ford shale joint venture.

 

COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)






For the Three Months Ended March 31, 2012



East Texas/ North

Louisiana



South Texas



Other



Continuing Operations




Discontinued Operations




Total

Oil production (Mbbls)



27




403




3




433




73




506

Gas production (MMcf)



19,100




2,660




535




22,295




127




22,422

Total production (MMcfe)



19,263




5,075




554




24,892




566




25,458

























Oil sales


$

2,751



$

42,474



$

303



$

45,528



$

7,113



$

52,641

Oil hedging losses(1)












(1,354)







(1,354)

Total oil including hedging



2,751




42,474




303




44,174




7,113




51,287

Natural gas sales



47,502




9,136




1,606




58,244




804




59,048

Total oil and gas sales and realized loss from derivatives


$

50,253



$

51,610



$

1,909



$

102,418



$

7,917



$

110,335

























Average oil price (per barrel)


$

101.49



$

105.52



$

94.88



$

105.19



$

97.12



$

104.02

Average oil price including hedging (per barrel)


$

101.49



$

105.52



$

94.88



$

102.06



$

97.12



$

101.35

Average gas price (per Mcf)


$

2.49



$

3.43



$

3.00



$

2.61



$

6.33



$

2.63

Average price (per Mcfe)


$

2.61



$

10.17



$

3.45



$

4.17



$

13.99



$

4.39

Average price including hedging (per Mcfe)


$

2.61



$

10.17



$

3.45



$

4.11



$

13.99



$

4.33

























Production taxes


$

801



$

2,291



$

155



$

3,247



$

390



$

3,637

Gathering and transportation


$

6,833



$

772



$

110



$

7,715



$

177



$

7,892

Lease operating


$

8,661



$

3,719



$

1,078



$

13,458



$

1,291



$

14,749

























Production taxes (per Mcfe)


$

0.04



$

0.45



$

0.28



$

0.13



$

0.69



$

0.14

Gathering and transportation (per Mcfe)


$

0.35



$

0.15



$

0.20



$

0.31



$

0.31



$

0.31

Lease operating (per Mcfe)


$

0.46



$

0.74



$

1.94



$

0.54



$

2.28



$

0.58

























Oil and Gas Capital Expenditures:
























Acquisitions


$



$



$



$



$

3,333



$

3,333

Exploratory leasehold



1,595




1,488







3,083




3,543




6,626

Development leasehold



345




1,216







1,561







1,561

Exploratory drilling



368




405







773







773

Development drilling



68,208




64,438







132,646




34,516




167,162

Other development



1,026




607




149




1,782




336




2,118

Total


$

71,542



$

68,154



$

149



$

139,845



$

41,728



$

181,573

























 

(1)

Reported as realized loss from derivatives in operating results.

 

SOURCE Comstock Resources, Inc.



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