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Comstock Resources, Inc. Reports Fourth Quarter and Annual 2011 Financial and Operating Results

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FRISCO, Texas, Feb. 6, 2012 /PRNewswire/ -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months and year ended December 31, 2011.  

Financial Results for the Three Months and Year Ended December 31, 2011

Comstock reported a net loss of $41.1 million or 89 cents per share for the three months ended December 31, 2011 as compared to a net loss of $20.6 million or 45 cents per share for the three months ended December 31, 2010.  The fourth quarter 2011 financial results include an impairment charge to write-down proved oil and gas properties of $60.8 million ($39.5 million after tax or 86 cents per share) and a gain realized from the sale of marketable securities of $2.9 million ($1.9 million after tax or 4 cents per share).  Financial results for the fourth quarter of 2010 included a loss on disposal of oil and gas properties of $25.8 million ($16.8 million after tax or 37 cents per share) and a gain on sale of marketable securities of $10.8 million ($7.0 million after tax, or 15 cents per share).

Comstock produced 25.5 billion cubic feet of natural gas equivalent ("Bcfe") in the fourth quarter of 2011, an increase of 48% over the 17.3 Bcfe produced in the fourth quarter of 2010.  Daily average production increased to 277 million cubic feet of natural gas equivalent ("MMcfe") from 188 MMcfe per day in the fourth quarter of 2010.  Crude oil production increased to 8% of total production in the fourth quarter of 2011 as compared to 4% in the third quarter of 2011.  Production from the Company's Eagle Ford shale operations increased 123% from the third quarter of 2011, averaging 3,300 barrels of oil equivalent per day in the fourth quarter and accounting for 7% of the Company's total production.  Production from the Company's Haynesville shale operations of 184 MMcfe per day in the fourth quarter of 2011 comprised 66% of the Company's total production.  

Comstock's average realized natural gas price decreased 9% to $3.40 per Mcf in the fourth quarter of 2011 as compared to $3.73 per Mcf in the fourth quarter of 2010.  The Company's average realized oil price improved by 34% to $100.18 per barrel in the fourth quarter of 2011 as compared to $74.75 per barrel in the fourth quarter of 2010.  Oil and gas sales increased by 58% to $114.5 million in the fourth quarter of 2011 as compared to 2010's fourth quarter sales of $72.7 million.  Operating cash flow (before changes in working capital accounts) increased 75% to $78.8 million in the fourth quarter of 2011 from $44.9 million in 2010's fourth quarter and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses in the quarter was up 75% to $89.9 million from $51.3 million in 2010's fourth quarter.

With weak natural gas prices and strong crude oil prices persisting, Comstock is redirecting most of its drilling activity to unconventional oil prospects.  In 2012, 92% of the net wells drilled by the Company are expected to be oil wells.  Comstock expects to spend 77% of its 2012 capital budget for oil prospects in its Eagle Ford shale properties in South Texas and its Permian basin properties in West Texas.  On December 31, 2011, 16% of the Company's production (based on a six Mcf to one barrel conversion) is attributable to oil and approximately 2% is attributable to natural gas liquids.  At the beginning of 2011 only 4% of the Company's production was oil.

Comstock reported a net loss of $33.5 million or 73 cents per share for the year ended December 31, 2011 as compared to a net loss of $19.6 million or 43 cents per share for the year ended December 31, 2010.  The financial results for the year ended December 31, 2011 include impairment charges of $70.6 million ($45.9 million after tax or $1.00 per share), a gain realized from the sale of marketable securities of $35.1 million ($22.8 million after tax or 50 cents per share), and a loss on early retirement of debt of $1.1 million ($0.7 million after taxes or 2 cents per share).  The net loss for the year ended December 31, 2010 included a loss on disposal of oil and gas properties of $25.8 million ($16.8 million after tax or 37 cents per share) and a gain realized from sale of marketable securities of $16.5 million ($10.7 million after tax or 24 cents per share).

Comstock's production in 2011 increased by 31% to 95.6 Bcfe as compared to the 73.3 Bcfe produced in 2010.  Natural gas prices continued to weaken in 2011.  Comstock's average realized natural gas price decreased 10% to $3.91 per Mcf for 2011 as compared to $4.35 per Mcf for 2010.  Oil prices continued to be very strong in 2011 and the Company's average realized oil price increased by 40% to $95.73 per barrel as compared to $68.35 per barrel for 2010.  The 31% increase in production and stronger oil prices overcame the lower natural gas prices, resulting in Comstock's oil and gas sales increasing by 24% to $434.4 million in 2011 as compared to 2010's sales of $349.1 million.  Operating cash flow (before changes in working capital accounts) increased 35% to $297.6 million in 2011 from 2010's operating cash flow of $219.7 million.  Higher sales and lower operating cost per Mcfe produced account for the operating cash flow growth.  EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, also increased 35% to $336.3 million in 2011 from EBITDAX of $249.1 million in 2010.

2011 Drilling Results

Comstock reported on the results of its 2011 drilling program.  The Company spent $573.4 million in 2011 on its drilling activities.  Also in 2011, Comstock spent $218.7 million to acquire 163.7 Bcfe in proved reserves primarily in the Permian basin in West Texas and $255.7 million to acquire exploratory acreage in the Permian basin, the Eagle Ford shale in South Texas, and the Haynesville shale in North Louisiana.  In 2011, Comstock drilled 87 wells (47.7 net) and completed 105 wells (59.8 net).  As of December 31, 2011 the Company also had three wells (1.6 net) in the process of being drilled.

In the East Texas/North Louisiana region, Comstock drilled 64 wells (28.3 net) during 2011, sixty-two of which were Haynesville or Bossier shale horizontal wells.  During 2011, Comstock completed 84 (42.3 net) Haynesville or Bossier shale horizontal wells, including 33 wells (22.2 net) that were drilled in 2010.  Wells drilled and completed in 2011 were put on production at an average per well initial production rate of 10.7 MMcfe per day.  As of December 31, 2011, Comstock had 14 (9.8 net) Haynesville or Bossier horizontal wells waiting on completion.  

In the South Texas region, the Company drilled 20 (19.2 net) horizontal Eagle Ford shale wells in 2011.  Comstock completed 17 wells (17.0 net) including one well that was drilled in 2010. These wells had an average per well initial production rate of 820 barrels of oil equivalent ("BOE") per day. Four wells (3.2 net) were awaiting completion at year end.  Since the last update, Comstock has completed four additional wells in its Eagle Ford shale program.  The Gloria Wheeler "A" #1H was drilled to a vertical depth of 11,358 feet with a 6,725 foot lateral.  This well was tested at an initial rate of 1,070 barrels of oil per day and 1.1 MMcf of natural gas per day or 1,254 BOE per day.  The Gloria Wheeler "B" #1H was drilled to a vertical depth of 10,908 feet with a 5,175 foot lateral.  This well was tested at an initial rate of 916 barrels of oil per day and 1.0 MMcf of natural gas per day or 1,085 BOE per day.  The Donnell "A" #1H was drilled to a vertical depth of 9,404 feet with a 6,481 foot lateral.  This well was tested at an initial rate of 646 barrels of oil per day and 0.2 MMcf of natural gas per day or 686 BOE per day.  The Cutter Creek #2H was drilled to a vertical depth of 10,013 feet with a 5,541 foot lateral.  This well was tested at an initial rate of 471 barrels of oil per day and 0.4 MMcf of natural gas per day or 541 BOE per day.  All of the reported well results were obtained while following Comstock's restricted choke program.  

During December 2011, production from the wells acquired as part of Comstock's Permian basin acquisition averaged 1,000 barrels of oil and 1.9 MMcf of natural gas per day.  At year end 2011 there were three wells (0.8 net) in the process of being drilled and four wells (2.5 net) that were awaiting completion on these West Texas properties.

Comstock has planned a conference call for 2:00 p.m. Eastern Time on February 6, 2012, to discuss the operational and financial results for the fourth quarter of 2011.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-362-5158 (international dial-in use 617-597-5397) and provide access code 53956340 when prompted.  A slide presentation on the financial results will be available on Comstock's website at www.comstockresources.com.  Click on "Presentations" to view the slides.  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 5:00 p.m. ET February 6, 2012 and will continue until 11:59 p.m. February 13, 2012.  To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US).  The conference call ID number is 11275509.

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 December 31,



Year Ended December 31,




2011



2010



2011



2010



















Revenues:

















Oil and gas sales                                           


$

114,456



$

72,650



$

434,367



$

349,141



















Operating expenses:

















Production taxes                                            



1,440




351




3,670




9,894


Gathering and transportation                                   



8,151




4,948




28,491




17,256


Lease operating                                             



10,040




12,375




46,552




53,525


Exploration                                                 



82




99




10,148




2,605


Depreciation, depletion and amortization                         



78,244




50,206




290,776




213,809


Impairment of oil and gas properties                             



60,817




11




60,817




224


Loss on sale of properties                                     






25,835




57




26,632


General and administrative                                    



9,199




8,235




35,172




37,200



















Total operating expenses                                 



167,973




102,060




475,683




361,145



















Operating loss                                                   



(53,517)




(29,410)




(41,316)




(12,004)



















Other income (expenses):

















Interest and other income                                     



210




91




790




499


Interest expense                                            



(12,006)




(6,905)




(42,688)




(29,456)


Gain on sale of marketable securities                            



2,905




10,837




35,118




16,529



















Total other income (expenses)                             



(8,891)




4,023




(6,780)




(12,428)



















Loss before income taxes                                         



(62,408)




(25,387)




(48,096)




(24,432)


Benefit from income taxes                                         



21,274




4,778




14,624




4,846


Net loss                                                       


$

(41,134)



$

(20,609)



$

(33,472)



$

(19,586)



















Net loss per share:

















Basic                                                     


$

(0.89)



$

(0.45)



$

(0.73)



$

(0.43)


Diluted                                                    


$

(0.89)



$

(0.45)



$

(0.73)



$

(0.43)



















Weighted average shares outstanding:

















Basic                                                     



46,011




45,631




45,997




45,561


Diluted                                                    



46,011




45,631




45,997




45,561





COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)




Three Months Ended December 31,



Year Ended December 31,




2011



2010



2011



2010



















OPERATING CASH FLOW:

















Net loss


$

(41,134)



$

(20,609)



$

(33,472)



$

(19,586)


Reconciling items:  

















Deferred income taxes                                         



(21,245)




(4,748)




(14,652)




(4,617)


Depreciation, depletion and amortization                           



78,244




50,206




290,776




213,809


Dry hole costs and lease impairments                             









9,819





Impairment of oil and gas properties                              



60,817




11




60,817




224


(Gain) loss on sale of assets                                   



(2,905)




14,998




(35,061)




10,103


Debt issuance costs and discount amortization                     



949




602




4,300




2,436


Stock-based compensation                                     



4,074




4,447




15,032




17,377


Operating cash flow                                       



78,800




44,907




297,559




219,746


Excess income taxes from stock-based
  compensation






12




612




(1,491)


Increase in accounts receivable                           



(4,088)




(12,528)




(9,046)




(4,432)


Decrease (increase) in other current assets



1,036




(1,358)




3,311




48,070


Increase (decrease) in accounts payable and
  accrued expenses



(8,393)




31,393




(7,532)




49,769



















Net cash provided by operating activities


$

67,355



$

62,426



$

284,904



$

311,662



















EBITDAX:

















Net loss                                                     


$

(41,134)



$

(20,609)



$

(33,472)



$

(19,586)


Interest expense                                             



12,006




6,905




42,688




29,456


Income tax benefit                                             



(21,274)




(4,778)




(14,624)




(4,846)


Depreciation, depletion and amortization                           



78,244




50,206




290,776




213,809


Exploration                                                   



82




99




10,148




2,605


Impairment of oil and gas properties                               



60,817




11




60,817




224


(Gain) loss on sale of assets                                    



(2,905)




14,998




(35,061)




10,103


Stock-based compensation                                     



4,074




4,447




15,032




17,377



















EBITDAX                                           


$

89,910



$

51,279



$

336,304



$

249,142

























As of December 31,




2011



2010











BALANCE SHEET DATA:


















Cash and cash equivalents                                           


$

8,460



$

1,732


Marketable securities                                                



47,642




84,637


Other current assets                                                 



56, 988




49,362


Property and equipment, net                                           



2,509,845




1,816,248


Other                                                             



16,949




12,235











Total assets                                                    


$

2,639,884



$

1,964,214











Current liabilities                                                    


$

187,207



$

155,064


Long-term debt                                                     



1,196,908




513,372


Deferred income taxes                                               



201,705




217,993


Other non-current liabilities                                           



16,439




9,254


Stockholders' equity                                                 



1,037,625




1,068,531











Total liabilities and stockholders' equity                               


$

2,639,884



$

1,964,214





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





For the Three Months Ended December 31, 2011



For the Three Months Ended December 31, 2010





East Texas/

North

Louisiana




South

Texas




West

Texas




Other




Total




East Texas/

North

Louisiana




South

Texas




Other




Total







































Oil production (thousand
  barrels)



28




312








6




346




33




43




82




158


Gas production (MMcf)  



20,177




2,659








595




23,431




12,637




3,130




549




16,316


Total production (MMcfe) 



20,348




4,537








624




25,509




12,835




3,383




1,042




17,260







































Oil sales              


$

2,614



$

31,638







$

453



$

34,705



$

2,667



$

3,517



$

5,573



$

11,757


Gas sales             



65,959




11,331








2,461




79,751




45,356




13,278




2,259




60,893


Total oil and gas sales 


$

68,573



$

42,969







$

2,914



$

114,456



$

48,023



$

16,795



$

7,832



$

72,650












































































Average oil price (per barrel)


$

92.25



$

101.10







$

88.26



$

100.18



$

80.63



$

83.16



$

68.03



$

74.75


Average gas price (per Mcf) 


$

3.27



$

4.26







$

4.14



$

3.40



$

3.59



$

4.24



$

4.11



$

3.73


Average price (per Mcfe)


$

3.37



$

9.47







$

4.67



$

4.49



$

3.74



$

4.96



$

7.52



$

4.21







































Production taxes       


$

(949)



$

2,228







$

161



$

1,440



$

(781)



$

682



$

450



$

351


Gathering and transportation 


$

7,741



$

294







$

116



$

8,151



$

4,189



$

643



$

116



$

4,948


Lease operating       


$

7,236



$

1,992







$

812



$

10,040



$

6,162



$

3,667



$

2,546



$

12,375


Production taxes (per Mcfe) 


$

(0.05)



$

0.49







$

0.26



$

0.06



$

(0.06)



$

0.20



$

0.43



$

0.02


Gathering and transportation
  (per Mcfe)


$

0.38



$

0.06







$

0.19



$

0.32



$

0.33



$

0.19



$

0.11



$

0.29


Lease operating (per Mcfe) 


$

0.36



$

0.44







$

1.30



$

0.39



$

0.48



$

1.09



$

2.45



$

0.71







































Oil and Gas Capital Expenditures:



































Acquisitions        


$

16,879



$



$

201,782



$



$

218,661



$



$



$



$


Exploratory leasehold



12,064




43,860




147,532







203,456




4,310




2,073







6,383


Development leasehold   



420













420




1,077




27




15




1,119


Exploratory drilling   



2,290




2,131










4,421




9,718




19,185







28,903


Development drilling  



46,713




76,726







160




123,599




96,913




7,441




101




104,455


Other development   



532




345







92




969




34




210




78




322


Total            


$

78,898



$

123,062



$

349,314



$

252



$

551,526



$

112,052



$

28,936



$

194



$

141,182









For the Year Ended December 31, 2011



For the Year Ended December 31, 2010





East Texas/

North

Louisiana




South

Texas




West

Texas




Other




Total




East Texas/

North

Louisiana




South

Texas




Other




Total







































Oil production (thousand
  barrels)



117




697








24




838




147




157




411




715


Gas production (MMcf)  



76,883




11,153








2,557




90,593




52,038




14,437




2,498




68,973


Total production (MMcfe) 



77,585




15,338








2,699




95,622




52,920




15,376




4,966




73,262







































Oil sales              


$

10,614



$

67,523







$

2,107



$

80,244



$

11,237



$

12,088



$

25,524



$

48,849


Gas sales             



290,028




51,789








12,306




354,123




219,387




68,915




11,990




300,292


Total oil and gas sales 


$

300,642



$

119,312







$

14,413



$

434,367



$

230,624



$

81,003



$

37,514



$

349,141












































































Average oil price (per barrel)


$

90.74



$

96.81







$

88.63



$

95.73



$

76.37



$

77.21



$

62.10



$

68.35


Average gas price (per Mcf) 


$

3.77



$

4.64







$

4.81



$

3.91



$

4.22



$

4.77



$

4.80



$

4.35


Average price (per Mcfe)


$

3.87



$

7.78







$

5.34



$

4.54



$

4.36



$

5.27



$

7.55



$

4.77







































Production taxes       


$

(1,958)



$

4,881







$

747



$

3,670



$

5,837



$

1,990



$

2,067



$

9,894


Gathering and transportation 


$

26,581



$

1,476







$

434



$

28,491



$

14,762



$

2,086



$

408



$

17,256


Lease operating       


$

30,419



$

12,443







$

3,690



$

46,552



$

28,000



$

14,027



$

11,498



$

53,525


Production taxes (per Mcfe)


$

(0.03)



$

0.32







$

0.28



$

0.04



$

0.11



$

0.13



$

0.42



$

0.14


Gathering and transportation
   (per Mcfe)


$

0.34



$

0.10







$

0.16



$

0.30



$

0.28



$

0.14



$

0.08



$

0.24


Lease operating (per Mcfe) 


$

0.40



$

0.81







$

1.37



$

0.48



$

0.53



$

0.91



$

2.31



$

0.72







































Oil and Gas Capital Expenditures:



































Acquisitions        


$

16,879



$



$

201,782



$



$

218,661



$



$



$



$


Exploratory leasehold 



37,682




66,263




151,754







255,699




53,288




81,440







134,728


Development leasehold   



695




103










798




2,500




535




173




3,208


Exploratory drilling   



33,381




48,647










82,028




59,579




25,561







85,140


Development drilling  



330,090




152,036







1,690




483,816




294,399




9,506




1,505




305,410


Other development   



4,089




1,966







461




6,516




2,251




2,559




838




5,648


Total              


$

422,816



$

269,015



$

353,536



$

2,151



$

1,047,518



$

412,017



$

119,601



$

2,516



$

534,134





SOURCE Comstock Resources, Inc.



RELATED LINKS
http://www.comstockresources.com

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