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

FRISCO, Texas, Aug. 1, 2011 /PRNewswire/ -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months and six months ended June 30, 2011.  

Financial Results for the Three Months and Six Months Ended June 30, 2011

Comstock reported net income of $3.9 million or 8 cents per diluted share for the three months ended June 30, 2011 as compared to a net loss of $1.6 million or 4 cents per share for the three months ended June 30, 2010.  The financial results include gains realized from the sale of marketable securities of $8.5 million ($5.5 million after tax or 12 cents per share) for the three months ended June 30, 2011 and $5.7 million ($3.7 million after tax or 8 cents per share) for the three months ended June 30, 2010.

Comstock produced 24.0 billion cubic feet of natural gas equivalent ("Bcfe") in the second quarter of 2011, an increase of 20% over the 20.0 Bcfe produced in the second quarter of 2010.  Production in the quarter was 25% higher than 2010 second quarter production adjusted to exclude production from properties sold in 2010.  Comstock's daily production rate, which averaged 263 million cubic feet of natural gas equivalent ("MMcfe") per day, grew 19% over the production rate in the first quarter of 2011, which averaged 222 MMcfe per day.  Production from the Company's Haynesville shale operations increased 32% from the prior quarter, averaging 176 MMcfe per day in the second quarter and accounting for 67% of the Company's total production.  

Comstock's average realized natural gas price increased 2% to $4.19 per Mcf in the second quarter of 2011 as compared to $4.09 per Mcf in the second quarter of 2010.  The Company's average realized oil price improved by 50% to $101.02 per barrel in the second quarter of 2011 as compared to $67.37 per barrel in the second quarter of 2010.  Higher production and improved oil and natural gas prices caused oil and gas sales to increase by 24% to $112.5 million in the second quarter of 2011 as compared to 2010's second quarter sales of $90.7 million.  Operating cash flow (before changes in working capital accounts) increased to $77.1 million in the second quarter of 2011 and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $87.1 million.  

Comstock reported net income of $6.4 million or 13 cents per diluted share for the first six months of 2011 as compared to net income of $5.7 million or 12 cents per share for the six months ended June 30, 2010.  

Comstock's production in the first half of 2011 of 43.9 billion Bcfe increased 13% over the 38.8 Bcfe produced in the first half of 2010.  Natural gas prices were weaker in the first six months of 2011 as compared to 2010's first six months.  Comstock's average realized natural gas price decreased 13% to $4.08 per Mcf for the first six months of 2011 as compared to $4.68 per Mcf for the first six months of 2010.  The Company's average realized oil price improved by 43% to $95.89 per barrel for the first half of 2011 as compared to $67.24 per barrel for the first half of 2010.  Oil and gas sales increased by 2% to $200.5 million in the first six months of 2011 as compared to 2010's first six months sales of $196.8 million.  The higher production level in the first half of this year was partially offset by lower natural gas prices.  Operating cash flow (before changes in working capital accounts) of $133.2 million in the first six months of 2011 increased 4% from 2010's first six months operating cash flow of $127.5 million.  EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, increased 6.3% to $152.2 million in 2011's first six months from 2010's first six months EBITDAX of $143.2 million.  

2011 Drilling Results

Comstock reported on the results to date of its 2011 drilling program.  During the first six months of 2011, Comstock spent $313.1 million on its drilling program and $36.0 million to acquire exploration acreage.  Comstock drilled 39 wells (20.8 net) and completed 45 wells (28.2 net) in the first half of 2011.  As of June 30, 2011 the Company also had nine wells (3.0 net) in the process of being drilled.

In the East Texas/North Louisiana region, Comstock has drilled 31 wells (14.8 net) in 2011, all of which were Haynesville or Bossier shale wells.  During the first half of 2011, Comstock completed 41 (24.2 net) of its Haynesville or Bossier shale wells.  As of June 30, 2011, Comstock had 16 wells (7.7 net) Haynesville or Bossier wells waiting on completion, down from 35 wells (23.4 net) at December 31, 2010.  Wells completed in the first half of the year were put on production at an average per well initial production rate of 10 MMcfe per day.  

In the South Texas region, the Company has drilled six Eagle Ford shale wells (6.0 net) in the first six months of 2011.  Comstock completed four wells (4.0 net) including one well that was drilled in 2010.  These wells had an average per well initial production rate of 870 barrels of oil equivalent ("BOE") per day.  In the second quarter of 2011, Comstock drilled four (4.0 net) Eagle Ford shale wells in its South Texas region in McMullen County.  The Company drilled the Hill #1H to a vertical depth of 11,264 feet with a 4,642 foot lateral.  This well was tested at an initial rate of 865 barrels of oil per day and 1.4 MMcf of natural gas per day or 1,095 BOE per day.  The initial production rate was based on flowing the well at a restricted rate on an 18/64th choke.  The Cutter Creek #1H was drilled to a vertical depth of 10,020 feet with a 4,650 foot lateral.  This well is currently in the process of being completed.  The Forrest Wheeler #1H well was drilled to a vertical depth of 11,142 feet with a 5,147 foot lateral.  The Rancho Tres Hijos "A" #1H was drilled to a vertical depth of 10,911 feet with a 4,893 foot lateral.  Both of these wells are awaiting completion.  

Comstock has planned a conference call for 9:30 a.m. Central Time on August 2, 2011, to discuss the operational and financial results for the second quarter of 2011.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-804-6925 (international dial-in use 857-350-1671) and provide access code 27198959 when prompted.  A slide show presentation on the financial results will be available on Comstock's website at www.comstockresources.com.  Click on "Presentations" to view the slide show.  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 1:30 p.m. ET August 2, 2011 and will continue until 11:59 p.m. August 9, 2011.  To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US).  The conference call ID number is 11607359.

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 June 30,



Six Months Ended June 30,




2011



2010



2011



2010



















Revenues:

















Oil and gas sales                                         


$

112,451



$

90,682



$

200,489



$

196,771



















Operating expenses:

















Production taxes                                         



1,363




4,806




2,089




6,481


Gathering and transportation                                



6,611




3,679




12,239




8,207


Lease operating                                          



12,437




13,988




23,985




28,148


Exploration                                              



82




99




9,619




1,268


Depreciation, depletion and amortization                       



74,689




57,398




135,014




116,807


Impairment of oil and gas properties                           






28







187


(Gain) loss on sale of properties                             



(26)




797




83




797


General and administrative                                 



8,917




9,764




17,345




19,565



















Total operating expenses                               



104,073




90,559




200,374




181,460



















Operating income                                             



8,378




123




115




15,311



















Other income (expenses):

















Interest income                                           






119







258


Other income                                            



83




25




393




45


Interest expense                                         



(10,410)




(7,599)




(20,694)




(15,443)


Gain on sale of marketable securities                         



8,480




5,692




29,729




5,692



















Total other income (expenses)                           



(1,847)




(1,763)




9,428




(9,448)



















Income (loss) before income taxes                               



6,531




(1,640)




9,543




5,863


Benefit from (provision for) income taxes                           



(2,582)




21




(3,190)




(140)


Net income (loss)                                             


$

3,949



$

(1,619)



$

6,353



$

5,723



















Net income (loss) per share:

















Basic                                                   


$

0.08



$

(0.04)



$

0.13



$

0.12


Diluted                                                 


$

0.08



$

(0.04)



$

0.13



$

0.12



















Weighted average shares outstanding:

















Basic                                                   



45,992




45,579




45,983




45,594


Diluted                                                 



45,992




45,579




45,983




45,571




COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)



Three Months Ended June 30,



Six Months Ended June 30,




2011



2010



2011



2010



















OPERATING CASH FLOW:

















Net income (loss)                                            


$

3,949



$

(1,619)



$

6,353



$

5,723


Reconciling items:  

















Deferred income taxes                                      



2,172




12




2,621




(43)


Depreciation, depletion and amortization                         



74,689




57,398




135,014




116,807


Impairments                                               






28




9,454




187


Gain on sale of assets                                      



(8,506)




(4,895)




(29,646)




(4,895)


Debt issuance costs and discount amortization                   



938




624




2,403




1,226


Stock-based compensation                                   



3,850




4,309




7,012




8,542


Operating cash flow                                     



77,092




55,857




133,211




127,547


Excess income taxes from stock-based compensation       



125




(41)




612




(1,531)


Decrease (increase) in accounts receivable               



(1,332)




3,332




(6,631)




(1,454)


Decrease (increase) in other current assets               



(7,338)




3,619




(8,454)




49,436


Increase (decrease) in accounts payable and accrued expenses



(1,572)




11,721




(836)




25,226



















Net cash provided by operating activities               


$

66,975



$

74,488



$

117,902



$

199,224



















EBITDAX:

















Net income (loss)                                           


$

3,949



$

(1,619)



$

6,353



$

5,723


Interest expense                                           



10,410




7,599




20,694




15,443


Income taxes expense (benefit)                               



2,582




(21)




3,190




140


Depreciation, depletion and amortization                         



74,689




57,398




135,014




116,807


Exploration                                                



82




99




9,619




1,268


Impairments                                               






28







187


Gain on sale of assets                                       



(8,506)




(4,895)




(29,646)




(4,895)


Stock-based compensation                                   



3,850




4,309




7,012




8,542



















EBITDAX                                         


$

87,056



$

62,898



$

152,236



$

143,215
























As of June 30,




2011



2010











Balance Sheet Data:


















Cash and cash equivalents                                           


$

3,556



$

42,651


Marketable securities                                                



62,482




53,535


Other current assets                                                 



64,447




45,303


Property and equipment, net                                           



2,021,287




1,715,099


Other                                                             



16,677




13,955











Total assets                                                    


$

2,168,449



$

1,870,543











Current liabilities                                                    


$

172,024



$

109,814


Long-term debt                                                     



691,640




468,104


Deferred income taxes                                               



217,992




224,484


Other non-current liabilities                                           



9,508




9,419


Stockholders' equity                                                 



1,077,285




1,058,722











Total liabilities and stockholders' equity                               


$

2,168,449



$

1,870,543





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




For the Three Months Ended June 30, 2011



For the Three Months Ended June 30, 2010




East
Texas/












East
Texas/













North



South









North



South










Louisiana



Texas



Other



Total



Louisiana



Texas



Other



Total



































Oil production (thousand barrels)



29




128




2




159




50




39




121




210


Gas production (MMcf)



19,552




2,915




529




22,996




14,288




3,790




631




18,709


Total production (MMcfe)



19,728




3,679




547




23,954




14,590




4,024




1,356




19,970



































Oil sales


$

3,092



$

12,726



$

305



$

16,123



$

3,894



$

2,953



$

7,309



$

14,156


Gas sales



79,384




14,170




2,774




96,328




57,381




16,334




2,811




76,526


Total oil and gas sales


$

82,476



$

26,896



$

3,079



$

112,451



$

61,275



$

19,287



$

10,120



$

90,682




































































Average oil price (per barrel)


$

105.40



$

99.88



$

107.06



$

101.02



$

77.25



$

75.57



$

60.59



$

67.37


Average gas price (per Mcf)


$

4.06



$

4.86



$

5.24



$

4.19



$

4.02



$

4.31



$

4.45



$

4.09


Average price (per Mcfe)


$

4.18



$

7.31



$

5.63



$

4.69



$

4.20



$

4.79



$

7.46



$

4.54



































Production taxes


$

65



$

1,116



$

182



$

1,363



$

3,670



$

526



$

610



$

4,806


Gathering and transportation


$

6,134



$

356



$

121



$

6,611



$

3,339



$

237



$

103



$

3,679


Lease operating


$

7,796



$

3,620



$

1,021



$

12,437



$

6,814



$

3,861



$

3,313



$

13,988


Production taxes (per Mcfe)


$



$

0.30



$

0.33



$

0.06



$

0.25



$

0.13



$

0.45



$

0.24


Gathering and transportation (per Mcfe)


$

0.31



$

0.10



$

0.22



$

0.28



$

0.23



$

0.06



$

0.08



$

0.18


Lease operating (per Mcfe)


$

0.40



$

0.98



$

1.87



$

0.51



$

0.47



$

0.96



$

2.44



$

0.71



































Oil and Gas Capital Expenditures:

































 Leasehold costs


$

4,409



$

17,585



$

1,311



$

23,305



$

29,523



$

22,844



$

72



$

52,439


 Exploratory drilling



10,046




18,367







28,413




6,407










6,407


 Development drilling



123,439




12,803




675




136,917




89,252




576







89,828


 Other development



998




1,015




198




2,211




841




694




255




1,790


Total


$

138,892



$

49,770



$

2,184



$

190,846



$

126,023



$

24,114



$

327



$

150,464








For the Six Months Ended June 30, 2011



For the Six Months Ended June 30, 2010




East
Texas/












East
Texas/













North



South









North



South










Louisiana



Texas



Other



Total



Louisiana



Texas



Other



Total


Oil production (thousand barrels)



63




222




12




297




87




81




218




386


Gas production (MMcf)



34,996




5,780




1,329




42,105




27,267




7,903




1,333




36,503


Total production (MMcfe)



35,375




7,110




1,404




43,889




27,790




8,391




2,636




38,817



































Oil sales


$

6,037



$

21,365



$

1,111



$

28,513



$

6,638



$

6,137



$

13,154



$

25,929


Gas sales



137,994




27,320




6,662




171,976




123,848




40,059




6,935




170,842


Total oil and gas sales


$

144,031



$

48,685



$

7,773



$

200,489



$

130,486



$

46,196



$

20,089



$

196,771




































































Average oil price (per barrel)


$

95.64



$

96.36



$

88.82



$

95.89



$

76.19



$

75.39



$

60.59



$

67.24


Average gas price (per Mcf)


$

3.94



$

4.73



$

5.01



$

4.08



$

4.54



$

5.07



$

5.20



$

4.68


Average price (per Mcfe)


$

4.07



$

6.85



$

5.54



$

4.57



$

4.70



$

5.51



$

7.62



$

5.07



































Production taxes


$

94



$

1,498



$

497



$

2,089



$

4,786



$

608



$

1,087



$

6,481


Gathering and transportation


$

11,210



$

813



$

216



$

12,239



$

6,999



$

1,010



$

198



$

8,207


Lease operating


$

14,995



$

6,987



$

2,003



$

23,985



$

14,762



$

7,329



$

6,057



$

28,148


Production taxes (per Mcfe)


$



$

0.21



$

0.35



$

0.05



$

0.17



$

0.07



$

0.41



$

0.17


Gathering and transportation (per Mcfe)


$

0.32



$

0.11



$

0.15



$

0.28



$

0.25



$

0.12



$

0.08



$

0.21


Lease operating (per Mcfe)


$

0.42



$

0.99



$

1.43



$

0.54



$

0.54



$

0.88



$

2.30



$

0.72



































Oil and Gas Capital Expenditures:

































 Leasehold costs


$

15,384



$

19,265



$

1,311



$

35,960



$

39,378



$

22,844



$

128



$

62,350


 Exploratory drilling



26,890




38,795







65,685




23,438










23,438


 Development drilling



219,027




24,341




773




244,141




152,494




2,170







154,664


 Other development



1,851




1,109




292




3,252




1,875




1,323




501




3,699


Total


$

263,152



$

83,510



$

2,376



$

349,038



$

217,185



$

26,337



$

629



$

244,151




SOURCE Comstock Resources, Inc.



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