Comstock Resources, Inc. Reports Third Quarter 2010 Financial and Operating Results
FRISCO, Texas, Nov. 1, 2010 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months and nine months ended September 30, 2010.
Financial Results for the Three Months and Nine Months Ended September 30, 2010
Comstock reported a net loss of $4.7 million or 10 cents per diluted share for the three months ended September 30, 2010 as compared to a net loss of $12.6 million or 28 cents per share for the three months ended September 30, 2009.
Comstock's production in the third quarter of 2010 of 17.2 billion cubic feet of natural gas equivalent ("Bcfe") was slightly higher than the 17.0 Bcfe produced in the third quarter of 2009. Production from the Company's Haynesville shale wells of 84.7 million cubic feet of natural gas equivalent ("MMcfe") per day accounted for 45% of the Company's total production of 186.8 MMcfe per day in the third quarter of 2010, as compared to 57.8 MMcfe per day (31%) during the third quarter of 2009. The Company's Haynesville shale production declined in the third quarter of 2010 as compared to the second quarter of 2010 due to the unavailability of high pressure pumping services required to complete the Haynesville shale wells that have been drilled. As of September 30, 2010, Comstock had 26 operated Haynesville shale wells waiting on completion. Beginning in October the Company has obtained adequate high pressure pumping services to resume completing the wells which should provide for production growth from its Haynesville shale operations in the fourth quarter.
Oil and natural gas prices improved in the third quarter of 2010 as compared to 2009's third quarter. Comstock's average realized natural gas price increased 17% to $4.24 per Mcf for the third quarter of 2010 as compared to $3.63 per Mcf for the third quarter of 2009. The Company's average realized oil price improved by 12% to $64.97 per barrel for the third quarter of 2010 as compared to $57.96 per barrel for the third quarter of 2009. The improved oil and natural gas prices caused oil and gas sales to increase by 18% to $79.7 million in the third quarter of 2010 as compared to 2009's third quarter sales of $67.4 million. Operating cash flow (before changes in working capital accounts) was $47.3 million in the third quarter of 2010 and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $54.6 million.
Comstock reported net income of $1.0 million or 2 cents per diluted share for the first nine months of 2010 as compared to a net loss of $29.7 million or 66 cents per share in the first nine months of 2009. Comstock's production in the first nine months of 2010 increased 21% to 56.0 Bcfe as compared to the 46.4 Bcfe produced during the first nine months of 2009. Comstock averaged $4.55 per Mcf for sales of its natural gas production in the first nine months of 2010, 12% higher than the $4.05 per Mcf realized during the first nine months of 2009. Realized oil prices in the first nine months of 2010 averaged $66.54 per barrel, 43% higher than the $46.42 per barrel in 2009's first nine months. Oil and gas sales for the first nine months of 2010 increased 38% to $276.5 million as compared with $200.7 million in the first nine months of 2009. Operating cash flow (before changes in working capital accounts) generated by Comstock for the first nine months of 2010 was $174.8 million while EBITDAX was $197.9 million.
2010 Drilling Results
Comstock reported on the results to date of its 2010 drilling program. The Company has spent $393.0 million during the first nine months of 2010 on its exploration and development activities, $262.6 million of which was spent on drilling activities and $130.4 million of which was spent to acquire leasehold to support future exploration activity. During the first nine months of 2010, Comstock drilled 58 wells (35.3 net), 27 of which have been successfully completed as producing wells. As of September 30, 2010 the Company also had eight wells drilling, including seven in the Haynesville or Bossier shale and one in the Eagle Ford shale.
In the East Texas/North Louisiana region, Comstock has drilled 55 wells (33.6 net) so far in 2010. Fifty-four of the wells are Haynesville or Bossier shale wells. As of November 1, 2010, twenty-four of the 54 Haynesville or Bossier shale wells drilled in 2010 have been completed and were put on production at an average per well initial production rate of 10.8 MMcfe per day. Comstock expects to complete fourteen operated Haynesville or Bossier shale wells in the fourth quarter.
In addition to its Haynesville shale horizontal drilling program, Comstock has drilled two vertical wells during 2010. Comstock successfully completed a Cotton Valley well in its Blocker field in East Texas and also completed the Julian Pasture #4 in its Ball Ranch field in South Texas.
Comstock has initiated development of its Eagle Ford shale acreage in Atascosa, Karnes and McMullen counties in South Texas. Comstock has drilled the Rancho Tres Hijos #1H in McMullen county to a vertical depth of 11,020 feet with a 4,091 lateral and has drilled the NWR #1H in Atascosa county to a vertical depth of 8,715 feet with a 5,209 foot lateral. These wells are scheduled for completion in November. Comstock is currently drilling its third Eagle Ford shale well in Karnes county.
The Company's previously announced sale of its non-core oil and gas properties in Mississippi remains on schedule to close during the fourth quarter of 2010. Based on the sale price of $75.0 million, the Company expects to realize a net loss after income taxes of approximately $16.6 million on this divestiture.
Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, November 2, 2010, to discuss the operational and financial results for the third quarter of 2010. Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-825-1692 (international dial-in use 617-213-8059) and provide access code 29796865 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.
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. |
|||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||
2010 |
2009 |
2010 |
2009 |
||||||||||||||
Revenues: |
|||||||||||||||||
Oil and gas sales |
$ |
79,720 |
$ |
67,436 |
$ |
276,491 |
$ |
200,662 |
|||||||||
Operating expenses: |
|||||||||||||||||
Production taxes |
3,062 |
1,848 |
9,543 |
5,486 |
|||||||||||||
Gathering and transportation |
4,101 |
1,368 |
12,308 |
3,962 |
|||||||||||||
Lease operating |
13,002 |
12,803 |
41,150 |
41,015 |
|||||||||||||
Exploration |
1,238 |
227 |
2,506 |
371 |
|||||||||||||
Depreciation, depletion and amortization |
46,796 |
53,933 |
163,603 |
152,001 |
|||||||||||||
Impairment of oil and gas properties |
26 |
115 |
213 |
115 |
|||||||||||||
General and administrative |
9,400 |
8,689 |
28,965 |
27,559 |
|||||||||||||
Total operating expenses |
77,625 |
78,983 |
258,288 |
230,509 |
|||||||||||||
Operating income (loss) |
2,095 |
(11,547) |
18,203 |
(29,847) |
|||||||||||||
Other income (expenses): |
|||||||||||||||||
Interest income |
5 |
3 |
263 |
35 |
|||||||||||||
Other income |
100 |
23 |
145 |
115 |
|||||||||||||
Gain on sale of assets |
— |
— |
4,895 |
— |
|||||||||||||
Interest expense |
(7,108) |
(3,244) |
(22,551) |
(8,307) |
|||||||||||||
Total other income (expenses) |
(7,003) |
(3,218) |
(17,248) |
|
|||||||||||||
Income (loss) before income taxes |
(4,908) |
(14,765) |
955 |
(38,004) |
|||||||||||||
Benefit from income taxes |
208 |
2,193 |
68 |
8,300 |
|||||||||||||
Net income (loss) |
$ |
(4,700) |
$ |
(12,572) |
$ |
1,023 |
$ |
(29,704) |
|||||||||
Net income (loss) per share: |
|||||||||||||||||
Basic |
$ |
(0.10) |
$ |
(0.28) |
$ |
0.02 |
$ |
(0.66) |
|||||||||
Diluted |
$ |
(0.10) |
$ |
(0.28) |
$ |
0.02 |
$ |
(0.66) |
|||||||||
Weighted average shares outstanding: |
|||||||||||||||||
Basic |
45,623 |
45,032 |
45,537 |
44,992 |
|||||||||||||
Diluted |
45,623 |
(1) |
45,032 |
(1) |
45,589 |
44,992 |
(1) |
||||||||||
(1) Basic and diluted shares are the same due to the net loss. |
|||||||||||||||||
COMSTOCK RESOURCES, INC. |
|||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||
2010 |
2009 |
2010 |
2009 |
||||||||||||||
OPERATING CASH FLOW: |
|||||||||||||||||
Net income (loss) |
$ |
(4,700) |
$ |
(12,572) |
$ |
1,023 |
$ |
(29,704) |
|||||||||
Reconciling items: |
|||||||||||||||||
Deferred income taxes |
174 |
24,302 |
131 |
22,318 |
|||||||||||||
Depreciation, depletion and amortization |
46,796 |
53,933 |
163,603 |
152,001 |
|||||||||||||
Impairment of oil and gas properties |
26 |
115 |
213 |
115 |
|||||||||||||
Gain on sale of assets |
— |
— |
(4,895) |
— |
|||||||||||||
Debt issuance costs and discount amortization |
608 |
203 |
1,834 |
608 |
|||||||||||||
Stock-based compensation |
4,388 |
4,046 |
12,930 |
11,533 |
|||||||||||||
Operating cash flow |
47,292 |
70,027 |
174,839 |
156,871 |
|||||||||||||
Excess tax benefit from stock-based compensation |
28 |
(50) |
(1,503) |
(974) |
|||||||||||||
Decrease (increase) in accounts receivable |
9,550 |
(1,767) |
8,096 |
12,043 |
|||||||||||||
Decrease (increase) in other current assets |
(8) |
(22,724) |
49,428 |
(23,378) |
|||||||||||||
Increase (decrease) in accounts payable and accrued expenses |
(6,850) |
2,919 |
18,376 |
(26,712) |
|||||||||||||
Net cash provided by operating activities |
$ |
50,012 |
$ |
48,405 |
$ |
249,236 |
$ |
117,850 |
|||||||||
EBITDAX: |
|||||||||||||||||
Net income (loss) |
$ |
(4,700) |
$ |
(12,572) |
$ |
1,023 |
$ |
(29,704) |
|||||||||
Interest expense |
7,108 |
3,244 |
22,551 |
8,307 |
|||||||||||||
Income tax benefit |
(208) |
(2,193) |
(68) |
(8,300) |
|||||||||||||
Depreciation, depletion and amortization |
46,796 |
53,933 |
163,603 |
152,001 |
|||||||||||||
Impairment of oil and gas properties |
26 |
115 |
213 |
115 |
|||||||||||||
Gain on sale of assets |
— |
— |
(4,895) |
— |
|||||||||||||
Stock-based compensation |
4,388 |
4,046 |
12,930 |
11,533 |
|||||||||||||
Exploration |
1,238 |
227 |
2,506 |
371 |
|||||||||||||
EBITDAX |
$ |
54,648 |
$ |
46,800 |
$ |
197,863 |
$ |
134,323 |
|||||||||
As of September 30, |
|||||||||
2010 |
2009 |
||||||||
BALANCE SHEET DATA: |
|||||||||
Cash and cash equivalents |
$ |
4,350 |
$ |
3,094 |
|||||
Derivative financial instruments |
— |
5,264 |
|||||||
Income taxes receivable |
— |
37,796 |
|||||||
Marketable securities |
70,661 |
86,721 |
|||||||
Other current assets |
35,761 |
34,529 |
|||||||
Property and equipment, net |
1,817,962 |
1,546,745 |
|||||||
Other |
7,856 |
2,545 |
|||||||
Total assets |
$ |
1,936,590 |
$ |
1,716,694 |
|||||
Accounts payable and accrued expenses |
$ |
104,577 |
$ |
93,036 |
|||||
Long-term debt |
528,238 |
340,000 |
|||||||
Deferred income taxes |
224,686 |
212,327 |
|||||||
Other non-current liabilities |
9,575 |
6,030 |
|||||||
Stockholders' equity |
1,069,514 |
1,065,301 |
|||||||
Total liabilities and stockholders' equity |
$ |
1,936,590 |
$ |
1,716,694 |
|||||
COMSTOCK RESOURCES, INC. |
|||||||||||||||||||||||||||||||||
For the Three Months Ended September 30, 2010 |
For the Three Months Ended September 30, 2009 |
||||||||||||||||||||||||||||||||
East Texas/ |
East Texas/ |
||||||||||||||||||||||||||||||||
North |
South |
North |
South |
||||||||||||||||||||||||||||||
Louisiana |
Texas |
Other |
Total |
Louisiana |
Texas |
Other |
Total |
||||||||||||||||||||||||||
Oil production (thousand barrels) |
27 |
33 |
111 |
171 |
39 |
33 |
91 |
163 |
|||||||||||||||||||||||||
Gas production (MMcf) |
12,134 |
3,404 |
616 |
16,154 |
10,486 |
4,831 |
659 |
15,976 |
|||||||||||||||||||||||||
Total production (MMcfe) |
12,295 |
3,602 |
1,288 |
17,185 |
10,715 |
5,029 |
1,211 |
16,955 |
|||||||||||||||||||||||||
Oil sales |
$ |
1,932 |
$ |
2,434 |
$ |
6,797 |
$ |
11,163 |
$ |
2,502 |
$ |
2,117 |
$ |
4,836 |
$ |
9,455 |
|||||||||||||||||
Gas sales |
50,183 |
15,578 |
2,796 |
68,557 |
31,434 |
17,183 |
2,058 |
50,675 |
|||||||||||||||||||||||||
Gas hedging gains |
— |
— |
— |
— |
— |
7,306 |
— |
7,306 |
|||||||||||||||||||||||||
Total gas sales |
50,183 |
15,578 |
2,796 |
68,557 |
31,434 |
24,489 |
2,058 |
57,981 |
|||||||||||||||||||||||||
Total oil and gas sales |
$ |
52,115 |
$ |
18,012 |
$ |
9,593 |
$ |
79,720 |
$ |
33,936 |
$ |
26,606 |
$ |
6,894 |
$ |
67,436 |
|||||||||||||||||
Average oil price (per barrel) |
$ |
71.71 |
$ |
74.05 |
$ |
60.68 |
$ |
64.97 |
$ |
64.15 |
$ |
64.15 |
$ |
53.14 |
$ |
57.96 |
|||||||||||||||||
Average gas price (per Mcf) |
$ |
4.14 |
$ |
4.58 |
$ |
4.54 |
$ |
4.24 |
$ |
3.00 |
$ |
3.56 |
$ |
3.12 |
$ |
3.17 |
|||||||||||||||||
Average gas price including hedging (per Mcf) |
$ |
4.14 |
$ |
4.58 |
$ |
4.54 |
$ |
4.24 |
$ |
3.00 |
$ |
5.07 |
$ |
3.12 |
$ |
3.63 |
|||||||||||||||||
Average price (per Mcfe) |
$ |
4.24 |
$ |
5.00 |
$ |
7.45 |
$ |
4.64 |
$ |
3.17 |
$ |
3.84 |
$ |
5.69 |
$ |
3.55 |
|||||||||||||||||
Average price including hedging |
$ |
4.24 |
$ |
5.00 |
$ |
7.45 |
$ |
4.64 |
$ |
3.17 |
$ |
5.29 |
$ |
5.69 |
$ |
3.98 |
|||||||||||||||||
Production taxes |
$ |
1,832 |
$ |
700 |
$ |
530 |
$ |
3,062 |
$ |
602 |
$ |
837 |
$ |
409 |
$ |
1,848 |
|||||||||||||||||
Gathering and transportation |
$ |
3,574 |
$ |
433 |
$ |
94 |
$ |
4,101 |
$ |
635 |
$ |
624 |
$ |
109 |
$ |
1,368 |
|||||||||||||||||
Lease operating |
$ |
7,076 |
$ |
3,031 |
$ |
2,895 |
$ |
13,002 |
$ |
6,400 |
$ |
3,373 |
$ |
3,030 |
$ |
12,803 |
|||||||||||||||||
Production taxes (per Mcfe) |
$ |
0.15 |
$ |
0.19 |
$ |
0.41 |
$ |
0.18 |
$ |
0.06 |
$ |
0.17 |
$ |
0.34 |
$ |
0.11 |
|||||||||||||||||
Gathering and transportation |
$ |
0.29 |
$ |
0.12 |
$ |
0.07 |
$ |
0.24 |
$ |
0.06 |
$ |
0.12 |
$ |
0.09 |
$ |
0.08 |
|||||||||||||||||
Lease operating (per Mcfe) |
$ |
0.58 |
$ |
0.85 |
$ |
2.25 |
$ |
0.75 |
$ |
0.59 |
$ |
0.67 |
$ |
2.50 |
$ |
0.75 |
|||||||||||||||||
Oil and Gas Capital Expenditures: |
|||||||||||||||||||||||||||||||||
Leasehold costs |
$ |
11,023 |
$ |
57,031 |
$ |
30 |
$ |
68,084 |
$ |
2,376 |
$ |
313 |
$ |
52 |
$ |
2,741 |
|||||||||||||||||
Exploratory drilling |
26,423 |
6,376 |
— |
32,799 |
22,416 |
39 |
— |
22,455 |
|||||||||||||||||||||||||
Development drilling |
44,992 |
(105) |
1,404 |
46,291 |
49,335 |
2,647 |
10 |
51,992 |
|||||||||||||||||||||||||
Other development |
342 |
1,026 |
259 |
1,627 |
824 |
954 |
30 |
1,808 |
|||||||||||||||||||||||||
Total |
$ |
82,780 |
$ |
64,328 |
$ |
1,693 |
$ |
148,801 |
$ |
74,951 |
$ |
3,953 |
$ |
92 |
$ |
78,996 |
|||||||||||||||||
For the Nine Months Ended September 30, 2010 |
For the Nine Months Ended September 30, 2009 |
||||||||||||||||||||||||||||||||
East Texas/ |
East Texas/ |
||||||||||||||||||||||||||||||||
North |
South |
North |
South |
||||||||||||||||||||||||||||||
Louisiana |
Texas |
Other |
Total |
Louisiana |
Texas |
Other |
Total |
||||||||||||||||||||||||||
Oil production (thousand barrels) |
114 |
114 |
329 |
557 |
167 |
122 |
295 |
584 |
|||||||||||||||||||||||||
Gas production (MMcf) |
39,401 |
11,307 |
1,949 |
52,657 |
26,278 |
14,565 |
2,034 |
42,877 |
|||||||||||||||||||||||||
Total production (MMcfe) |
40,085 |
11,993 |
3,924 |
56,002 |
27,278 |
15,299 |
3,803 |
46,380 |
|||||||||||||||||||||||||
Oil sales |
$ |
8,570 |
$ |
8,571 |
$ |
19,951 |
$ |
37,092 |
$ |
8,185 |
$ |
6,310 |
$ |
12,603 |
$ |
27,098 |
|||||||||||||||||
Gas sales |
174,031 |
55,637 |
9,731 |
239,399 |
91,009 |
55,293 |
6,930 |
153,232 |
|||||||||||||||||||||||||
Gas hedging gains |
— |
— |
— |
— |
— |
20,332 |
— |
20,332 |
|||||||||||||||||||||||||
Total gas sales |
174,031 |
55,637 |
9,731 |
239,399 |
91,009 |
75,625 |
6,930 |
173,564 |
|||||||||||||||||||||||||
Total oil and gas sales |
$ |
182,601 |
$ |
64,208 |
$ |
29,682 |
$ |
276,491 |
$ |
99,194 |
$ |
81,935 |
$ |
19,533 |
$ |
200,662 |
|||||||||||||||||
Average oil price (per barrel) |
$ |
75.14 |
$ |
75.01 |
$ |
60.62 |
$ |
66.54 |
$ |
49.01 |
$ |
51.72 |
$ |
42.72 |
$ |
46.42 |
|||||||||||||||||
Average gas price (per Mcf) |
$ |
4.42 |
$ |
4.92 |
$ |
4.99 |
$ |
4.55 |
$ |
3.46 |
$ |
3.80 |
$ |
3.41 |
$ |
3.57 |
|||||||||||||||||
Average gas price including hedging (per Mcf) |
$ |
4.42 |
$ |
4.92 |
$ |
4.99 |
$ |
4.55 |
$ |
3.46 |
$ |
5.19 |
$ |
3.41 |
$ |
4.05 |
|||||||||||||||||
Average price (per Mcfe) |
$ |
4.56 |
$ |
5.35 |
$ |
7.56 |
$ |
4.94 |
$ |
3.64 |
$ |
4.03 |
$ |
5.14 |
$ |
3.89 |
|||||||||||||||||
Average price including hedging |
$ |
4.56 |
$ |
5.35 |
$ |
7.56 |
$ |
4.94 |
$ |
3.64 |
$ |
5.36 |
$ |
5.14 |
$ |
4.33 |
|||||||||||||||||
Production taxes |
$ |
6,618 |
$ |
1,308 |
$ |
1,617 |
$ |
9,543 |
$ |
1,956 |
$ |
2,370 |
$ |
1,160 |
$ |
5,486 |
|||||||||||||||||
Gathering and transportation |
$ |
10,573 |
$ |
1,443 |
$ |
292 |
$ |
12,308 |
$ |
1,444 |
$ |
2,186 |
$ |
332 |
$ |
3,962 |
|||||||||||||||||
Lease operating |
$ |
21,838 |
$ |
10,360 |
$ |
8,952 |
$ |
41,150 |
$ |
20,489 |
$ |
11,058 |
$ |
9,468 |
$ |
41,015 |
|||||||||||||||||
Production taxes (per Mcfe) |
$ |
0.17 |
$ |
0.11 |
$ |
0.41 |
$ |
0.17 |
$ |
0.07 |
$ |
0.15 |
$ |
0.31 |
$ |
0.12 |
|||||||||||||||||
Gathering and transportation |
$ |
0.26 |
$ |
0.12 |
$ |
0.07 |
$ |
0.22 |
$ |
0.05 |
$ |
0.14 |
$ |
0.09 |
$ |
0.09 |
|||||||||||||||||
Lease operating (per Mcfe) |
$ |
0.54 |
$ |
0.86 |
$ |
2.29 |
$ |
0.73 |
$ |
0.76 |
$ |
0.73 |
$ |
2.48 |
$ |
0.88 |
|||||||||||||||||
Oil and Gas Capital Expenditures: |
|||||||||||||||||||||||||||||||||
Leasehold costs |
$ |
50,401 |
$ |
79,875 |
$ |
158 |
$ |
130,434 |
$ |
9,544 |
$ |
644 |
$ |
155 |
$ |
10,343 |
|||||||||||||||||
Exploratory drilling |
49,861 |
6,376 |
— |
56,237 |
88,917 |
1,932 |
— |
90,849 |
|||||||||||||||||||||||||
Development drilling |
197,486 |
2,065 |
1,404 |
200,955 |
117,187 |
26,433 |
121 |
143,741 |
|||||||||||||||||||||||||
Other development |
2,217 |
2,349 |
760 |
5,326 |
4,036 |
4,232 |
326 |
8,594 |
|||||||||||||||||||||||||
Total |
$ |
299,965 |
$ |
90,665 |
$ |
2,322 |
$ |
392,952 |
$ |
219,684 |
$ |
33,241 |
$ |
602 |
$ |
253,527 |
|||||||||||||||||
SOURCE Comstock Resources, Inc.
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