Comstock Resources, Inc. Reports Third Quarter 2011 Financial and Operating Results and 2012 Drilling Budget

FRISCO, Texas, Oct. 31, 2011 /PRNewswire/ -- 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, 2011.  

Financial Results for the Three Months and Nine Months Ended September 30, 2011

Comstock reported net income of $1.3 million or 3 cents per diluted share for the three months ended September 30, 2011 as compared to a net loss of $4.7 million or 10 cents per share for the three months ended September 30, 2010.  The financial results include a gain realized from the sale of marketable securities of $2.5 million ($1.6 million after tax or 4 cents per share) for the three months ended September 30, 2011.

Comstock produced 26.2 billion cubic feet of natural gas equivalent ("Bcfe") in the third quarter of 2011, an increase of 53% over the 17.2 Bcfe produced in the third quarter of 2010.  Comstock's daily production rate, which averaged 285 million cubic feet of natural gas equivalent ("MMcfe") per day, grew 8% over the production rate in the second quarter of 2011, which averaged 263 MMcfe per day.  Production from the Company's Haynesville shale operations increased 15% from the prior quarter, averaging 200 MMcfe per day in the third quarter and accounting for 70% of the Company's total production.  

Comstock's average realized natural gas price decreased 4% to $4.09 per Mcf in the third quarter of 2011 as compared to $4.24 per Mcf in the third quarter of 2010.  The Company's average realized oil price improved by 35% to $87.55 per barrel in the third quarter of 2011 as compared to $64.97 per barrel in the third quarter of 2010.  The higher production level allowed the Company's oil and gas sales to increase by 50% to $119.4 million in the third quarter of 2011 as compared to 2010's third quarter sales of $79.7 million.  Operating cash flow (before changes in working capital accounts) increased 81% to $85.5 million in the third quarter of 2011 from $47.3 million in 2010's third quarter and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses in the quarter was up 72% to $94.2 million from $54.6 million in 2010's third quarter.

Comstock had net income of $7.7 million or 16 cents per diluted share for the first nine months of 2011 as compared to net income of $1.0 million or 2 cents per diluted share for the nine months ended September 30, 2010.  The financial results for the nine months ended September 30, 2011 include a gain realized from the sale of marketable securities of $32.2 million ($20.9 million after tax or 46 cents per share), impairments of leasehold costs of $9.8 million ($6.4 million after tax or 14 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).  Net income for the nine months ended September 30, 2010 included a gain realized from sale of marketable securities of $5.7 million ($3.7 million after tax or 8 cents per share).

Comstock's production in the first nine months of 2011 of 70.1 billion Bcfe was 25% higher than the 56.0 Bcfe produced in the first nine months of 2010.  Natural gas prices have been weaker in the first nine months of 2011 as compared to 2010's first nine months. Comstock's average realized natural gas price decreased 10% to $4.09 per Mcf for the first nine months of 2011 as compared to $4.55 per Mcf for the first nine months of 2010.  The Company's average realized oil price improved by 39% to $92.59 per barrel for the first three quarters of 2011 as compared to $66.54 per barrel for the first three quarters of 2010.  With higher production and lower natural gas prices, oil and gas sales increased by 16% to $319.9 million in the first nine months of 2011 as compared to 2010's first nine months sales of $276.5 million.  Operating cash flow (before changes in working capital accounts) of $218.8 million in the first nine months of 2011 increased 25% from 2010's first nine months operating cash flow of $174.8 million.  EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, increased 25% to $246.4 million in 2011's first nine months from EBITDAX of $197.9 million for the same period in 2010.

2011 Drilling Results

Comstock reported on the results to date of its 2011 drilling program.  During the first nine months of 2011, Comstock spent $443.4 million on its drilling program and $52.6 million to acquire acreage to support future exploration and development activity.  The Company is expecting to spend a total of $575.0 million in 2011 to drill 88 wells (47.4 net) and to complete 35 (23.4 net) Haynesville shale wells drilled in 2010.  Comstock expects to spend a total of $125.0 million on acreage acquisitions in 2011.  In the first three quarters of 2011, Comstock has drilled 67 wells (33.9 net) and completed 77 wells (44.2 net).  As of September 30, 2011 the Company also had nine wells (4.9 net) in the process of being drilled.

In the East Texas/North Louisiana region, Comstock has drilled 52 wells (21.6 net) in 2011, 51 of which were Haynesville or Bossier shale wells.  During the first nine months of 2011, Comstock completed 65 (35.7 net) of its Haynesville or Bossier shale wells.  Wells completed in the first nine months of the year were put on production at an average per well initial production rate of 10 MMcfe per day.  As of September 30, 2011, Comstock had 21 (8.9 net) Haynesville or Bossier wells waiting on completion, down from 35 wells (23.4 net) at December 31, 2010.  

In the South Texas region, the Company has drilled twelve Eagle Ford shale wells (12.0 net) in the first nine months of 2011.  Comstock completed eight wells (8.0 net) including one well that was drilled in 2010.  These wells had an average per well initial production rate of 683 barrels of oil equivalent ("BOE") per day.  In the third quarter of 2011, Comstock completed four wells in the Eagle Ford shale.  The Cutter Creek #1H was drilled to a vertical depth of 9,970 feet with a 4,824 foot lateral.  This well was tested at an initial rate of 575 barrels of oil per day and 0.2 MMcf of natural gas per day or 608 BOE per day.  The Forrest Wheeler #1H was drilled to a vertical depth of 11,142 feet with a 5,458 foot lateral.  This well was tested at an initial rate of 480 barrels of oil per day and 0.7 MMcf of natural gas per day or 597 BOE per day.  The Rancho Tres Hijos "A" #1H was drilled to a vertical depth of 10,911 feet with a 4,512 foot lateral.  This well was tested at an initial rate of 465 barrels of oil per day and 0.6 MMcf of natural gas per day or 565 BOE per day.  The Jupe "A" #1H was drilled to a vertical depth of 8,282 feet with a 7,101 foot lateral.  This well was tested at an initial rate of 197 barrels of oil per day and 0.1 MMcf of natural gas per day or 218 BOE per day.  All of the reported well results were obtained while following Comstock's restricted choke program.  Currently, Comstock also has five Eagle Ford shale wells that are being completed.  Comstock has increased its Eagle Ford shale acreage in South Texas that is prospective for oil to approximately 28,000 net acres.  Comstock completed lease acquisitions in the Eagle Ford shale that added approximately 6,000 net acres during October 2011.

2012 Capital Budget

Comstock also announced that it plans to spend approximately $396.0 million in 2012 for drilling and completion activities.  Comstock expects to reduce the number of rigs drilling for natural gas in its Haynesville shale program to one from the three rigs that it is currently using.  Comstock will add one drilling rig during 2012 to the two which are currently drilling for oil in its Eagle Ford shale development program in South Texas.

Comstock has budgeted to drill 71 wells (43.2 net) in 2012 as well as complete an additional 23 wells (20.3 net) which were drilled in 2011. Comstock plans to spend $104.0 million in its East Texas/North Louisiana operating region to drill 38 wells (13.3 net) which includes 37 (12.6 net) Haynesville or Bossier shale wells.  $65.0 million will be spent to complete 17 wells (14.7 net) that were drilled in 2011.  Comstock has budgeted to spend $207.0 million in its South Texas region to drill 32 (28.9 net) Eagle Ford shale horizontal wells in 2012 and $14.0 million to complete six wells (5.6 net) that were drilled in 2011.  The remaining $6.0 million of expenditures in 2012 are budgeted for exploration and developmental activity on the Company's other properties.

"Our 2012 drilling program will focus much of our drilling activity on growing our oil production while at the same time staying within the operating cash flow that we should generate," stated M. Jay Allison, Chairman and Chief Executive Officer of Comstock.  "To the extent that natural gas prices improve, we have the flexibility to increase our drilling activity in either the Eagle Ford shale or Haynesville shale depending on where we can generate the best returns."

Comstock has planned a conference call for 9:30 a.m. Central Time on November 1, 2011, to discuss the operational and financial results for the third quarter of 2011.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-700-7101 (international dial-in use 617-213-8837) and provide access code 54819845 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 1:30 p.m. ET November 1, 2011 and will continue until 11:59 p.m. November 8, 2011.  To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US).  The conference call ID number is 60253347.

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 September 30,



Nine Months Ended September 30,




2011



2010



2011



2010



















Revenues:

















Oil and gas sales


$

119,422



$

79,720



$

319,911



$

276,491



















Operating expenses:

















Production taxes



141




3,062




2,230




9,543


Gathering and transportation



8,101




4,101




20,340




12,308


Lease operating



12,527




13,002




36,512




41,150


Exploration



447




1,238




10,066




2,506


Depreciation, depletion and amortization



77,518




46,796




212,532




163,603


Impairment of oil and gas properties






26







213


(Gain) loss on sale of properties



(26)







57




797


General and administrative



8,628




9,400




25,973




28,965



















Total operating expenses



107,336




77,625




307,710




259,085



















Operating income



12,086




2,095




12,201




17,406



















Other income (expenses):

















Interest and other income



187




105




580




408


Interest expense



(9,988)




(7,108)




(30,682)




(22,551)


Gain on sale of marketable securities



2,484







32,213




5,692



















Total other income (expenses)



(7,317)




(7,003)




2,111




(16,451)



















Income (loss) before income taxes



4,769




(4,908)




14,312




955


Benefit from (provision for) income taxes



(3,460)




208




(6,650)




68


Net income (loss)


$

1,309



$

(4,700)



$

7,662



$

1,023



















Net income (loss) per share:

















Basic


$

0.03



$

(0.10)



$

0.16



$

0.02


Diluted


$

0.03



$

(0.10)



$

0.16



$

0.02



















Weighted average shares outstanding:

















Basic



46,011




45,623




45,992




45,537


Diluted



46,011




45,623




45,992




45,589





COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)




Three Months Ended September 30,



Nine Months Ended September 30,




2011



2010



2011



2010



















OPERATING CASH FLOW:

















Net income (loss)


$

1,309



$

(4,700)



$

7,662



$

1,023


Reconciling items:  

















Deferred income taxes



3,972




174




6,593




131


Depreciation, depletion and amortization



77,518




46,796




212,532




163,603


Dry hole costs and lease impairments



365







9,819





Impairment of oil and gas properties






26







213


Gain on sale of assets



(2,510)







(32,156)




(4,895)


Debt issuance costs and discount amortization



948




608




3,351




1,834


Stock-based compensation



3,946




4,388




10,958




12,930


Operating cash flow



85,548




47,292




218,759




174,839


Excess income taxes from stock-based compensation






28




612




(1,503)


Decrease (increase) in accounts receivable



1,673




9,550




(4,958)




8,096


Decrease (increase) in other current assets



10,729




(8)




2,275




49,428


Increase (decrease) in accounts payable and accrued expenses



1,697




(6,850)




861




18,376



















Net cash provided by operating activities


$

99,647



$

50,012



$

217,549



$

249,236



















EBITDAX:

















Net income (loss)


$

1,309



$

(4,700)



$

7,662



$

1,023


Interest expense



9,988




7,108




30,682




22,551


Income taxes expense (benefit)



3,460




(208)




6,650




(68)


Depreciation, depletion and amortization



77,518




46,796




212,532




163,603


Exploration



447




1,238




10,066




2,506


Impairment of oil and gas properties






26







213


Gain on sale of assets



(2,510)







(32,156)




(4,895)


Stock-based compensation



3,946




4,388




10,958




12,930



















EBITDAX


$

94,158



$

54,648



$

246,394



$

197,863

























As of September 30,




2011



2010











BALANCE SHEET DATA:


















Cash and cash equivalents


$

4,544



$

4,350


Marketable securities



31,707




70,661


Other current assets



53,477




35,761


Property and equipment, net



2,090,554




1,817,962


Other



15,863




7,856











Total assets


$

2,196,145



$

1,936,590











Current liabilities


$

153,352



$

104,577


Long-term debt



746,774




528,238


Deferred income taxes



223,237




224,686


Other non-current liabilities



9,649




9,575


Stockholders' equity



1,063,133




1,069,514











Total liabilities and stockholders' equity


$

2,196,145



$

1,936,590





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





For the Three Months Ended September 30, 2011



For the Three Months Ended September 30, 2010




East Texas/












East Texas/













North



South









North



South










Louisiana



Texas



Other



Total



Louisiana



Texas



Other



Total



































Oil production (thousand barrels)



26




163




6




195




27




33




111




171


Gas production (MMcf)



21,710




2,714




633




25,057




12,134




3,404




616




16,154


Total production (MMcfe)



21,862




3,691




671




26,224




12,295




3,602




1,288




17,185



































Oil sales


$

1,963



$

14,520



$

543



$

17,026



$

1,932



$

2,434



$

6,797



$

11,163


Gas sales



86,075




13,138




3,183




102,396




50,183




15,578




2,796




68,557


Total oil and gas sales


$

88,038



$

27,658



$

3,726



$

119,422



$

52,115



$

18,012



$

9,593



$

79,720




































































Average oil price (per barrel)


$

76.93



$

89.18



$

88.54



$

87.55



$

71.71



$

74.05



$

60.68



$

64.97


Average gas price (per Mcf)


$

3.96



$

4.84



$

5.03



$

4.09



$

4.14



$

4.58



$

4.54



$

4.24


Average price (per Mcfe)


$

4.03



$

7.49



$

5.55



$

4.55



$

4.24



$

5.00



$

7.45



$

4.64



































Production taxes


$

(1,103)



$

1,155



$

89



$

141



$

1,832



$

700



$

530



$

3,062


Gathering and transportation


$

7,630



$

369



$

102



$

8,101



$

3,574



$

433



$

94



$

4,101


Lease operating


$

8,188



$

3,464



$

875



$

12,527



$

7,076



$

3,031



$

2,895



$

13,002


Production taxes (per Mcfe)


$

(0.05)



$

0.31



$

0.13



$

0.01



$

0.15



$

0.19



$

0.41



$

0.18


Gathering and transportation (per Mcfe)


$

0.35



$

0.10



$

0.15



$

0.31



$

0.29



$

0.12



$

0.07



$

0.24


Lease operating (per Mcfe)


$

0.37



$

0.94



$

1.31



$

0.47



$

0.58



$

0.85



$

2.25



$

0.75



































Oil and Gas Capital Expenditures:

































 Leasehold costs


$

10,509



$

3,241



$

2,911



$

16,661



$

11,023



$

57,031



$

30



$

68,084


 Exploratory drilling



4,201




7,721







11,922




26,423




6,376







32,799


 Development drilling



64,350




50,969




757




116,076




44,992




(105)




1,404




46,291


 Other development



1,706




512




77




2,295




342




1,026




259




1,627


Total


$

80,766



$

62,443



$

3,745



$

146,954



$

82,780



$

64,328



$

1,693



$

148,801









For the Nine Months Ended September 30, 2011



For the Nine Months Ended September 30, 2010




East Texas/












East Texas/













North



South









North



South










Louisiana



Texas



Other



Total



Louisiana



Texas



Other



Total


Oil production (thousand barrels)



89




385




18




492




114




114




329




557


Gas production (MMcf)



56,706




8,494




1,962




67,162




39,401




11,307




1,949




52,657


Total production (MMcfe)



57,237




10,801




2,075




70,113




40,085




11,993




3,924




56,002



































Oil sales


$

8,000



$

35,885



$

1,654



$

45,539



$

8,570



$

8,571



$

19,951



$

37,092


Gas sales



224,069




40,458




9,845




274,372




174,031




55,637




9,731




239,399


Total oil and gas sales


$

232,069



$

76,343



$

11,499



$

319,911



$

182,601



$

64,208



$

29,682



$

276,491




































































Average oil price (per barrel)


$

90.25



$

93.32



$

88.73



$

92.59



$

75.14



$

75.01



$

60.62



$

66.54


Average gas price (per Mcf)


$

3.95



$

4.76



$

5.02



$

4.09



$

4.42



$

4.92



$

4.99



$

4.55


Average price (per Mcfe)


$

4.05



$

7.07



$

5.54



$

4.56



$

4.56



$

5.35



$

7.56



$

4.94



































Production taxes


$

(1,009)



$

2,653



$

586



$

2,230



$

6,618



$

1,308



$

1,617



$

9,543


Gathering and transportation


$

18,840



$

1,182



$

318



$

20,340



$

10,573



$

1,443



$

292



$

12,308


Lease operating


$

23,183



$

10,451



$

2,878



$

36,512



$

21,838



$

10,360



$

8,952



$

41,150


Production taxes (per Mcfe)


$

(0.02)



$

0.25



$

0.28



$

0.03



$

0.17



$

0.11



$

0.41



$

0.17


Gathering and transportation (per Mcfe)


$

0.33



$

0.11



$

0.15



$

0.29



$

0.26



$

0.12



$

0.07



$

0.22


Lease operating (per Mcfe)


$

0.41



$

0.96



$

1.39



$

0.52



$

0.54



$

0.86



$

2.29



$

0.73



































Oil and Gas Capital Expenditures:

































 Leasehold costs


$

25,893



$

22,506



$

4,222



$

52,621



$

50,401



$

79,875



$

158



$

130,434


 Exploratory drilling



31,091




46,516







77,607




49,861




6,376







56,237


 Development drilling



283,377




75,310




1,530




360,217




197,486




2,065




1,404




200,955


 Other development



3,557




1,621




369




5,547




2,217




2,349




760




5,326


Total


$

343,918



$

145,953



$

6,121



$

495,992



$

299,965



$

90,665



$

2,322



$

392,952





SOURCE Comstock Resources, Inc.



RELATED LINKS
http://www.comstockresources.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.