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Comstock Resources, Inc. Reports Third Quarter 2012 Financial And Operating Results

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FRISCO, Texas, Oct. 29, 2012 /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, 2012. 

Financial Results for the Three Months and Nine Months Ended September 30, 2012

Low natural gas prices continue to adversely impact the Company's financial results for the third quarter of 2012 as Comstock reported a net loss of $26.0 million or 56 cents per share as compared to net income of $1.3 million or 3 cents per diluted share for the three months ended September 30, 2011.  The third quarter of 2012 results include a loss of $2.8 million ($1.8 million after tax or 4 cents per diluted share) from the sale of oil and gas properties and costs incurred in connection with the formation of the Company's Eagle Ford shale joint venture, and impairments of unevaluated properties of $1.4 million ($0.9 million after tax or 2 cents per diluted share).  Results for the three months ended September 30, 2011 included a gain on sale of marketable securities of $2.5 million ($1.6 million after tax or 4 cents per diluted share). 

Comstock's oil production in the third quarter of 2012 increased 238% to 659,000 barrels as compared to 195,000 barrels in 2011's third quarter.  Oil production in the third quarter of 2012, which averaged 7,200 barrels of oil per day, also increased from the 6,400 barrels per day produced in the second quarter of 2012.  The Company's natural gas production decreased 19% to 20 billion cubic feet ("Bcf") as compared to 25 Bcf in 2011's third quarter.  The decrease is due to the sale of 10 million cubic feet ("MMcf") per day in May 2012 and declines resulting from the decrease in the Company's natural gas directed drilling due to the very low natural gas prices in 2012.

Comstock's average realized natural gas price of $2.46 per Mcf for the third quarter of 2012 was 40% lower than the $4.09 per Mcf realized for the third quarter of 2011.  The Company's average realized oil price for the third quarter of 2012, including hedging gains, was $102.08 per barrel, and was 17% higher than the average price of $87.55 per barrel in the third quarter of 2011.  Total oil and gas sales for the third quarter of 2012 decreased by 2% to $117.1 million as compared to 2011's third quarter sales of $119.4 million.  Comstock's oil revenues in the third quarter of 2012 increased by $50.3 million from the third quarter of 2011.  The increase in oil revenues only partially offset the effect of the extraordinarily low natural gas prices, as revenues from natural gas sales decreased by $52.6 million or 51% from the third quarter of 2011.  Oil sales composed 57% of total sales in the third quarter of 2012 as compared to only 14% in the third quarter of 2011.  Operating cash flow (before changes in working capital accounts) of $70.8 million in the third quarter of 2012 was 17% lower than operating cash flow of $85.5 million for the third quarter of 2011, and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, of $86.7 million in the third quarter of 2012 decreased 8% from EBITDAX of $94.2 million in the third quarter of 2011.  The lower natural gas prices not only caused revenues, cash flow, EBITDAX and earnings to decline but also resulted in an increase to the Company's depreciation, depletion and amortization expense in the quarter due to the exclusion of approximately 434 Bcf of the Company's undeveloped natural gas reserves from proved reserves. 

Comstock reported a net loss of $29.4 million or 63 cents per share for the first nine months of 2012 as compared to net income of $7.7 million or 16 cents per diluted share for the nine months ended September 30, 2011.  The 2012 results include a net gain of $24.3 million ($15.8 million after tax or 34 cents per diluted share) from the sale of oil and gas properties, which generated net proceeds of $142.9 million, and a gain of $26.6 million ($17.3 million or 37 cents per share) on the sale of marketable securities which generated net proceeds of $37.7 million.  The nine months 2012 financial results also include impairments of oil and gas properties and unevaluated leases of $8.0 million ($5.2 million after tax, or 11 cents per diluted share).  Results for the nine months ended September 30, 2011 included a gain on sale of marketable securities of $32.2 million ($20.9 million after tax or 46 cents per diluted share), impairments of unevaluated leases of $9.8 million ($6.4 million after tax or 14 cents per share), and a loss on early extinguishment of debt of $1.1 million ($0.7 million after tax or 2 cents per share).

Comstock's oil production in the first nine months of 2012 of 1.7 million barrels increased by 255% over the oil produced in the first nine months of 2011.  Oil comprised 14% of equivalent production during the first nine months of 2012 as compared to only 4% in 2011.  Natural gas production of 65 Bcf for the nine months ended September 30, 2012 decreased by 4% from the nine months ended September 30, 2011.  Natural gas prices were substantially weaker in the first nine months of 2012 as compared to 2011's first nine months.  Comstock's average realized natural gas price decreased 42% to $2.37 per Mcf for the first nine months of 2012 as compared to $4.09 per Mcf for the first nine months of 2011.  The Company's average realized oil price for the first nine months of 2012 of $102.30 per barrel, including hedging gains, was 10% above 2011's average realized price of $92.59.  Total oil and gas sales increased by 4% to $332.2 million in the first nine months of 2012 as compared to 2011's first nine months sales of $319.9 million.  Revenues from oil sales of $178.8 million for the nine months ended September 30, 2012 increased by $133.3 million or 293% from the nine months ended September 30, 2011, while revenues from natural gas sales decreased by $121.0 million or 44% from the nine months ended September 30, 2011.  Operating cash flow (before changes in working capital accounts) of $198.8 million in the first nine months of 2012 decreased 9% from operating cash flow of $218.8 million in the first nine months of 2011.  EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, decreased 2% to $240.4 million in 2012's first nine months from 2011's first nine months EBITDAX of $246.4 million

2012 Drilling Results

Comstock reported on the results to date of its 2012 drilling program.  During the first nine months of 2012, Comstock spent $401.9 million on development and exploration activities, net of amounts the Company received from the Eagle Ford shale joint venture, and $27.4 million for acreage and other acquisition costs.  Comstock drilled 56 wells (38.3 net) and had seven wells (4.8 net) drilling at September 30, 2012.  On September 30, 2012, the Company's five operated drilling rigs were all drilling oil wells in South Texas and West Texas as the Company suspended its natural gas drilling operations until natural gas prices improve.

Since the beginning of 2012, the Company has completed 50 oil wells, including 27 vertical Wolfbone wells and one horizontal Wolfcamp shale well in its West Texas region, and 22 wells in the horizontal Eagle Ford shale program in the South Texas region.  The 22 Eagle Ford shale wells that were completed had an average per well initial production rate of 638 barrels of oil equivalent ("BOE") per day.  The six new Eagle Ford wells reported on this quarter averaged 816 BOE per day with the Swenson C #1H, the Hill A #3H and the Hubberd #1H in McMullen County having the highest initial production rates at 1,002, 829 and 786 BOE per day, respectively.  These wells are being produced under the Company's restricted choke program and the initial tests were obtained with a 16/64 inch choke.  The first 35 wells, which have been producing for more than 90 days, had an average initial production rate of 686 BOE per day.  The 30 day per well production rate for these wells averaged 517 BOE per day and the 90 day per well production rate averaged 448 BOE per day, or 65% of the initial 24 hour test rate.

Since closing on the acquisition of acreage in Reeves County in West Texas, Comstock has drilled and completed 20 operated vertical Wolfbone wells and one horizontal Wolfcamp shale well.  These vertical wells were drilled to total depths of 11,250 to 12,786 feet and completed with 5 to 11 frac stages.  These wells have an average per well initial production rate of 356 BOE per day (79% oil).  Of the eight new operated wells reported on in the third quarter, the Ponderosa State 25 #1 and the Jesse James 4 #2 each had an initial production rate of 511 BOE per day.  Comstock also participated in five non-operated Wolfbone vertical wells which had an average initial production rate of 350 BOE per day.

Comstock has drilled its first horizontal well, the Monroe 35 #1-H, targeting the Wolfcamp shale formation and the results have been very positive with an initial production rate of 653 BOE per day.  The well was completed with fifteen frac stages over a 3,627 foot lateral.  Comstock's second horizontal well targeting the Wolfcamp shale, the Dale Evans 196 #2H, has reached total depth at 14,584 feet with a 3,428 foot lateral and is currently waiting to be completed.

Comstock has planned a conference call for 9:30 a.m. Central Time on October 30, 2012, to discuss the operational and financial results for the third quarter of 2012.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 800-659-1942 (international dial-in use 617-614-2710) and provide access code 67921574 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 October 30, 2012 and will continue until 11:59 p.m. November 6, 2012.  To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US).  The conference call ID number is 22637143.

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.  For additional information, please visit Comstock's website at www.comstockresources.com.


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








Three Months Ended September 30,



Nine Months Ended September 30,



2012


2011



2012


2011














Oil and gas sales


$

117,129


$

119,422


$

332,154


$

319,911














Operating expenses:













Production taxes



3,856



141



10,873



2,230

Gathering and transportation



6,382



8,101



21,612



20,340

Lease operating



15,503



12,527



44,200



36,512

Exploration



1,407



447



2,797



10,066

Depreciation, depletion and amortization



99,230



77,518



268,410



212,532

General and administrative



8,142



8,628



25,973



25,973

Impairment of oil and gas properties







5,350



(Gain) loss on sale of oil and gas properties



2,794



(26)



(24,271)



57

Total operating expenses



137,314



107,336



354,944



307,710














Operating income (loss)



(20,185)



12,086



(22,790)



12,201














Other income (expenses):













Interest expense



(17,535)



(9,988)



(45,301)



(30,682)

Gain on sale of marketable securities





2,484



26,621



32,213

Other income



153



187



675



580

Total other income (expenses)



(17,382)



(7,317)



(18,005)



2,111














Income (loss) before income taxes



(37,567)



4,769



(40,795)



14,312

Benefit from (provision for) income taxes



11,579



(3,460)



11,362



(6,650)

Net income (loss)


$

(25,988)


$

1,309


$

(29,433)


$

7,662














Net income (loss) per share:













Basic


$

(0.56)


$

0.03


$

(0.63)


$

0.16

Diluted


$

(0.56)


$

0.03


$

(0.63)


$

0.16














Weighted average shares outstanding:













Basic



46,443



46,011



46,414



45,992

Diluted



46,443



46,011



46,414



45,992

 

 

 

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)








Three Months Ended September 30,


Nine Months Ended September 30,



2012


2011



2012


2011














OPERATING CASH FLOW:


























Net income (loss)


$

(25,988)


$

1,309


$

(29,433)


$

7,662

Reconciling items: 













Deferred income taxes



(11,567)



3,972



(11,151)



6,593

Depreciation, depletion and amortization



99,230



77,518



268,410



212,532

Impairment of oil and gas properties







5,350



Dry hole costs and leasehold impairments



1,370



365



2,685



9,819

Loss (gain) on sale of assets



2,794



(2,510)



(50,892)



(32,156)

Debt issuance cost and discount amortization



1,586



948



3,689



3,351

Stock-based compensation



3,329



3,946



10,189



10,958

Operating cash flow



70,754



85,548



198,847



218,759

Excess income taxes from stock-based compensation



11





1,681



612

(Increase) decrease in accounts receivable



(9,785)



1,673



1,826



(4,958)

(Increase) decrease  in other current assets



(962)



10,729



(5,059)



2,275

Increase in accounts payable and accrued expenses



23,782



1,697



28,403



861

Net cash provided by operating activities


$

83,800


$

99,647


$

225,698


$

217,549














EBITDAX:


























Net income (loss)


$

(25,988)


$

1,309


$

(29,433)


$

7,662

Interest expense



17,535



9,988



45,301



30,682

Income tax expense (benefit)



(11,579)



3,460



(11,362)



6,650

Depreciation, depletion and amortization



99,230



77,518



268,410



212,532

Exploration



1,407



447



2,797



10,066

Impairment of oil and gas properties







5,350



Loss (gain) on sale of assets



2,794



(2,510)



(50,892)



(32,156)

Stock-based compensation



3,329



3,946



10,189



10,958

EBITDAX


$

86,728


$

94,158


$

240,360


$

246,394

 



As of September 30,



2012



2011









BALANCE SHEET DATA:
















Cash and cash equivalents


$

2,569



$

4,544

Marketable securities



15,072




31,707

Derivative financial instruments



10,823




Other current assets



59,565




53,477

Property and equipment, net



2,546,024




2,090,554

Other



23,786




15,863

Total assets


$

2,657,839



$

2,196,145

















Accounts payable and accrued expenses


$

200,086



$

153,352

Long-term debt



1,238,809




746,774

Deferred income taxes



190,784




223,237

Other non-current liabilities



16,846




9,649

Stockholders' equity



1,011,314




1,063,133

Total liabilities and stockholders' equity


$

2,657,839



$

2,196,145


 

 

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











 

For the Three Months Ended September 30, 2012



For the Three Months Ended September 30, 2011




East Texas/

North

Louisiana




South

Texas




West

Texas




Other




Total




East Texas/

North

Louisiana




South

Texas




Other




Total

Oil production (Mbbls)



22




457




172




8




659




26




163




6




195

Gas production (MMcf)



17,633




1,937




202




480




20,252




21,710




2,714




633




25,057

Total production (MMcfe)



17,770




4,677




1,235




526




24,208




21,862




3,691




671




26,224





































Oil sales


$

2,103



$

45,923



$

15,211



$

776



$

64,013



$

1,963



$

14,520



$

543



$

17,026

Hedging gains






2,501




792







3,293













Total oil, including hedging



2,103




48,424




16,003




776




67,306




1,963




14,520




543




17,026

Natural gas sales



41,342




5,680




1,076




1,725




49,823




86,075




13,138




3,183




102,396

Total oil and gas sales


$

43,445



$

54,104



$

17,079



$

2,501



$

117,129



$

88,038



$

27,658



$

3,726



$

119,422









































































Average oil price (per barrel)


$

92.33



$

100.58



$

88.33



$

99.77



$

97.09



$

76.93



$

89.18



$

88.54



$

87.55

Average oil price including
   hedging (per barrel)


$

92.33



$

106.06



$

92.93



$

99.77



$

102.08



$

76.93



$

89.18



$

88.54



$

87.55

Average gas price (per Mcf)


$

2.34



$

2.93



$

5.33



$

3.59



$

2.46



$

3.96



$

4.84



$

5.03



$

4.09

Average price (per Mcfe)


$

2.44



$

11.03



$

13.19



$

4.75



$

4.70



$

4.03



$

7.49



$

5.55



$

4.55

Average price including
   hedging (per Mcfe)


$

2.44



$

11.57



$

13.83



$

4.75



$

4.84



$

4.03



$

7.49



$

5.55



$

4.55





































Production taxes


$

699



$

2,243



$

758



$

156



$

3,856



$

(1,103)



$

1,155



$

89



$

141

Gathering and transportation


$

5,503



$

432



$

349



$

98



$

6,382



$

7,630



$

369



$

102



$

8,101

Lease operating


$

8,341



$

3,658



$

2,541



$

963



$

15,503



$

8,188



$

3,464



$

875



$

12,527





































Production taxes (per Mcfe)


$

0.04



$

0.48



$

0.61



$

0.30



$

0.16



$

(0.05)



$

0.31



$

0.13



$

0.01

Gathering and transportation

   (per Mcfe)


$

0.31



$

0.09



$

0.28



$

0.19



$

0.26



$

0.35



$

0.10



$

0.15



$

0.31

Lease operating (per Mcfe)


$

0.47



$

0.78



$

2.06



$

1.82



$

0.64



$

0.37



$

0.94



$

1.31



$

0.47





































Oil and Gas Capital Expenditures:


































Leasehold costs


$

2,015



$

1,903



$

4,135



$



$

8,053



$

10,509



$

3,241



$

2,911



$

16,661

Exploratory drilling



408




497










905




4,201




7,721







11,922

Development drilling



9,418




21,675




58,441







89,534




64,350




50,969




757




116,076

Other development



256




45




122




64




487




1,706




512




77




2,295

Total


$

12,097



$

24,120

(a)


$

62,698



$

64



$

98,979

(a)


$

80,766



$

62,443



$

3,745



$

146,954



(a)

Net of reimbursements received of $23,804 under the Company's Eagle Ford shale joint venture.


 

 

 

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











 

For the Nine Months Ended September 30, 2012



For the Nine Months Ended September 30, 2011




East Texas/

North

Louisiana




South

Texas




West

Texas




Other




Total




East Texas/

North

Louisiana




South

Texas




Other




Total

Oil production (Mbbls)



69




1,285




369




25




1,748




89




385




18




492

Gas production (MMcf)



55,745




6,807




474




1,541




64,567




56,706




8,494




1,962




67,162

Total production (MMcfe)



56,162




14,514




2,686




1,693




75,055




57,237




10,801




2,075




70,113





































Oil sales


$

6,714



$

132,367



$

32,493



$

2,582



$

174,156



$

8,000



$

35,885



$

1,654



$

45,539

Hedging gains






3,592




1,066







4,658













Total oil, including hedging



6,714




135,959




33,559




2,582




178,814




8,000




35,885




1,654




45,539

Natural gas sales



125,438




20,472




2,767




4,663




153,340




224,069




40,458




9,845




274,372

Total oil and gas sales


$

132,152



$

156,431



$

36,326



$

7,245



$

332,154



$

232,069



$

76,343



$

11,499



$

319,911









































































Average oil price (per barrel)


$

96.75



$

103.05



$

88.11



$

102.07



$

99.63



$

90.25



$

93.32



$

88.73



$

92.59

Average oil price including
   hedging (per barrel)


$

96.75



$

105.84



$

91.00



$

102.07



$

102.30



$

90.25



$

93.32



$

88.73



$

92.59

Average gas price (per Mcf)


$

2.25



$

3.01



$

5.84



$

3.03



$

2.37



$

3.95



$

4.76



$

5.02



$

4.09

Average price (per Mcfe)


$

2.35



$

10.53



$

13.13



$

4.28



$

4.36



$

4.05



$

7.07



$

5.54



$

4.56

Average price including
    hedging (per Mcfe)


$

2.35



$

10.78



$

13.52



$

4.28



$

4.43



$

4.05



$

7.07



$

5.54



$

4.56





































Production taxes


$

2,106



$

6,526



$

1,667



$

574



$

10,873



$

(1,009)



$

2,653



$

586



$

2,230

Gathering and transportation


$

18,580



$

1,939



$

758



$

335



$

21,612



$

18,840



$

1,182



$

318



$

20,340

Lease operating


$

24,979



$

10,512



$

5,587



$

3,122



$

44,200



$

23,183



$

10,451



$

2,878



$

36,512





































Production taxes (per Mcfe)


$

0.04



$

0.45



$

0.62



$

0.34



$

0.14



$

(0.02)



$

0.25



$

0.28



$

0.03

Gathering and transportation
   (per Mcfe)


$

0.33



$

0.13



$

0.28



$

0.20



$

0.29



$

0.33



$

0.11



$

0.15



$

0.29

Lease operating (per Mcfe)


$

0.44



$

0.73



$

2.08



$

1.84



$

0.59



$

0.41



$

0.96



$

1.39



$

0.52





































Oil and Gas Capital Expenditures:


































Acquisitions


$



$



$

3,235



$



$

3,235



$



$



$



$

Leasehold costs



5,813




6,218




12,149







24,180




25,893




22,506




4,222




52,621

Exploratory drilling



976




2,825










3,801




31,091




46,516







77,607

Development drilling



99,962




157,569




138,166







395,697




283,377




75,310




1,530




360,217

Other development



1,241




660




331




195




2,427




3,557




1,621




369




5,547

Total


$

107,992



$

167,272

(a)


$

153,881



$

195



$

429,340

(a)


$

343,918



$

145,953



$

6,121



$

495,992



(a)

Net of reimbursements received of $23,804 under the Company's Eagle Ford shale joint venture.

 

SOURCE Comstock Resources, Inc.



RELATED LINKS
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