EX-99.1 2 comstockexhibit99pt1.htm COMSTOCK RESOURCES, INC. EXHIBIT 99.1 comstockexhibit99pt1.htm
Exhibit 99.1
 
5300 Town and Country Blvd., Suite 500
comstock resources, inc. logo
Frisco, Texas 75034
Telephone: (972) 668-8800
Contact: Roland O. Burns
Sr. Vice President and Chief Financial Officer
 
Web Site: www.comstockresources.com

NEWS RELEASE
For Immediate Release

COMSTOCK RESOURCES, INC. REPORTS
THIRD QUARTER 2007 FINANCIAL AND OPERATING RESULTS

FRISCO, TEXAS, November 5, 2007– Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter and nine months ended September 30, 2007.

Financial Results for the Three Months and Nine Months Ended September 30, 2007

Comstock reported net income of $16.4 million or 37¢ per diluted share for the three months ended September 30, 2007 as compared to 2006's third quarter net income of $17.0 million or 39¢ per diluted share.  The 2006 results include a $1.2 million unrealized gain on derivative financial instruments.  Without this gain Comstock would have had net income of $16.3 million or 37¢ per diluted share.  The third quarter results reflect strong production growth from the Company's successful drilling activities.  Comstock's production in the third quarter of 2007 increased 35% to 23.1 billion cubic feet equivalent of natural gas ("Bcfe") as compared to production of 17.1 Bcfe in the third quarter of 2006.  Onshore production has increased 38% and offshore production was up 31% from the third quarter of 2006.  The third quarter average daily production rate of 251 million cubic feet of natural gas equivalent ("Mmcfe") also has increased 6% from the second quarter 2007 production rate of 236 Mmcfe per day.  Oil prices also improved from the third quarter of 2006.  Realized oil prices in the third quarter of 2007 averaged $72.57 per barrel, 10% higher than the $65.95 per barrel in 2006's third quarter.  Natural gas prices realized in the third quarter of 2007 averaged $6.35 per Mcf, 4% lower than the $6.63 per Mcf for 2006.  The 35% production increase caused third quarter 2007's oil and gas sales to increase 32% to $171.1 million from 2006's third quarter sales of $129.3 million.  Operating cash flow (before changes in working capital accounts) generated by Comstock in 2007's third quarter of $115.9 million increased 30% over 2006's third quarter cash flow of $89.3 million.  EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses increased 35% to $133.2 million in 2007's third quarter over 2006's third quarter EBITDAX of $98.8 million.

Comstock reported net income of $47.2 million or $1.05 per diluted share for the nine months ended September 30, 2007 as compared to 2006's net income of $62.3 million or $1.42 per diluted share.  The 2006 results include a $11.3 million unrealized gain on derivative financial instruments.  Without this gain, Comstock would have had net income of $54.7 million or $1.25 per diluted share.

Financial results for the first nine months of 2007 also reflect the Company's strong production growth in 2007.  Comstock's production in the first nine months of 2007 increased 32% to 64.6 Bcfe as compared to production of 49.1 Bcfe in the first nine months of 2006.  Onshore production has increased 25% and offshore production was up 40% over the first nine months of 2006.  Realized oil prices in the first nine months of 2007 averaged $63.45 per barrel, slightly above the $63.06 per barrel realized in 2006.  The production gains and higher crude oil prices for the first nine months of 2007 were offset in part by lower natural gas prices.  The Company's realized natural gas price averaged $6.93 per Mcf in 2007's first nine months, 3% lower than the $7.13 per Mcf in 2006's first nine months.  Oil and gas sales of $491.3 million for the first nine months of 2007 increased 28% from 2006's first nine months sales of $385.2 million.  Operating cash flow (before changes in working capital accounts) generated by Comstock in 2007's first nine months of $343.7 million increased 28% from 2006's first nine months cash flow of $267.7 million.  EBITDAX was $388.0 million in 2007's first nine months, a 32% increase over 2006's first nine months EBITDAX of $294.7 million.
 
Nine Months 2007 Drilling Results

Comstock also announced the results to date of its 2007 drilling program.  In the first nine months of 2007 Comstock drilled 142 wells (111.2 net).  One hundred twenty-nine of the wells drilled were successful and thirteen were dry holes.

Comstock has spent $287.0 million during the first nine months of 2007 for its onshore acquisition, exploration and development activities, comprised of $31.2 million for acquisitions of producing properties, $255.6 million in capital expenditures for lease acquisition, drilling and other development activity and $0.2 million for seismic data acquisition and other geologic and geophysical costs.  During the last quarter of 2007, the Company expects to make an additional $74.0 million in capital expenditures on its onshore properties.

Onshore, Comstock drilled 124 (97.5 net) development wells in the first nine months of 2007 with 122 (95.8 net) being successful.  Of the four (2.7 net) onshore exploratory wells, one (0.6 net) was successful.  Comstock drilled 95 successful wells (76.0 net) in its East Texas and North Louisiana region which have been tested at an average per well initial production rate of 1.3 Mmcfe per day.  At September 30, 2007 Comstock had six additional wells in this region that were being drilled which are part of Comstock's 125 well drilling program planned in this region for 2007.  Production in this region has increased 37% in the first nine months of 2007 as compared to the first nine months of 2006 as a result of this drilling program.

In South Texas, Comstock drilled eighteen successful wells (12.5 net) and one (0.1 net) unsuccessful well during the first nine months of 2007.  The successful wells had an average per well initial production rate of 5.9 Mmcfe per day.  Six of the successful wells were in the Las Hermanitas field in Duval County, Texas, five were in the Javelina Field in Hidalgo County, four were in the Company's Ball Ranch field, two were in the Double A Wells field and one was in the Tom East field.  Comstock had two rigs drilling in this region on September 30, 2007.

Comstock drilled thirteen wells (11.5 net) in Mississippi during the first nine months of 2007, eleven of which were successful.  Six of these wells were tested at an average per well initial production rate of 184 barrels of oil per day and two wells tested at 1.7 Mmcf of natural gas per day.  Comstock also had one (0.2 net) successful well in the San Juan Basin.

Comstock's offshore operations are conducted by its 49% owned subsidiary, Bois d'Arc Energy, Inc. (NYSE: BDE) ("Bois d'Arc").  Bois d'Arc spent $172.1 million during the first nine months of 2007 for its exploration and development activities, comprised of $167.1 million in capital expenditures for lease acquisition, drilling, facilities and other development activity and $5.0 million for seismic data acquisition and other geologic and geophysical costs.  Since the beginning of 2007, Bois d'Arc has drilled six (5.6 net) successful wells out of a total of fourteen (11.0 net) wells drilled.  Despite the lower drilling success rate, Bois d'Arc has had successful results from its exploration focused drilling program.  Bois d'Arc estimates that 2007 discoveries and the performance of its M-8 Sand water flood project at its Ship Shoal 113 unit have added in excess of 100 Bcfe of net proved reserves in 2007.  During the last quarter of 2007, Bois d'Arc expects to make an additional $48.0 million in capital expenditures.  Bois d'Arc is currently drilling a development well in the Ship Shoal 113 Unit and will then drill an 18,500 foot well to test its "Chinook" prospect in South Pelto block 21.

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 a growing independent energy company based in Frisco, Texas and is engaged in oil and gas acquisitions, exploration and development primarily in Texas, Louisiana and the Gulf of Mexico.  The Company's stock is traded on the New York Stock Exchange under the symbol CRK.

 
 
 
 

 

COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per share amounts)
 
   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2007
    
2006
    
2007
    
2006
  
                                 
Oil and gas sales
  
$
171,074
    
$
129,251
    
$
491,309
    
$
385,153
  
Operating expenses:
                                
Oil and gas operating
    
34,005
      
26,904
      
91,268
      
78,220
  
Exploration
    
5,710
      
8,069
      
36,709
      
16,662
  
Depreciation, depletion and amortization
    
62,420
      
40,709
      
178,887
      
104,457
  
Impairment
    
826
      
1,389
      
826
      
10,169
  
General and administrative
    
8,676
      
7,370
      
26,540
      
22,738
  
                                 
Total operating expenses
    
111,637
      
84,441
      
334,230
      
232,246
  
                                 
 
                                
Income from operations
    
59,437
      
44,810
      
157,079
      
152,907
  
                                 
Other income (expenses):
                                
Interest income
    
410
      
258
      
1,041
      
724
  
Other income
    
154
      
187
      
505
      
616
  
Interest expense
    
(11,225
)
    
(6,733
)
    
(29,880
)
    
(18,322
)
Gain on derivatives
    
—
      
1,180
      
—
      
10,608
  
                                 
Total other income (expenses)
    
(10,661
)
    
(5,108
)
    
(28,334
)
    
(6,374
)
                                 
Income before income taxes and minority interest
    
48,776
      
39,702
      
128,745
      
146,533
  
Provision for income taxes
    
(21,570
)
    
(16,662
)
    
(55,955
)
    
(61,847
)
Minority interest in earnings of Bois d'Arc Energy
    
(10,778
)
    
(6,004
)
    
(25,587
)
    
(22,433
)
                                 
Net income
  
$
16,428
    
$
17,036
    
$
47,203
    
$
62,253
  
                                 
                                 
Net income per share:
                                
Basic
  
$
0.38
    
$
0.40
    
$
1.09
    
$
1.48
  
Diluted
  
$
0.37
    
$
0.39
    
$
1.05
    
$
1.42
  
                               
Weighted average common and common stock
   equivalent shares outstanding:
                              
Basic
    
43,379
      
42,243
      
43,372
      
42,128
  
Diluted
    
44,434
      
43,553
      
44,345
      
43,505
  


 
 
 

 





COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands)
 
   
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
   
2007
    
2006
    
2007
    
2006
  
                                 
Cash flow from operations:
                                
Net cash provided by operating activities
  
$
97,332
    
$
98,236
    
$
324,885
    
$
274,300
  
Excess tax benefit from stock-based compensation
    
2
      
—
      
602
      
922
  
Increase (decrease) in accounts receivable
    
(14,183
)
    
2,366
      
1,230
      
(10,774
)
Increase (decrease) in other current assets
    
24
      
(10,560
)
    
2,588
      
139
  
Decrease (increase) in accounts payable
                                
   and accrued expenses
    
32,735
      
(763
)
    
14,346
      
3,153
  
Cash flow from operations
  
$
115,910
    
$
89,279
    
$
343,651
    
$
267,740
  
                                 
EBITDAX:
                                
Net income
  
$
16,428
    
$
17,036
    
$
47,203
    
$
62,253
  
Interest expense
    
11,225
      
6,733
      
29,880
      
18,322
  
Income tax expense
    
21,570
      
16,662
      
55,955
      
61,847
  
Depreciation, depletion and amortization
    
62,420
      
40,709
      
178,887
      
104,457
  
Impairment
    
826
      
1,389
      
826
      
10,169
  
Minority interest in earnings of Bois d'Arc Energy
    
10,778
      
6,004
      
25,587
      
22,433
  
Stock-based compensation
    
4,280
      
3,342
      
12,910
      
9,834
  
Exploration expense
    
5,710
      
8,069
      
36,709
      
16,662
  
Unrealized gain on derivatives
    
—
      
(1,180
)
    
—
      
(11,311
)
EBITDAX
  
$
133,237
    
$
98,764
    
$
387,957
    
$
294,666
  


   
As of September 30,
  
   
2007
    
2006
  
                 
Balance Sheet Data:
                
Cash and cash equivalents                                                                                        
  
$
17,032
    
$
27,084
  
Other current assets                                                                                        
    
93,857
      
78,089
  
Property and equipment, net                                                                                        
    
2,020,736
      
1,682,758
  
Other                                                                                        
    
4,734
      
4,959
  
Total assets                                                                                   
  
$
2,136,359
    
$
1,792,890
  
                 
Current liabilities
  
$
132,878
    
$
122,899
  
Long-term debt
    
597,000
      
455,000
  
Deferred income taxes
    
356,050
      
305,062
  
Asset retirement obligation
    
60,436
      
44,333
  
Minority interest in Bois d'Arc Energy
    
251,443
      
212,683
  
Stockholders' equity
    
738,552
      
652,913
  
Total liabilities and stockholders' equity
  
$
2,136,359
    
$
1,792,890
  

 
 
 
 
 

 
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per unit amounts)
 
   
For the Three Months Ended September 30, 2007
    
For the Three Months Ended September 30, 2006
  
   
Onshore(1)
    
Bois d'Arc Energy
    
Total
    
Onshore(1)
    
Bois d'Arc Energy
    
Total
  
Oil production (thousand barrels)
    
260
      
448
      
708
      
231
      
370
      
601
  
Gas production (million cubic
feet – Mmcf)
    
10,612
      
8,241
      
18,853
      
7,409
      
6,106
      
13,515
  
Total production (Mmcfe)
    
12,170
      
10,930
      
23,100
      
8,792
      
8,328
      
17,120
  
                                                 
Oil sales
  
$
16,628
    
$
34,738
    
$
51,366
    
$
13,696
    
$
25,935
    
$
39,631
  
Gas sales
    
66,459
      
53,249
      
119,708
      
48,559
      
41,061
      
89,620
  
          Total oil and gas sales
  
$
83,087
    
$
87,987
    
$
171,074
    
$
62,255
    
$
66,996
    
$
129,251
  
                                                 
Average oil price (per barrel)
  
$
64.06
    
$
77.50
    
$
72.57
    
$
59.42
    
$
70.01
    
$
65.95
  
Average gas price (per thousand cubic feet – Mcf)
  
$
6.26
    
$
6.46
    
$
6.35
    
$
6.55
    
$
6.72
    
$
6.63
  
Average price (per Mcf equivalent)
  
$
6.83
    
$
8.05
    
$
7.41
    
$
7.08
    
$
8.04
    
$
7.55
  
Lifting cost
  
$
17,030
    
$
16,975
    
$
34,005
    
$
13,366
    
$
13,538
    
$
26,904
  
Lifting cost (per Mcf equivalent)
  
$
1.40
    
$
1.55
    
$
1.47
    
$
1.52
    
$
1.63
    
$
1.57
  
Oil and Gas Capital Expenditures
  
$
84,669
    
$
44,905
    
$
129,574
    
$
120,656
    
$
77,500
    
$
198,156
  


   
For the Nine Months Ended September 30, 2007
    
For the Nine Months Ended September 30, 2006
  
   
Onshore(1)
    
Bois d'Arc Energy
    
Total
    
Onshore(1)
    
Bois d'Arc Energy
    
Total
  
Oil production (thousand barrels)
    
766
      
1,233
      
1,999
      
696
      
1,033
      
1,729
  
Gas production (million cubic feet –Mmcf)
    
28,462
      
24,136
      
52,598
      
22,327
      
16,388
      
38,715
  
Total production (Mmcfe)
    
33,056
      
31,535
      
64,591
      
26,501
      
22,587
      
49,088
  
                                                 
Oil sales
  
$
42,993
    
$
83,844
    
$
126,837
    
$
39,808
    
$
69,215
    
$
109,023
  
Gas sales
    
193,101
      
171,371
      
364,472
      
156,909
      
119,221
      
276,130
  
          Total oil and gas sales
  
$
236,094
    
$
255,215
    
$
491,309
    
$
196,717
    
$
188,436
    
$
385,153
  
                                                 
Average oil price (per barrel)
  
$
56.15
    
$
67.99
    
$
63.45
    
$
57.22
    
$
67.00
    
$
63.06
  
Average gas price (per thousand cubic feet – Mcf)
  
$
6.78
    
$
7.10
    
$
6.93
    
$
7.03
    
$
7.27
    
$
7.13
  
Average price (per Mcf equivalent)
  
$
7.14
    
$
8.09
    
$
7.61
    
$
7.42
    
$
8.34
    
$
7.85
  
Lifting cost
  
$
48,709
    
$
42,559
    
$
91,268
    
$
40,421
    
$
37,799
    
$
78,220
  
Lifting cost (per Mcf equivalent)
  
$
1.47
    
$
1.35
    
$
1.41
    
$
1.53
    
$
1.67
    
$
1.59
  
Oil and Gas Capital Expenditures
  
$
286,804
    
$
167,069
    
$
453,783
    
$
212,938
    
$
191,798
    
$
404,736
  

                                                 
(1)  Includes the onshore results of operations of Comstock Resources, Inc.
  

 
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
 
   
For the Three Months Ended September 30, 2007
    
For the Three Months Ended September 30, 2006
  
   
East Texas/
                      
East Texas/
                    
   
North
    
South
          
Total
    
North
    
South
          
Total
  
   
Louisiana
    
Texas
    
Other
    
Onshore
    
Louisiana
    
Texas
    
Other
    
Onshore
  
Oil production (thousand
barrels)
    
37
      
51
      
172
      
260
      
29
      
51
      
151
      
231
  
Gas production (million cubic
feet – Mmcf)
    
6,395
      
3,426
      
791
      
10,612
      
4,507
      
2,065
      
837
      
7,409
  
Total production (Mmcfe)
    
6,616
      
3,735
      
1,819
      
12,170
      
4,679
      
2,371
      
1,742
      
8,792
  
                                                                 
Oil sales
  
$
2,610
    
$
3,820
    
$
10,198
    
$
16,628
    
$
1,906
    
$
3,498
    
$
8,292
    
$
13,696
  
Gas sales
    
38,802
      
22,919
      
4,738
      
66,459
      
28,737
      
14,625
      
5,197
      
48,559
  
Total oil and gas sales
  
$
41,412
    
$
26,739
    
$
14,936
    
$
83,087
    
$
30,643
    
$
18,123
    
$
13,489
    
$
62,255
  
                                                                 
Average oil price (per barrel)
  
$
70.54
    
$
74.90
    
$
59.29
    
$
64.06
    
$
65.72
    
$
68.59
    
$
54.91
    
$
59.42
  
Average gas price (per thousand cubic feet – Mcf)
  
$
6.07
    
$
6.69
    
$
5.99
    
$
6.26
    
$
6.38
    
$
7.08
    
$
6.61
    
$
6.55
  
Average price (per Mcf
equivalent)
  
$
6.26
    
$
7.16
    
$
8.21
    
$
6.83
    
$
6.55
    
$
7.64
    
$
7.74
    
$
7.08
  
Lifting cost(1)
  
$
7,822
    
$
4,276
    
$
4,932
    
$
17,030
  
$
5,568
    
$
3,437
    
$
4,361
    
$
13,366
  
Lifting cost (per Mcf
equivalent)
  
$
1.18
    
$
1.14
    
$
2.71
    
$
1.40
    
$
1.19
    
$
1.45
    
$
2.50
    
$
1.52
  
                                                                 
Oil and Gas Capital Expenditures:
                                                                
Acquisitions
  
$
—
    
$
(776
)
  
$
—
    
$
(776
)
  
$
—
    
$
67,263
    
$
—
    
$
67,263
  
Leasehold costs
    
2,266
      
460
      
75
      
2,801
      
259
      
882
      
689
      
1,830
  
Exploratory drilling
    
—
      
2,607
      
229
      
2,836
      
—
      
—
      
—
      
—
  
Development drilling
    
48,045
      
22,333
      
6,971
      
77,349
      
39,066
      
6,296
      
732
      
46,094
  
Other development
    
808
      
642
      
1,009
      
2,459
      
3,149
      
353
      
1,967
      
5,469
  
Total
  
$
51,119
    
$
25,266
    
$
8,284
    
$
84,669
    
$
42,474
    
$
74,794
    
$
3,388
    
$
120,656
  

                                                                 
(1)  Includes production taxes of $4,009 and $2,487 for the three months ended September 30, 2007 and 2006, respectively.
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

   
For the Nine Months Ended September 30, 2007
    
For the Nine Months Ended September 30, 2006
  
   
East Texas/
                      
East Texas/
                    
   
North
    
South
          
Total
    
North
    
South
          
Total
  
   
Louisiana
    
Texas
    
Other
    
Onshore
    
Louisiana
    
Texas
    
Other
    
Onshore
  
Oil production (thousand barrels)
    
122
      
158
      
486
      
766
      
89
      
164
      
443
      
696
  
Gas production (million cubic
feet – Mmcf)
    
17,848
      
8,426
      
2,188
      
28,462
      
13,075
      
6,728
      
2,524
      
22,327
  
Total production (Mmcfe)
    
18,578
      
9,375
      
5,103
      
33,056
      
13,609
      
7,715
      
5,177
      
26,501
  
                                                                 
Oil sales
  
$
7,500
    
$
10,121
    
$
25,372
    
$
42,993
    
$
5,637
    
$
10,785
    
$
23,386
    
$
39,808
  
Gas sales
    
118,793
      
60,310
      
13,998
      
193,101
      
89,802
      
50,415
      
16,692
      
156,909
  
Total oil and gas sales
  
$
126,293
    
$
70,431
    
$
39,370
    
$
236,094
    
$
95,439
    
$
61,200
    
$
40,078
    
$
196,717
  
                                                                 
Average oil price (per barrel)
  
$
61.48
    
$
64.06
    
$
52.21
    
$
56.15
    
$
63.34
    
$
65.76
    
$
52.79
    
$
57.22
  
Average gas price (per thousand cubic feet – Mcf)
  
$
6.66
    
$
7.16
    
$
6.40
    
$
6.78
    
$
6.87
    
$
7.49
    
$
6.21
    
$
7.03
  
Average price (per Mcf
equivalent)
  
$
6.80
    
$
7.51
    
$
7.72
    
$
7.14
    
$
7.01
    
$
7.93
    
$
7.74
    
$
7.42
  
Lifting cost(2)
  
$
22,817
    
$
12,060
    
$
13,832
    
$
48,709
  
$
17,229
     $ 
10,770
    
$
12,422
    
$
40,421
  
Lifting cost (per Mcf equivalent)
  
$
1.23
    
$
1.29
    
$
2.71
    
$
1.47
    
$
1.27
    
$
1.40
    
$
2.40
    
$
1.53
  
                                                                 
Oil and Gas Capital Expenditures:
                                                                
Acquisitions
  
$
—
    
$
31,189
    
$
—
    
$
31,189
    
$
912
    
$
67,263
    
$
—
    
$
68,175
  
Leasehold costs
    
2,801
      
1,965
      
2,780
      
7,546
      
493
      
1,067
      
1,823
      
3,383
  
Exploratory drilling
    
—
      
7,994
      
2,430
      
10,424
      
—
      
75
      
—
      
75
  
Development drilling
    
159,139
      
49,818
      
22,913
      
231,870
      
91,525
      
11,903
      
20,488
      
123,916
  
Other development
    
1,822
      
1,627
      
2,326
      
5,775
      
11,320
      
996
      
5,073
      
17,389
  
Total
  
$
163,762
    
$
92,593
    
$
30,449
    
$
286,804
    
$
104,250
    
$
81,304
    
$
27,384
    
$
212,938
  

                                                                 
(2)  Includes production taxes of $10,511 and $8,793 for the nine months ended September 30, 2007 and 2006, respectively.