EX-99.1 2 exhibit99pnt1.htm EXHIBIT 99.1 exhibit99pnt1.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
FIRST QUARTER 2009 FINANCIAL AND OPERATING RESULTS

FRISCO, TEXAS, May 4, 2009 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months ended March 31, 2009.  Reported results for the three months ended March 31, 2008 reflect the Company's offshore operations which were sold during 2008 as discontinued operations.

Financial Results for the Three Months Ended March 31, 2009

Comstock reported a net loss of $5.7 million or 12¢ per share for the first quarter of 2009 as compared to 2008's first quarter net income from continuing operations of $29.4 million or 64¢ per diluted share.  The loss in the first quarter is attributable to the decline in oil and natural gas prices.  Comstock averaged $4.75 per Mcf for sales of its natural gas production in the first quarter of 2009, 42% lower than the $8.22 per Mcf realized in 2008's first quarter.  Realized oil prices in the first quarter of 2009 averaged $35.03 per barrel, 57% lower than the $81.49 per barrel in 2008's first quarter.

Comstock's production in the first quarter of 2009 increased 3% to 14.1 billion cubic feet equivalent of natural gas ("Bcfe") as compared to pro forma production of 13.7 Bcfe in the first quarter of 2008, which excludes production from properties sold during 2008.  The first quarter average daily production rate of 157 million cubic feet of natural gas equivalent ("MMcfe") decreased 4% from the 2008 fourth quarter production rate of 164 MMcfe per day mainly due to operational problems at third party operated gas processing facilities as well as delays experienced by the Company in completing some of its horizontal Haynesville wells during the first quarter of 2009.

Weaker oil and natural gas prices caused first quarter 2009's oil and gas sales to decrease 46% to $68.4 million from 2008's first quarter sales of $127.7 million.  Operating cash flow (before changes in working capital accounts) generated by Comstock's continuing operations in 2009's first quarter of $44.8 million decreased 51% from 2008's first quarter operating cash flow of $91.5 million.  EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses from continuing operations, decreased 56% to $45.3 million in 2009's first quarter from 2008's first quarter EBITDAX from continuing operations of $103.2 million.

 
 
 
 
 
 
 
 
 
 

 
 
 
 

 
2009 Drilling Results

Comstock also provided the results to date of its 2009 drilling program.  Comstock spent $97.3 million during the first three months of 2009 on its exploration and development activities.  Comstock expects to spend a total of $360.0 million in 2009 on its drilling program.  In the first quarter of 2009, Comstock drilled 14 wells (11.6 net), all of which were successful.  Nine of the 14 wells drilled in the first quarter were horizontal wells.

Comstock reported on its Haynesville Shale program in East Texas and North Louisiana.  The Company is very encouraged with recent results from its horizontal wells after changing its completion techniques.  Comstock's first Haynesville Shale horizontal wells utilized a formation stimulation process that utilized cross-linked heavier gel frac fluids and 20/40 ceramic proppants.  Based on results that other operators had achieved, Comstock modified the formation stimulation process to primarily non-cross linked lighter frac fluids (slick water) and smaller 40/70 resin coated sand or ceramic proppants.  Initial production results from wells using the new completion method were notably superior to wells using the old method.

The two wells drilled in the first quarter completed with the old method were the Bogue A #6H well drilled in the Waskom field in Harrison County, Texas and the Hart #1H drilled in the Logansport field in DeSoto Parish, Louisiana.  The Bogue A #6H was drilled to a vertical depth of 10,858 feet with a 2,600 foot horizontal lateral.  The well was completed with seven frac stages and was tested at an initial production rate of 7.4 MMcfe per day.  Comstock has a 100% working interest in this well.  The Hart #1H was drilled to a vertical depth of 11,553 feet with a 3,770 foot horizontal lateral.  The well was completed with ten frac stages and was tested at an initial production rate of 7.2 MMcfe per day.  Comstock has an 88% working interest in this well.  The Moneyham #1H in the Longwood field in Caddo Parish, Louisiana used the cross-linked heavier gel frac fluids but used smaller 40/70 proppant.  The Moneyham #1H was drilled to a vertical depth of 10,572 feet with a 3,840 foot horizontal lateral.  The Moneyham was completed with ten frac stages, however during clean-out operations coiled tubing was lost in the well lateral.  The well subsequently tested at an initial production rate of 6.6 MMcfe per day.  Comstock has a 100% working interest in this well.

Comstock has completed three wells using the new completion method.  The Headrick #1H and the Holmes A #1H were drilled in the Logansport field in the DeSoto Parish, Louisiana.  The Headrick #1H was drilled to a vertical depth of 11,525 feet with a 4,060 foot horizontal lateral.  The well was completed with ten frac stages and was tested at an initial production rate of 15.1 MMcfe per day.  Comstock has a 100% working interest in this well.  The Holmes A #1H was drilled to a vertical depth of 11,442 feet with a 4,010 foot horizontal lateral.  The Holmes was completed with ten frac stages and was tested at an initial production rate of 16.2 MMcfe per day.  Comstock has a 78% working interest in this well.  Comstock's most recently completed Haynesville well is in its Toledo Bend North field in DeSoto Parish, Louisiana.  The BSMC 12 #1H was drilled to a vertical depth of 11,535 feet with a 4,135 foot horizontal lateral.  This well was completed with ten frac stages and was tested with an initial production rate of 11.6 MMcfe per day.  Comstock has an 88% working interest in this well.

Comstock has scheduled the completion of four Haynesville horizontal wells, the Green #13H in Harrison County, Texas and the Broome #1H, Caraway #3H and the Colvin-Craner #2H in DeSoto Parish, Louisiana.  Comstock currently has five operated horizontal Haynesville Shale wells drilling and is participating in four non-operated horizontal Haynesville Shale wells.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
In addition to the Haynesville Shale wells drilled in the East Texas/North Louisiana region in the first quarter, Comstock drilled three (2.2 net) successful horizontal wells targeting the Cotton Valley Taylor Sands.  These wells were drilled in the Blocker and Waskom fields in Harrison County, Texas and were tested at an average per well initial production rate of 4.2 MMcfe per day.  Comstock also drilled two (1.4 net) successful vertical wells in its Logansport field in DeSoto Parish, Louisiana which were tested at an average per well initial production rate of 1.6 MMcfe per day.

In its South Texas region, Comstock drilled three successful wells (2.5 net) in the first quarter which had an average per well initial production rate of 8.5 MMcfe per day.  Comstock drilled the Muzza #13 in the Fandango field to a 16,300 foot vertical depth and completed this well with an initial production rate of 7.3 MMcfe per day.  The Trevino #3 also in the Fandango field was drilled to a vertical depth of 14,720 feet.  This well was successfully completed with an initial production rate of 8.4 MMcfe per day.  Comstock has a 100% working interest in these wells.  The Santa Fe Julian Pasture #1 well in the Ball Ranch field was drilled to a total vertical depth of 13,388 feet and completed with an initial production rate of 9.9 MMcfe per day.  Comstock has a 45% working interest in this well.

Comstock also announced that its bank group led by Bank of Montreal has redetermined the Company's borrowing base under its bank revolving credit facility to $550.0 million.  At the end of the first quarter, Comstock had $90.0 million outstanding under its bank revolving credit facility.

Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, May 5, 2009 to discuss the operational and financial results for the first quarter of 2009.  Investors wishing to participate should visit our website at www.comstockresources.com for a live web cast or dial 1-866-788-0540 and provide access code 48691066 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 a growing 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
March 31,
  
   
2009
    
2008
  
                 
Revenues:
                
Oil and gas sales
  
$
68,351
    
$
127,721
  
                 
Operating expenses:
                
Oil and gas operating
    
16,959
      
21,202
  
Exploration
    
13
      
2,238
  
Depreciation, depletion and amortization
    
47,272
      
41,505
  
General and administrative
    
9,819
      
6,164
  
Loss on sales of assets
    
—
      
240
  
                 
Total operating expenses
    
74,063
      
71,349
  
                 
Operating income (loss) from continuing operations
    
(5,712
)
    
56,372
  
                 
Other income (expenses):
                
Interest income
    
22
      
161
  
Other income
    
63
      
22
  
Interest expense
    
(2,162
)
    
(9,951
)
                 
Total other income (expenses)
    
(2,077
)
    
(9,768
)
                 
Income (loss) from continuing operations
before income taxes
    
(7,789
)
    
46,604
  
Benefit from (provision for) income taxes
    
2,132
      
(17,202
)
                 
Income (loss) from continuing operations
    
(5,657
)
    
29,402
  
                 
Income from discontinued operations after
income taxes and minority interest
    
—
      
11,693
  
Net income (loss)
  
$
(5,657
)
  
$
41,095
  
                 
Basic net income (loss) per share:
                
Continuing operations
  
$
(0.12
)
  
$
0.65
  
Discontinued operations
    
—
      
0.26
  
   
$
(0.12
)
  
$
0.91
  
Diluted net income (loss) per share:
                
Continuing operations
  
$
(0.12
)(1)
  
$
0.64
  
Discontinued operations
    
—
      
0.26
  
   
$
(0.12
)(1)
  
$
0.90
  
Weighted average shares outstanding:
                
Basic 
    
44,941
      
44,179
  
Diluted 
    
44,941
(1)
    
44,567
  
 
                                                                 
(1)  Basic and diluted are the same due to the net loss.
  


 
 
 
 

 
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)

   
Three Months Ended March 31,
  
   
2009
    
2008
  
                 
                 
OPERATING CASH FLOW:
                
Net income (loss) from continuing operations
  
$
(5,657
)
  
$
29,402
  
Reconciling items:
                
Deferred income taxes
    
(721
)
    
15,232
  
Dry hole costs and lease impairments
    
—
      
2,238
  
Depreciation, depletion and amortization
    
47,272
      
41,505
  
Loss on sale of assets
    
—
      
240
  
Debt issuance cost amortization
    
203
      
202
  
Stock-based compensation
    
3,667
      
2,678
  
Operating cash flow
    
44,764
      
91,497
  
Excess tax benefit from stock-based compensation
    
(679
)
    
(670
)
Decrease (increase) in accounts receivable
    
10,185
      
(15,665
)
Decrease (increase) in other current assets
    
235
      
(158
)
Decrease in accounts payable and accrued expenses
    
(14,043
)
    
(20,647
)
Net cash provided by operating activities from continuing operations
  
$
40,462
    
$
54,357
  
                 
EBITDAX:
                
Income (loss) from continuing operations
  
$
(5,657
)
  
$
29,402
  
Loss on sale of assets
    
—
      
240
  
Interest expense
    
2,162
      
9,951
  
Income tax expense (benefit)
    
(2,132
)
    
17,202
  
Depreciation, depletion and amortization
    
47,272
      
41,505
  
Stock-based compensation
    
3,667
      
2,678
  
Exploration
    
13
      
2,238
  
EBITDAX from continuing operations
  
$
45,325
    
$
103,216
  

   
As of March 31,
  
   
2009
    
2008
  
                 
Balance Sheet Data:
                
Cash and cash equivalents
  
$
963
    
$
1,555
  
Derivative financial instruments
    
18,369
      
—
  
Other current assets
    
60,691
      
73,046
  
Marketable securities
    
15,351
      
—
  
Property and equipment, net
    
1,494,923
      
1,329,340
  
Assets of discontinued operations
    
—
      
1,011,934
  
Other
    
2,950
      
3,741
  
Total assets
  
$
1,593,247
    
$
2,419,616
  
                 
Accounts payable and accrued expenses
  
$
96,035
    
$
63,780
  
Derivative financial instruments
    
—
      
17,658
  
Long-term debt
    
265,000
      
680,000
  
Deferred income taxes
    
184,484
      
105,064
  
Asset retirement obligation
    
5,678
      
7,827
  
Liabilities and minority interest of discontinued operations
    
—
      
738,226
  
Stockholders' equity
    
1,042,050
      
807,061
  
Total liabilities and stockholders' equity
  
$
1,593,247
    
$
2,419,616
  

 
 
 
 
 
 
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
 
 
   
For the Three Months Ended March 31, 2009
  
   
East Texas/
                    
   
North
    
South
              
   
Louisiana
    
Texas
    
Other
    
Total
  
Oil production (thousand barrels)
    
63
      
51
      
102
      
216
  
Gas production (million cubic feet – Mmcf)
    
7,179
      
4,911
      
703
      
12,793
  
Total production (Mmcfe)
    
7,555
      
5,218
      
1,315
      
14,088
  
                                 
Oil sales
  
$
2,275
    
$
2,079
    
$
3,207
    
$
7,561
  
Gas sales
    
31,318
      
20,964
      
2,596
      
54,878
  
Gas hedging gains
    
—
      
5,912
      
—
      
5,912
  
Total gas sales
    
31,318
      
26,876
      
2,596
      
60,790
  
Total oil and gas sales
  
$
33,593
    
$
28,955
    
$
5,803
    
$
68,351
  
                                 
Average oil price (per barrel)
  
$
36.11
    
$
40.76
    
$
31.44
    
$
35.03
  
Average gas price (per thousand cubic feet – Mcf)
  
$
4.36
    
$
4.27
    
$
3.69
    
$
4.29
  
Average gas price including hedging (per Mcf)
  
$
4.36
    
$
5.27
    
$
3.69
    
$
4.75
  
Average price (per Mcf equivalent)
  
$
4.45
    
$
4.42
    
$
4.41
    
$
4.43
  
Average price including hedging (per Mcf equivalent)
  
$
4.45
    
$
5.55
    
$
4.41
    
$
4.85
  
Lifting cost(1)
  
$
7,503
    
$
5,502
    
$
3,954
    
$
16,959
(1)
Lifting cost (per Mcf equivalent)
  
$
0.99
    
$
1.05
    
$
3.01
    
$
1.20
  
                                 
Oil and Gas Capital Expenditures:
                                
Leasehold costs
  
$
3,401
    
$
271
    
$
—
    
$
3,672
  
Exploratory drilling
    
36,467
      
1,812
      
—
      
38,279
  
Development drilling
    
31,657
      
18,952
      
—
      
50,609
  
Other development
    
1,398
      
2,966
      
332
      
4,696
  
Total
  
$
72,923
    
$
24,001
    
$
332
    
$
97,256
  
 
                                                                 
(1)     Includes production taxes of $1,122.
  

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

   
For the Three Months Ended March 31, 2008
  
   
As Reported
    
Adjusted to Exclude 2008 Asset Sales
  
   
East
Texas/
                      
East Texas/
                    
   
North
    
South
                
North
    
South
              
   
Louisiana
    
Texas
    
Other
    
Total
    
Louisiana
    
Texas
    
Other
    
Total
  
Oil production (thousand barrels)
    
47
      
46
      
150
      
243
      
42
      
33
      
150
      
225
  
Gas production (million cubic
feet – Mmcf)
    
6,727
      
5,630
      
773
      
13,130
      
6,281
      
5,330
      
773
      
12,384
  
Total production (Mmcfe)
    
7,008
      
5,907
      
1,671
      
14,586
      
6,535
      
5,527
      
1,671
      
13,733
  
                                                                 
Oil sales
  
$
4,424
    
$
4,520
    
$
10,828
    
$
19,772
    
$
3,981
    
$
3,235
    
$
10,828
    
$
18,044
  
Gas sales
    
55,731
      
46,135
      
6,327
      
108,193
      
52,657
      
43,799
      
6,327
      
102,783
  
Gas hedging losses
    
—
      
(244
)
    
—
      
(244
)
    
—
      
(244
)
    
—
      
(244
)
Total gas sales
    
55,731
      
45,891
      
6,327
      
107,949
      
52,657
      
43,555
      
6,327
      
102,539
  
Total oil and gas sales(4)
  
$
60,155
    
$
50,411
    
$
17,155
    
$
127,721
    
$
56,638
    
$
46,790
    
$
17,155
    
$
120,583
(4)
                                                                 
Average oil price (per barrel)
  
$
94.13
    
$
98.26
    
$
72.19
    
$
81.49
    
$
94.79
    
$
98.03
    
$
72.19
    
$
80.17
  
Average gas price (per thousand cubic feet – Mcf)
  
$
8.28
    
$
8.19
    
$
8.18
    
$
8.24
    
$
8.38
    
$
8.22
    
$
8.18
    
$
8.30
  
Average gas price including hedging (per Mcf)
  
$
8.28
    
$
8.15
    
$
8.18
    
$
8.22
    
$
8.38
    
$
8.17
    
$
8.18
    
$
8.28
  
Average price (per Mcf
equivalent)
  
$
8.58
    
$
8.58
    
$
10.27
    
$
8.77
    
$
8.67
    
$
8.51
    
$
10.27
    
$
8.80
  
Average price including hedging (per Mcf equivalent)
  
$
8.58
    
$
8.53
    
$
10.27
    
$
8.76
    
$
8.67
    
$
8.47
    
$
10.27
    
$
8.78
  
Lifting cost(2)(3)(4)
  
$
8,769
    
$
7,056
    
$
5,377
    
$
21,202
(2)
$
7,833
    
$
6,125
    
$
5,377
    
$
19,335
(3)(4)
Lifting cost (per Mcf equivalent)
  
$
1.25
    
$
1.19
    
$
3.22
    
$
1.45
    
$
1.20
    
$
1.11
    
$
3.22
    
$
1.41
  
                                                                 
Oil and Gas Capital Expenditures:
                                                                
Leasehold costs
  
$
2,861
    
$
1,124
    
$
49
    
$
4,034
    
$
2,861
    
$
1,124
    
$
49
    
$
4,034
  
Exploratory drilling
    
—
      
2,356
      
123
      
2,479
      
—
      
2,356
      
123
      
2,479
  
Development drilling
    
39,373
      
11,403
      
1,389
      
52,165
      
39,373
      
11,403
      
1,389
      
52,165
  
Other development(4)
    
930
      
717
      
1,716
      
3,363
      
782
      
545
      
1,716
      
3,043
(4)
Total(4)
  
$
43,164
    
$
15,600
    
$
3,277
    
$
62,041
    
$
43,016
    
$
15,428
    
$
3,277
    
$
61,721
(4)
 
                                                                 
(2)     Includes production taxes of $6,233.
(3)     Includes production taxes of $5,936.
(4)    Excludes oil and gas revenues of $7,138, operating expenses of $1,867 and other development capital expenditures of $320 related to oil and gas properties sold during 2008.