EX-99.1 2 exhibit99pnt1may2010.htm EXHIBIT 99.1 exhibit99pnt1may2010.htm
 
 
Exhibit 99.1
 
 
 
5300 Town and Country Blvd., Suite 500
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 2010
FINANCIAL AND OPERATING RESULTS

FRISCO, TEXAS, May 3, 2010 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months ended March 31, 2010.
 
Financial Results for the Three Months Ended March 31, 2010
 
Comstock reported net income of $7.3 million or 16¢ per diluted share for the first quarter of 2010 as compared to 2009's first quarter net loss of $5.7 million or 12¢ per share.  The improved profits for the first quarter of 2010 as compared to the net loss in the first quarter of 2009 are primarily attributable to higher natural gas production and increased oil and natural gas prices.

Comstock's production in the first quarter of 2010 grew 34% to 18.8 billion cubic feet of natural gas equivalent ("Bcfe") as compared to 14.1 Bcfe produced in the first quarter of 2009.  Production in the first quarter averaged 209 million cubic feet of natural gas equivalent ("MMcfe") per day.  The increase in production is primarily attributable to Comstock's successful Haynesville shale drilling program.  Production from Haynesville shale wells comprised 93 MMcfe per day (44%) of the Company's total production in the first quarter of 2010, as compared to only 6 MMcfe per day (4%) during the first quarter of 2009.  The Company's realized oil prices improved by 91% to $67.08 per barrel in the first quarter of 2010 from $35.03 per barrel in the first quarter of 2009, while natural gas prices increased 55¢ per Mcf or 12% to $5.30 per Mcf in the first quarter of 2010 as compared to $4.75 per Mcf in the first quarter of 2009.

The higher sales volumes, combined with the higher oil and natural gas prices, resulted in sales increasing by 55% to $106.1 million in the first quarter of 2010 as compared to 2009's first quarter sales of $68.4 million.  Comstock generated $71.7 million in operating cash flow (before changes in working capital accounts) in the first quarter of 2010 as compared to 2009's first quarter operating cash flow of $44.8 million.  EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $80.3 million in 2010's first quarter as compared to 2009's first quarter EBITDAX of $45.3 million.
 
 
 
 
 
 
 

 
 
 
 

2010 Drilling Results
In the first quarter of 2010, Comstock drilled 14 wells (9.9 net), nine of which have been successfully completed as producing wells.  The remaining five wells are scheduled for completion during May, 2010.

In the East Texas/North Louisiana region, Comstock drilled 13 wells (9.4 net) in the first quarter.   Twelve of the wells are Haynesville shale wells.  Six of the operated Haynesville shale wells drilled in 2010 have been completed and had an average initial production rate of 14.0 MMcfe per day.

In the South Toledo Bend field in Sabine Parish, Louisiana, Comstock drilled the Sustainable Forest 3#1H well to the upper section of the Haynesville shale or Bossier shale and completed the well with 16 frac stages.  The well's initial production rate was 20 MMcfe per day.  Comstock has a 67% working interest in this well.  In the Logansport field in DeSoto Parish, Louisiana, Comstock completed two successful operated Haynesville shale wells.  The Horn 5 #1H well was drilled to a vertical depth of 11,275 feet with a 4,669 foot lateral.  The well was completed with 18 frac stages and was tested at an initial production rate of 20 MMcfe per day.  Comstock has a 100% working interest in this well.  The Ramsey 4 #1H well was drilled to a vertical depth of 11,426 feet with a 4,616 foot horizontal lateral.  The well was completed with 18 frac stages and was tested at an initial production rate of 15 MMcfe per day.  Comstock has a 100% working interest in this well.  In the North Toledo Bend field in DeSoto Parish, Louisiana, Comstock completed two successful wells.  The BSMC 1 #1H was drilled to a vertical depth of 11,416 feet with a 4,471 foot horizontal lateral.  The well was completed with 12 frac stages and was tested at an initial production rate of 9 MMcfe per day.  Comstock has a 63% working interest in this well.  The BSMC 12 #2H was drilled to a vertical depth of 11,017 feet with a 4,431 foot horizontal lateral.  The well was completed with 12 frac stages and was tested with an initial production rate of 9 MMcfe per day.  Comstock has a 66% working interest in this well.  In the Waskom field in Harrison County, Texas Comstock drilled the Clark H #1H well to a vertical depth of 10,908 feet with a 4,261 foot horizontal lateral.  The well was completed with 18 frac stages and was tested at an initial production rate of 12 MMcfe per day.  Comstock has a 100% working interest in this well.

In addition to its Haynesville shale horizontal drilling program, Comstock has drilled two vertical wells in 2010’s first quarter.  Comstock successfully completed a Cotton Valley well in our Blocker field in East Texas and also completed the Julian Pasture #4 in the Ball Ranch field in South Texas which was tested at an initial production rate of 8 MMcfe per day.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, May 4, 2010, to discuss the operational and financial results for the first quarter of 2010.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-202-3109 (international dial-in use 617-213-8844) and provide access code 60429994 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.
OPERATING RESULTS
(In thousands, except per share amounts)



   
Three Months Ended
March 31,
  
   
2010
    
2009
  
                 
Revenues:
                
Oil and gas sales
  
$
106,089
    
$
68,351
  
                 
Operating expenses:
                
Production taxes
    
1,675
      
1,122
  
Gathering and transportation
    
4,528
      
1,244
  
Lease operating
    
14,160
      
14,593
  
Exploration
    
1,169
      
13
  
Depreciation, depletion and amortization
    
59,409
      
47,272
  
Impairment of oil and gas properties
    
159
      
—
  
General and administrative
    
9,801
      
9,819
  
                 
Total operating expenses
    
90,901
      
74,063
  
                 
Operating income (loss)
    
15,188
      
(5,712
)
                 
Other income (expenses):
                
Interest income
    
139
      
22
  
Other income
    
20
      
63
  
Interest expense
    
(7,844
)
    
(2,162
)
                 
Total other income (expenses)
    
(7,685
)
    
(2,077
)
                 
Income (loss) before income taxes
    
7,503
      
(7,789
)
Benefit from (provision for) income taxes
    
(161
)
    
2,132
  
Net income (loss)
  
$
7,342
    
$
(5,657
)
                 
Net income (loss) per share:
                
Basic
  
$
0.16
    
$
(0.12
)
Diluted
  
$
0.16
    
$
(0.12
)
                 
Weighted average shares outstanding:
                
Basic
    
45,408
      
44,941
  
Diluted(1) 
    
45,544
      
44,941
  
                                       
(1)  For 2009, basic and diluted shares are the same due to the net loss.

 
 
 
 
 
 
 

 
 
 
 
 
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)

   
Three Months Ended
March 31,
  
   
2010
    
2009
  
                 
OPERATING CASH FLOW:
                
Net income (loss)
  
$
7,342
    
$
(5,657
)
Reconciling items:
                
Deferred income taxes
    
(55
)
    
(721
)
Depreciation, depletion and amortization
    
59,409
      
47,272
  
Impairment of oil and gas properties
    
159
      
—
  
Debt issuance cost and discount amortization
    
602
      
203
  
Stock-based compensation
    
4,233
      
3,667
  
Operating cash flow
    
71,690
      
44,764
  
Excess tax benefit from stock-based compensation
    
(1,490
)
    
(679
)
(Increase) decrease in accounts receivable
    
(4,786
)
    
10,185
  
Decrease in other current assets
    
45,817
      
235
  
Increase (decrease) in accounts payable and accrued expenses
    
13,505
      
(14,043
)
                 
Net cash provided by operating activities
  
$
124,736
    
$
40,462
  
                 
EBITDAX:
                
Income (loss)
  
$
7,342
    
$
(5,657
)
Interest expense
    
7,844
      
2,162
  
Income tax expense (benefit)
    
161
      
(2,132
)
Depreciation, depletion and amortization
    
59,409
      
47,272
  
Impairment of oil and gas properties
    
159
      
—
  
Stock-based compensation
    
4,233
      
3,667
  
Exploration
    
1,169
      
13
  
EBITDAX
  
$
80,317
    
$
45,325
  


   
As of March 31,
  
   
2010
    
2009
  
                 
BALANCE SHEET DATA:
                
Cash and cash equivalents
  
$
122,197
    
$
963
  
Derivative financial instruments
    
—
      
18,369
  
Income taxes receivable
    
—
      
3,328
  
Marketable securities
    
94,378
      
15,351
  
Other current assets
    
52,254
      
57,363
  
Property and equipment, net
    
1,610,604
      
1,494,923
  
Other
    
9,136
      
2,950
  
Total assets
  
$
1,888,569
    
$
1,593,247
  
                 
Accounts payable and accrued expenses
  
$
100,288
    
$
96,035
  
Current deferred income taxes payable
    
6,029
      
—
  
Long-term debt
    
470,970
      
265,000
  
Deferred income taxes
    
225,481
      
184,484
  
Reserve for future abandonment costs
    
6,716
      
5,678
  
Stockholders' equity
    
1,079,085
      
1,042,050
  
Total liabilities and stockholders' equity
  
$
1,888,569
    
$
1,593,247
  
 
 
 
 
 
 

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


 
   
For the Three Months Ended March 31, 2010
    
For the Three Months Ended March 31, 2009
  
   
East Texas/
                      
East Texas/
                    
   
North
    
South
                
North
    
South
              
   
Louisiana
    
Texas
    
Other
    
Total
    
Louisiana
    
Texas
    
Other
    
Total
  
Oil production (thousand barrels)
    
37
      
42
      
97
      
176
      
63
      
51
      
102
      
216
  
Gas production (Mmcf)
    
12,979
      
4,113
      
702
      
17,794
      
7,179
      
4,911
      
703
      
12,793
  
Total production (Mmcfe)
    
13,200
      
4,367
      
1,280
      
18,847
      
7,555
      
5,218
      
1,315
      
14,088
  
                                                                 
Oil sales
  
$
2,744
    
$
3,184
    
$
5,845
    
$
11,773
    
$
2,275
    
$
2,079
    
$
3,207
    
$
7,561
  
Gas sales
    
66,467
      
23,725
      
4,124
      
94,316
      
31,318
      
20,964
      
2,596
      
54,878
  
Gas hedging gains
    
—
      
—
      
—
      
—
      
—
      
5,912
      
—
      
5,912
  
Total gas sales
    
66,467
      
23,725
      
4,124
      
94,316
      
31,318
      
26,876
      
2,596
      
60,790
  
Total oil and gas sales
  
$
69,211
    
$
26,909
    
$
9,969
    
$
106,089
    
$
33,593
    
$
28,955
    
$
5,803
    
$
68,351
  
                                                                 
Average oil price (per barrel)
  
$
74.75
    
$
75.23
    
$
60.58
    
$
67.08
    
$
36.11
    
$
40.76
    
$
31.44
    
$
35.03
  
Average gas price (per Mcf)
  
$
5.12
    
$
5.77
    
$
5.87
    
$
5.30
    
$
4.36
    
$
4.27
    
$
3.69
    
$
4.29
  
Average gas price including hedging (per Mcf)
  
$
5.12
    
$
5.77
    
$
5.87
    
$
5.30
    
$
4.36
    
$
5.47
    
$
3.69
    
$
4.75
  
Average price (per Mcfe)
  
$
5.24
    
$
6.16
    
$
7.79
    
$
5.63
    
$
4.45
    
$
4.42
    
$
4.41
    
$
4.43
  
Average price including hedging (per Mcfe)
  
$
5.24
    
$
6.16
    
$
7.79
    
$
5.63
    
$
4.45
    
$
5.55
    
$
4.41
    
$
4.85
  
                                                                 
Production taxes
  
$
1,116
    
$
82
    
$
477
    
$
1,675
    
$
143
    
$
623
    
$
356
    
$
1,122
  
Gathering and transportation
  
$
3,660
    
$
773
    
$
95
    
$
4,528
    
$
273
    
$
855
    
$
116
    
$
1,244
  
Lease operating
  
$
7,948
    
$
3,468
    
$
2,744
    
$
14,160
    
$
7,087
    
$
4,024
    
$
3,482
    
$
14,593
  
Production taxes (per Mcfe)
  
$
0.08
    
$
0.02
    
$
0.37
    
$
0.09
    
$
0.02
    
$
0.12
    
$
0.27
    
$
0.08
  
Gathering and transportation (per Mcfe)
  
$
0.28
    
$
0.18
    
$
0.07
    
$
0.24
    
$
0.04
    
$
0.16
    
$
0.09
    
$
0.09
  
Lease operating (per Mcfe)
  
$
0.60
    
$
0.79
    
$
2.15
    
$
0.75
    
$
0.93
    
$
0.77
    
$
2.65
    
$
1.03
  
                                                                 
Oil and Gas Capital Expenditures:
                                                                
Leasehold costs
  
$
9,855
    
$
—
    
$
56
    
$
9,911
    
$
3,401
    
$
271
    
$
—
    
$
3,672
  
Exploratory drilling
    
17,031
      
—
      
—
      
17,031
      
36,467
      
1,812
      
—
      
38,279
  
Development drilling
    
63,242
      
1,594
      
—
      
64,836
      
31,657
      
18,952
      
—
      
50,609
  
Other development
    
1,034
      
629
      
246
      
1,909
      
1,398
      
2,966
      
332
      
4,696
  
Total
  
$
91,162
    
$
2,223
    
$
302
    
$
93,687
    
$
72,923
    
$
24,001
    
$
332
    
$
97,256