EX-99.1 2 exhibit99pnt1nov12010.htm EXHIBIT 99.1 exhibit99pnt1nov12010.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
THIRD QUARTER 2010 FINANCIAL AND OPERATING RESULTS

FRISCO, TEXAS, November 1, 2010 – 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, 2010.

Financial Results for the Three Months and Nine Months Ended September 30, 2010

Comstock reported a net loss of $4.7 million or 10¢ per diluted share for the three months ended September 30, 2010 as compared to a net loss of $12.6 million or 28¢ per share for the three months ended September 30, 2009.
 
Comstock's production in the third quarter of 2010 of 17.2 billion cubic feet of natural gas equivalent ("Bcfe") was slightly higher than the 17.0 Bcfe produced in the third quarter of 2009.  Production from the Company's Haynesville shale wells of 84.7 million cubic feet of natural gas equivalent ("MMcfe") per day accounted for 45% of the Company's total production of 186.8 MMcfe per day in the third quarter of 2010, as compared to 57.8 MMcfe per day (31%) during the third quarter of 2009.  The Company's Haynesville shale production declined in the third quarter of 2010 as compared to the second quarter of 2010 due to the unavailability of high pressure pumping services required to complete the Haynesville shale wells that have been drilled.  As of September 30, 2010, Comstock had 26 operated Haynesville shale wells waiting on completion.  Beginning in October the Company has obtained adequate high pressure pumping services to resume completing the wells which should provide for production growth from its Haynesville shale operations in the fourth quarter.

Oil and natural gas prices improved in the third quarter of 2010 as compared to 2009's third quarter.  Comstock's average realized natural gas price increased 17% to $4.24 per Mcf for the third quarter of 2010 as compared to $3.63 per Mcf for the third quarter of 2009.  The Company's average realized oil price improved by 12% to $64.97 per barrel for the third quarter of 2010 as compared to $57.96 per barrel for the third quarter of 2009.  The improved oil and natural gas prices caused oil and gas sales to increase by 18% to $79.7 million in the third quarter of 2010 as compared to 2009's third quarter sales of $67.4 million.  Operating cash flow (before changes in working capital accounts) was $47.3 million in the third quarter of 2010 and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $54.6 million.
 
 
 
 
 
 
 
 
 

 
 
 
 
Comstock reported net income of $1.0 million or 2¢ per diluted share for the first nine months of 2010 as compared to a net loss of $29.7 million or 66¢ per share in the first nine months of 2009.  Comstock's production in the first nine months of 2010 increased 21% to 56.0 Bcfe as compared to the 46.4 Bcfe produced during the first nine months of 2009.  Comstock averaged $4.55 per Mcf for sales of its natural gas production in the first nine months of 2010, 12% higher than the $4.05 per Mcf realized during the first nine months of 2009.  Realized oil prices in the first nine months of 2010 averaged $66.54 per barrel, 43% higher than the $46.42 per barrel in 2009's first nine months.  Oil and gas sales for the first nine months of 2010 increased 38% to $276.5 million as compared with $200.7 million in the first nine months of 2009.  Operating cash flow (before changes in working capital accounts) generated by Comstock for the first nine months of 2010 was $174.8 million while EBITDAX was $197.9 million.
 
2010 Drilling Results
 
Comstock reported on the results to date of its 2010 drilling program.  The Company has spent $393.0 million during the first nine months of 2010 on its exploration and development activities, $262.6 million of which was spent on drilling activities and $130.4 million of which was spent to acquire leasehold to support future exploration activity.  During the first nine months of 2010, Comstock drilled 58 wells (35.3 net), 27 of which have been successfully completed as producing wells.  As of September 30, 2010 the Company also had eight wells drilling, including seven in the Haynesville or Bossier shale and one in the Eagle Ford shale.
 
In the East Texas/North Louisiana region, Comstock has drilled 55 wells (33.6 net) so far in 2010.   Fifty-four of the wells are Haynesville or Bossier shale wells.  As of November 1, 2010, twenty-four of the 54 Haynesville or Bossier shale wells drilled in 2010 have been completed and were put on production at an average per well initial production rate of 10.8 MMcfe per day.  Comstock expects to complete fourteen operated Haynesville or Bossier shale wells in the fourth quarter.

In addition to its Haynesville shale horizontal drilling program, Comstock has drilled two vertical wells during 2010.  Comstock successfully completed a Cotton Valley well in its Blocker field in East Texas and also completed the Julian Pasture #4 in its Ball Ranch field in South Texas.

Comstock has initiated development of its Eagle Ford shale acreage in Atascosa, Karnes and McMullen counties in South Texas.  Comstock has drilled the Rancho Tres Hijos #1H in McMullen county to a vertical depth of 11,020 feet with a 4,091 lateral and has drilled the NWR #1H in Atascosa county to a vertical depth of 8,715 feet with a 5,209 foot lateral.  These wells are scheduled for completion in November.  Comstock is currently drilling its third Eagle Ford shale well in Karnes county.

The Company′s previously announced sale of its non-core oil and gas properties in Mississippi remains on schedule to close during the fourth quarter of 2010.  Based on the sale price of $75.0 million, the Company expects to realize a net loss after income taxes of approximately $16.6 million on this divestiture.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, November 2, 2010, to discuss the operational and financial results for the third quarter of 2010.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-825-1692 (international dial-in use 617-213-8059) and provide access code 29796865 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 September 30,
    
Nine Months Ended September 30,
  
   
2010
    
2009
    
2010
    
2009
  
                                 
Revenues:
                                
Oil and gas sales
  
$
79,720
    
$
67,436
    
$
276,491
    
$
200,662
  
                                 
Operating expenses:
                                
Production taxes
    
3,062
      
1,848
      
9,543
      
5,486
  
Gathering and transportation
    
4,101
      
1,368
      
12,308
      
3,962
  
Lease operating
    
13,002
      
12,803
      
41,150
      
41,015
  
Exploration
    
1,238
      
227
      
2,506
      
371
  
Depreciation, depletion and amortization
    
46,796
      
53,933
      
163,603
      
152,001
  
Impairment of oil and gas properties
    
26
      
115
      
213
      
115
  
General and administrative
    
9,400
      
8,689
      
28,965
      
27,559
  
                                 
Total operating expenses
    
77,625
      
78,983
      
258,288
      
230,509
  
                                 
Operating income (loss)
    
2,095
      
(11,547
)
    
18,203
      
(29,847
)
                                 
Other income (expenses):
                                
Interest income
    
5
      
3
      
263
      
35
  
Other income
    
100
      
23
      
145
      
115
  
Gain on sale of assets
    
—
      
—
      
4,895
      
—
  
Interest expense
    
(7,108
)
    
(3,244
)
    
(22,551
)
    
(8,307
)
                                 
Total other income (expenses)
    
(7,003
)
    
(3,218
)
    
(17,248
)
    
 
(8,157
)
                                 
Income (loss) before income taxes
    
(4,908
)
    
(14,765
)
    
955
      
(38,004
)
Benefit from income taxes
    
208
      
2,193
      
68
      
8,300
  
Net income (loss)
  
$
(4,700
)
  
$
(12,572
)
  
$
1,023
    
$
(29,704
)
                                 
Net income (loss) per share:
                                
Basic
  
$
(0.10
)
  
$
(0.28
)
  
$
0.02
    
$
(0.66
)
Diluted
  
$
(0.10
)
  
$
(0.28
)
  
$
0.02
    
$
(0.66
)
                                 
Weighted average shares outstanding:
                                
Basic
    
45,623
      
45,032
      
45,537
      
44,992
  
Diluted
    
45,623
(1)
    
45,032
(1)
    
45,589
      
44,992
(1)
 
   
(1)  Basic and diluted shares are the same due to the net loss.



 
 



 
 
 
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)

   
Three Months Ended September 30,
    
Nine Months Ended September 30,
  
   
2010
    
2009
    
2010
    
2009
  
                                 
OPERATING CASH FLOW:
                                
Net income (loss)
  
$
(4,700
)
  
$
(12,572
)
  
$
1,023
    
$
(29,704
)
Reconciling items:
                                
Deferred income taxes
    
174
      
24,302
      
131
      
22,318
  
Depreciation, depletion and amortization
    
46,796
      
53,933
      
163,603
      
152,001
  
Impairment of oil and gas properties
    
26
      
115
      
213
      
115
  
Gain on sale of assets
    
—
      
—
      
(4,895
)
    
—
  
Debt issuance costs and discount amortization
    
608
      
203
      
1,834
      
608
  
Stock-based compensation
    
4,388
      
4,046
      
12,930
      
11,533
  
Operating cash flow
    
47,292
      
70,027
      
174,839
      
156,871
  
Excess tax benefit from stock-based compensation
    
28
      
(50
)
    
(1,503
)
    
(974
)
Decrease (increase) in accounts receivable
    
9,550
      
(1,767
)
    
8,096
      
12,043
  
Decrease (increase) in other current assets
    
(8
)
    
(22,724
)
    
49,428
      
(23,378
)
Increase (decrease) in accounts payable and accrued expenses
    
(6,850
)
    
2,919
      
18,376
      
(26,712
)
                                 
Net cash provided by operating activities
  
$
50,012
    
$
48,405
    
$
249,236
    
$
117,850
  
                                 
EBITDAX:
                                
Net income (loss)
  
$
(4,700
)
  
$
(12,572
)
  
$
1,023
    
$
(29,704
)
Interest expense
    
7,108
      
3,244
      
22,551
      
8,307
  
Income tax benefit
    
(208
)
    
(2,193
)
    
(68
)
    
(8,300
)
Depreciation, depletion and amortization
    
46,796
      
53,933
      
163,603
      
152,001
  
Impairment of oil and gas properties
    
26
      
115
      
213
      
115
  
Gain on sale of assets
    
—
      
—
      
(4,895
)
    
—
  
Stock-based compensation
    
4,388
      
4,046
      
12,930
      
11,533
  
Exploration
    
1,238
      
227
      
2,506
      
371
  
                                 
EBITDAX
  
$
54,648
    
$
46,800
    
$
197,863
    
$
134,323
  
 
   
As of September 30,
  
   
2010
    
2009
  
                 
BALANCE SHEET DATA:
                
Cash and cash equivalents                                                                                                 
  
$
4,350
    
$
3,094
  
Derivative financial instruments        
    
—
      
5,264
  
Income taxes receivable
    
—
      
37,796
  
Marketable securities
    
70,661
      
86,721
  
Other current assets
    
35,761
      
34,529
  
Property and equipment, net
    
1,817,962
      
1,546,745
  
Other
    
7,856
      
2,545
  
                 
Total assets
  
$
1,936,590
    
$
1,716,694
  
                 
Accounts payable and accrued expenses
  
$
104,577
    
$
93,036
  
Long-term debt
    
528,238
      
340,000
  
Deferred income taxes
    
224,686
      
212,327
  
Other non-current liabilities
    
9,575
      
6,030
  
Stockholders' equity
    
1,069,514
      
1,065,301
  
                 
Total liabilities and stockholders' equity
  
$
1,936,590
    
$
1,716,694
  
 
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)

   
For the Three Months Ended September 30, 2010
    
For the Three Months Ended September 30, 2009
  
   
East
Texas/
                      
East
Texas/
                    
   
North
    
South
                
North
    
South
              
   
Louisiana
    
Texas
    
Other
    
Total
    
Louisiana
    
Texas
    
Other
    
Total
  
Oil production (thousand barrels)
    
27
      
33
      
111
      
171
      
39
      
33
      
91
      
163
  
Gas production (MMcf)
    
12,134
      
3,404
      
616
      
16,154
      
10,486
      
4,831
      
659
      
15,976
  
Total production (MMcfe)
    
12,295
      
3,602
      
1,288
      
17,185
      
10,715
      
5,029
      
1,211
      
16,955
  
                                                                 
Oil sales
  
$
1,932
    
$
2,434
    
$
6,797
    
$
11,163
    
$
2,502
    
$
2,117
    
$
4,836
    
$
9,455
  
Gas sales
    
50,183
      
15,578
      
2,796
      
68,557
      
31,434
      
17,183
      
2,058
      
50,675
  
Gas hedging gains
    
—
      
—
      
—
      
—
      
—
      
7,306
      
—
      
7,306
  
Total gas sales
    
50,183
      
15,578
      
2,796
      
68,557
      
31,434
      
24,489
      
2,058
      
57,981
  
Total oil and gas sales
  
$
52,115
    
$
18,012
    
$
9,593
    
$
79,720
    
$
33,936
    
$
26,606
    
$
6,894
    
$
67,436
  
                                                                 
Average oil price (per barrel)
  
$
71.71
    
$
74.05
    
$
60.68
    
$
64.97
    
$
64.15
    
$
64.15
    
$
53.14
    
$
57.96
  
Average gas price (per Mcf)
  
$
4.14
    
$
4.58
    
$
4.54
    
$
4.24
    
$
3.00
    
$
3.56
    
$
3.12
    
$
3.17
  
Average gas price including hedging (per Mcf)
  
$
4.14
    
$
4.58
    
$
4.54
    
$
4.24
    
$
3.00
    
$
5.07
    
$
3.12
    
$
3.63
  
Average price (per Mcfe)
  
$
4.24
    
$
5.00
    
$
7.45
    
$
4.64
    
$
3.17
    
$
3.84
    
$
5.69
    
$
3.55
  
Average price including hedging (per Mcfe)
  
$
4.24
    
$
5.00
    
$
7.45
    
$
4.64
    
$
3.17
    
$
5.29
    
$
5.69
    
$
3.98
  
                                                                 
Production taxes
  
$
1,832
    
$
700
    
$
530
    
$
3,062
    
$
602
    
$
837
    
$
409
    
$
1,848
  
Gathering and transportation
  
$
3,574
    
$
433
    
$
94
    
$
4,101
    
$
635
    
$
624
    
$
109
    
$
1,368
  
Lease operating
  
$
7,076
    
$
3,031
    
$
2,895
    
$
13,002
    
$
6,400
    
$
3,373
    
$
3,030
    
$
12,803
  
Production taxes (per Mcfe)
  
$
0.15
    
$
0.19
    
$
0.41
    
$
0.18
    
$
0.06
    
$
0.17
    
$
0.34
    
$
0.11
  
Gathering and transportation (per Mcfe)
  
$
0.29
    
$
0.12
    
$
0.07
    
$
0.24
    
$
0.06
    
$
0.12
    
$
0.09
    
$
0.08
  
Lease operating (per Mcfe)
  
$
0.58
    
$
0.85
    
$
2.25
    
$
0.75
    
$
0.59
    
$
0.67
    
$
2.50
    
$
0.75
  
                                                                 
Oil and Gas Capital Expenditures:
                                                                
Leasehold costs
  
$
11,023
    
$
57,031
    
$
30
    
$
68,084
    
$
2,376
    
$
313
    
$
52
    
$
2,741
  
Exploratory drilling
    
26,423
      
6,376
      
—
      
32,799
      
22,416
      
39
      
—
      
22,455
  
Development drilling
    
44,992
      
(105
)
    
1,404
      
46,291
      
49,335
      
2,647
      
10
      
51,992
  
Other development
    
342
      
1,026
      
259
      
1,627
      
824
      
954
      
30
      
1,808
  
Total
  
$
82,780
    
$
64,328
    
$
1,693
    
$
148,801
    
$
74,951
    
$
3,953
    
$
92
    
$
78,996
  
 
 
 
 
 
 
 
 
 
 
 
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
 
   
For the Nine Months Ended September 30, 2010
    
For the Nine Months Ended September 30, 2009
  
   
East
Texas/
                      
East
Texas/
                    
   
North
    
South
                
North
    
South
              
   
Louisiana
    
Texas
    
Other
    
Total
    
Louisiana
    
Texas
    
Other
    
Total
  
Oil production (thousand barrels)
    
114
      
114
      
329
      
557
      
167
      
122
      
295
      
584
  
Gas production (MMcf)
    
39,401
      
11,307
      
1,949
      
52,657
      
26,278
      
14,565
      
2,034
      
42,877
  
Total production (MMcfe)
    
40,085
      
11,993
      
3,924
      
56,002
      
27,278
      
15,299
      
3,803
      
46,380
  
                                                                 
Oil sales
  
$
8,570
    
$
8,571
    
$
19,951
    
$
37,092
    
$
8,185
    
$
6,310
    
$
12,603
    
$
27,098
  
Gas sales
    
174,031
      
55,637
      
9,731
      
239,399
      
91,009
      
55,293
      
6,930
      
153,232
  
Gas hedging gains
    
—
      
—
      
—
      
—
      
—
      
20,332
      
—
      
20,332
  
Total gas sales
    
174,031
      
55,637
      
9,731
      
239,399
      
91,009
      
75,625
      
6,930
      
173,564
  
Total oil and gas sales
  
$
182,601
    
$
64,208
    
$
29,682
    
$
276,491
    
$
99,194
    
$
81,935
    
$
19,533
    
$
200,662
  
                                                                 
Average oil price (per barrel)
  
$
75.14
    
$
75.01
    
$
60.62
    
$
66.54
    
$
49.01
    
$
51.72
    
$
42.72
    
$
46.42
  
Average gas price (per Mcf)
  
$
4.42
    
$
4.92
    
$
4.99
    
$
4.55
    
$
3.46
    
$
3.80
    
$
3.41
    
$
3.57
  
Average gas price including hedging (per Mcf)
  
$
4.42
    
$
4.92
    
$
4.99
    
$
4.55
    
$
3.46
    
$
5.19
    
$
3.41
    
$
4.05
  
Average price (per Mcfe)
  
$
4.56
    
$
5.35
    
$
7.56
    
$
4.94
    
$
3.64
    
$
4.03
    
$
5.14
    
$
3.89
  
Average price including hedging (per Mcfe)
  
$
4.56
    
$
5.35
    
$
7.56
    
$
4.94
    
$
3.64
    
$
5.36
    
$
5.14
    
$
4.33
  
                                                                 
Production taxes
  
$
6,618
    
$
1,308
    
$
1,617
    
$
9,543
    
$
1,956
    
$
2,370
    
$
1,160
    
$
5,486
  
Gathering and transportation
  
$
10,573
    
$
1,443
    
$
292
    
$
12,308
    
$
1,444
    
$
2,186
    
$
332
    
$
3,962
  
Lease operating
  
$
21,838
    
$
10,360
    
$
8,952
    
$
41,150
    
$
20,489
    
$
11,058
    
$
9,468
    
$
41,015
  
Production taxes (per Mcfe)
  
$
0.17
    
$
0.11
    
$
0.41
    
$
0.17
    
$
0.07
    
$
0.15
    
$
0.31
    
$
0.12
  
Gathering and transportation (per Mcfe)
  
$
0.26
    
$
0.12
    
$
0.07
    
$
0.22
    
$
0.05
    
$
0.14
    
$
0.09
    
$
0.09
  
Lease operating (per Mcfe)
  
$
0.54
    
$
0.86
    
$
2.29
    
$
0.73
    
$
0.76
    
$
0.73
    
$
2.48
    
$
0.88
  
                                                                 
Oil and Gas Capital Expenditures:
                                                                
Leasehold costs
  
$
50,401
    
$
79,875
    
$
158
    
$
130,434
    
$
9,544
    
$
644
    
$
155
    
$
10,343
  
Exploratory drilling
    
49,861
      
6,376
      
—
      
56,237
      
88,917
      
1,932
      
—
      
90,849
  
Development drilling
    
197,486
      
2,065
      
1,404
      
200,955
      
117,187
      
26,433
      
121
      
143,741
  
Other development
    
2,217
      
2,349
      
760
      
5,326
      
4,036
      
4,232
      
326
      
8,594
  
Total
  
$
299,965
    
$
90,665
    
$
2,322
    
$
392,952
    
$
219,684
    
$
33,241
    
$
602
    
$
253,527