EX-99.1 2 exhibit99pnt1apr3012.htm EXHIBIT 99.1 exhibit99pnt1apr3012.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 2012 FINANCIAL AND OPERATING RESULTS

FRISCO, TEXAS, April 30, 2012 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months ended March 31, 2012.

Financial Results for the Three Months Ended March 31, 2012
 
Comstock reported net income of $6.9 million or 14¢ per diluted share for the first quarter of 2012 as compared to net income of $2.4 million or 5¢ per diluted share for the three months ended March 31, 2011.  The first quarter of 2012 results include a gain of $26.6 million ($17.3 million after tax, or 37¢ per diluted share) from sales of marketable securities and a gain of $6.7 million ($4.4 million after tax or 9¢ per diluted share) from the sale of oil and gas properties.  The Company also had impairments of unevaluated acreage of $1.3 million ($0.9 million after tax, or 2¢ per diluted share) included in the first quarter results.  Results for the three months ended March 31, 2011 included a gain on sale of marketable securities of $21.2 million ($13.8 million after tax or 30¢ per diluted share), impairments of unevaluated acreage of $9.5 million ($6.1 million after tax or 13¢ per diluted share), and a loss on early extinguishment of debt of $1.1 million ($0.7 million after tax or 2¢ per diluted share).

Comstock's production in the first quarter of 2012 of 506 thousand barrels of oil and 22.4 billion cubic feet of natural gas or 25.5 billion cubic feet of natural gas equivalent ("Bcfe") increased 28% over the 19.9 Bcfe produced in the first quarter of 2011.  Oil production increased 267% over 2011's first quarter.  Oil production in the first quarter, which averaged 5,600 barrels of oil per day, grew 48% from the 3,800 barrels per day produced in the fourth quarter of 2011.

Low natural gas prices continue to adversely impact the Company as natural gas prices continued to weaken further in the first quarter of 2012.  Comstock's average realized natural gas price decreased 34% to $2.63 per Mcf for the first quarter of 2012 as compared to $3.96 per Mcf for the first quarter of 2011.  Oil prices continued to improve in this first quarter.  The Company's average realized oil price improved by 16% to $104.02 per barrel for the first quarter of 2012 as compared to $89.94 per barrel for the first quarter of 2011.  Comstock's higher oil production more than offset the effect of lower natural gas prices as oil and gas sales for the first quarter of 2012 increased by 25% to $110.3 million as compared to 2011's first quarter sales of $88.0 million.  Oil sales made up 47% of total sales in the quarter as compared to only 14% in the first quarter of 2011.  Operating cash flow (before changes in working capital accounts) of $66.8 million in the first quarter of 2012 was 19% higher than operating cash flow of $56.1 million for the first quarter of 2011, and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, of $79.0 million in the first quarter of 2012 increased 21% over EBITDAX of $65.2 million in the first quarter of 2011.
 
 
 

 
 
 
 
 
2012 Drilling Results

Comstock reported on the results to date of its 2012 drilling program.  During the first three months of 2012, Comstock spent $173.4 million on development and exploration activities and $8.2 million on acreage acquisitions.  Comstock drilled 22 wells (15.0 net) and had seven wells (4.6 net) drilling at March 31, 2012.  The wells drilled in the first quarter included eight (5.7 net) oil wells in West Texas, seven (5.9 net) oil wells in the Eagle Ford shale in South Texas, and seven natural gas wells (3.4 net) in its East Texas/North Louisiana region.  At the end of the first quarter of 2012, the Company's six operated drilling rigs were all drilling oil wells in South Texas and West Texas as the Company has suspended its natural gas drilling operations until natural gas prices improve.

Since the beginning of 2012, the Company has completed 18 oil wells, ten in the vertical Wolfbone program in its West Texas region and eight in the horizontal Eagle Ford shale program in the South Texas region.  The eight Eagle Ford shale wells that were completed had an average per well initial production rate of 498 barrels of oil equivalent ("BOE") per day.  These wells were primarily drilled in the Company's northern acreage in Atascosa, La Salle and McMullen counties to earn acreage.  Later in 2012 Comstock plans to begin developmental drilling which will allow for cost efficiencies from pad drilling.  These wells are being produced under the Company's restricted choke program.  Longer term production results from the first nineteen Eagle Ford shale wells have confirmed the benefit of this program.  The first nineteen wells, which have been producing for more than 90 days, had an average initial production rate of 782 BOE per day.  The 30 day per well production rate for these wells averaged 584 BOE per day and the 90 day per well production rate averaged 514 BOE per day, or 68% of the initial 24 hour test rate.

Since closing on the acquisition of acreage in Reeves County in West Texas, Comstock has completed seven operated Wolfbone vertical wells.  These wells were drilled to total depths of 11,477 to 12,170 feet and completed with 5 to 9 frac stages.  These wells have an average per well initial production rate of 347 BOE per day (80% oil).  The first three wells averaged 262 BOE per day.  Comstock changed its completion techniques and had improved results with the last four wells which averaged 410 BOE per day, including the Jessie James 4 #1 well which had an initial production rate of 539 BOE per day.  This well is one of the top vertical wells in the Wolfbone play.  Comstock also participated in the completion of three non-operated Wolfbone wells which averaged 322 BOE per day.
 
Comstock has planned a conference call for 9:30 a.m. Central Time on May 1, 2012, to discuss the operational and financial results for the first quarter of 2012.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-271-0675 (international dial-in use 617-213-8892) and provide access code 91001330 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 May 1, 2012 and will continue until 11:59 p.m. May 8, 2012.  To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US).  The conference call ID number is 77364920.


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,
  
   
2012
    
2011
  
                 
Revenues:
                
Oil and gas sales
  
$
110,335
    
$
88,038
  
Gain on sale of oil and gas properties
    
6,727
      
—
  
Total revenues
    
117,062
      
88,038
  
                 
Operating expenses:
                
Production taxes
    
3,637
      
726
  
Gathering and transportation
    
7,892
      
5,628
  
Lease operating
    
14,749
      
11,548
  
Exploration
    
1,353
      
9,537
  
Depreciation, depletion and amortization
    
79,097
      
60,325
  
Impairment of oil and gas properties
    
49
      
—
  
Loss on sale of oil and gas properties
    
—
      
109
  
General and administrative
    
8,798
      
8,428
  
                 
Total operating expenses
    
115,575
      
96,301
  
                 
Operating income (loss)
    
1,487
      
(8,263
)
                 
Other income (expenses):
                
Interest expense
    
(13,237
)
    
(10,284
)
Gain on sale of marketable securities
    
26,621
      
21,249
  
   Other income (expense)     (23 )      310  
                 
Total other income (expenses)
    
13,361
      
11,275
  
                 
Income before income taxes
    
14,848
      
3,012
  
Provision for income taxes
    
(7,989
)
    
(608
)
Net income
  
$
6,859
    
$
2,404
  
                 
Net income per share:
                
Basic
  
$
0.14
    
$
0.05
  
Diluted
  
$
0.14
    
$
0.05
  
                 
Weighted average shares outstanding:
                
Basic
    
46,372
      
45,974
  
Diluted
    
46,372
      
45,974
  

 
 
 
 
 
 
 
 
 

 
 
 
 
 
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)

   
Three Months Ended March 31,
  
   
2012
    
2011
  
                 
OPERATING CASH FLOW:
                
                 
Net income
  
$
6,859
    
$
2,404
  
Reconciling items:
                
Deferred income taxes
    
8,072
      
449
  
Depreciation, depletion and amortization
    
79,097
      
60,325
  
Dry hole costs and impairments
    
1,364
      
9,454
  
Gain on sale of assets
    
(33,348
)
    
(21,140
)
Debt issuance cost and discount amortization
    
944
      
1,465
  
Unrealized loss on derivative financial instruments
    
262
      
—
  
Stock-based compensation
    
3,535
      
3,162
  
Operating cash flow
    
66,785
      
56,119
  
Excess income taxes from stock-based compensation
    
1,405
      
487
  
(Increase) decrease in accounts receivable
    
1,815
      
(5,299
)
Increase in other current assets
    
(199
)
    
(1,116
)
Increase in accounts payable and accrued expenses
    
63,374
      
736
  
                 
Net cash provided by operating activities
  
$
133,180
    
$
50,927
  
                 
EBITDAX:
                
                 
Net income
  
$
6,859
    
$
2,404
  
Interest expense
    
13,237
      
10,284
  
Income taxes
    
7,989
      
608
  
Depreciation, depletion and amortization
    
79,097
      
60,325
  
Exploration
    
1,353
      
9,537
  
Impairments
    
49
      
—
  
Gain on sale of assets
    
(33,348
)
    
(21,140
)
Unrealized loss on derivative financial instruments
    
262
      
—
  
Stock-based compensation
    
3,535
      
3,162
  
                 
EBITDAX
  
$
79,033
    
$
65,180
  
                 
   
As of March 31,
  
   
2012
    
2011
  
                 
BALANCE SHEET DATA:
                
                 
Cash and cash equivalents
  
$
3,750
    
$
4,196
  
Marketable securities
    
17,154
      
80,956
  
Other current assets
    
155,895
      
55,782
  
Property and equipment, net
    
2,517,672
      
1,904,818
  
Other
    
16,201
      
17,481
  
                 
Total assets
  
$
2,710,672
    
$
2,063,233
  
                 
                 
Accounts payable and accrued expenses
  
$
241,928
    
$
145,564
  
Other current liabilities
    
8,132
      
16,014
  
Long-term debt
    
1,207,042
      
596,506
  
Deferred income taxes
    
208,078
      
216,381
  
Other non-current liabilities
    
18,135
      
9,360
  
Stockholders' equity
    
1,027,357
      
1,079,408
  
                 
Total liabilities and stockholders' equity
  
$
2,710,672
    
$
2,063,233
  
 
 

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


     
For the Three Months Ended March 31, 2012
    
For the Three Months Ended March 31, 2011
  
     
East Texas/
North
Louisiana
      
South
Texas
      
West
Texas
      
Other
      
Total
      
East Texas/
North
Louisiana
      
South
Texas
      
Other
      
Total
  
                                                                         
Oil production (Mbbls)
    
27
      
403
      
73
      
3
      
506
      
34
      
94
      
10
      
138
  
Gas production (MMcf)
    
19,100
      
2,660
      
127
      
535
      
22,422
      
15,444
      
2,865
      
800
      
19,109
  
Total production (MMcfe)
    
19,263
      
5,075
      
566
      
554
      
25,458
      
15,647
      
3,431
      
857
      
19,935
  
                                                                         
Oil sales
  
$
2,751
    
$
42,474
    
$
7,113
    
$
303
    
$
52,641
    
$
2,945
    
$
8,639
    
$
806
    
$
12,390
  
Oil hedging losses
    
—
      
(1,129
)
    
(225
)
    
—
      
(1,354
)
    
—
      
—
      
—
      
—
  
Total oil sales
    
2,751
      
41,345
      
6,888
      
303
      
51,287
      
2,945
      
8,639
      
806
      
12,390
  
Natural gas sales
    
47,502
      
9,136
      
804
      
1,606
      
59,048
      
58,610
      
13,150
      
3,888
      
75,648
  
Total oil and gas sales
  
$
50,253
    
$
50,481
    
$
7,692
    
$
1,909
    
$
110,335
    
$
61,555
    
$
21,789
    
$
4,694
    
$
88,038
  
                                                                         
                                                                         
                                                                         
Average oil price (per barrel)
  
$
101.49
    
$
105.52
    
$
97.12
    
$
94.88
    
$
104.02
    
$
87.16
    
$
91.61
    
$
83.46
    
$
89.94
  
Average oil price including hedging (per barrel)
  
$
101.49
    
$
102.71
    
$
94.05
    
$
94.88
    
$
101.35
    
$
87.16
    
$
91.61
    
$
83.46
    
$
89.94
  
Average gas price (per Mcf)
  
$
2.49
    
$
3.43
    
$
6.33
    
$
3.00
    
$
2.63
    
$
3.80
    
$
4.59
    
$
4.86
    
$
3.96
  
Average price (per Mcfe)
  
$
2.61
    
$
10.17
    
$
13.99
    
$
3.45
    
$
4.39
    
$
3.93
    
$
6.35
    
$
5.48
    
$
4.42
  
Average price including hedging (per Mcfe)
  
$
2.61
    
$
9.95
    
$
13.59
    
$
3.45
    
$
4.33
    
$
3.93
    
$
6.35
    
$
5.48
    
$
4.42
  
                                                                         
Production taxes
  
$
801
    
$
2,291
    
$
390
    
$
155
    
$
3,637
    
$
29
    
$
382
    
$
315
    
$
726
  
Gathering and transportation
  
$
6,833
    
$
772
    
$
177
    
$
110
    
$
7,892
    
$
5,076
    
$
457
    
$
95
    
$
5,628
  
Lease operating
  
$
8,661
    
$
3,719
    
$
1,291
    
$
1,078
    
$
14,749
    
$
7,199
    
$
3,367
    
$
982
    
$
11,548
  
Production taxes (per Mcfe)
  
$
0.04
    
$
0.45
    
$
0.69
    
$
0.28
    
$
0.14
    
$
—
    
$
0.11
    
$
0.37
    
$
0.04
  
Gathering and transportation (per Mcfe)
  
$
0.35
    
$
0.15
    
$
0.31
    
$
0.20
    
$
0.31
    
$
0.32
    
$
0.13
    
$
0.11
    
$
0.28
  
Lease operating (per Mcfe)
  
$
0.46
    
$
0.74
    
$
2.28
    
$
1.94
    
$
0.58
    
$
0.47
    
$
0.99
    
$
1.14
    
$
0.58
  
                                                                         
                                                                     
Oil and Gas Capital Expenditures:
                                                                    
Acquisitions
  
$
—
    
$
—
    
$
3,333
    
$
—
    
$
3,333
    
$
—
    
$
—
    
$
—
    
$
—
  
Exploratory leasehold
    
1,595
      
1,488
      
3,543
      
—
      
6,626
      
10,845
      
1,680
      
—
      
12,525
  
Development leasehold
    
345
      
1,216
      
—
      
—
      
1,561
      
130
      
—
      
—
      
130
  
Exploratory drilling
    
368
      
405
      
—
      
—
      
773
      
16,844
      
20,428
      
—
      
37,272
  
Development drilling
    
68,208
      
64,438
      
34,516
      
—
      
167,162
      
95,588
      
11,538
      
98
      
107,224
  
Other development
    
1,026
      
719
      
224
      
149
      
2,118
      
853
      
94
      
94
      
1,041
  
Total
  
$
71,542
    
$
68,266
    
$
41,616
    
$
149
    
$
181,573
    
$
124,260
    
$
33,740
    
$
192
    
$
158,192