10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended June 30, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-03262

COMSTOCK RESOURCES, INC.

(Exact name of registrant as specified in its charter)

NEVADA	94-1667468
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

5300 Town and Country Blvd., Suite 500, Frisco, Texas 75034

(Address of principal executive offices)

Telephone No.: (972) 668-8800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x	Accelerated filer  ¨	Non-accelerated filer  ¨	Smaller reporting company  ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ¨    No  x

The number of shares outstanding of the registrant’s common stock, par value $0.50, as of August 6, 2014 was 47,860,582.

COMSTOCK RESOURCES, INC.

QUARTERLY REPORT

For the Quarter Ended June 30, 2014

INDEX

	Page
PART I. Financial Information
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets - June 30, 2014 and December 31, 2013	4
Consolidated Statements of Operations - Three Months and Six Months ended June 30, 2014 and 2013	5
Consolidated Statements of Comprehensive Income - Three Months and Six Months ended June 30, 2014 and 2013	6
Consolidated Statement of Stockholders’ Equity Six Months ended June 30, 2014	7
Consolidated Statements of Cash Flows - Six Months ended June 30, 2014 and 2013	8
Notes to Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosure About Market Risk	22
Item 4. Controls and Procedures	22
PART II. Other Information
Item 6. Exhibits	23
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

3

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2014			December 31, 2013
	(In thousands)
ASSETS
Cash and Cash Equivalents	$	3,813		$	2,967
Accounts Receivable:
Oil and gas sales		57,635			35,867
Joint interest operations		23,032			15,534
Derivative Financial Instruments		—			970
Deferred Income Taxes		2,972			—
Other Current Assets		2,745			1,796
Total current assets		90,197			57,134
Property and Equipment:
Unevaluated oil and gas properties		178,384			134,350
Oil and gas properties, successful efforts method		4,046,243			3,781,313
Other		19,438			18,373
Accumulated depreciation, depletion and amortization		(2,050,567	)		(1,867,301	)
Net property and equipment		2,193,498			2,066,735
Other Assets		16,564			15,529
	$	2,300,259		$	2,139,398
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable	$	128,938		$	101,872
Deferred Income Taxes		—			339
Current Taxes Payable		102			1,487
Derivative Financial Instruments		8,492			—
Accrued Liabilities		42,135			91,297
Total current liabilities		179,667			194,995
Long-term Debt		975,151			798,700
Deferred Income Taxes		183,274			177,026
Reserve for Future Abandonment Costs		15,630			14,534
Other Non-Current Liabilities		1,803			2,138
Total liabilities		1,355,525			1,187,393
Commitments and Contingencies
Stockholders’ Equity:
Common stock – $0.50 par, 75,000,000 shares authorized, 47,864,249 and 47,680,516 shares outstanding at June 30, 2014 and December 31, 2013, respectively		23,932			23,840
Additional paid-in capital		482,353			480,816
Retained earnings		438,449			447,349
Total stockholders’ equity		944,734			952,005
	$	2,300,259		$	2,139,398

The accompanying notes are an integral part of these statements.

4

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		Three Months Ended June 30,						Six Months Ended June 30,
		2014			2013			2014			2013
		(In thousands, except per share amounts)
Revenues:
Oil sales		$	111,071		$	55,073		$	201,384		$	100,813
Natural gas sales			44,652			52,747			96,248			102,027
Gain on sale of oil and gas properties			—			81			—			81
Total revenues			155,723			107,901			297,632			202,921
Operating expenses:
Production taxes			6,467			3,883			12,068			6,004
Gathering and transportation			3,138			4,354			6,914			8,556
Lease operating			13,980			12,962			29,041			26,168
Exploration			—			9,754			—			12,347
Depreciation, depletion and amortization			94,539			85,244			183,413			170,211
Impairment of oil and gas properties			256			652			256			652
General and administrative, net			9,614			9,056			17,983			17,843
Total operating expenses			127,994			125,905			249,675			241,781
Operating income (loss)			27,729			(18,004	)		47,957			(38,860	)
Other income (expenses):
Gain on sale of marketable securities			—			—			—			7,877
Gain (loss) from derivative financial instruments			(9,850	)		3,521			(14,796	)		(2,926	)
Other income			39			196			290			441
Interest expense			(14,767	)		(19,240	)		(28,447	)		(36,818	)
Total other income (expenses)			(24,578	)		(15,523	)		(42,953	)		(31,426	)
Income (loss) before income taxes			3,151			(33,527	)		5,004			(70,286	)
Benefit from (provision for) income taxes			(1,253	)		11,996			(1,941	)		24,238
Income (loss) from continuing operations			1,898			(21,531	)		3,063			(46,048	)
Income from discontinued operations, net of income taxes			—			151,236			—			148,609
Net income		$	1,898		$	129,705		$	3,063		$	102,561
Net income (loss) per share:
Basic	- income (loss) from continuing operations	$	0.04		$	(0.45	)	$	0.06		$	(0.95	)
	- income from discontinued operations		—			3.13			—			3.07
	- net income	$	0.04		$	2.68		$	0.06		$	2.12
Diluted	- income (loss) from continuing operations	$	0.04		$	(0.45	)	$	0.06		$	(0.95	)
	- income from discontinued operations		—			3.13			—			3.07
	- net income	$	0.04		$	2.68		$	0.06		$	2.12
Dividends per share		$	0.125		$	0.125		$	0.250		$	0.125
Weighted average shares outstanding:
Basic			46,651			46,754			46,616			46,742
Diluted			47,004			46,754			46,941			46,742

The accompanying notes are an integral part of these statements.

5

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
			(In thousands)
Net income	$	1,898	$	129,705	$	3,063	$	102,561
Net change in unrealized gains and losses on marketable securities, net of a benefit from income taxes of $2,380		—		—		—		(4,418	)
Comprehensive income	$	1,898	$	129,705	$	3,063	$	98,143

The accompanying notes are an integral part of these statements.

6

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2014

(Unaudited)

	Common Stock (Shares)			Common Stock – Par Value			Additional Paid-in Capital			Retained Earnings			Total
	(In thousands)
Balance at January 1, 2014		47,681		$	23,840		$	480,816		$	447,349		$	952,005
Stock-based compensation		313			157			4,840			—			4,997
Restricted stock used for tax withholdings		(130	)		(65	)		(2,284	)		—			(2,349	)
Excess income taxes from stock-based compensation		—			—			(1,019	)		—			(1,019	)
Dividends paid		—			—			—			(11,963	)		(11,963	)
Net income		—			—			—			3,063			3,063
Balance at June 30, 2014		47,864		$	23,932		$	482,353		$	438,449		$	944,734

The accompanying notes are an integral part of these statements.

7

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Cash Flows from Operating Activities:
Net income	$	3,063		$	102,561
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations		—			(148,609	)
Gain on sale of assets		—			(7,958	)
Deferred income taxes		1,904			(24,238	)
Dry hole costs and lease impairments		—			11,908
Impairment of oil and gas properties		256			652
Depreciation, depletion and amortization		183,413			170,211
Loss on derivative financial instruments		14,796			2,926
Settlements of derivative financial instruments		(5,334	)		5,201
Amortization of debt discount, premium and issuance costs		2,183			3,218
Stock-based compensation		4,997			6,440
Excess income taxes from stock-based compensation		1,019			2,015
Increase in accounts receivable		(29,266	)		(22,293	)
Increase in other current assets		(935	)		(978	)
Increase in accounts payable and accrued liabilities		29,199			14,671
Net cash provided by continuing operations		205,295			115,727
Net cash used for discontinued operations		—			(7,715	)
Net cash provided by operating activities		205,295			108,012
Cash Flows From Investing Activities:
Capital expenditures		(362,351	)		(132,826	)
Proceeds from sales of marketable securities		—			13,392
Investing activities of continuing operations		(362,351	)		(119,434	)
Cash flow from investing activities of discontinued operations:
Capital expenditures		—			(101,037	)
Proceeds from sale of oil and gas properties		—			823,701
Net cash provided by investing activities of discontinued operations		—			722,664
Net cash provided by (used for) investing activities		(362,351	)		603,230
Cash Flows from Financing Activities:
Borrowings		275,750			95,000
Principal payments on debt		(100,000	)		(537,225	)
Debt issuance costs		(2,517	)		(15	)
Tax withholdings related to restricted stock		(2,349	)		(1,680	)
Excess income taxes from stock-based compensation		(1,019	)		(2,015	)
Dividends paid		(11,963	)		(6,041	)
Net cash provided by (used for) financing activities		157,902			(451,976	)
Net increase in cash and cash equivalents		846			259,266
Cash and cash equivalents, beginning of period		2,967			4,471
Cash and cash equivalents, end of period	$	3,813		$	263,737

The accompanying notes are an integral part of these statements.

8

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –

Basis of Presentation

In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position of Comstock Resources, Inc. and subsidiaries (“Comstock” or the “Company”) as of June 30, 2014, the related results of operations and comprehensive income for the three months and six months ended June 30, 2014 and 2013, and cash flows for the six months ended June 30, 2014 and 2013.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock’s Annual Report on Form 10-K for the year ended December 31, 2013.

The results of operations for the three months and six months ended June 30, 2014 are not necessarily an indication of the results expected for the full year.

These unaudited consolidated financial statements include the accounts of Comstock and its wholly-owned and controlled subsidiaries.

Reclassifications

Certain reclassifications have been made to prior periods’ financial statements, consisting primarily of reclassifications to the presentation of the Company’s derivative financial instruments to conform to the current periods’ presentation.

Marketable Securities

During the six months ended June 30, 2013, the Company sold 600,000 shares of Stone Energy Corporation common stock and received $13.4 million in proceeds. These shares had a cost basis of $5.5 million. Comstock realized a gain before income taxes of $7.9 million on the sale which is included in other income in the consolidated statements of operations. The Company utilized the specific identification method to determine the cost of the securities that were sold.

Property and Equipment

The Company follows the successful efforts method of accounting for its oil and gas properties. Costs incurred to acquire oil and gas leasehold are capitalized.

Unproved oil and gas properties are periodically assessed and any impairment in value is charged to exploration expense. The costs of unproved properties which are determined to be productive are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis. For the three months and six months ended June 30, 2013, the Company recognized impairment charges in exploration expense of $9.5 million and $11.9 million, respectively, related to certain leases that were expected to expire prior to the Company conducting drilling operations. There were no unproved property impairments during the six months ended June 30, 2014.

The Company also assesses the need for an impairment of the costs capitalized for its oil and gas properties on a property basis. The Company recognized impairment charges of $0.3 million and $0.7 million for the three months and six months ended June 30, 2014 and June 30, 2013, respectively, related to its oil and gas properties.

9

Accrued Liabilities

Accrued liabilities at June 30, 2014 and December 31, 2013 consist of the following:

	As of June 30, 2014		As of December 31, 2013
	(In thousands)
Accrued oil and gas property acquisition costs	$	—	$	40,128
Accrued drilling costs		22,027		34,914
Accrued interest		9,003		7,051
Accrued ad valorem taxes		3,000		—
Other accrued liabilities		8,105		9,204
	$	42,135	$	91,297

Reserve for Future Abandonment Costs

Comstock’s asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock’s total estimated liability during the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Future abandonment costs – beginning of period	$	14,534		$	16,387
Accretion expense		402			494
New wells placed on production		728			313
Liabilities settled and assets disposed of		(34	)		(534	)
Future abandonment costs — end of period	$	15,630		$	16,660

Derivative Financial Instruments and Hedging Activities

Comstock periodically uses swaps, floors and collars to hedge oil and natural gas prices and interest rates. Swaps are settled monthly based on differences between the prices specified in the instruments and the settlement prices of futures contracts. Generally, when the applicable settlement price is less than the price specified in the contract, Comstock receives a settlement from the counterparty based on the difference multiplied by the volume or amounts hedged. Similarly, when the applicable settlement price exceeds the price specified in the contract, Comstock pays the counterparty based on the difference. Comstock generally receives a settlement from the counterparty for floors when the applicable settlement price is less than the price specified in the contract, which is based on the difference multiplied by the volumes hedged. For collars, generally Comstock receives a settlement from the counterparty when the settlement price is below the floor and pays a settlement to the counterparty when the settlement price exceeds the cap. No settlement occurs when the settlement price falls between the floor and cap.

As of June 30, 2014, the Company had the following outstanding commodity derivatives:

Commodity and Derivative Type	Weighted-Average Contract Price	Volume (barrels)	Contract Period
Crude Oil Price Swap Agreements	$96.60 per  Bbl.	1,266,000	July 2014 – December 2014

All of the Company’s derivative financial instruments are used for risk management purposes and by policy none are held for trading or speculative purposes. Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. All of Comstock’s derivative financial instruments are with parties that are lenders under its bank credit facility. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company’s derivative financial instruments involve payment or receipt of premiums.

None of the derivative contracts have been designated as cash flow hedges. The Company recognizes cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). The Company had losses of $9.9 million and gains of $3.5 million related to its oil swap agreements during the three months ended June 30, 2014 and

10

2013, respectively, and losses of $14.8 million and $2.9 million during the six months ended June 30, 2014 and 2013, respectively. Cash settlements on derivative financial instruments were payments of $4.0 million and receipts of $2.9 million for the three months ended June 30, 2014 and 2013, respectively, and payments of $5.3 million and receipts of $5.2 million during the six months ended June 30, 2014 and 2013, respectively. The estimated fair value and carrying value of the Company’s derivative financial instruments was a liability of $8.5 million and an asset of $1.0 million as of June 30, 2014 and December 31, 2013, respectively, which are reflected as current liabilities and current assets, respectively.

Stock-Based Compensation

Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period. During the three months ended June 30, 2014 and 2013, the Company recognized $2.7 million and $3.2 million, respectively, of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and performance stock units to its employees and directors. For the six months ended June 30, 2014 and 2013, the Company recognized $5.0 million and $6.4 million, respectively, of stock-based compensation expense within general and administrative expenses.

During the six months ended June 30, 2014, the Company granted 235,524 shares of restricted stock with a grant date fair value of $4.8 million or $20.24 per share to its employees and non-employee directors. The fair value of each restricted share on the date of grant is equal to its market price. As of June 30, 2014, Comstock had 1,213,361 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $19.91 per share. Total unrecognized compensation cost related to unvested restricted stock grants of $10.7 million as of June 30, 2014 is expected to be recognized over a period of 1.6 years.

During the six months ended June 30, 2014, the Company granted 188,958 performance share units (“PSUs”) with a grant date fair value of $3.7 million or $19.81 per unit to its employees. As of June 30, 2014, Comstock had 362,161 PSUs outstanding at a weighted average grant date fair value of $20.48 per unit. The number of shares of common stock to be issued related to the PSUs is based on the Company’s stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 848,567 shares of common stock. Total unrecognized compensation cost related to these grants of $4.3 million as of June 30, 2014 is expected to be recognized over a period of 1.4 years.

As of June 30, 2014, Comstock had outstanding options to purchase 115,150 shares of common stock at a weighted average exercise price of $32.90 per share. All of the stock options were exercisable and there were no unrecognized compensation costs related to the stock options as of June 30, 2014. No stock options were exercised during the three months or six months ended June 30, 2014 or 2013.

Income Taxes

The following is an analysis of consolidated income tax expense (benefit) from continuing operations:

	Three Months EndedJune 30,					Six Months EndedJune 30,
	2014		2013			2014		2013
	(In thousands)
Current provision (benefit)	$	23	$	(3	)	$	37	$	—
Deferred provision (benefit)		1,230		(11,993	)		1,904		(24,238	)
Provision for (benefit from) income taxes	$	1,253	$	(11,996	)	$	1,941	$	(24,238	)

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. The difference between the Company’s effective tax rate and the 35% federal statutory rate is mainly caused by non-deductible stock compensation and state taxes. The impact of these items varies based upon the Company’s projected full year income or loss and the jurisdictions that are expected to generate the projected income and/or losses. The difference between the Company’s customary rate of 35% and the effective tax rate on income before income taxes from continuing operations is due to the following:

11

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2014			2013			2014			2013
Tax at statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
Tax effect of:
Nondeductible stock-based compensation		4.2			0.6			3.3			(1.4	)
State income taxes, net of federal benefit		(0.4	)		0.3			(0.3	)		1.1
Other		1.0			(0.1	)		0.8			(0.2	)
Effective tax rate		39.8	%		35.8	%		38.8	%		34.5	%

The Company’s federal income tax returns for the years subsequent to December 31, 2009, remain subject to examination. The Company’s income tax returns in major state income tax jurisdictions remain subject to examination from various periods subsequent to December 31, 2008. State tax returns in one state jurisdiction are currently under review. The Company has evaluated the preliminary findings in this jurisdiction and believes it is more likely than not that the ultimate resolution of these matters will not have a material effect on the Company’s financial statements. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.

Fair Value Measurements

The Company holds or has held certain items that are required to be measured at fair value. These include cash and cash equivalents held in bank accounts and derivative financial instruments in the form of oil price swap agreements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements:

Level 1 – Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2 – Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3 – Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The Company’s valuation of cash and cash equivalents is a Level 1 measurement. The Company’s oil price swap agreements are not traded on a public exchange, and their value is determined utilizing a discounted cash flow model based on inputs that are readily available in public markets and, accordingly, the valuation of these swap agreements is categorized as a Level 2 measurement.

The following table summarizes financial assets and liabilities accounted for at fair value as of June 30, 2014:

	Carrying Value Measured at Fair Value at June 30, 2014		Level 1		Level 2
	(In thousands)
Assets measured at fair value on a recurring basis:
Cash and cash equivalents held in bank accounts	$	3,813	$	3,813	$	—
Total assets	$	3,813	$	3,813	$	—
Liabilities measured at fair value on a recurring basis:
Derivative financial instruments	$	8,492	$	—	$	8,492
Total liabilities	$	8,492	$	—	$	8,492

12

The following table presents the carrying amounts and estimated fair value of the Company’s other financial instruments:

	As of June 30, 2014
	Carrying Value		Fair Value
	(In thousands)
Fixed rate debt	$	695,151	$	766,000
Floating rate debt	$	280,000	$	280,000

The fair market value of the Company’s fixed rate debt was based on the market prices as of June 30, 2014, a Level 1 measurement. The fair value of the floating rate debt outstanding at June 30, 2014 approximated its carrying value, a Level 2 measurement.

Earnings Per Share

Basic earnings per share is determined without the effect of any outstanding potentially dilutive stock options or PSUs and diluted earnings per share is determined with the effect of outstanding stock options and PSUs that are potentially dilutive. Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participatory securities and are included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company’s common stock that may range from zero to up to three times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. Basic and diluted earnings per share for the three months and six months ended June 30, 2014 and 2013 were determined as follows:

	Three Months Ended June 30,
	2014							2013
	Income			Shares		Per Share		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	1,898						$	(21,531	)
(Income) loss allocable to unvested restricted stock		(153	)						697
Basic net income (loss) from continuing operations attributable to common stock	$	1,745			46,651	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			353				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	1,745			47,004	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Net income from discontinued operations								$	151,236
Income allocable to unvested restricted stock									(4,893	)
Basic net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13

13

	Six Months Ended June 30,
	2014							2013
	Income			Shares		PerShare		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	3,063						$	(46,048	)
(Income) loss allocable to unvested restricted stock		(292	)						1,495
Basic net income (loss) from continuing operations attributable to common stock	$	2,771			46,616	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			325				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	2,771			46,941	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Net income from discontinued operations								$	148,609
Income allocable to unvested restricted stock									(4,825	)
Basic net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07

At June 30, 2014 and December 31, 2013, 1,213,361 and 1,515,889 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a nonforfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company’s stockholders. Weighted average shares of unvested restricted stock outstanding during the three months and six months ended June 30, 2014 and 2013 were as follows:

	Three Months EndedJune 30,				Six Months EndedJune 30,
	2014		2013		2014		2013
	(In thousands)
Unvested restricted stock		1,222		1,563		1,168		1,568

Options to purchase common stock and PSUs that were outstanding and that were excluded as anti-dilutive from the determination of diluted earnings per share are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands except per share/unit data)
Weighted average anti-dilutive stock options		115		134		115		145
Weighted average exercise price per share	$	32.90	$	32.90	$	32.90	$	32.90
Weighted average performance share units		—		254		—		254
Weighted average grant date fair value per unit	$	—	$	21.14	$	—	$	21.14

For the three months and six months ended June 30, 2014, the excluded options that were anti-dilutive were at exercise prices in excess of the average stock price for that period. All stock options, unvested restricted stock and unvested PSUs were anti-dilutive to earnings and excluded from weighted average shares used in the computation of earnings per share in the three months and six months ended June 30, 2013 due to the net loss in the periods.

14

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At June 30, 2014 and December 31, 2013, the Company’s cash investments consisted of cash held in bank accounts.

The following is a summary of cash payments made for interest and income taxes:

	Six Months Ended June 30,
	2014		2013
	(In thousands)
Cash Payments:
Interest payments	$	28,907	$	43,738
Income tax payments	$	1,408	$	2

The Company capitalizes interest on its unevaluated oil and gas property costs during periods when it is conducting exploration activity on this acreage. The Company capitalized interest capitalized interest of $2.6 million and $0.7 million for the three months ended June 30, 2014 and 2013, respectively, and $4.8 million and $1.7 million for the six months ended June 30, 2014 and 2013, respectively, which reduced interest expense.

Comprehensive Income

Comprehensive income consists of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Net income	$	1,898	$	129,705	$	3,063	$	102,561
Other comprehensive income:
Realized gains on marketable securities reclassified to gain on sale of marketable securities, net of a benefit from income taxes of $2,757		—		—		—		(5,120	)
Unrealized gains on marketable securities, net of provision for income taxes of $377		—		—		—		702
Total comprehensive income	$	1,898	$	129,705	$	3,063	$	98,143

15

Discontinued Operations

On March 14, 2013, the Company entered into an agreement to sell its oil and gas properties located in Reeves and Gaines counties in West Texas to a third party. The sale closed on May 14, 2013 with an effective date of January 1, 2013. Income from discontinued operations for the three months and six months ended June 30, 2013 is comprised of the following:

	Three MonthsEndedJune 30, 2013			Six MonthsEndedJune 30, 2013
	(In thousands)
Revenues:
Oil and gas sales	$	8,826		$	25,125
Costs and expenses:
Production taxes		427			1,120
Gathering and transportation		170			501
Lease operating		3,545			9,853
Depletion, depreciation and amortization		—			8,649
Interest expense(1)		2,847			6,346
Total costs and expenses		6,989			26,469
Gain on sale of discontinued operations		230,637			230,637
Income from discontinued operations before income taxes		232,474			229,293
Income tax expense:
Current		(637	)		(637	)
Deferred		(80,601	)		(80,047	)
Total income tax expense		(81,238	)		(80,684	)
Net income from discontinued operations	$	151,236		$	148,609

(1) Interest expense was allocated to discontinued operations based on the ratio of the net assets of discontinued operations to our consolidated net assets plus long-term debt. Interest expense is net of capitalized interest of $— and $2,010 for the three months and six months ended June 30, 2013, respectively.

(2) STOCKHOLDERS’ EQUITY –

On February 20 and May 21, 2014, Comstock’s Board of Directors declared a dividend of 12.5¢ per share on the Company’s common stock to stockholders of record at the close of business on March 7 and June 6, 2014, respectively. Dividends of $12.0 million and $6.0 million were paid during the six months ended June 30, 2014 and June 30, 2013, respectively. In 2013, the Board of Directors approved an open market share repurchase plan which permits the Company to repurchase up to $100.0 million of its common stock on the open market. The Company did not make any purchases under this plan during the six months ended June 30, 2014 or June 30, 2013, and repurchases of up to $90.8 million remain available under this plan in future periods as of June 30, 2014.

(3) LONG-TERM DEBT –

At June 30, 2014, long-term debt was comprised of:

	(In thousands)
Bank credit facility	$	280,000
73⁄4% Senior Notes due 2019		405,571
91⁄2% Senior Notes due 2020		289,580
	$	975,151

Comstock has a $1.0 billion bank credit facility with Bank of Montreal, as the administrative agent. The bank credit facility is a five year revolving credit commitment that matures on November 22, 2018. Indebtedness under the bank credit facility is secured by all of Comstock’s assets and is guaranteed by all of its wholly owned subsidiaries. The credit facility is subject to borrowing base availability, which is redetermined semiannually based on the banks’ estimates of the Company’s future net cash flows of oil and natural gas properties. As of June 30, 2014, the borrowing base was $700.0 million, of which $420.0 million was available. The borrowing base may be affected by the performance of Comstock’s properties and changes in oil and natural gas prices. The determination of the borrowing base is at the sole discretion of the administrative agent and the bank group. Borrowings under the bank credit facility bear interest, based on the utilization of the borrowing base, at Comstock’s option at either (1) LIBOR plus 1.5% to 2.5% or (2) the base rate (which is the

16

higher of the administrative agent’s prime rate, the federal funds rate plus 0.5% or 30 day LIBOR plus 1.0%) plus 0.5% to 1.5%. A commitment fee of 0.375% to 0.5%, based on the utilization of the borrowing base, is payable annually on the unused borrowing base. The bank credit facility contains covenants that, among other things, restrict the payment of cash dividends and repurchases of common stock in excess of $120.0 million per year, limit the amount of consolidated debt that Comstock may incur and limit the Company’s ability to make certain loans and investments. The only financial covenants are the maintenance of a leverage ratio and the maintenance of an interest coverage ratio. The Company was in compliance with these covenants as of June 30, 2014.

Comstock has $400.0 million of 7¾% senior notes (the “2019 Notes”) outstanding which are due on April 1, 2019 and bear interest which is payable semi-annually on each April 1 and October 1. Comstock also has $300.0 million of 9½% senior notes (the “2020 Notes”) which are due on June 15, 2020 and bear interest which is payable semi-annually on each June 15 and December 15. During the three months ended June 30, 2014 the Company issued $100.0 million of the 2019 Notes in a public offering. Net proceeds from the issuance of the additional 2019 Notes of $103.3 million were used to pay down borrowings under the Company’s bank credit facility. The 2019 Notes and 2020 Notes are unsecured obligations of Comstock and are guaranteed by all of Comstock’s material subsidiaries. Such subsidiary guarantors are 100% owned and all of the guarantees are full and unconditional and joint and several obligations. As of June 30, 2014, Comstock had no material assets or operations which are independent of its subsidiaries. There are no restrictions on the ability of Comstock to obtain funds from its subsidiaries through dividends or loans.

(4) Commitments and Contingencies –

From time to time, Comstock is involved in certain litigation that arises in the normal course of its operations. The Company records a loss contingency for these matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not believe the resolution of these matters will have a material effect on the Company’s financial position or results of operations.

In connection with its exploration and development activities, the Company contracts for drilling rigs under terms of up to two years. As of June 30, 2014, the Company had commitments for contracted drilling services of $28.8 million.

The Company has entered into natural gas transportation and treating agreements through July 2019. Maximum commitments under these transportation agreements as of June 30, 2014 totaled $15.4 million.

17

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements that involve risks and uncertainties that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated in our forward-looking statements due to many factors. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in this report and in our annual report filed on Form 10-K for the year ended December 31, 2013.

Results of Operations From Continuing Operations

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands, except per unit amounts)
Net Production Data:
Oil (Mbbls)		1,112		551		2,047		983
Natural gas (Mmcf)		10,102		14,206		21,081		29,834
Natural gas equivalent (Mmcfe)		16,773		17,509		33,362		35,730
Revenues:
Oil sales	$	111,071	$	55,073	$	201,384	$	100,813
Natural gas sales		44,652		52,747		96,248		102,027
Total oil and gas sales	$	155,723	$	107,820	$	297,632	$	202,840
Expenses:
Production taxes	$	6,467	$	3,883	$	12,068	$	6,004
Gathering and transportation		3,138		4,354		6,914		8,556
Lease operating(1)		13,980		12,962		29,041		26,168
Exploration expense		—		9,754		—		12,347
Depreciation, depletion and amortization		94,539		85,244		183,413		170,211
Average Sales Price:
Natural gas (per Mcf)	$	4.42	$	3.71	$	4.57	$	3.42
Oil (per Bbl)	$	99.90	$	100.06	$	98.39	$	102.60
Average equivalent (Mcfe)	$	9.28	$	6.16	$	8.92	$	5.68
Expenses ($ per Mcfe):
Production taxes	$	0.39	$	0.22	$	0.36	$	0.17
Gathering and transportation	$	0.19	$	0.25	$	0.21	$	0.24
Lease operating(1)	$	0.83	$	0.74	$	0.87	$	0.73
Depreciation, depletion and amortization(2)	$	5.62	$	4.85	$	5.48	$	4.75

(1) Includes ad valorem taxes.

(2) Represents depreciation, depletion and amortization of oil and gas properties only.

Revenues –

Our oil and natural gas sales increased $47.9 million (44%) in the second quarter of 2014 to $155.7 million from $107.8 million in the second quarter of 2013. Oil sales in the second quarter of 2014 increased by $56.0 million (102%) from 2013 while our natural gas sales decreased by $8.1 million (15%) from 2013. The increase in oil sales was attributable to the 102% growth in oil production. Our drilling activity in the Eagleville field in South Texas generated the primary oil production growth. Due to limited drilling in our natural gas properties, our natural gas production fell by 29% from 2013 while our realized natural gas price improved by 19%.

In the first six months of 2014, our oil and natural gas sales increased $94.8 million (47%) to $297.6 million from $202.8 million in the first six months of 2013. Oil sales in the first six months of 2014 increased by $100.6 million (100%) from 2013 while our natural gas sales decreased by $5.8 million (6%) from 2013. The increase in oil sales was attributable to the 108% growth in oil production offset by a 4% decrease in our realized prices in 2014. Our natural gas production fell by 29% from 2013 while our realized natural gas price improved by 34%.

18

Costs and Expenses –

Production taxes increased $2.6 million to $6.5 million for the second quarter of 2014 from $3.9 million in the second quarter of 2013. Production taxes of $12.1 million for the first six months of 2014 increased $6.1 million over production taxes of $6.0 million for the first six months of 2013. This increase is mainly related to increased oil and gas sales in 2014.

Gathering and transportation costs for the second quarter of 2014 decreased $1.3 million to $3.1 million as compared to $4.4 million in the second quarter of 2013. Gathering and transportation costs for the first six months of 2014 decreased $1.7 million to $6.9 million as compared to $8.6 million for the first six months of 2013. The decrease mainly reflects the transportation costs relating to decreased natural gas production.

Our lease operating expenses of $14.0 million for the second quarter of 2014 increased $1.0 million (8%) from operating expenses of $13.0 million for the second quarter of 2013. Our lease operating expense for the first six months of 2014 of $29.0 million increased $2.8 million or 11% from our lease operating expense of $26.2 million for the first six months of 2013. Our lease operating expense of $0.87 per Mcfe produced for the six months ended June 30, 2014 was $0.14 per Mcfe or 19% higher than for the same period in 2013. This increase primarily reflects our lower natural gas production and the fixed nature of much of our lifting costs as well as increased lifting costs associated with new oil wells put on production during 2014.

Exploration costs of $9.8 million and $12.3 million in the three months and six months ended June 30, 2013, respectively, primarily related to impairments on certain of our unevaluated properties where we no longer expect to conduct drilling operations prior to the expiration of the lease term.

Depreciation, depletion and amortization (“DD&A”) increased $9.3 million (11%) to $94.5 million in the second quarter of 2014 from $85.2 million in the second quarter of 2013. The increase was primarily the result of our higher DD&A rate in 2014. Our DD&A per equivalent Mcf produced increased $0.77 (16%) to $5.62 for the three months ended June 30, 2014 from $4.85 for the three months ended June 30, 2013. DD&A for the first six months of 2014 increased $13.2 million (8%) to $183.4 million from $170.2 million for the six months ended June 30, 2013. For the first six months of 2014, our per unit DD&A rate of $5.48 increased $0.73 (15%) from our DD&A rate of $4.75 for the first six months of 2013. The higher DD&A rate per Mcfe primarily reflects the higher capitalized costs related to oil wells drilled in 2013 and 2014.

General and administrative expenses, which are reported net of overhead reimbursements, increased slightly to $9.6 million for the second quarter of 2014 from $9.1 million in the second quarter of 2013. Included in general and administrative expenses are stock-based compensation of $2.7 million and $3.2 million for the three months ended June 30, 2014 and 2013, respectively. For the first six months of 2014, general and administrative expenses of $18.0 million were essentially unchanged from general and administrative expenses of $17.8 million for the first six months of 2013. Included in general and administrative expense is stock-based compensation of $5.0 million and $6.4 million for the six months ended June 30, 2014 and 2013, respectively.

Interest expense decreased $4.4 million to $14.8 million for the second quarter of 2014 from interest expense from continuing operations of $19.2 million in the second quarter of 2013. The decrease was primarily related to the decrease in debt outstanding in 2014 due to the redemption of $300.0 million of our 8³⁄₈% senior notes in October 2013. We had average borrowings of $331.0 million outstanding under our bank credit facility during the second quarter of 2014 as compared to average borrowings of $240.7 million outstanding under our bank credit facility during the second quarter of 2013. We capitalized interest of $2.6 million and $0.7 million on our unevaluated properties during the three months ended June 30, 2014 and 2013, respectively. Interest expense allocated to discontinued operations was $2.8 million during the three months ended June 30, 2013, none of which was capitalized. Interest expense decreased $8.4 million to $28.4 million for the first six months of 2014 from interest expense of $36.8 million in the first six months of 2013. The decrease was primarily due to the decrease in debt outstanding in 2014 due to the redemption of $300.0 million of our 8³⁄₈% senior notes in October 2013. We had average borrowings of $313.0 million outstanding under our bank credit facility during the first six months of 2014 as compared to average borrowings of $351.0 million outstanding under our bank credit facility during the first six months of 2013. We capitalized interest of $4.8 million and $1.7 million on our unevaluated properties during the six months ended June 30, 2014 and 2013, respectively. Interest expense allocated to discontinued operations was $8.4 million during the six months ended June 30, 2013, of which $2.0 million was capitalized.

During the first six months of 2013, we recognized a gain of $7.9 million from the sale of 600,000 shares of common stock in Stone Energy Corporation held as marketable securities.

19

We utilized oil price swaps to manage our exposure to oil prices and protect returns on investment from our drilling activities in 2014 and 2013. Losses related to our derivative financial instruments were $9.9 million in the three months ended June 30, 2014 and gains related to our derivative financial instruments were $3.5 million in the three months ended June 30, 2013. Losses related to our derivative financial instruments were $14.8 million and $2.9 million in the six months ended June 30, 2014 and 2013, respectively. The following table presents our crude oil equivalent prices before and after the effect of cash settlements of our derivative financial instruments:

	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014			2013
Average Realized Oil Price:
Oil, per barrel	$	99.90		$	100.06	$	98.39		$	102.60
Cash settlements of derivative financial instruments, per barrel		(3.63	)		5.24		(2.61	)		5.29
Price per barrel, including cash settlements of derivative financial instruments	$	96.27		$	105.30	$	95.78		$	107.89

Income taxes related to continuing operations for the second quarter of 2014 were a provision of $1.3 million as compared to a benefit for income taxes of $12.0 million for the three months ended June 30, 2013. Income taxes related to continuing operations for the six months ended June 30, 2014 were a provision of $1.9 million as compared to a benefit for income taxes of $24.2 million for the six months ended June 30, 2013. Our effective tax rate for the first three months of 2014 was a provision of 39.8% as compared to a benefit of 35.8% for the first three months of 2013. Our effective tax rate was 38.8% for the first six months of 2014 as compared to 34.5% for the first six months of 2013. The effective tax rates for in 2014 and 2013 primarily reflect the effect of certain non-deductible expenses and our state tax expenses.

We reported net income from continuing operations of $1.9 million for the three months ended June 30, 2014 or 4¢ per diluted share, as compared to a net loss of $21.5 million, or $0.45 per share, for the three months ended June 30, 2013. We reported net income from continuing operations of $3.1 million, or 6¢ per diluted share, for the six months ended June 30, 2014, as compared to a net loss from continuing operations of $46.0 million for the six months ended June 30, 2013 or $0.95 per share. The net change in the first half of 2014 was primarily due to higher oil production, improved natural gas prices, and lower interest expense, which was partially offset by higher DD&A, higher operating expenses and the gains from sales of marketable securities in 2013. We had net income from discontinued operations of $151.2 million, or $3.13 per share, for the three months ended June 30, 2013 and net income from discontinued operations of $148.6 million or $3.07 per share for the six months ended June 30, 2013.

Liquidity and Capital Resources

Funding for our activities has historically been provided by our operating cash flow, debt or equity financings or proceeds from asset sales. For the six months ended June 30, 2014, our primary source of funds were cash provided by operating activities from continuing operations of $205.3 million, net borrowings of $70.0 million under our bank credit facility and net proceeds from our senior notes offering of $103.3 million. Our net cash flow from operating activities of continuing operations increased $89.6 million (77%) in the first six months of 2014 to $205.3 million from $115.7 million for the first six months of 2013 mainly due to higher revenues resulting from increased oil production and improved natural gas prices.

Our primary needs for capital, in addition to funding our ongoing operations, relate to the acquisition, development and exploration of our oil and gas properties and the repayment of our debt. In the first six months of 2014, we incurred capital expenditures from continuing operations of $308.3 million primarily for our development and exploration activities.

20

The following table summarizes our capital expenditure activity, on an accrual basis, for the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Exploration and development:
Proved property acquisitions	$	2,400		$	—
Exploratory leasehold		47,595			4,539
Development leasehold		2,832			283
Exploratory drilling		16,738			—
Development drilling		231,398			125,508
Other development		7,308			3,165
Total capital expenditures related to continuing operations(1)		308,271	(1)		133,495	(1)
Capital expenditures related to discontinued operations		—			91,471
	$	308,271		$	224,966

(1) Net of $16.5 million and $21.5 million received from joint venture partner for participation in drilling activity for the six months ended June 30, 2014 and 2013, respectively.

We expect to spend approximately $565.0 million for developmental and exploratory drilling and for acquisition of leases during 2014. We expect to fund our development and exploration activities with operating cash flow and borrowings under our bank credit facility.

The timing of most of our capital expenditures is discretionary because we have no material long-term capital expenditure commitments except for commitments for contract drilling services. Consequently, we have a significant degree of flexibility to adjust the level of our capital expenditures as circumstances warrant. As of June 30, 2014, we have contracted for the services of drilling rigs through November 2015 at an aggregate cost of $28.8 million. In addition, we have maximum commitments of $15.4 million to transport and treat natural gas through July 2019. We have obligations to incur future payments for dismantlement, abandonment and restoration costs of oil and gas properties. These payments are currently estimated to be incurred primarily after 2019. We record a separate liability for the fair value of these asset retirement obligations which totaled $15.6 million as of June 30, 2014.

We have a $1.0 billion bank credit facility with Bank of Montreal, as the administrative agent. The bank credit facility is a five-year revolving credit commitment that matures on November 22, 2018. Indebtedness under the bank credit facility is secured by all of our assets and is guaranteed by all of our wholly owned subsidiaries. The bank credit facility is subject to borrowing base availability, which is redetermined semiannually based on the banks’ estimates of the future net cash flows of our oil and gas properties. As of June 30, 2014, the borrowing base was $700.0 million, of which $420.0 million was available. The borrowing base may be affected by the performance of our properties and changes in oil and natural gas prices. The determination of the borrowing base is at the sole discretion of the administrative agent and the bank group. Borrowings under the bank credit facility bear interest, based on the utilization of the borrowing base, at our option at either (1) LIBOR plus 1.5% to 2.5% or (2) the base rate (which is the higher of the administrative agent’s prime rate, the federal funds rate plus 0.5% or 30 day LIBOR plus 1.0%) plus 0.5% to 1.5%. A commitment fee of 0.375% to 0.5%, based on the utilization of the borrowing base, is payable annually on the unused borrowing base. The bank credit facility contains covenants that, among other things, restrict the payment of cash dividends and repurchases of common stock in excess of $120.0 million per year, limit the amount of consolidated debt that we may incur and limit our ability to make certain loans and investments. The only financial covenants are the maintenance of a leverage ratio and the maintenance of an interest coverage ratio. We were in compliance with these covenants as of June 30, 2014.

We have $400.0 million of 7¾% senior notes (the “2019 Notes”) outstanding which are due on April 1, 2019 and bear interest which is payable semi-annually on each April 1 and October 1. We also have $300.0 million of 9½% senior notes (the “2020 Notes”) which are due on June 15, 2020 and bear interest which is payable semi-annually on each June 15 and December 15. During the three months ended June 30, 2014 we issued $100.0 million of the 2019 Notes in a public offering. Net proceeds from the issuance of the additional 2019 Notes of $103.3 million were used to pay down borrowings under our bank credit facility. The 2019 Notes and 2020 Notes are unsecured obligations and are guaranteed by all of our material subsidiaries. Such subsidiary guarantors are 100% owned and all of the guarantees are full and unconditional and joint and several obligations. As of June 30, 2014, we had no material assets or operations which are independent of our subsidiaries. There are no restrictions on our ability to obtain funds from our subsidiaries through dividends or loans.

We believe that our cash flow from operations, proceeds from asset sales, cash on hand and available borrowings under our bank credit facility will be sufficient to fund our operations and future growth as contemplated under our current business plan. However, if our plans or assumptions change or if our assumptions prove to be inaccurate, we may be required to seek additional

21

capital. We cannot provide any assurance that we will be able to obtain such capital, or if such capital is available, that we will be able to obtain it on acceptable terms.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Oil and Natural Gas Prices

Our financial condition, results of operations and capital resources are highly dependent upon the prevailing market prices of natural gas and oil. These commodity prices are subject to wide fluctuations and market uncertainties due to a variety of factors, some of which are beyond our control. Factors influencing oil and natural gas prices include the level of global demand for crude oil, the foreign supply of oil and natural gas, the establishment of and compliance with production quotas by oil exporting countries, weather conditions that determine the demand for natural gas, the price and availability of alternative fuels and overall economic conditions. It is impossible to predict future oil and natural gas prices with any degree of certainty. Sustained weakness in natural gas and oil prices may adversely affect our financial condition and results of operations, and may also reduce the amount of oil and natural gas reserves that we can produce economically. Any reduction in our natural gas and oil reserves, including reductions due to price fluctuations, can have an adverse effect on our ability to obtain capital for our exploration and development activities. Similarly, any improvements in natural gas and oil prices can have a favorable impact on our financial condition, results of operations and capital resources. Based on our oil and natural gas production for the six months ended June 30, 2014, a $0.10 change in the price per Mcf of natural gas would have changed our cash flow from continuing operations by approximately $2.9 million and a $1.00 change in the price per barrel of oil would have resulted in a change in our cash flow from continuing operations for such period by approximately $1.2 million after considering gains or losses from our oil price swap agreements.

We have hedged a portion of our price risks associated with our oil sales. As of June 30, 2014, our outstanding oil price swap agreements had a fair value liability of $8.5 million. A change in the fair value of our oil swaps that would result from a 10% change in commodities prices at June 30, 2014 would be $8.4 million. Such a change in fair value could be a gain or a loss depending on whether prices increase or decrease.

Gains and losses on settlements and changes in the fair value of our swap agreements are reported as a separate component of other income (loss) in the consolidated statement of operations. None of our derivative contracts have margin requirements or collateral provisions that could require funding prior to the scheduled cash settlement date.

Interest Rates

At June 30, 2014, we had approximately $975.2 million of long-term debt outstanding. Of this amount, $400.0 million bears interest at a fixed rate of 7¾% and $300.0 million bears interest at a fixed rate of 9½%. The fair market value of our fixed rate debt as of June 30, 2014 was $766.0 million based on the market price of approximately 110% of the face amount. At June 30, 2014, we had $280.0 million outstanding under our bank credit facility, which is subject to variable rates of interest that are tied to LIBOR or the corporate base rate, at our option. Any increase in these interest rates would have an adverse impact on our results of operations and cash flow. Based on borrowings outstanding at June 30, 2014, a 100 basis point change in interest rates would change our annual interest expense on our variable rate debt by approximately $1.4 million. We had no interest rate derivatives outstanding during 2013 or at June 30, 2014.

ITEM 4: CONTROLS AND PROCEDURES

As of June 30, 2014, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2014 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed by us is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. There were no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended June 30, 2014, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

22

PART II — OTHER INFORMATION

ITEM 6: EXHIBITS

Exhibit No.	Description
31.1*	Section 302 Certification of the Chief Executive Officer.
31.2*	Section 302 Certification of the Chief Financial Officer.
32.1†	Certification for the Chief Executive Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†	Certification for the Chief Financial Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.LAB*	XBRL Labels Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document

* Filed herewith.

† Furnished herewith.

23

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COMSTOCK RESOURCES, INC.
Date: August 6, 2014	/s/ M. JAY ALLISON
	M. Jay Allison, Chairman, Chief
	Executive Officer (Principal Executive Officer)
Date: August 6, 2014	/s/ ROLAND O. BURNS
	Roland O. Burns, President, Chief Financial
	Officer and Secretary (Principal Financial and Accounting Officer)

24

EX-31

Exhibit 31.1

Section 302 Certification

I, M. Jay Allison, certify that:

1. I have reviewed this June 30, 2014 Form 10-Q of Comstock Resources, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2014

/s/ M. JAY ALLISON

President and Chief Executive Officer

EX-31

Exhibit 31.2

Section 302 Certification

I, Roland O. Burns, certify that:

1. I have reviewed this June 30, 2014 Form 10-Q of Comstock Resources, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2014

/s/ ROLAND O. BURNS

President and Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Comstock Resources, Inc. (the “Company”) on Form 10-Q for the three months ending June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, M. Jay Allison, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ M. JAY ALLISON

M. Jay Allison

Chief Executive Officer

August 6, 2014

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Comstock Resources, Inc. (the “Company”) on Form 10-Q for the three months ending June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Roland O. Burns, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ ROLAND O. BURNS

Roland O. Burns

Chief Financial Officer

August 6, 2014

XML

Summary of Significant Accounting Policies - Basic and Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Line Items]
Net income (loss) from continuing operations	$ 1,898	$ (21,531)	$ 3,063	$ (46,048)
Net loss from discontinued operations		151,236		148,609
Basic net income (loss) attributable to common stock, Shares	46,651	46,754	46,616	46,742
Diluted net income (loss) attributable to common stock, Shares	47,004	46,754	46,941	46,742
Basic net income (loss) from continuing operations attributable to common stock, Per Share	$ 0.04	$ (0.45)	$ 0.06	$ (0.95)
Diluted net income (loss) from continuing operations attributable to common stock, Per Share	$ 0.04	$ (0.45)	$ 0.06	$ (0.95)
Basic net income from discontinued operations attributable to common stock, Per Share		$ 3.13		$ 3.07
Diluted net income from discontinued operations attributable to common stock, Per Share		$ 3.13		$ 3.07
Continuing Operations
Earnings Per Share [Line Items]
Net income (loss) from continuing operations	1,898	(21,531)	3,063	(46,048)
(Income) loss allocable to unvested restricted stock	(153)	697	(292)	1,495
Basic net income (loss) attributable to common stock	1,745	(20,834)	2,771	(44,553)
Effect of dilutive securities: Stock options
Effect of dilutive securities: Performance share units
Diluted net income (loss) attributable to common stock	1,745	(20,834)	2,771	(44,553)
Basic net income (loss) attributable to common stock, Shares	46,651	46,754	46,616	46,742
Effect of dilutive securities: Stock options, Shares
Effect of dilutive securities: Performance share units, Shares	353		325
Diluted net income (loss) attributable to common stock, Shares	47,004	46,754	46,941	46,742
Basic net income (loss) from continuing operations attributable to common stock, Per Share	$ 0.04	$ (0.45)	$ 0.06	$ (0.95)
Diluted net income (loss) from continuing operations attributable to common stock, Per Share	$ 0.04	$ (0.45)	$ 0.06	$ (0.95)
Discontinued Operations
Earnings Per Share [Line Items]
Net loss from discontinued operations		151,236		148,609
(Income) loss allocable to unvested restricted stock		(4,893)		(4,825)
Basic net income (loss) attributable to common stock		146,343		143,784
Effect of dilutive securities: Stock options
Effect of dilutive securities: Performance share units
Diluted net income (loss) attributable to common stock		$ 146,343		$ 143,784
Basic net income (loss) attributable to common stock, Shares		46,754		46,742
Effect of dilutive securities: Stock options, Shares
Effect of dilutive securities: Performance share units, Shares
Diluted net income (loss) attributable to common stock, Shares		46,754		46,742
Basic net income from discontinued operations attributable to common stock, Per Share		$ 3.13		$ 3.07
Diluted net income from discontinued operations attributable to common stock, Per Share		$ 3.13		$ 3.07

XML

Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Commitments And Contingencies [Line Items]
Contract term related to drilling rigs	up to two years
Commitments for contracted drilling services	$ 28.8
Natural gas transportation and treating agreements	Through July 2019
Maximum commitments under natural gas transportation and treating agreements	$ 15.4

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2014

Summary of Significant Accounting Policies

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –

Basis of Presentation

In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position of Comstock Resources, Inc. and subsidiaries (“Comstock” or the “Company”) as of June 30, 2014, the related results of operations and comprehensive income for the three months and six months ended June 30, 2014 and 2013, and cash flows for the six months ended June 30, 2014 and 2013.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock’s Annual Report on Form 10-K for the year ended December 31, 2013.

The results of operations for the three months and six months ended June 30, 2014 are not necessarily an indication of the results expected for the full year.

These unaudited consolidated financial statements include the accounts of Comstock and its wholly-owned and controlled subsidiaries.

Reclassifications

Certain reclassifications have been made to prior periods’ financial statements, consisting primarily of reclassifications to the presentation of the Company’s derivative financial instruments to conform to the current periods’ presentation.

Marketable Securities

During the six months ended June 30, 2013, the Company sold 600,000 shares of Stone Energy Corporation common stock and received $13.4 million in proceeds. These shares had a cost basis of $5.5 million. Comstock realized a gain before income taxes of $7.9 million on the sale which is included in other income in the consolidated statements of operations. The Company utilized the specific identification method to determine the cost of the securities that were sold.

Property and Equipment

The Company follows the successful efforts method of accounting for its oil and gas properties. Costs incurred to acquire oil and gas leasehold are capitalized.

Unproved oil and gas properties are periodically assessed and any impairment in value is charged to exploration expense. The costs of unproved properties which are determined to be productive are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis. For the three months and six months ended June 30, 2013, the Company recognized impairment charges in exploration expense of $9.5 million and $11.9 million, respectively, related to certain leases that were expected to expire prior to the Company conducting drilling operations. There were no unproved property impairments during the six months ended June 30, 2014.

The Company also assesses the need for an impairment of the costs capitalized for its oil and gas properties on a property basis. The Company recognized impairment charges of $0.3 million and $0.7 million for the three months and six months ended June 30, 2014 and June 30, 2013, respectively, related to its oil and gas properties.

Accrued Liabilities

Accrued liabilities at June 30, 2014 and December 31, 2013 consist of the following:

	As of June 30, 2014		As of December 31, 2013
	(In thousands)
Accrued oil and gas property acquisition costs	$	—	$	40,128
Accrued drilling costs		22,027		34,914
Accrued interest		9,003		7,051
Accrued ad valorem taxes		3,000		—
Other accrued liabilities		8,105		9,204
	$	42,135	$	91,297

Reserve for Future Abandonment Costs

Comstock’s asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock’s total estimated liability during the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Future abandonment costs – beginning of period	$	14,534		$	16,387
Accretion expense		402			494
New wells placed on production		728			313
Liabilities settled and assets disposed of		(34	)		(534	)
Future abandonment costs — end of period	$	15,630		$	16,660

Derivative Financial Instruments and Hedging Activities

Comstock periodically uses swaps, floors and collars to hedge oil and natural gas prices and interest rates. Swaps are settled monthly based on differences between the prices specified in the instruments and the settlement prices of futures contracts. Generally, when the applicable settlement price is less than the price specified in the contract, Comstock receives a settlement from the counterparty based on the difference multiplied by the volume or amounts hedged. Similarly, when the applicable settlement price exceeds the price specified in the contract, Comstock pays the counterparty based on the difference. Comstock generally receives a settlement from the counterparty for floors when the applicable settlement price is less than the price specified in the contract, which is based on the difference multiplied by the volumes hedged. For collars, generally Comstock receives a settlement from the counterparty when the settlement price is below the floor and pays a settlement to the counterparty when the settlement price exceeds the cap. No settlement occurs when the settlement price falls between the floor and cap.

As of June 30, 2014, the Company had the following outstanding commodity derivatives:

Commodity and Derivative Type	Weighted-Average Contract Price	Volume (barrels)	Contract Period
Crude Oil Price Swap Agreements	$96.60 per  Bbl.	1,266,000	July 2014 – December 2014

All of the Company’s derivative financial instruments are used for risk management purposes and by policy none are held for trading or speculative purposes. Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. All of Comstock’s derivative financial instruments are with parties that are lenders under its bank credit facility. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company’s derivative financial instruments involve payment or receipt of premiums.

None of the derivative contracts have been designated as cash flow hedges. The Company recognizes cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). The Company had losses of $9.9 million and gains of $3.5 million related to its oil swap agreements during the three months ended June 30, 2014 and 2013, respectively, and losses of $14.8 million and $2.9 million during the six months ended June 30, 2014 and 2013, respectively. Cash settlements on derivative financial instruments were payments of $4.0 million and receipts of $2.9 million for the three months ended June 30, 2014 and 2013, respectively, and payments of $5.3 million and receipts of $5.2 million during the six months ended June 30, 2014 and 2013, respectively. The estimated fair value and carrying value of the Company’s derivative financial instruments was a liability of $8.5 million and an asset of $1.0 million as of June 30, 2014 and December 31, 2013, respectively, which are reflected as current liabilities and current assets, respectively.

Stock-Based Compensation

Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period. During the three months ended June 30, 2014 and 2013, the Company recognized $2.7 million and $3.2 million, respectively, of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and performance stock units to its employees and directors. For the six months ended June 30, 2014 and 2013, the Company recognized $5.0 million and $6.4 million, respectively, of stock-based compensation expense within general and administrative expenses.

During the six months ended June 30, 2014, the Company granted 235,524 shares of restricted stock with a grant date fair value of $4.8 million or $20.24 per share to its employees and non-employee directors. The fair value of each restricted share on the date of grant is equal to its market price. As of June 30, 2014, Comstock had 1,213,361 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $19.91 per share. Total unrecognized compensation cost related to unvested restricted stock grants of $10.7 million as of June 30, 2014 is expected to be recognized over a period of 1.6 years.

During the six months ended June 30, 2014, the Company granted 188,958 performance share units (“PSUs”) with a grant date fair value of $3.7 million or $19.81 per unit to its employees. As of June 30, 2014, Comstock had 362,161 PSUs outstanding at a weighted average grant date fair value of $20.48 per unit. The number of shares of common stock to be issued related to the PSUs is based on the Company’s stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 848,567 shares of common stock. Total unrecognized compensation cost related to these grants of $4.3 million as of June 30, 2014 is expected to be recognized over a period of 1.4 years.

As of June 30, 2014, Comstock had outstanding options to purchase 115,150 shares of common stock at a weighted average exercise price of $32.90 per share. All of the stock options were exercisable and there were no unrecognized compensation costs related to the stock options as of June 30, 2014. No stock options were exercised during the three months or six months ended June 30, 2014 or 2013.

Income Taxes

The following is an analysis of consolidated income tax expense (benefit) from continuing operations:

	Three Months EndedJune 30,					Six Months EndedJune 30,
	2014		2013			2014		2013
	(In thousands)
Current provision (benefit)	$	23	$	(3	)	$	37	$	—
Deferred provision (benefit)		1,230		(11,993	)		1,904		(24,238	)
Provision for (benefit from) income taxes	$	1,253	$	(11,996	)	$	1,941	$	(24,238	)

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. The difference between the Company’s effective tax rate and the 35% federal statutory rate is mainly caused by non-deductible stock compensation and state taxes. The impact of these items varies based upon the Company’s projected full year income or loss and the jurisdictions that are expected to generate the projected income and/or losses. The difference between the Company’s customary rate of 35% and the effective tax rate on income before income taxes from continuing operations is due to the following:

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2014			2013			2014			2013
Tax at statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
Tax effect of:
Nondeductible stock-based compensation		4.2			0.6			3.3			(1.4	)
State income taxes, net of federal benefit		(0.4	)		0.3			(0.3	)		1.1
Other		1.0			(0.1	)		0.8			(0.2	)
Effective tax rate		39.8	%		35.8	%		38.8	%		34.5	%

The Company’s federal income tax returns for the years subsequent to December 31, 2009, remain subject to examination. The Company’s income tax returns in major state income tax jurisdictions remain subject to examination from various periods subsequent to December 31, 2008. State tax returns in one state jurisdiction are currently under review. The Company has evaluated the preliminary findings in this jurisdiction and believes it is more likely than not that the ultimate resolution of these matters will not have a material effect on the Company’s financial statements. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.

Fair Value Measurements

The Company holds or has held certain items that are required to be measured at fair value. These include cash and cash equivalents held in bank accounts and derivative financial instruments in the form of oil price swap agreements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements:

Level 1 – Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2 – Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3 – Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The Company’s valuation of cash and cash equivalents is a Level 1 measurement. The Company’s oil price swap agreements are not traded on a public exchange, and their value is determined utilizing a discounted cash flow model based on inputs that are readily available in public markets and, accordingly, the valuation of these swap agreements is categorized as a Level 2 measurement.

The following table summarizes financial assets and liabilities accounted for at fair value as of June 30, 2014:

	Carrying Value Measured at Fair Value at June 30, 2014		Level 1		Level 2
	(In thousands)
Assets measured at fair value on a recurring basis:
Cash and cash equivalents held in bank accounts	$	3,813	$	3,813	$	—
Total assets	$	3,813	$	3,813	$	—
Liabilities measured at fair value on a recurring basis:
Derivative financial instruments	$	8,492	$	—	$	8,492
Total liabilities	$	8,492	$	—	$	8,492

The following table presents the carrying amounts and estimated fair value of the Company’s other financial instruments:

	As of June 30, 2014
	Carrying Value		Fair Value
	(In thousands)
Fixed rate debt	$	695,151	$	766,000
Floating rate debt	$	280,000	$	280,000

The fair market value of the Company’s fixed rate debt was based on the market prices as of June 30, 2014, a Level 1 measurement. The fair value of the floating rate debt outstanding at June 30, 2014 approximated its carrying value, a Level 2 measurement.

Earnings Per Share

Basic earnings per share is determined without the effect of any outstanding potentially dilutive stock options or PSUs and diluted earnings per share is determined with the effect of outstanding stock options and PSUs that are potentially dilutive. Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participatory securities and are included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company’s common stock that may range from zero to up to three times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. Basic and diluted earnings per share for the three months and six months ended June 30, 2014 and 2013 were determined as follows:

	Three Months Ended June 30,
	2014							2013
	Income			Shares		Per Share		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	1,898						$	(21,531	)
(Income) loss allocable to unvested restricted stock		(153	)						697
Basic net income (loss) from continuing operations attributable to common stock	$	1,745			46,651	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			353				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	1,745			47,004	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Net income from discontinued operations								$	151,236
Income allocable to unvested restricted stock									(4,893	)
Basic net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13

	Six Months Ended June 30,
	2014							2013
	Income			Shares		PerShare		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	3,063						$	(46,048	)
(Income) loss allocable to unvested restricted stock		(292	)						1,495
Basic net income (loss) from continuing operations attributable to common stock	$	2,771			46,616	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			325				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	2,771			46,941	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Net income from discontinued operations								$	148,609
Income allocable to unvested restricted stock									(4,825	)
Basic net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07

At June 30, 2014 and December 31, 2013, 1,213,361 and 1,515,889 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a nonforfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company’s stockholders. Weighted average shares of unvested restricted stock outstanding during the three months and six months ended June 30, 2014 and 2013 were as follows:

	Three Months EndedJune 30,				Six Months EndedJune 30,
	2014		2013		2014		2013
	(In thousands)
Unvested restricted stock		1,222		1,563		1,168		1,568

Options to purchase common stock and PSUs that were outstanding and that were excluded as anti-dilutive from the determination of diluted earnings per share are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands except per share/unit data)
Weighted average anti-dilutive stock options		115		134		115		145
Weighted average exercise price per share	$	32.90	$	32.90	$	32.90	$	32.90
Weighted average performance share units		—		254		—		254
Weighted average grant date fair value per unit	$	—	$	21.14	$	—	$	21.14

For the three months and six months ended June 30, 2014, the excluded options that were anti-dilutive were at exercise prices in excess of the average stock price for that period. All stock options, unvested restricted stock and unvested PSUs were anti-dilutive to earnings and excluded from weighted average shares used in the computation of earnings per share in the three months and six months ended June 30, 2013 due to the net loss in the periods.

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At June 30, 2014 and December 31, 2013, the Company’s cash investments consisted of cash held in bank accounts.

The following is a summary of cash payments made for interest and income taxes:

	Six Months Ended June 30,
	2014		2013
	(In thousands)
Cash Payments:
Interest payments	$	28,907	$	43,738
Income tax payments	$	1,408	$	2

The Company capitalizes interest on its unevaluated oil and gas property costs during periods when it is conducting exploration activity on this acreage. The Company capitalized interest capitalized interest of $2.6 million and $0.7 million for the three months ended June 30, 2014 and 2013, respectively, and $4.8 million and $1.7 million for the six months ended June 30, 2014 and 2013, respectively, which reduced interest expense.

Comprehensive Income

Comprehensive income consists of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Net income	$	1,898	$	129,705	$	3,063	$	102,561
Other comprehensive income:
Realized gains on marketable securities reclassified to gain on sale of marketable securities, net of a benefit from income taxes of $2,757		—		—		—		(5,120	)
Unrealized gains on marketable securities, net of provision for income taxes of $377		—		—		—		702
Total comprehensive income	$	1,898	$	129,705	$	3,063	$	98,143

Discontinued Operations

On March 14, 2013, the Company entered into an agreement to sell its oil and gas properties located in Reeves and Gaines counties in West Texas to a third party. The sale closed on May 14, 2013 with an effective date of January 1, 2013. Income from discontinued operations for the three months and six months ended June 30, 2013 is comprised of the following:

	Three MonthsEndedJune 30, 2013			Six MonthsEndedJune 30, 2013
	(In thousands)
Revenues:
Oil and gas sales	$	8,826		$	25,125
Costs and expenses:
Production taxes		427			1,120
Gathering and transportation		170			501
Lease operating		3,545			9,853
Depletion, depreciation and amortization		—			8,649
Interest expense(1)		2,847			6,346
Total costs and expenses		6,989			26,469
Gain on sale of discontinued operations		230,637			230,637
Income from discontinued operations before income taxes		232,474			229,293
Income tax expense:
Current		(637	)		(637	)
Deferred		(80,601	)		(80,047	)
Total income tax expense		(81,238	)		(80,684	)
Net income from discontinued operations	$	151,236		$	148,609

(1) Interest expense was allocated to discontinued operations based on the ratio of the net assets of discontinued operations to our consolidated net assets plus long-term debt. Interest expense is net of capitalized interest of $— and $2,010 for the three months and six months ended June 30, 2013, respectively.

XML

Summary of Significant Accounting Policies - Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net income	$ 1,898	$ 129,705	$ 3,063	$ 102,561
Other comprehensive income:
Realized gains on marketable securities reclassified to gain on sale of marketable securities, net of a benefit from income taxes of $2,757				(5,120)
Unrealized gains on marketable securities, net of provision for income taxes of $377				702
Total comprehensive income	$ 1,898	$ 129,705	$ 3,063	$ 98,143

XML

Summary of Significant Accounting Policies - Cash Payments Made for Interest and Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash Payments:
Interest payments	$ 28,907	$ 43,738
Income tax payments	$ 1,408	$ 2

XML

Summary of Significant Accounting Policies - Comprehensive Loss (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Benefit from income taxes on realized gains on marketable securities reclassified to gain on sale of marketable securities				$ (2,757)
Provision for income taxes on unrealized gains on marketable securities				$ 377

XML

Summary of Significant Accounting Policies - Summary of Income from Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013		Jun. 30, 2013
Revenues:
Oil and gas sales	$ 8,826		$ 25,125
Costs and expenses:
Production taxes	427		1,120
Gathering and transportation	170		501
Lease operating	3,545		9,853
Depletion, depreciation and amortization			8,649
Interest expense	2,847	[1]	6,346	[1]
Total costs and expenses	6,989		26,469
Gain on sale of discontinued operations	230,637		230,637
Income from discontinued operations before income taxes	232,474		229,293
Income tax expense:
Current	(637)		(637)
Deferred	(80,601)		(80,047)
Total income tax expense	(81,238)		(80,684)
Net income from discontinued operations	$ 151,236		$ 148,609

[1] Interest expense was allocated to discontinued operations based on the ratio of the net assets of discontinued operations to our consolidated net assets plus long-term debt. Interest expense is net of capitalized interest of $— and $2,010 for the three months and six months ended June 30, 2013, respectively.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,063	$ 102,561
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations		(148,609)
Gain on sale of assets		(7,958)
Deferred income taxes	1,904	(24,238)
Dry hole costs and lease impairments		11,908
Impairment of oil and gas properties	256	652
Depreciation, depletion and amortization	183,413	170,211
Loss on derivative financial instruments	14,796	2,926
Settlements of derivative financial instruments	(5,334)	5,201
Amortization of debt discount, premium and issuance costs	2,183	3,218
Stock-based compensation	4,997	6,440
Excess income taxes from stock-based compensation	1,019	2,015
Increase in accounts receivable	(29,266)	(22,293)
Increase in other current assets	(935)	(978)
Increase in accounts payable and accrued liabilities	29,199	14,671
Net cash provided by continuing operations	205,295	115,727
Net cash used for discontinued operations		(7,715)
Net cash provided by operating activities	205,295	108,012
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(362,351)	(132,826)
Proceeds from sales of marketable securities		13,392
Investing activities of continuing operations	(362,351)	(119,434)
Cash flow from investing activities of discontinued operations:
Capital expenditures		(101,037)
Proceeds from sale of oil and gas properties		823,701
Net cash provided by investing activities of discontinued operations		722,664
Net cash provided by (used for) investing activities	(362,351)	603,230
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings	275,750	95,000
Principal payments on debt	(100,000)	(537,225)
Debt issuance costs	(2,517)	(15)
Tax withholdings related to restricted stock	(2,349)	(1,680)
Excess income taxes from stock-based compensation	(1,019)	(2,015)
Dividends paid	(11,963)	(6,041)
Net cash provided by (used for) financing activities	157,902	(451,976)
Net increase in cash and cash equivalents	846	259,266
Cash and cash equivalents, beginning of period	2,967	4,471
Cash and cash equivalents, end of period	$ 3,813	$ 263,737

XML

Summary of Significant Accounting Policies - Summary of Income from Discontinued Operations (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]
Capitalized interest related to Discontinued Operations	$ 2,010

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Cash and Cash Equivalents	$ 3,813	$ 2,967
Accounts Receivable:
Oil and gas sales	57,635	35,867
Joint interest operations	23,032	15,534
Derivative Financial Instruments		970
Deferred Income Taxes	2,972
Other Current Assets	2,745	1,796
Total current assets	90,197	57,134
Property and Equipment:
Unevaluated oil and gas properties	178,384	134,350
Oil and gas properties, successful efforts method	4,046,243	3,781,313
Other	19,438	18,373
Accumulated depreciation, depletion and amortization	(2,050,567)	(1,867,301)
Net property and equipment	2,193,498	2,066,735
Other Assets	16,564	15,529
Total Assets	2,300,259	2,139,398
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable	128,938	101,872
Deferred Income Taxes		339
Current Taxes Payable	102	1,487
Derivative Financial Instruments	8,492
Accrued Liabilities	42,135	91,297
Total current liabilities	179,667	194,995
Long-term Debt	975,151	798,700
Deferred Income Taxes	183,274	177,026
Reserve for Future Abandonment Costs	15,630	14,534
Other Non-Current Liabilities	1,803	2,138
Total liabilities	1,355,525	1,187,393
Commitments and Contingencies
Stockholders’ Equity:
Common stock – $0.50 par, 75,000,000 shares authorized, 47,864,249 and 47,680,516 shares outstanding at June 30, 2014 and December 31, 2013, respectively	23,932	23,840
Additional paid-in capital	482,353	480,816
Retained earnings	438,449	447,349
Total stockholders’ equity	944,734	952,005
Total liabilities and stockholders' equity	$ 2,300,259	$ 2,139,398

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Net change in unrealized gains and losses on marketable securities, income tax benefit	$ 2,380

XML

Long-term Debt - Additional Information (Detail) (Bank credit facility, USD $)	6 Months Ended
	Jun. 30, 2014
Debt Instrument [Line Items]
Bank credit facility	$ 1,000,000,000
Line of credit facility commitment term (in years)	5 years
Maturity of credit facility	Nov. 22, 2018
Borrowing base	700,000,000
Availability of borrowing base	420,000,000
Stated percentage over federal funds rate to calculate base rate	0.50%
Stated percentage over 30 day LIBOR to calculate base rate	1.00%
Minimum spread rate over base rate for interest rate on credit facility	0.50%
Maximum spread rate over base rate for interest rate on credit facility	1.50%
Maximum amount of cash dividends without restriction under credit facility	$ 120,000,000
Minimum
Debt Instrument [Line Items]
Spread rate over LIBOR for interest rate on credit facility	1.50%
Commitment fee on unused borrowing base	0.375%
Maximum
Debt Instrument [Line Items]
Spread rate over LIBOR for interest rate on credit facility	2.50%
Commitment fee on unused borrowing base	0.50%

XML

Summary of Significant Accounting Policies - Difference Between Customary Rate and Effective Tax Rate on Income Before Income Taxes Due (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Line Items]
Tax at statutory rate	35.00%	35.00%	35.00%	35.00%
Tax effect of:
Nondeductible stock-based compensation	4.20%	0.60%	3.30%	(1.40%)
State income taxes, net of federal benefit	(0.40%)	0.30%	(0.30%)	1.10%
Other	1.00%	(0.10%)	0.80%	(0.20%)
Effective tax rate	39.80%	35.80%	38.80%	34.50%

XML

Long-term Debt - Additional Information 1 (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
7 3/4% Senior Notes due 2019
Debt Instrument [Line Items]
Outstanding senior notes	$ 400.0
Interest rate on senior notes	7.75%
Maturity of senior notes	Apr. 01, 2019
Net proceeds from issuance of debt	103.3
Debt instrument, face amount	100.0
9 1/2% Senior Notes due 2020
Debt Instrument [Line Items]
Outstanding senior notes	$ 300.0
Interest rate on senior notes	9.50%
Maturity of senior notes	Jun. 15, 2020
Bank credit facility
Debt Instrument [Line Items]
Ownership percentage of guarantor subsidiary	100.00%

XML

Summary of Significant Accounting Policies - Carrying Amounts and Estimated Fair Value of Other Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Long-term debt, including current portion, Carrying Value	$ 975,151
Fixed Rate Debt
Long-term debt, including current portion, Carrying Value	695,151
Long-term debt, including current portion, Fair Value	766,000
Floating Rate Debt
Long-term debt, including current portion, Carrying Value	280,000
Long-term debt, including current portion, Fair Value	$ 280,000

XML

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) In Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings
Beginning Balance at Dec. 31, 2013	$ 952,005	$ 23,840	$ 480,816	$ 447,349
Beginning Balance, Shares at Dec. 31, 2013		47,681
Stock-based compensation	4,997	157	4,840
Stock-based compensation, Shares		313
Restricted stock used for tax withholdings	(2,349)	(65)	(2,284)
Restricted stock used for tax withholdings, Shares		(130)
Excess income taxes from stock-based compensation	(1,019)		(1,019)
Dividends paid	(11,963)			(11,963)
Net income	3,063			3,063
Ending Balance at Jun. 30, 2014	$ 944,734	$ 23,932	$ 482,353	$ 438,449
Ending Balance, Shares at Jun. 30, 2014		47,864

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares outstanding	47,864,249	47,680,516

XML

Summary of Significant Accounting Policies - Summary of Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Schedule Of Accrued Liabilities [Line Items]
Accrued oil and gas property acquisition costs		$ 40,128
Accrued drilling costs	22,027	34,914
Accrued interest	9,003	7,051
Accrued ad valorem taxes	3,000
Other accrued liabilities	8,105	9,204
Total accrued expenses	$ 42,135	$ 91,297

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 06, 2014
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	CRK
Entity Registrant Name	COMSTOCK RESOURCES INC
Entity Central Index Key	0000023194
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		47,860,582

XML

Summary of Significant Accounting Policies - Summary of Changes in Reserve for Future Abandonment Costs (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Asset Retirement Obligations [Line Items]
Future abandonment costs – beginning of period	$ 14,534	$ 16,387
Accretion expense	402	494
New wells placed on production	728	313
Liabilities settled and assets disposed of	(34)	(534)
Future abandonment costs — end of period	$ 15,630	$ 16,660

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:
Oil sales	$ 111,071	$ 55,073	$ 201,384	$ 100,813
Natural gas sales	44,652	52,747	96,248	102,027
Gain on sale of oil and gas properties		81		81
Total revenues	155,723	107,901	297,632	202,921
Operating expenses:
Production taxes	6,467	3,883	12,068	6,004
Gathering and transportation	3,138	4,354	6,914	8,556
Lease operating	13,980	12,962	29,041	26,168
Exploration		9,754		12,347
Depreciation, depletion and amortization	94,539	85,244	183,413	170,211
Impairment of oil and gas properties	256	652	256	652
General and administrative, net	9,614	9,056	17,983	17,843
Total operating expenses	127,994	125,905	249,675	241,781
Operating income (loss)	27,729	(18,004)	47,957	(38,860)
Other income (expenses):
Gain on sale of marketable securities				7,877
Gain (loss) from derivative financial instruments	(9,850)	3,521	(14,796)	(2,926)
Other income	39	196	290	441
Interest expense	(14,767)	(19,240)	(28,447)	(36,818)
Total other income (expenses)	(24,578)	(15,523)	(42,953)	(31,426)
Income (loss) before income taxes	3,151	(33,527)	5,004	(70,286)
Benefit from (provision for) income taxes	(1,253)	11,996	(1,941)	24,238
Income (loss) from continuing operations	1,898	(21,531)	3,063	(46,048)
Income from discontinued operations, net of income taxes		151,236		148,609
Net income	$ 1,898	$ 129,705	$ 3,063	$ 102,561
Net income (loss) per share:
Income (loss) from continuing operations, Basic	$ 0.04	$ (0.45)	$ 0.06	$ (0.95)
Loss from discontinued operations, Basic		$ 3.13		$ 3.07
Net income (loss), Basic	$ 0.04	$ 2.68	$ 0.06	$ 2.12
Income (loss) from continuing operations, Diluted	$ 0.04	$ (0.45)	$ 0.06	$ (0.95)
Loss from discontinued operations, Diluted		$ 3.13		$ 3.07
Net income (loss), Diluted	$ 0.04	$ 2.68	$ 0.06	$ 2.12
Dividends per share	$ 0.125	$ 0.125	$ 0.250	$ 0.125
Weighted average shares outstanding:
Basic	46,651	46,754	46,616	46,742
Diluted	47,004	46,754	46,941	46,742

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies

(4) Commitments and Contingencies –

From time to time, Comstock is involved in certain litigation that arises in the normal course of its operations. The Company records a loss contingency for these matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not believe the resolution of these matters will have a material effect on the Company’s financial position or results of operations.

In connection with its exploration and development activities, the Company contracts for drilling rigs under terms of up to two years. As of June 30, 2014, the Company had commitments for contracted drilling services of $28.8 million.

The Company has entered into natural gas transportation and treating agreements through July 2019. Maximum commitments under these transportation agreements as of June 30, 2014 totaled $15.4 million.

XML

Long-term Debt

6 Months Ended

Jun. 30, 2014

Long-term Debt

(3) LONG-TERM DEBT –

At June 30, 2014, long-term debt was comprised of:

	(In thousands)
Bank credit facility	$	280,000
73⁄4% Senior Notes due 2019		405,571
91⁄2% Senior Notes due 2020		289,580
	$	975,151

Comstock has a $1.0 billion bank credit facility with Bank of Montreal, as the administrative agent. The bank credit facility is a five year revolving credit commitment that matures on November 22, 2018. Indebtedness under the bank credit facility is secured by all of Comstock’s assets and is guaranteed by all of its wholly owned subsidiaries. The credit facility is subject to borrowing base availability, which is redetermined semiannually based on the banks’ estimates of the Company’s future net cash flows of oil and natural gas properties. As of June 30, 2014, the borrowing base was $700.0 million, of which $420.0 million was available. The borrowing base may be affected by the performance of Comstock’s properties and changes in oil and natural gas prices. The determination of the borrowing base is at the sole discretion of the administrative agent and the bank group. Borrowings under the bank credit facility bear interest, based on the utilization of the borrowing base, at Comstock’s option at either (1) LIBOR plus 1.5% to 2.5% or (2) the base rate (which is the higher of the administrative agent’s prime rate, the federal funds rate plus 0.5% or 30 day LIBOR plus 1.0%) plus 0.5% to 1.5%. A commitment fee of 0.375% to 0.5%, based on the utilization of the borrowing base, is payable annually on the unused borrowing base. The bank credit facility contains covenants that, among other things, restrict the payment of cash dividends and repurchases of common stock in excess of $120.0 million per year, limit the amount of consolidated debt that Comstock may incur and limit the Company’s ability to make certain loans and investments. The only financial covenants are the maintenance of a leverage ratio and the maintenance of an interest coverage ratio. The Company was in compliance with these covenants as of June 30, 2014.

Comstock has $400.0 million of 7¾% senior notes (the “2019 Notes”) outstanding which are due on April 1, 2019 and bear interest which is payable semi-annually on each April 1 and October 1. Comstock also has $300.0 million of 9½% senior notes (the “2020 Notes”) which are due on June 15, 2020 and bear interest which is payable semi-annually on each June 15 and December 15. During the three months ended June 30, 2014 the Company issued $100.0 million of the 2019 Notes in a public offering. Net proceeds from the issuance of the additional 2019 Notes of $103.3 million were used to pay down borrowings under the Company’s bank credit facility. The 2019 Notes and 2020 Notes are unsecured obligations of Comstock and are guaranteed by all of Comstock’s material subsidiaries. Such subsidiary guarantors are 100% owned and all of the guarantees are full and unconditional and joint and several obligations. As of June 30, 2014, Comstock had no material assets or operations which are independent of its subsidiaries. There are no restrictions on the ability of Comstock to obtain funds from its subsidiaries through dividends or loans.

XML

Summary of Significant Accounting Policies - Summary of Financial Assets and Liabilities at Fair Value (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Liabilities measured at fair value on a recurring basis:
Derivative Financial Instruments	$ 8,492
Fair Value, Measurements, Recurring
Assets measured at fair value on a recurring basis:
Cash and cash equivalents held in bank accounts	3,813
Total assets	3,813
Liabilities measured at fair value on a recurring basis:
Derivative Financial Instruments	8,492
Total liabilities	8,492
Fair Value, Measurements, Recurring | Level 1
Assets measured at fair value on a recurring basis:
Cash and cash equivalents held in bank accounts	3,813
Total assets	3,813
Fair Value, Measurements, Recurring | Level 2
Liabilities measured at fair value on a recurring basis:
Derivative Financial Instruments	8,492
Total liabilities	$ 8,492

XML

Summary of Significant Accounting Policies - Summary of Outstanding Commodity Derivatives (Detail) (Crude Oil Price Swap Agreements)	6 Months Ended
	Jun. 30, 2014 bbl
Crude Oil Price Swap Agreements
Derivative [Line Items]
Commodity Derivatives Weighted Average Contract Price	96.60
Commodity Derivatives Volume	1,266,000
Commodity Derivatives Beginning of Remaining Contract Period	July 2014
Commodity Derivatives End of Remaining Contract Period	December 2014

XML

Long-term Debt (Tables)

6 Months Ended

Jun. 30, 2014

Long-term Debt

At June 30, 2014, long-term debt was comprised of:

	(In thousands)
Bank credit facility	$	280,000
73⁄4% Senior Notes due 2019		405,571
91⁄2% Senior Notes due 2020		289,580
	$	975,151

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2014

Basis of Presentation

Basis of Presentation

In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position of Comstock Resources, Inc. and subsidiaries (“Comstock” or the “Company”) as of June 30, 2014, the related results of operations and comprehensive income for the three months and six months ended June 30, 2014 and 2013, and cash flows for the six months ended June 30, 2014 and 2013.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock’s Annual Report on Form 10-K for the year ended December 31, 2013.

The results of operations for the three months and six months ended June 30, 2014 are not necessarily an indication of the results expected for the full year.

These unaudited consolidated financial statements include the accounts of Comstock and its wholly-owned and controlled subsidiaries.

Reclassifications

Reclassifications

Certain reclassifications have been made to prior periods’ financial statements, consisting primarily of reclassifications to the presentation of the Company’s derivative financial instruments to conform to the current periods’ presentation.

Marketable Securities

Marketable Securities

During the six months ended June 30, 2013, the Company sold 600,000 shares of Stone Energy Corporation common stock and received $13.4 million in proceeds. These shares had a cost basis of $5.5 million. Comstock realized a gain before income taxes of $7.9 million on the sale which is included in other income in the consolidated statements of operations. The Company utilized the specific identification method to determine the cost of the securities that were sold.

Property and Equipment

Property and Equipment

The Company follows the successful efforts method of accounting for its oil and gas properties. Costs incurred to acquire oil and gas leasehold are capitalized.

Unproved oil and gas properties are periodically assessed and any impairment in value is charged to exploration expense. The costs of unproved properties which are determined to be productive are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis. For the three months and six months ended June 30, 2013, the Company recognized impairment charges in exploration expense of $9.5 million and $11.9 million, respectively, related to certain leases that were expected to expire prior to the Company conducting drilling operations. There were no unproved property impairments during the six months ended June 30, 2014.

The Company also assesses the need for an impairment of the costs capitalized for its oil and gas properties on a property basis. The Company recognized impairment charges of $0.3 million and $0.7 million for the three months and six months ended June 30, 2014 and June 30, 2013, respectively, related to its oil and gas properties.

Accrued Liabilities

Accrued Liabilities

Accrued liabilities at June 30, 2014 and December 31, 2013 consist of the following:

	As of June 30, 2014		As of December 31, 2013
	(In thousands)
Accrued oil and gas property acquisition costs	$	—	$	40,128
Accrued drilling costs		22,027		34,914
Accrued interest		9,003		7,051
Accrued ad valorem taxes		3,000		—
Other accrued liabilities		8,105		9,204
	$	42,135	$	91,297

Reserve for Future Abandonment Costs

Reserve for Future Abandonment Costs

Comstock’s asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock’s total estimated liability during the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Future abandonment costs – beginning of period	$	14,534		$	16,387
Accretion expense		402			494
New wells placed on production		728			313
Liabilities settled and assets disposed of		(34	)		(534	)
Future abandonment costs — end of period	$	15,630		$	16,660

Derivative Financial Instruments and Hedging Activities

Derivative Financial Instruments and Hedging Activities

Comstock periodically uses swaps, floors and collars to hedge oil and natural gas prices and interest rates. Swaps are settled monthly based on differences between the prices specified in the instruments and the settlement prices of futures contracts. Generally, when the applicable settlement price is less than the price specified in the contract, Comstock receives a settlement from the counterparty based on the difference multiplied by the volume or amounts hedged. Similarly, when the applicable settlement price exceeds the price specified in the contract, Comstock pays the counterparty based on the difference. Comstock generally receives a settlement from the counterparty for floors when the applicable settlement price is less than the price specified in the contract, which is based on the difference multiplied by the volumes hedged. For collars, generally Comstock receives a settlement from the counterparty when the settlement price is below the floor and pays a settlement to the counterparty when the settlement price exceeds the cap. No settlement occurs when the settlement price falls between the floor and cap.

As of June 30, 2014, the Company had the following outstanding commodity derivatives:

Commodity and Derivative Type	Weighted-Average Contract Price	Volume (barrels)	Contract Period
Crude Oil Price Swap Agreements	$96.60 per  Bbl.	1,266,000	July 2014 – December 2014

All of the Company’s derivative financial instruments are used for risk management purposes and by policy none are held for trading or speculative purposes. Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. All of Comstock’s derivative financial instruments are with parties that are lenders under its bank credit facility. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company’s derivative financial instruments involve payment or receipt of premiums.

None of the derivative contracts have been designated as cash flow hedges. The Company recognizes cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). The Company had losses of $9.9 million and gains of $3.5 million related to its oil swap agreements during the three months ended June 30, 2014 and 2013, respectively, and losses of $14.8 million and $2.9 million during the six months ended June 30, 2014 and 2013, respectively. Cash settlements on derivative financial instruments were payments of $4.0 million and receipts of $2.9 million for the three months ended June 30, 2014 and 2013, respectively, and payments of $5.3 million and receipts of $5.2 million during the six months ended June 30, 2014 and 2013, respectively. The estimated fair value and carrying value of the Company’s derivative financial instruments was a liability of $8.5 million and an asset of $1.0 million as of June 30, 2014 and December 31, 2013, respectively, which are reflected as current liabilities and current assets, respectively.

Stock-Based Compensation

Stock-Based Compensation

Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period. During the three months ended June 30, 2014 and 2013, the Company recognized $2.7 million and $3.2 million, respectively, of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and performance stock units to its employees and directors. For the six months ended June 30, 2014 and 2013, the Company recognized $5.0 million and $6.4 million, respectively, of stock-based compensation expense within general and administrative expenses.

During the six months ended June 30, 2014, the Company granted 235,524 shares of restricted stock with a grant date fair value of $4.8 million or $20.24 per share to its employees and non-employee directors. The fair value of each restricted share on the date of grant is equal to its market price. As of June 30, 2014, Comstock had 1,213,361 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $19.91 per share. Total unrecognized compensation cost related to unvested restricted stock grants of $10.7 million as of June 30, 2014 is expected to be recognized over a period of 1.6 years.

During the six months ended June 30, 2014, the Company granted 188,958 performance share units (“PSUs”) with a grant date fair value of $3.7 million or $19.81 per unit to its employees. As of June 30, 2014, Comstock had 362,161 PSUs outstanding at a weighted average grant date fair value of $20.48 per unit. The number of shares of common stock to be issued related to the PSUs is based on the Company’s stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 848,567 shares of common stock. Total unrecognized compensation cost related to these grants of $4.3 million as of June 30, 2014 is expected to be recognized over a period of 1.4 years.

As of June 30, 2014, Comstock had outstanding options to purchase 115,150 shares of common stock at a weighted average exercise price of $32.90 per share. All of the stock options were exercisable and there were no unrecognized compensation costs related to the stock options as of June 30, 2014. No stock options were exercised during the three months or six months ended June 30, 2014 or 2013.

Income Taxes

Income Taxes

The following is an analysis of consolidated income tax expense (benefit) from continuing operations:

	Three Months EndedJune 30,					Six Months EndedJune 30,
	2014		2013			2014		2013
	(In thousands)
Current provision (benefit)	$	23	$	(3	)	$	37	$	—
Deferred provision (benefit)		1,230		(11,993	)		1,904		(24,238	)
Provision for (benefit from) income taxes	$	1,253	$	(11,996	)	$	1,941	$	(24,238	)

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. The difference between the Company’s effective tax rate and the 35% federal statutory rate is mainly caused by non-deductible stock compensation and state taxes. The impact of these items varies based upon the Company’s projected full year income or loss and the jurisdictions that are expected to generate the projected income and/or losses. The difference between the Company’s customary rate of 35% and the effective tax rate on income before income taxes from continuing operations is due to the following:

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2014			2013			2014			2013
Tax at statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
Tax effect of:
Nondeductible stock-based compensation		4.2			0.6			3.3			(1.4	)
State income taxes, net of federal benefit		(0.4	)		0.3			(0.3	)		1.1
Other		1.0			(0.1	)		0.8			(0.2	)
Effective tax rate		39.8	%		35.8	%		38.8	%		34.5	%

The Company’s federal income tax returns for the years subsequent to December 31, 2009, remain subject to examination. The Company’s income tax returns in major state income tax jurisdictions remain subject to examination from various periods subsequent to December 31, 2008. State tax returns in one state jurisdiction are currently under review. The Company has evaluated the preliminary findings in this jurisdiction and believes it is more likely than not that the ultimate resolution of these matters will not have a material effect on the Company’s financial statements. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.

Fair Value Measurements

Fair Value Measurements

The Company holds or has held certain items that are required to be measured at fair value. These include cash and cash equivalents held in bank accounts and derivative financial instruments in the form of oil price swap agreements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements:

Level 1 – Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2 – Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3 – Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The Company’s valuation of cash and cash equivalents is a Level 1 measurement. The Company’s oil price swap agreements are not traded on a public exchange, and their value is determined utilizing a discounted cash flow model based on inputs that are readily available in public markets and, accordingly, the valuation of these swap agreements is categorized as a Level 2 measurement.

The following table summarizes financial assets and liabilities accounted for at fair value as of June 30, 2014:

	Carrying Value Measured at Fair Value at June 30, 2014		Level 1		Level 2
	(In thousands)
Assets measured at fair value on a recurring basis:
Cash and cash equivalents held in bank accounts	$	3,813	$	3,813	$	—
Total assets	$	3,813	$	3,813	$	—
Liabilities measured at fair value on a recurring basis:
Derivative financial instruments	$	8,492	$	—	$	8,492
Total liabilities	$	8,492	$	—	$	8,492

The following table presents the carrying amounts and estimated fair value of the Company’s other financial instruments:

	As of June 30, 2014
	Carrying Value		Fair Value
	(In thousands)
Fixed rate debt	$	695,151	$	766,000
Floating rate debt	$	280,000	$	280,000

The fair market value of the Company’s fixed rate debt was based on the market prices as of June 30, 2014, a Level 1 measurement. The fair value of the floating rate debt outstanding at June 30, 2014 approximated its carrying value, a Level 2 measurement.

Earnings Per Share

Earnings Per Share

Basic earnings per share is determined without the effect of any outstanding potentially dilutive stock options or PSUs and diluted earnings per share is determined with the effect of outstanding stock options and PSUs that are potentially dilutive. Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participatory securities and are included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company’s common stock that may range from zero to up to three times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. Basic and diluted earnings per share for the three months and six months ended June 30, 2014 and 2013 were determined as follows:

	Three Months Ended June 30,
	2014							2013
	Income			Shares		Per Share		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	1,898						$	(21,531	)
(Income) loss allocable to unvested restricted stock		(153	)						697
Basic net income (loss) from continuing operations attributable to common stock	$	1,745			46,651	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			353				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	1,745			47,004	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Net income from discontinued operations								$	151,236
Income allocable to unvested restricted stock									(4,893	)
Basic net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13

	Six Months Ended June 30,
	2014							2013
	Income			Shares		PerShare		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	3,063						$	(46,048	)
(Income) loss allocable to unvested restricted stock		(292	)						1,495
Basic net income (loss) from continuing operations attributable to common stock	$	2,771			46,616	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			325				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	2,771			46,941	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Net income from discontinued operations								$	148,609
Income allocable to unvested restricted stock									(4,825	)
Basic net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07

At June 30, 2014 and December 31, 2013, 1,213,361 and 1,515,889 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a nonforfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company’s stockholders. Weighted average shares of unvested restricted stock outstanding during the three months and six months ended June 30, 2014 and 2013 were as follows:

	Three Months EndedJune 30,				Six Months EndedJune 30,
	2014		2013		2014		2013
	(In thousands)
Unvested restricted stock		1,222		1,563		1,168		1,568

Options to purchase common stock and PSUs that were outstanding and that were excluded as anti-dilutive from the determination of diluted earnings per share are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands except per share/unit data)
Weighted average anti-dilutive stock options		115		134		115		145
Weighted average exercise price per share	$	32.90	$	32.90	$	32.90	$	32.90
Weighted average performance share units		—		254		—		254
Weighted average grant date fair value per unit	$	—	$	21.14	$	—	$	21.14

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. At June 30, 2014 and December 31, 2013, the Company’s cash investments consisted of cash held in bank accounts.

The following is a summary of cash payments made for interest and income taxes:

	Six Months Ended June 30,
	2014		2013
	(In thousands)
Cash Payments:
Interest payments	$	28,907	$	43,738
Income tax payments	$	1,408	$	2

The Company capitalizes interest on its unevaluated oil and gas property costs during periods when it is conducting exploration activity on this acreage. The Company capitalized interest capitalized interest of $2.6 million and $0.7 million for the three months ended June 30, 2014 and 2013, respectively, and $4.8 million and $1.7 million for the six months ended June 30, 2014 and 2013, respectively, which reduced interest expense.

Comprehensive Income

Comprehensive Income

Comprehensive income consists of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Net income	$	1,898	$	129,705	$	3,063	$	102,561
Other comprehensive income:
Realized gains on marketable securities reclassified to gain on sale of marketable securities, net of a benefit from income taxes of $2,757		—		—		—		(5,120	)
Unrealized gains on marketable securities, net of provision for income taxes of $377		—		—		—		702
Total comprehensive income	$	1,898	$	129,705	$	3,063	$	98,143

Discontinued Operations

Discontinued Operations

On March 14, 2013, the Company entered into an agreement to sell its oil and gas properties located in Reeves and Gaines counties in West Texas to a third party. The sale closed on May 14, 2013 with an effective date of January 1, 2013. Income from discontinued operations for the three months and six months ended June 30, 2013 is comprised of the following:

	Three MonthsEndedJune 30, 2013			Six MonthsEndedJune 30, 2013
	(In thousands)
Revenues:
Oil and gas sales	$	8,826		$	25,125
Costs and expenses:
Production taxes		427			1,120
Gathering and transportation		170			501
Lease operating		3,545			9,853
Depletion, depreciation and amortization		—			8,649
Interest expense(1)		2,847			6,346
Total costs and expenses		6,989			26,469
Gain on sale of discontinued operations		230,637			230,637
Income from discontinued operations before income taxes		232,474			229,293
Income tax expense:
Current		(637	)		(637	)
Deferred		(80,601	)		(80,047	)
Total income tax expense		(81,238	)		(80,684	)
Net income from discontinued operations	$	151,236		$	148,609

(1) Interest expense was allocated to discontinued operations based on the ratio of the net assets of discontinued operations to our consolidated net assets plus long-term debt. Interest expense is net of capitalized interest of $— and $2,010 for the three months and six months ended June 30, 2013, respectively.

XML

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2014

Summary of Accrued Liabilities

Accrued liabilities at June 30, 2014 and December 31, 2013 consist of the following:

	As of June 30, 2014		As of December 31, 2013
	(In thousands)
Accrued oil and gas property acquisition costs	$	—	$	40,128
Accrued drilling costs		22,027		34,914
Accrued interest		9,003		7,051
Accrued ad valorem taxes		3,000		—
Other accrued liabilities		8,105		9,204
	$	42,135	$	91,297

Summary of Changes in Reserve for Future Abandonment Costs

Comstock’s asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock’s total estimated liability during the six months ended June 30, 2014 and 2013:

	Six Months Ended June 30,
	2014			2013
	(In thousands)
Future abandonment costs – beginning of period	$	14,534		$	16,387
Accretion expense		402			494
New wells placed on production		728			313
Liabilities settled and assets disposed of		(34	)		(534	)
Future abandonment costs — end of period	$	15,630		$	16,660

Summary of Outstanding Oil Price Derivatives

As of June 30, 2014, the Company had the following outstanding commodity derivatives:

Commodity and Derivative Type	Weighted-Average Contract Price	Volume (barrels)	Contract Period
Crude Oil Price Swap Agreements	$96.60 per  Bbl.	1,266,000	July 2014 – December 2014

Income Tax Expense from Continuing Operations

The following is an analysis of consolidated income tax expense (benefit) from continuing operations:

	Three Months EndedJune 30,					Six Months EndedJune 30,
	2014		2013			2014		2013
	(In thousands)
Current provision (benefit)	$	23	$	(3	)	$	37	$	—
Deferred provision (benefit)		1,230		(11,993	)		1,904		(24,238	)
Provision for (benefit from) income taxes	$	1,253	$	(11,996	)	$	1,941	$	(24,238	)

Difference Between Customary Rate and Effective Tax Rate on Income Before Income Taxes Due

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. The difference between the Company’s effective tax rate and the 35% federal statutory rate is mainly caused by non-deductible stock compensation and state taxes. The impact of these items varies based upon the Company’s projected full year income or loss and the jurisdictions that are expected to generate the projected income and/or losses. The difference between the Company’s customary rate of 35% and the effective tax rate on income before income taxes from continuing operations is due to the following:

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2014			2013			2014			2013
Tax at statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
Tax effect of:
Nondeductible stock-based compensation		4.2			0.6			3.3			(1.4	)
State income taxes, net of federal benefit		(0.4	)		0.3			(0.3	)		1.1
Other		1.0			(0.1	)		0.8			(0.2	)
Effective tax rate		39.8	%		35.8	%		38.8	%		34.5	%

Summary of Financial Assets and Liabilities at Fair Value

The following table summarizes financial assets and liabilities accounted for at fair value as of June 30, 2014:

	Carrying Value Measured at Fair Value at June 30, 2014		Level 1		Level 2
	(In thousands)
Assets measured at fair value on a recurring basis:
Cash and cash equivalents held in bank accounts	$	3,813	$	3,813	$	—
Total assets	$	3,813	$	3,813	$	—
Liabilities measured at fair value on a recurring basis:
Derivative financial instruments	$	8,492	$	—	$	8,492
Total liabilities	$	8,492	$	—	$	8,492

Carrying Amounts and Estimated Fair Value of Other Financial Instruments

The following table presents the carrying amounts and estimated fair value of the Company’s other financial instruments:

	As of June 30, 2014
	Carrying Value		Fair Value
	(In thousands)
Fixed rate debt	$	695,151	$	766,000
Floating rate debt	$	280,000	$	280,000

Basic and Diluted Earnings Per Share

Basic earnings per share is determined without the effect of any outstanding potentially dilutive stock options or PSUs and diluted earnings per share is determined with the effect of outstanding stock options and PSUs that are potentially dilutive. Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participatory securities and are included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company’s common stock that may range from zero to up to three times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. Basic and diluted earnings per share for the three months and six months ended June 30, 2014 and 2013 were determined as follows:

	Three Months Ended June 30,
	2014							2013
	Income			Shares		Per Share		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	1,898						$	(21,531	)
(Income) loss allocable to unvested restricted stock		(153	)						697
Basic net income (loss) from continuing operations attributable to common stock	$	1,745			46,651	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			353				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	1,745			47,004	$	0.04	$	(20,834	)		46,754	$	(0.45	)
Net income from discontinued operations								$	151,236
Income allocable to unvested restricted stock									(4,893	)
Basic net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	146,343			46,754	$	3.13

	Six Months Ended June 30,
	2014							2013
	Income			Shares		PerShare		Income (Loss)			Shares		Per Share
	(In thousands, except per share amounts)
Net income (loss) from continuing operations	$	3,063						$	(46,048	)
(Income) loss allocable to unvested restricted stock		(292	)						1,495
Basic net income (loss) from continuing operations attributable to common stock	$	2,771			46,616	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Effect of dilutive securities:
Stock options		—			—				—			—
Performance share units		—			325				—			—
Diluted net income (loss) from continuing operations attributable to common stock	$	2,771			46,941	$	0.06	$	(44,553	)		46,742	$	(0.95	)
Net income from discontinued operations								$	148,609
Income allocable to unvested restricted stock									(4,825	)
Basic net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07
Effect of dilutive securities:
Stock options									—			—
Performance share units									—			—
Diluted net income from discontinued operations attributable to common stock								$	143,784			46,742	$	3.07

Weighted Average Shares of Unvested Restricted Stock

At June 30, 2014 and December 31, 2013, 1,213,361 and 1,515,889 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a nonforfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company’s stockholders. Weighted average shares of unvested restricted stock outstanding during the three months and six months ended June 30, 2014 and 2013 were as follows:

	Three Months EndedJune 30,				Six Months EndedJune 30,
	2014		2013		2014		2013
	(In thousands)
Unvested restricted stock		1,222		1,563		1,168		1,568

Common Stock Stock Options Excluded as Anti-Dilutive from Determination of Diluted Earnings Per Share

Options to purchase common stock and PSUs that were outstanding and that were excluded as anti-dilutive from the determination of diluted earnings per share are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands except per share/unit data)
Weighted average anti-dilutive stock options		115		134		115		145
Weighted average exercise price per share	$	32.90	$	32.90	$	32.90	$	32.90
Weighted average performance share units		—		254		—		254
Weighted average grant date fair value per unit	$	—	$	21.14	$	—	$	21.14

Cash Payments Made for Interest and Income Taxes

The following is a summary of cash payments made for interest and income taxes:

	Six Months Ended June 30,
	2014		2013
	(In thousands)
Cash Payments:
Interest payments	$	28,907	$	43,738
Income tax payments	$	1,408	$	2

Comprehensive Income

Comprehensive income consists of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Net income	$	1,898	$	129,705	$	3,063	$	102,561
Other comprehensive income:
Realized gains on marketable securities reclassified to gain on sale of marketable securities, net of a benefit from income taxes of $2,757		—		—		—		(5,120	)
Unrealized gains on marketable securities, net of provision for income taxes of $377		—		—		—		702
Total comprehensive income	$	1,898	$	129,705	$	3,063	$	98,143

Summary of Income from Discontinued Operations

On March 14, 2013, the Company entered into an agreement to sell its oil and gas properties located in Reeves and Gaines counties in West Texas to a third party. The sale closed on May 14, 2013 with an effective date of January 1, 2013. Income from discontinued operations for the three months and six months ended June 30, 2013 is comprised of the following:

	Three MonthsEndedJune 30, 2013			Six MonthsEndedJune 30, 2013
	(In thousands)
Revenues:
Oil and gas sales	$	8,826		$	25,125
Costs and expenses:
Production taxes		427			1,120
Gathering and transportation		170			501
Lease operating		3,545			9,853
Depletion, depreciation and amortization		—			8,649
Interest expense(1)		2,847			6,346
Total costs and expenses		6,989			26,469
Gain on sale of discontinued operations		230,637			230,637
Income from discontinued operations before income taxes		232,474			229,293
Income tax expense:
Current		(637	)		(637	)
Deferred		(80,601	)		(80,047	)
Total income tax expense		(81,238	)		(80,684	)
Net income from discontinued operations	$	151,236		$	148,609

(1) Interest expense was allocated to discontinued operations based on the ratio of the net assets of discontinued operations to our consolidated net assets plus long-term debt. Interest expense is net of capitalized interest of $— and $2,010 for the three months and six months ended June 30, 2013, respectively.

XML

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Operations And Summary Of Significant Accounting Policies [Line Items]
Proceeds from sale of Stone Energy Corporation common stock available for sale				$ 13,392,000
Impairment charges for unevaluated properties		9,500,000	0	11,900,000
Impairment charges related to oil and gas properties	300,000	700,000	300,000	700,000
Total gains (losses) on oil price swaps	(9,900,000)	3,500,000	(14,800,000)	(2,900,000)
(Payments) receipts on derivative financial instruments	(4,000,000)	2,900,000	(5,300,000)	5,200,000
Derivative Financial Instruments - Current Liability	8,492,000		8,492,000
Derivative Financial Instruments - Current Asset					970,000
Common Stock Marketable Securities
Operations And Summary Of Significant Accounting Policies [Line Items]
Shares of Stone Energy Corporation common stock sold by company		600,000		600,000
Cost basis of Stone Energy Corporation common stock sold		5,500,000		5,500,000
Proceeds from sale of Stone Energy Corporation common stock available for sale				13,400,000
Realized gain on available-for-sale securities before income tax				$ 7,900,000

XML

Long-term Debt - Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014
Debt Instrument [Line Items]
Long-term Debt	$ 975,151
Bank credit facility
Debt Instrument [Line Items]
Long-term Debt	280,000
7 3/4% Senior Notes due 2019
Debt Instrument [Line Items]
Long-term Debt	405,571
9 1/2% Senior Notes due 2020
Debt Instrument [Line Items]
Long-term Debt	$ 289,580

XML

Summary of Significant Accounting Policies - Income Tax Expense from Continuing Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Tax Expense Benefit From Continuing Operations [Line Items]
Current provision (benefit)	$ 23	$ (3)	$ 37
Deferred provision (benefit)	1,230	(11,993)	1,904	(24,238)
Provision for (benefit from) income taxes	$ 1,253	$ (11,996)	$ 1,941	$ (24,238)

XML

Summary of Significant Accounting Policies - Weighted Average Shares of Unvested Restricted Stock (Detail) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Unvested restricted stock	1,222	1,563	1,168	1,568

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net income	$ 1,898	$ 129,705	$ 3,063	$ 102,561
Net change in unrealized gains and losses on marketable securities, net of a benefit from income taxes of $2,380	0	0	0	(4,418)
Comprehensive income	$ 1,898	$ 129,705	$ 3,063	$ 98,143

XML

Stockholders' Equity

6 Months Ended

Jun. 30, 2014

Stockholders' Equity

(2) STOCKHOLDERS’ EQUITY –

On February 20 and May 21, 2014, Comstock’s Board of Directors declared a dividend of 12.5¢ per share on the Company’s common stock to stockholders of record at the close of business on March 7 and June 6, 2014, respectively. Dividends of $12.0 million and $6.0 million were paid during the six months ended June 30, 2014 and June 30, 2013, respectively. In 2013, the Board of Directors approved an open market share repurchase plan which permits the Company to repurchase up to $100.0 million of its common stock on the open market. The Company did not make any purchases under this plan during the six months ended June 30, 2014 or June 30, 2013, and repurchases of up to $90.8 million remain available under this plan in future periods as of June 30, 2014.

XML

Summary of Significant Accounting Policies - Common Stock Stock Options Excluded as Anti-Dilutive from Determination of Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average anti-dilutive stock options	115	134	115	145
Weighted average exercise price per share	$ 32.90	$ 32.90	$ 32.90	$ 32.90
Weighted average performance share units		254		254
Weighted average grant date fair value per unit		21.14		21.14

XML

Summary of Significant Accounting Policies - Additional Information 1 (Detail) (USD $)	3 Months Ended		6 Months Ended				6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Jurisdictions	Jun. 30, 2013	Jun. 30, 2014 Restricted Stock	Dec. 31, 2013 Restricted Stock	Jun. 30, 2014 Performance Shares Unit	Jun. 30, 2014 Performance Shares Minimum	Jun. 30, 2014 Performance Shares Maximum	Jun. 30, 2014 Stock Options	Jun. 30, 2013 Stock Options	Jun. 30, 2014 Stock Options	Jun. 30, 2013 Stock Options	Jun. 30, 2014 General and Administrative Expense	Jun. 30, 2013 General and Administrative Expense	Jun. 30, 2014 General and Administrative Expense	Jun. 30, 2013 General and Administrative Expense
Operations And Summary Of Significant Accounting Policies [Line Items]
Stock-based compensation expense recognized			$ 4,997,000	$ 6,440,000										$ 2,700,000	$ 3,200,000	$ 5,000,000	$ 6,400,000
Number of shares granted					235,524
Restricted stock grant date fair value					4,800,000
Grant date fair value of share units, per unit					$ 20.24
Shares of unvested restricted stock outstanding					1,213,361	1,515,889
Weighted average grant date fair value of stock grants per share					$ 19.91
Unrecognized compensation cost					10,700,000		4,300,000
Period in which compensation cost expected to be recognized					1 year 7 months 6 days		1 year 4 months 24 days
Number of units granted							188,958
Performance units grant date fair value							3,700,000
Grant date fair value of share units, per unit							19.81
Number of performance stock units ("PSUs") outstanding							362,161
Weighted average grant date fair value of PSU's per unit							20.48
Common stock, shares, issued								0	848,567
Number of Options Outstanding										115,150		115,150
Weighted average exercise price										$ 32.90		$ 32.90
Number of option, Exercised										0	0	0	0
Customary rate	35.00%	35.00%	35.00%	35.00%
State jurisdiction currently under review			1
Performance Multiplier, minimum			0.00%
Performance Multiplier, maximum			300.00%
Interest costs, capitalized during period	$ 2,600,000	$ 700,000	$ 4,800,000	$ 1,700,000