Comstock Resources, Inc. Reports First Quarter 2008 Financial and Operating Results
FRISCO, Texas, May 5 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended March 31, 2008.
First Quarter 2008 Financial Results
Comstock reported net income of $41.1 million or 91 cents per diluted share for the three months ended March 31, 2008 as compared to 2007's first quarter net income of $12.6 million or 28 cents per diluted share.
The outstanding first quarter financial results reflect strong market prices for oil and natural gas and the Company's production growth from acquisitions, onshore development drilling and offshore exploration activities. Comstock's production in the first quarter of 2008 increased 25% to 25.1 billion cubic feet equivalent of natural gas ("Bcfe") as compared to production of 20.0 Bcfe in the first quarter of 2007. Onshore production has increased 44% and offshore production was up 6% from the first quarter of 2007. The first quarter average daily production rate of 275 million cubic feet of natural gas equivalent ("Mmcfe") also has increased 11% from the fourth quarter production rate of 249 Mmcfe per day. The Company's realized natural gas price averaged $8.46 per Mcf in 2008's first quarter, 23% higher than the $6.89 per Mcf in 2007's first quarter and $1.17 per Mcfe above the natural gas price realized in the fourth quarter of 2007. Realized oil prices in the first quarter of 2008 averaged $93.93 per barrel, 73% higher than the $54.15 per barrel for 2007 and $7.92 per barrel above the oil price realized in the fourth quarter of 2007. Driven by the 25% increase in production and the much stronger oil and natural gas prices, first quarter 2008's oil and gas sales of $241.0 million increased 65% from 2007's first quarter sales of $146.0 million. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2008's first quarter of $170.5 million was 70% higher than 2007's first quarter cash flow of $100.5 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $199.5 million in 2008's first quarter, a 75% increase from 2007's first quarter EBITDAX of $114.0 million.
First Quarter 2008 Drilling Results
Comstock announced the results to date of its 2008 drilling program. In the first three months of 2008 Comstock drilled 36 wells (23.2 net). Thirty-five of the wells drilled were successful and one was a dry hole.
Onshore, Comstock drilled 31 (19.6 net) successful development wells in the first quarter of 2008. Comstock drilled 26 successful wells (16.3 net) in its East Texas/North Louisiana region which have been tested at an average per well initial production rate of 2.1 Mmcfe per day. At March 31, 2008 Comstock had four additional wells in this region that were being drilled which are part of Comstock's 84 well drilling program planned in this region for 2008. In South Texas, Comstock drilled four successful wells (3.5 net) and had one exploratory dry hole (0.5 net) during the first quarter of 2008. The successful wells were tested at an average per well initial production rate of 3.9 Mmcfe per day. Three of the wells were in the Javelina field and the other was a successful exploratory well. Comstock also drilled two successful wells (0.3 net) in the San Juan Basin in New Mexico during the first quarter.
Comstock also announced that it plans to increase its 2008 budget for its onshore drilling program to $322 million from the $278 million previously announced. The increase is primarily attributable to increased spending in its East Texas/North Louisiana region on acreage acquisitions and drilling related to the Company's Haynesville shale program. The Company estimates that it has 65,500 (50,400 net) acres that are prospective for Haynesville shale development. The onshore drilling program now includes 105 (70.2 net) development wells and 12 (7.7) exploratory wells. Capital spending in the Company's East Texas/North Louisiana operating region is forecasted to be $200 million, which includes 84 total wells (57.6 net), nine of which will be horizontal wells. Comstock also expects to spend $115 million in its South Texas operating region, including 28 wells (19.5 net). The remaining $7 million will be spent on Comstock's other onshore regions.
Comstock's offshore operations are conducted by its 49% owned subsidiary, Bois d'Arc Energy, Inc. (NYSE: BDE). Bois d'Arc has drilled three successful wells (2.6 net) so far in 2008. The OCS-G 24922 #1 at Ship Shoal block 97 was drilled to a depth of 12,983 feet and encountered 71 net feet of pay in two high quality sands. This well was put on production in February at a rate of 10.3 MMcfe per day. Bois d'Arc has a 78% working interest in this well. The OCS-G 24926 #1 was drilled to test the "Perch" prospect at Ship Shoal block 120. This well was drilled to a depth of 5,000 feet and encountered 94 feet of pay in eight commercial sands. First production for the well is expected in the second quarter. Bois d'Arc has a 100% working interest in this well. Bois d'Arc also drilled the OCS-G 24977 #1 at South Pelto block 21 to test the "Chinook" prospect. This exploratory well was drilled to a depth of 18,250 feet and encountered 38 feet of pay in the objective sand. First production for the well is expected July 1, 2008. Bois d'Arc has a 79% working interest in this well. Bois d'Arc is currently drilling a 16,500 foot exploratory well to test its "Kelsie" prospect at Ship Shoal block 95. Bois d'Arc has a 100% working interest in this well.
Proposed Sale of Bois d'Arc Energy
As previously announced, on April 30, 2008 Bois d'Arc Energy entered into a definitive merger agreement with Stone Energy Corporation ("Stone") (NYSE: SGY) pursuant to which Stone will acquire Bois d'Arc. Under the terms of the merger agreement, Bois d'Arc shareholders, including Comstock, will receive $13.65 in cash and 0.165 shares of Stone common stock for each share of Bois d'Arc. Comstock will receive $440 million in cash and 5,317,069 shares of the common stock of Stone for its stake in Bois d'Arc. Completion of the transaction is subject to approval by the Bois d'Arc and Stone stockholders, regulatory approvals, and other customary conditions. Concurrent with the execution of the merger agreement, Comstock entered into a stockholder agreement in which it has agreed to vote in favor of the merger.
Property Divestiture
Comstock also announced today that it has accepted offers whereby it intends to sell certain properties in East and South Texas for $122.0 million. The properties include Comstock's interests in the J.C. Martin, AWP and East Seven Sisters fields in South Texas and the Gilmer field in East Texas. Comstock owns net profit interests in these fields which are operated by other parties. The sales are expected to close in June 2008 with an effective date of April 1, 2008. The estimated proved reserves attributable to the properties being sold are 44.3 Bcfe. Production in the first quarter of 2008 attributable to Comstock's interest in these properties was 8.5 MMcfe per day. Comstock expects to realize an after tax gain of $16.6 million on these sales. Scotia Waterous (USA) Inc. acted as financial advisor to Comstock with respect to these sales.
This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein. Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.
Comstock Resources, Inc. is a growing independent energy company based in Frisco, Texas and is engaged in oil and gas acquisitions, exploration and development primarily in Texas, Louisiana and the Gulf of Mexico. The Company's stock is traded on the New York Stock Exchange under the symbol CRK.
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per share amounts)
Three Months Ended March 31,
2008 2007
Oil and gas sales $240,987 $146,029
Operating expenses:
Oil and gas operating 36,640 27,083
Exploration 8,655 11,133
Depreciation, depletion and amortization 70,562 56,707
General and administrative 9,339 9,702
Loss on disposal of assets 240 -
Total operating expenses 125,436 104,625
Income from operations 115,551 41,404
Other income (expenses):
Interest income 244 296
Other income 157 130
Interest expense (11,314) (8,449)
Total other income (expenses) (10,913) (8,023)
Income before income taxes and minority interest 104,638 33,381
Provision for income taxes (44,073) (14,824)
Minority interest in earnings of
Bois d'Arc Energy (19,470) (5,999)
Net income $41,095 $12,558
Net income per share:
Basic $0.93 $0.29
Diluted $0.91 $0.28
Weighted average common and common stock equivalent
shares outstanding:
Basic 44,179 43,364
Diluted 44,994 44,238
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands)
Three Months Ended March 31,
2008 2007
Cash flow from operations:
Net cash provided by operating activities $128,181 $78,746
Excess tax benefit from stock based compensation 670 166
Increase in accounts receivable 22,112 4,874
Decrease in other current assets 1,392 1,237
Decrease in accounts payable and accrued expenses 18,124 15,521
Cash flow from operations $170,479 $100,544
EBITDAX:
Net income $41,095 $12,558
Interest expense 11,314 8,449
Income tax expense 44,073 14,824
Depreciation, depletion and amortization 70,562 56,707
Loss on disposal of assets 240 -
Minority interest in earnings of
Bois d'Arc Energy 19,470 5,999
Stock-based compensation 4,052 4,312
Exploration expense 8,655 11,133
EBITDAX $199,461 $113,982
As of March 31,
2008 2007
Balance Sheet Data:
Cash and cash equivalents $15,520 $12,003
Other current assets 125,609 90,974
Property and equipment, net 2,271,982 1,857,521
Other 6,505 5,361
Total assets $2,419,616 $1,965,859
Current liabilities $129,804 $147,153
Long-term debt 736,000 511,000
Deferred income taxes 400,964 323,507
Other long-term liabilities 57,968 58,113
Minority interest in Bois d'Arc Energy 287,819 228,006
Stockholders' equity 807,061 698,080
Total liabilities and stockholders' equity $2,419,616 $1,965,859
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
($ In thousands, except per unit amounts)
For the Three Months ended March 31, 2008
Bois d'Arc
Onshore(1) Energy Total
Oil production (thousand barrels) 243 427 670
Gas production (million cubic feet
- Mmcf) 13,130 7,927 21,057
Total production (Mmcfe) 14,586 10,486 25,072
Oil sales $19,772 $43,091 $62,863
Gas sales 108,193 70,175 178,368
Realized hedging losses (244) - (244)
Total gas sales 107,949 70,175 178,124
Total oil and gas sales $127,721 $113,266 $240,987
Average oil price (per barrel) $81.49 $101.01 $93.93
Average gas price excluding
realized hedging losses (per
thousand cubic feet - Mcf) $8.24 $8.85 $8.47
Average gas price including
hedging losses (per thousand
cubic feet - Mcf) $8.22 $8.85 $8.46
Average price excluding hedging
losses (per Mcf equivalent) $8.77 $10.80 $9.62
Average price including hedging
losses (per Mcf equivalent) $8.76 $10.80 $9.61
Lifting cost $21,202 $15,438 $36,640
Lifting cost (per Mcf equivalent) $1.45 $1.47 $1.46
Oil and gas capital expenditures $62,041 $58,315 $120,356
(1) Includes the onshore results of operations of Comstock Resources, Inc.
For the Three Months ended March 31, 2007
Bois d'Arc
Onshore(1) Energy Total
Oil production (thousand barrels) 251 368 619
Gas production (million cubic feet
- Mmcf) 8,635 7,701 16,336
Total production (Mmcfe) 10,140 9,909 20,049
Oil sales $12,054 $21,468 $33,522
Gas sales 57,793 54,714 112,507
Total oil and gas sales $69,847 $76,182 $146,029
Average oil price (per barrel) $48.03 $58.33 $54.15
Average gas price (per thousand
cubic feet - Mcf) $6.69 $7.10 $6.89
Average price (per Mcf equivalent) $6.89 $7.69 $7.28
Lifting cost $14,055 $13,028 $27,083
Lifting cost (per Mcf equivalent) $1.39 $1.31 $1.35
Oil and gas capital expenditures $84,251 $62,753 $147,004
(1) Includes the onshore results of operations of Comstock Resources, Inc.
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
($ In thousands, except per unit amounts)
For the Three Months ended March 31, 2008
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production (thousand
barrels) 47 46 150 243
Gas production (million
cubic feet - Mmcf) 6,727 5,630 773 13,130
Total production (Mmcfe) 7,008 5,907 1,671 14,586
Oil sales $4,424 $4,520 $10,828 $19,772
Gas sales 55,731 46,135 6,327 108,193
Realized hedging losses - (244) - (244)
Total gas sales 55,731 45,891 6,327 107,949
Total oil and
gas sales $60,155 $50,411 $17,155 $127,721
Average oil price
(per barrel) $94.13 $98.26 $72.19 $81.49
Average gas price
excluding hedging
losses (per thousand
cubic feet - Mcf) $8.28 $8.19 $8.18 $8.24
Average gas price
including hedging
losses (per Mcf) $8.28 $8.15 $8.18 $8.22
Average price excluding
hedging losses (per
Mcf equivalent) $8.58 $8.58 $10.27 $8.77
Average price including
hedging losses (per
Mcf equivalent) $8.58 $8.53 $10.27 $8.76
Lifting cost $8,769 $7,056 $5,377 $21,202
Lifting cost (per
Mcf equivalent) $1.25 $1.19 $3.22 $1.45
Oil and Gas Capital
Expenditures:
Leasehold costs $2,861 $1,124 $49 $4,034
Exploratory drilling - 2,356 123 2,479
Development drilling 39,373 11,403 1,389 52,165
Other development 930 717 1,716 3,363
Total $43,164 $15,600 $3,277 $62,041
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
($ In thousands, except per unit amounts)
For the Three Months ended March 31, 2007
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production (thousand
barrels) 46 53 152 251
Gas production (million
cubic feet - Mmcf) 5,381 2,577 677 8,635
Total production (Mmcfe) 5,657 2,896 1,587 10,140
Oil sales $2,492 $2,958 $6,604 $12,054
Gas sales 35,501 18,101 4,191 57,793
Total oil and
gas sales $37,993 $21,059 $10,795 $69,847
Average oil price
(per barrel) $54.17 $55.81 $43.45 $48.03
Average gas price (per
thousand cubic feet -
Mcf) $6.60 $7.02 $6.19 $6.69
Average gas price (per
thousand cubic feet -
Mcf equivalent) $6.72 $7.27 $6.80 $6.89
Lifting cost $6,684 $3,322 $4,049 $14,055
Lifting cost (per Mcf
equivalent) $1.18 $1.15 $2.55 $1.39
Oil and Gas Capital
Expenditures:
Leasehold costs $398 $816 $2,400 $3,614
Exploratory drilling - 2,255 442 2,697
Development drilling 54,707 11,677 10,009 76,393
Other development 242 483 822 1,547
Total $55,347 $15,231 $13,673 $84,251
SOURCE Comstock Resources, Inc.
CONTACT: Roland O. Burns, Sr. Vice President and Chief Financial Officer
of Comstock Resources, Inc., +1-972-668-8800
Web site: http://www.comstockresources.com
(CRK BDE)