Comstock Resources is a leading independent natural gas producer with operations focused
on the development of the Haynesville Shale in North Louisiana and East Texas

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Comstock Resources, Inc. Reports First Quarter 2012 Financial and Operating Results

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

Financial Results for the Three Months Ended March 31, 2012

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

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

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

2012 Drilling Results

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

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

Since closing on the acquisition of acreage in Reeves County in West Texas, Comstock has completed seven operated Wolfbone vertical wells.  These wells were drilled to total depths of 11,477 to 12,170 feet and completed with 5 to 9 frac stages.  These wells have an average per well initial production rate of 347 BOE per day (80% oil).  The first three wells averaged 262 BOE per day.  Comstock changed its completion techniques and had improved results with the last four wells which averaged 410 BOE per day, including the Jessie James 4 #1 well which had an initial production rate of 539 BOE per day.  This well is one of the top vertical wells in the Wolfbone play.  Comstock also participated in the completion of three non-operated Wolfbone wells which averaged 322 BOE per day.

Comstock has planned a conference call for 9:30 a.m. Central Time on May 1, 2012, to discuss the operational and financial results for the first quarter of 2012.  Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-271-0675 (international dial-in use 617-213-8892) and provide access code 91001330 when prompted.  If you are unable to participate in the original conference call, a web replay will be available approximately 24 hours following the completion of the call on Comstock's website at www.comstockresources.com.  The web replay will be available for approximately one week.  A replay of the conference call will be available beginning at 12:30 p.m. ET May 1, 2012 and will continue until 11:59 p.m. May 8, 2012.  To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US).  The conference call ID number is 77364920.

This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995.  Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein.  Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.

Comstock Resources, Inc. is an independent energy company based in Frisco, Texas and is engaged in oil and gas acquisitions, exploration and development primarily in Texas and Louisiana.  The Company's stock is traded on the New York Stock Exchange under the symbol CRK.


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

 


Three Months Ended March 31,


2012

2011









Revenues:







Oil and gas sales

$

110,335

$

88,038

Gain on sale of oil and gas properties



6,727

-

Total revenues

117,062

88,038







Operating expenses:





Production taxes

3,637

726

Gathering and transportation

7,892

5,628

Lease operating



14,749

11,548

Exploration

1,353

9,537

Depreciation, depletion and amortization

79,097

60,325

Impairment of oil and gas properties

49

-

Loss on sale of oil and gas properties

-

109

General and administrative

8,798

8,428







Total operating expenses



115,575

96,301







Operating income (loss)



1,487

(8,263)







Other income (expenses):





Interest expense



(13,237)

(10,284)

Gain on sale of marketable securities



26,621

21,249

Other income (expense)

(23)

310







Total other income (expenses)



13,361

11,275







Income before income taxes



14,848

3,012

Provision for income taxes



(7,989)

(608)

Net income

$

6,859

$

2,404







Net income per share:





Basic


$

0.14

$

0.05

Diluted

$

0.14

$

0.05







Weighted average shares outstanding:





Basic

46,372

45,974

Diluted

46,372

45,974

 

 

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)

 


Three Months Ended March 31,


2012

2011









OPERATING CASH FLOW:
















Net income

$

6,859

$

2,404

Reconciling items: 








Deferred income taxes

8,072

449

Depreciation, depletion and amortization

79,097

60,325

Dry hole costs and impairments

1,364

9,454

Gain on sale of assets

(33,348)

(21,140)

Debt issuance cost and discount amortization



944

1,465

Unrealized loss on derivative financial instruments

262

-

Stock-based compensation

3,535

3,162

Operating cash flow

66,785

56,119

Excess income taxes from stock-based compensation



1,405

487

(Increase) decrease in accounts receivable

1,815

(5,299)

Increase in other current assets



(199)

(1,116)

Increase in accounts payable and accrued expenses

63,374

736







Net cash provided by operating activities

$

133,180

$

50,927







EBITDAX:












Net income

$

6,859

$

2,404

Interest expense

13,237

10,284

Income taxes

7,989

608

Depreciation, depletion and amortization

79,097

60,325

Exploration

1,353

9,537

Impairments

49

-

Gain on sale of assets

(33,348)

(21,140)

Unrealized loss on derivative financial instruments

262

-

Stock-based compensation



3,535

3,162







EBITDAX


$

79,033

$

65,180








As of March 31,


2012

2011









BALANCE SHEET DATA:
















Cash and cash equivalents

$

3,750

$

4,196

Marketable securities



17,154

80,956

Other current assets

155,895

55,782

Property and equipment, net

2,517,672

1,904,818

Other

16,201

17,481







Total assets


$

2,710,672

$

2,063,233














Accounts payable and accrued expenses


$

241,928

$

145,564

Other current liabilities

8,132

16,014

Long-term debt



1,207,042

596,506

Deferred income taxes

208,078

216,381

Other non-current liabilities



18,135

9,360

Stockholders' equity



1,027,357

1,079,408







Total liabilities and stockholders' equity

$

2,710,672

$

2,063,233

 

 

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

 

 



For the Three Months Ended March 31, 2012

For the Three Months Ended March 31, 2011



East Texas/

North

Louisiana

South

Texas

West

Texas

Other

Total

East Texas/

North

Louisiana

South

Texas

Other

Total





























Oil production (Mbbls)

27

403

73

3

506

34

94

10

138

Gas production (MMcf)

19,100

2,660

127

535

22,422

15,444

2,865

800

19,109

Total production (MMcfe)

19,263

5,075

566

554

25,458

15,647

3,431

857

19,935





























Oil sales

$

2,751

$

42,474

$

7,113

$

303

$

52,641

$

2,945

$

8,639

$

806

$

12,390

Oil hedging losses



-

(1,129)

(225)

-

(1,354)

-

-

-

-

Total oil sales

2,751

41,345

6,888

303

51,287

2,945

8,639

806

12,390

Natural gas sales



47,502

9,136

804

1,606

59,048

58,610

13,150

3,888

75,648

Total oil and gas sales

$

50,253

$

50,481

$

7,692

$

1,909

$

110,335

$

61,555

$

21,789

$

4,694

$

88,038























































































Average oil price (per barrel)

$

101.49

$

105.52

$

97.12

$

94.88

$

104.02

$

87.16

$

91.61

$

83.46

$

89.94

Average oil price including hedging (per barrel)

$

101.49

$

102.71

$

94.05

$

94.88

$

101.35

$

87.16

$

91.61

$

83.46

$

89.94

Average gas price (per Mcf)

$

2.49

$

3.43

$

6.33

$

3.00

$

2.63

$

3.80

$

4.59

$

4.86

$

3.96

Average price (per Mcfe)

$

2.61

$

10.17

$

13.99

$

3.45

$

4.39

$

3.93

$

6.35

$

5.48

$

4.42

Average price including hedging (per Mcfe)


$

2.61

$

9.95

$

13.59

$

3.45

$

4.33

$

3.93

$

6.35

$

5.48

$

4.42





























Production taxes


$

801

$

2,291

$

390

$

155

$

3,637

$

29

$

382

$

315

$

726

Gathering and transportation

$

6,833

$

772

$

177

$

110

$

7,892

$

5,076

$

457

$

95

$

5,628

Lease operating

$

8,661

$

3,719

$

1,291

$

1,078

$

14,749

$

7,199

$

3,367

$

982

$

11,548

Production taxes (per Mcfe)

$

0.04

$

0.45

$

0.69

$

0.28

$

0.14

$

-

$

0.11

$

0.37

$

0.04

Gathering and transportation
(per Mcfe)

$

0.35

$

0.15

$

0.31

$

0.20

$

0.31

$

0.32

$

0.13

$

0.11

$

0.28

Lease operating (per Mcfe)

$

0.46

$

0.74

$

2.28

$

1.94

$

0.58

$

0.47

$

0.99

$

1.14

$

0.58


























































Oil and Gas Capital Expenditures:


























Acquisitions

$

-

$

-

$

3,333

$

-

$

3,333

$

-

$

-

$

-

$

-

Exploratory leasehold

1,595

1,488

3,543

-

6,626

10,845

1,680

-

12,525

Development leasehold

345

1,216

-

-

1,561

130

-

-

130

Exploratory drilling

368

405

-

-

773

16,844

20,428

-

37,272

Development drilling

68,208

64,438

34,516

-

167,162

95,588

11,538

98

107,224

Other development

1,026

719

224

149

2,118

853

94

94

1,041

Total

$

71,542

$

68,266

$

41,616

$

149

$

181,573

$

124,260

$

33,740

$

192

$

158,192

 

 

                                                                                                                          

SOURCE Comstock Resources, Inc.

Roland O. Burns, Sr. Vice President and Chief Financial Officer of Comstock Resources, Inc., +1-972-668-8800