Comstock Resources, Inc. Reports Fourth Quarter 2005 and Year End 2005 Financial and Operating Results
FRISCO, Texas, Feb. 13 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. (NYSE: CRK) ("Comstock" or the "Company") today reported financial and operating results for the quarter and year ended December 31, 2005 which represent a new corporate high record for sales, operating cash flow, net income and earnings per share.
Financial Results for the Three Months and Year Ended December 31, 2005
Comstock reported net income of $41.3 million or 96 cents per diluted share for the three months ended December 31, 2005 as compared to net income of $15.9 million or 43 cents per diluted share in the same quarter of 2004. The fourth quarter 2005 results include a $9.8 million unrealized gain on the Company's derivatives held for price risk management. Without the unrealized gain from derivatives, net income for the fourth quarter of 2005 would have been approximately $35.5 million, or 82 cents per diluted share. Comstock's oil and gas sales were $93.4 million in 2005's fourth quarter, an increase of 31% over 2004's fourth quarter oil and gas sales of $71.2 million. Comstock generated $69.0 million in operating cash flow (before changes in working capital accounts) in 2005's fourth quarter, which represents a 45% increase over 2004's fourth quarter cash flow of $47.5 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $72.8 million for the three months ended December 31, 2005 as compared to 2004's fourth quarter EBITDAX of $54.9 million. On May 10, 2005, Comstock began accounting for its interest in Bois d'Arc Energy, Inc. (NYSE: BDE) ("Bois d'Arc") under the equity method and since that date is no longer including its share of Bois d'Arc's revenues, EBITDAX and cash flow in its consolidated results.
For the year ended December 31, 2005, Comstock's oil and gas sales totaled $303.3 million, as compared to oil and gas sales of $261.6 million for the same period in 2004. Net income for the year ended December 31, 2005 was $60.5 million, or $1.47 per diluted share, as compared to net income of $46.9 million or $1.29 per diluted share in 2004. The 2005 results include the Company's share of a one time provision of $64.6 million for deferred income taxes by Bois d'Arc in connection with its conversion from a limited liability company to a corporation and a gain of $28.8 million recognized by Comstock in connection with Bois d'Arc's initial public offering. The 2005 results also include an $11.1 million unrealized loss on the Company's derivatives held for price risk management. Excluding the one time adjustments to reflect Bois d'Arc's conversion to a corporation and initial public offering and the unrealized loss on derivatives, Comstock's net income for the year ended December 31, 2005 would have been $91.0 million or $2.21 per diluted share. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2005 was $216.3 million, a 23% increase from 2004's cash flow of $176.2 million. For the year ended December 31, 2005 EBITDAX of $240.6 million increased 19% as compared to EBITDAX of $202.6 million for the same period in 2004.
Production from Comstock's onshore properties in the fourth quarter of 2005 increased by 23% to 9.3 Bcf equivalent of natural gas ("Bcfe"), as compared to 2004's fourth quarter onshore production of 7.5 Bcfe. For the year ended 2005, Comstock's onshore production increased 14% to 33.2 Bcfe as compared to onshore production in 2004 of 29.0 Bcfe.
Comstock realized $10.38 per Mcf for its natural gas production in 2005's fourth quarter as compared to $6.66 per Mcf in 2004's fourth quarter. Realized oil prices in the fourth quarter of 2005 averaged $50.17 per barrel as compared to $47.06 per barrel for 2004. For the year ended December 31, 2005, Comstock's realized natural gas price averaged $7.83 per Mcf as compared to 2004's average natural gas price of $5.98 per Mcf and its realized oil price was $49.01 per barrel as compared to $39.86 per barrel in 2004.
In addition to achieving substantial growth of its onshore reserves and production in 2005, Comstock was able to significantly improve its balance sheet. Comstock reduced its outstanding debt from $403.0 million at the end of 2004 to $243.0 million at December 31, 2005 and increased its stockholders equity from $355.9 million at the end of 2004 to $582.9 million at December 31, 2005. Debt as a percent of total book capitalization fell from 53% at the end of 2004 to 29% at December 31, 2005.
2005 Drilling Results
Comstock has spent $201.8 million on acquisitions in 2005 and $122.2 million for exploration and development activities on its onshore properties in 2005. Onshore, Comstock drilled 75 wells (49.8 net) in 2005. Seventy-two (48.4 net) of the wells drilled were development wells and three (1.4 net) were exploratory. All of the development wells were successful and one (.2 net) of the exploratory wells was successful. The unsuccessful exploratory wells were a shallow test well drilled in West Texas and an unsuccessful exploratory well drilled to test the "Big Sandy" prospect in Polk County, Texas.
Comstock drilled 52 successful wells (40.2 net) in its East Texas/North Louisiana region. These wells have been tested at a per well average rate of 1.6 million cubic feet of gas equivalent ("Mmcfe") per day. In 2006, Comstock plans to drill 96 (74.2 net) development wells in this region and currently has seven drilling rigs under contract for this program.
In its South Texas region, Comstock drilled ten (3.5 net) successful wells. These wells have been tested at a per well average rate of 6.3 Mmcfe per day. In 2006, Comstock plans to drill 21 (6.5 net) wells in this region.
Comstock drilled eleven successful wells (5.0 net) in its other regions during 2005. Six (1.0 net) of the wells drilled were successful coal bed methane wells in the San Juan Basin in New Mexico. Comstock drilled two (1.9 net) successful wells in its Laurel field in South Mississippi. The remaining three (2.1 net) successful wells were drilled in Arkansas and Oklahoma. In 2006, Comstock plans to drill 16 (15.4 net) wells in South Mississippi, two wells (.6 net) in its Double A Wells field in Southeast Texas and 14 (5.8 net) wells in certain of its other fields.
Comstock's offshore operations are conducted exclusively through its 48% ownership of Bois d'Arc. In 2005, Bois d'Arc drilled 19 (16.1 net) successful wells out of a total of 22 (18.7 net) wells drilled with three (2.6 net) dry holes. The discoveries at Ship Shoal block 111, which proved up the "Laker" prospect, the South Timbalier block 75 discovery, which tested the "Doc Holiday" prospect, the Ship Shoal block 56 discovery and the Ship Shoal block 92 "Paddlefish" well were the larger reserve discoveries in 2005.
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 Louisiana and Texas and in the Gulf of Mexico through its ownership in Bois d'Arc Energy, Inc. 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 Year ended
December 31, December 31,
2005 2004 2005 2004
Oil and gas sales $93,366 $71,176 $303,336 $261,647
Operating expenses:
Oil and gas operating 14,097 14,480 50,966 52,068
Exploration 16 3,703 19,725 15,610
Depreciation, depletion
and amortization 15,970 16,741 63,338 63,879
Impairment --- 1,648 3,400 1,648
General and
administrative 5,518 5,253 16,533 14,569
Total operating
expenses 35,601 41,825 153,962 147,774
Income from operations 57,765 29,351 149,374 113,873
Other income (expenses):
Other income 36 37 209 166
Interest income 155 678 1,604 1,207
Interest expense (4,773) (5,588) (20,272) (21,182)
Equity in earnings of
Bois d'Arc Energy 5,005 --- (49,862) ---
Gain on sale of
Bois d'Arc Energy
shares --- --- 28,797 ---
Gain (loss) on
derivatives 7,489 398 (13,556) (155)
Loss on early
extinguishment of debt --- --- --- (19,599)
Formation Costs of
Bois d'Arc Energy --- (119) --- (1,101)
Total other income
(expenses) 7,912 (4,594) (53,080) (40,664)
Income before income taxes 65,677 24,757 96,294 73,209
Provision for income taxes (24,346) (8,899) (35,815) (26,342)
Net income $41,331 $15,858 $60,479 $46,867
Net income per share:
Basic $0.99 $0.46 $1.54 $1.37
Diluted $0.96 $0.43 $1.47 $1.29
Weighted average common
and common stock equivalent
shares outstanding:
Basic 41,652 34,475 39,216 34,187
Diluted 43,114 36,780 41,154 36,252
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)
Three Months ended Year ended
December 31, December 31,
2005 2004 2005 2004
Cash flow from operations:
Net cash provided by
operating activities $62,700 $52,598 $217,954 $171,351
Increase (decrease)
in accounts
receivable 8,289 5,192 13,030 (5,584)
Increase (decrease)
in other current
assets 1,043 933 (616) 1,735
Decrease (increase)
in accounts payable
and accrued expenses (2,994) (11,252) (14,079) 8,714
Cash flow from
operations $69,038 $47,471 $216,289 $176,216
EBITDAX:
Net income $41,331 $15,858 $60,479 $46,867
Interest expense 4,773 5,588 20,272 21,182
Income tax expense 24,346 8,899 35,815 26,342
Depreciation, depletion
and amortization 15,970 16,741 63,338 63,879
Impairment --- 1,648 3,400 1,648
Equity in earnings of
Bois d'Arc Energy (5,005) --- 49,862 ---
Gain on sale of shares
by Bois d'Arc Energy
--- --- (28,797) ---
Formation Costs of
Bois d'Arc Energy --- 119 --- 1,101
Unrealized (gain) loss
on derivatives (9,818) (398) 11,087 155
Loss from early
extinguishment of debt --- --- --- 19,599
Stock-based compensation 1,224 2,714 5,419 6,208
Exploration expense 16 3,703 19,725 15,610
EBITDAX $72,837 $54,872 $240,600 $202,591
As of December 31,
2005 2004
Balance Sheet Data:
Current assets $52,770 $48,215
Property and equipment, net 706,928 827,761
Investment in Bois d'Arc Energy 252,134 ---
Other 4,831 65,500
Total assets $1,016,663 $941,476
Current liabilities $68,117 $63,924
Long-term debt 243,000 403,000
Other 122,687 118,699
Stockholders' equity 582,859 355,853
Total liabilities and
stockholders' equity $1,016,663 $941,476
COMSTOCK RESOURCES, INC.
SELECTED OPERATING AND FINANCIAL RESULTS
(In thousands, except as noted and per unit amounts)
For the Three Months ended December 31, 2005
Equity
Comstock Method
Resources(A) Bois d'Arc(B) Adjustments Total(C)
Oil production
(thousand barrels) 234 96 (96) 234
Gas production (million
cubic feet - Mmcf) 7,868 1,523 (1,523) 7,868
Total production (Mmcfe) 9,270 2,095 (2,095) 9,270
Oil sales $11,725 $5,644 $(5,644) $11,725
Gas sales 81,641 17,776 (17,776) 81,641
Total oil and
gas sales
$93,366 $23,420 (23,420) 93,366
Average oil price
(per barrel) $50.17 $59.29 $50.17
Average gas price (per
thousand cubic feet - Mcf) $10.38 $11.67 $10.38
Average price
(per Mcf equivalent) $10.07 $11.18 $10.07
Lifting cost $14,097 $6,121 $(6,121) $14,097
Lifting cost
(per Mcf equivalent) $1.52 $2.92 $1.52
For the Year ended December 31, 2005
Equity
Comstock Method
Resources(A) Bois d'Arc(B) Adjustments Total(C)
Oil production
(thousand barrels) 735 615 (313) 1,037
Gas production (million
cubic feet - Mmcf) 28,742 7,849 (4,342) 32,249
Total production (Mmcfe) 33,151 11,537 (6,219) 38,469
Oil sales $36,259 $32,211 $(17,665) $50,805
Gas sales 228,547 63,992 (40,008) 252,531
Total oil and
gas sales $264,806 $96,203 $(57,673) $303,336
Average oil price
(per barrel) $49.34 $52.42 $49.01
Average gas price (per
thousand cubic feet - Mcf) $7.95 $8.15 $7.83
Average price
(per Mcf equivalent) $7.99 $8.34 $7.89
Lifting cost $44,268 $19,134 $(12,436) $50,966
Lifting cost
(per Mcf equivalent) $1.34 $1.66 $1.32
(A) Excludes Bois d'Arc Energy.
(B) Comstock owned 60% of Bois d'Arc Energy through May 10, 2005,
48% thereafter.
(C) Includes Comstock's proportionate share of Bois d'Arc Energy's
results through May 10, 2005.
COMSTOCK RESOURCES, INC.
SELECTED OPERATING AND FINANCIAL RESULTS
(In thousands, except as noted and per unit amounts)
For the Three Months ended December 31, 2005
East Texas/
North Southeast Total
Louisiana Texas Other Onshore
Oil production
(thousand barrels) 34 42 158 234
Gas production (million
cubic feet - Mmcf) 4,276 1,477 2,115 7,868
Total production (Mmcfe) 4,478 1,729 3,063 9,270
Oil sales $2,060 $2,475 $7,190 $11,725
Gas sales 45,013 15,532 21,096 81,641
Total oil and
gas sales
$47,073 $18,007 $28,286 $93,366
Average oil price
(per barrel) $60.59 $58.93 $45.51 $50.17
Average gas price (per
thousand cubic feet - Mcf) $10.53 $10.52 $9.97 $10.38
Average price
(per Mcf equivalent) $10.51 $10.41 $9.23 $10.07
Lifting cost $6,123 $3,039 $4,935 $14,097
Lifting cost
(per Mcf equivalent) $1.37 $1.76 $1.61 $1.52
Acquisition, development
and exploration
expenditures $21,996 $376 $5,184 $27,556
For the Year ended December 31, 2005
East Texas/
North Southeast Total
Louisiana Texas Other Onshore
Oil production
(thousand barrels) 97 164 474 735
Gas production (million
cubic feet - Mmcf) 14,130 6,401 8,211 28,742
Total production (Mmcfe) 14,710 7,383 11,058 33,151
Oil sales $5,243 $8,864 $22,152 $36,259
Gas sales 114,186 50,710 63,651 228,547
Total oil and
gas sales $119,429 $59,574 $85,803 $264,806
Average oil price
(per barrel) $54.05 $54.05 $46.73 $49.34
Average gas price (per
thousand cubic feet - Mcf) $8.08 $7.92 $7.75 $7.95
Average price
(per Mcf equivalent) $8.12 $8.07 $7.76 $7.99
Lifting cost $17,823 $9,333 $17,112 $44,268
Lifting cost
(per Mcf equivalent) $1.21 $1.26 $1.55 $1.34
Acquisition, development
and exploration
expenditures $209,837 $16,030 $98,086 $323,953
SOURCE Comstock Resources, Inc.
CONTACT:
Roland O. Burns
Sr. Vice President and Chief Financial Officer
Comstock Resources, Inc.
972-668-8800