Comstock Resources, Inc. Reports Fourth Quarter and Year End 2002 Financial Results
Prior Years' Financial Statements to Be Restated
FRISCO, Texas, Feb 18, 2003 /PRNewswire-FirstCall via Comtex/ -- Comstock Resources, Inc. (NYSE: CRK) today reported financial and operating results for the fourth quarter and the year ended 2002.
Comstock reported improved results in the fourth quarter of 2002 with net income from continuing operations of $9.5 million, or 29 cents per share, as compared to a net loss from continuing operations of $4.1 million, or 14 cents per share in the fourth quarter of 2001. Total revenues for the quarter were $49.8 million, a 106% increase over revenues of $24.2 million in the fourth quarter of 2001. EBITDAX or earnings before interest expense, income taxes, depletion, depreciation and amortization, exploration expense, other noncash expenses including derivative mark-to-market adjustments and gains or losses on property sales was $38.7 million in the fourth quarter of 2002 as compared to $15.0 million in the fourth quarter of 2001. Cash flow generated by operations before changes in working capital in the fourth quarter of 2002 was $31.1 million as compared to $13.0 million for the fourth quarter of 2001. Included in the fourth quarter results was other income of $7.7 million related to refunds of severance taxes paid in prior years. Also included was $2.1 million in exploration expense which primarily related to the unsuccessful Vastar Fee #2 well drilled east of Comstock's Hamman #1 discovery in Polk County, Texas.
For the year ended December 31, 2002, Comstock reported net income from continuing operations of $11.0 million, or 37 cents per share as compared to net income from continuing operations of $32.9 million, or $1.00 per share for the same period in 2001. The 2002 financial results were substantially lower than the 2001 results due to a significant decrease in natural gas prices in 2002 as compared to 2001. Total revenues for 2002 were $150.2 million as compared to $166.8 million in 2001. EBITDAX was $109.4 million in 2002 as compared to $131.4 million in 2001. Cash flow generated by operations in 2002 was $79.7 million as compared to $110.1 million in 2001. The 2002 results include a $1.1 million after tax loss (4 cents per share) from discontinued operations relating to certain oil and gas properties that Comstock sold in 2002.
Comstock's production for the fourth quarter of 2002 increased 13% to approximately 10.1 Bcfe as compared to 9.0 Bcfe for the fourth quarter of 2001. Comstock's realized natural gas prices for the fourth quarter averaged $4.07 per Mcf, which was 63% higher than average realized natural gas price for the fourth quarter of 2001 of $2.49 per Mcf. Comstock's realized oil prices averaged $27.26 per barrel for the fourth quarter, a 40% increase compared to the fourth quarter 2001's average oil price of $19.48 per barrel. For the year ended December 31, 2002, Comstock's realized natural gas prices averaged $3.30 per Mcf and its realized oil prices averaged $24.95 per barrel as compared to 2001's average prices of $4.58 per Mcf for natural gas and $25.46 per barrel for oil.
Comstock also announced that it will restate its financial statements for fiscal years 1998 through 2001. The restatement is due to the recharacterization of certain advances made by Comstock to its joint venture partner under the Company's joint exploration venture in the Gulf of Mexico with Bois d' Arc Offshore, Ltd. ("Bois d' Arc").
Under the joint exploration venture Comstock makes advances to Bois d' Arc to fund the acquisition of offshore leases and seismic data. Bois d' Arc generates drilling prospects on the leases and Comstock is entitled to a 40% interest in any prospects generated. The remaining portion of the prospect is retained by Bois d'Arc and interest in the prospect wells sold to third parties. Upon sale of the prospect, Comstock is reimbursed 100% of the costs advanced for leases and paid a fee which allows Comstock to recover the amounts advanced for seismic. Historically, Comstock has capitalized the costs associated with acquiring the leases and seismic and offset these costs with the reimbursements received from the sale of the prospects. Comstock's new independent auditors are re-auditing the Company's financial statements for the years ended December 31, 2000 and 2001 as these financial statements had previously been audited by Arthur Andersen, which is no longer reissuing its audit reports. In connection with the re-audits, Comstock's new auditors advised that any unreimbursed advances related to seismic data acquisition on the balance sheet should be charged to exploration expense with the future reimbursements of such costs to be offset against future exploration expense. After a review and analysis of this issue by Comstock's management and its audit committee and further discussions with its independent auditors, Comstock concluded that it should change its accounting treatment for the advances used for seismic data and restate its financial statements for 1998, 1999, 2000 and 2001, which will result in a reduction to previously reported net income by $0.4 million, $0.3 million, $0.2 million and $1.6 million for the years 1998, 1999, 2000 and 2001, respectively. There is no significant impact with using the new accounting treatment on the previously reported financial results for the first three quarters of 2002.
2001 2000 1999 1998
As Previously Reported: (In thousands, except per share amounts)
Net income (loss)
from continuing
operations
attributable to
common stock $34,458 $38,705 $(4,866) $(17,201)
Income from
discontinued
operations 396 227 197 33
Net income (loss)
attributable to
common stock $34,854 $38,932 $(4,669) $(17,168)
Net income (loss)
per share:
Basic -
Net income
(loss) from
continuing
operations
per share $1.19 $1.47 $(0.20) $(0.71)
Net income
(loss) per
share $1.20 $1.48 $(0.19) $(0.71)
Diluted -
Net income
(loss) from
continuing
operations
per share $1.04 $1.20
Net income
(loss) per share $1.06 $1.21
As Restated:
Net income (loss) from
continuing operations
attributable to
common stock $32,902 $38,502 $(5,136) $(17,591)
Income from
discontinued
operations 396 227 197 33
Net income (loss)
attributable to
common stock $33,298 $38,729 $(4,939) $(17,558)
Net income (loss)
per share:
Basic -
Net income
(loss) from
continuing
operations
per share $1.13 $1.46 $(0.21) $(0.72)
Net income (loss)
per share $1.15 $1.47 $(0.20) $(0.72)
Diluted -
Net income (loss)
from continuing
operations per $1.00 $1.19
Net income (loss)
per share $1.01 $1.20
"The restatement will result in earnings in certain years being slightly lower than previously announced but will also result in slightly higher earnings in the year that we recover expenses from our joint venture partner," commented M. Jay Allison, Comstock's Chief Executive Officer. He further added, "We understand that any restatement of our financial results may cause concern on the part of our investors. However, I believe that a careful reading of today's information will help assure our shareholders that our financial condition has not been materially affected."
Comstock expects to file restated financial statements for the affected annual periods with the Securities and Exchange Commission in connection with the filing of its 2002 Annual Report on Form 10-K. Until Comstock issues its restated financial statements, the financial information contained in Comstock's previously filed annual reports on Form 10-K and the auditors' reports thereon for the fiscal years ended December 31, 1998, 1999, 2000 and 2001 is qualified by the information contained in this press release as to the impact of the restatement described above.
Forward Looking Statements -- Except for historical information, the statements in this release, including statements regarding Comstock's review and restatement of its financial statements and the implications thereof, are forward-looking statements within the meaning of the federal securities laws. These statements reflect management's current expectations and are subject to numerous risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the risks and uncertainties associated with the restatement (which could include material changes in Comstock's financial statements, litigation, and increased volatility in Comstock's common stock price), as well as the risks and uncertainties arising out of economic, competitive, governmental and technological factors affecting Comstock's operations, markets, and prices. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
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.
OPERATING RESULTS
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Revenues: Restated Restated
Oil and gas sales $42,041 $23,905 $142,085 $166,118
Other income 7,762 330 8,089 711
Total revenues 49,803 24,235 150,174 166,829
Expenses:
Oil and gas operating 8,973 7,188 33,499 31,855
Exploration 2,087 1,487 5,479 6,611
Depreciation, depletion
and amortization 13,694 12,611 54,405 48,790
Impairment of oil and
gas properties --- 1,400 --- 1,400
General and
administrative, net 2,171 1,901 5,113 4,351
Interest 7,615 5,258 30,002 20,737
Loss from derivatives 32 --- 2,326 ---
Total expenses 34,572 29,845 130,824 113,744
Income (loss) from
continuing operations
before income taxes 15,231 (5,610) 19,350 53,085
Income tax
benefit (expense) (5,331) 1,963 (6,773) (18,579)
Net income (loss) from
continuing operations 9,900 (3,647) 12,577 34,506
Preferred stock
dividends (405) (405) (1,604) (1,604)
Net income (loss) from
continuing operations
attributable to common
stock 9,495 (4,052) 10,973 32,902
Income (loss) from
discontinued
operations, including
loss on disposal --- (15) (1,072) 396
Net income (loss)
attributable to common
stock $9,495 $(4,067) $9,901 $33,298
Net income (loss) per
share:
Basic -
Net income (loss)
from continuing
operations per share $0.33 $(0.14) $0.38 $1.13
Net income (loss)
per share 0.33 $(0.14) $0.34 $1.15
Diluted -
Net income (loss)
from continuing
operations per share $0.29 $0.37 $1.00
Net income (loss)
per share $0.29 $0.34 $1.01
Weighted average shares
outstanding:
Basic 28,861 28,510 28,764 29,030
Diluted 34,112 33,558 33,901 34,552
Cash flow from
operations $31,122 $12,991 $79,656 $110,093
EBITDAX:
Net income (loss)
attributable to
common stock $9,495 $(4,067) $9,901 $33,298
Interest 7,615 5,258 30,002 20,737
Income tax expense
(benefit) 5,331 (1,963) 6,773 18,579
Depreciation,
depletion and
amortization 13,694 12,611 54,405 48,790
Impairment of oil
and gas properties --- 1,400 --- 1,400
Exploration 2,087 1,487 5,479 6,611
Preferred stock
dividends 405 405 1,604 1,604
Unrealized (gains)
losses from
derivatives 70 (254) (119) (254)
Gains on sales of
property --- --- --- (12)
Non-cash effect of
discontinued
operations --- 114 1,395 614
EBITDAX $38,697 $14,991 $109,440 $131,367
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months ended December 31, 2002
East Texas / South
North Gulf of Southeast Texas /
Louisiana Mexico Texas Other Total
Oil production
(thousand
barrels) 24 202 79 26 331
Gas production
(million cubic
feet - Mmcf) 2,891 1,653 2,455 1,119 8,118
Total production
(Mmcfe) 3,035 2,864 2,930 1,276 10,105
Oil sales $638 $5,615 $2,123 $650 $9,026
Gas sales 10,861 6,964 10,579 4,893 33,297
Loss from gas
price hedges --- --- --- --- (282)
Total oil and
gas sales $11,499 $12,579 $12,702 $5,543 $42,041
Average oil
price (per
barrel) $26.58 $27.80 $26.87 $25.00 $27.26
Average gas
price (per
thousand cubic
feet - Mcf) $3.76 $4.21 $4.31 $4.37 $4.07
Average price
(per Mcf
equivalent) $3.79 $4.39 $4.34 $4.34 $4.16
Lifting cost $2,133 $3,348 $2,454 $1,038 $8,973
Lifting cost
(per Mcf
equivalent) $0.70 $1.17 $0.84 $0.81 $0.89
Capital
expenditures $5,615 $15,594 $1,769 $3,886 $26,864
For the Year ended December 31, 2002
East Texas / South
North Gulf of Southeast Texas /
Louisiana Mexico Texas Other Total
Oil production
(thousand
barrels) 105 788 318 91 1,302
Gas production
(million cubic
feet - Mmcf) 11,841 7,549 8,869 4,912 33,171
Total
production
(Mmcfe) 12,471 12,278 10,778 5,459 40,986
Oil sales $2,539 $19,860 $7,856 $2,251 $32,506
Gas sales 35,250 25,699 31,253 16,042 108,244
Gains from gas
price hedges --- --- --- --- 1,335
Total oil
and gas
sales $37,789 $45,559 $39,109 $18,293 $142,085
Average oil
price (per
barrel) $24.18 $25.20 $24.70 $24.74 $24.95
Average gas
price (per
thousand cubic
feet - Mcf) $2.98 $3.40 $3.52 $3.27 $3.30
Average price
(per Mcf
equivalent) $3.03 $3.71 $3.63 $3.35 $3.47
Lifting cost $9,169 $10,931 $7,894 $5,505 $33,499
Lifting cost
(per Mcf
equivalent) $0.74 $0.89 $0.73 $1.01 $0.82
Capital
expenditures $20,259 $45,973 $4,823 $13,147 $84,202
As of December 31,
2002 2001
Balance Sheet Data: Restated
Current assets $39,902 $38,272
Property and equipment, net 664,208 636,274
Other 6,943 6,223
Total assets $711,053 $680,769
Current liabilities $49,797 $39,839
Long-term debt 366,002 372,235
Other 69,254 55,454
Stockholders' equity 226,000 213,241
Total liabilities and stockholders' equity $711,053 $680,769
SOURCE Comstock Resources, Inc.
CONTACT: Roland O. Burns, Sr. Vice President and Chief Financial Officer of Comstock Resources, Inc., +1-972-668-8800
URL: http://www.comstockresources.com