Comstock Resources, Inc. Reports Second Quarter 2008 Financial and Operating Results
FRISCO, Texas, Aug. 4 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter and six months ended June 30, 2008. In the second quarter of 2008, Comstock began reflecting its offshore operations, which are held by Bois d'Arc Energy, Inc. ("Bois d'Arc Energy") (NYSE: BDE) as discontinued operations due to the expected closing of the merger between Bois d'Arc Energy and Stone Energy Corporation ("Stone") (NYSE: SGY) in the third quarter of 2008. The Company's financial results for prior periods have also been adjusted to present the offshore properties of Bois d'Arc Energy as discontinued operations.
Financial Results for the Three Months and Six Months Ended June 30, 2008
Comstock reported record high net income of $82.6 million or $1.81 per diluted share for the three months ended June 30, 2008 as compared to 2007's second quarter net income of $18.2 million or $0.41 per diluted share. Comstock's income from continuing operations was $70.4 million or $1.55 per diluted share as compared to income from continuing operations of $13.0 million or $0.29 per diluted share for the second quarter of last year.
Second quarter operating results reflect strong market prices for oil and natural gas combined with strong production growth from Comstock's onshore operations. Comstock's production from its continuing onshore operations in the second quarter of 2008 increased 42% to 15.3 billion cubic feet equivalent of natural gas ("Bcfe") as compared to production of 10.7 Bcfe in the second quarter of 2007. The second quarter average daily production rate of 168 million cubic feet of natural gas equivalent ("Mmcfe") also increased 5% from the first quarter 2008 production rate of 160 Mmcfe per day. Comstock's realized oil prices in the second quarter of 2008 averaged $105.16 per barrel, 87% higher than the $56.10 per barrel in 2007's second quarter. Oil prices in the second quarter of 2008 also improved from the $81.49 per barrel realized during the first quarter of 2008. Natural gas prices realized in the second quarter of 2008 averaged $10.51 per Mcf, 41% higher than the $7.47 per Mcf for 2007. Natural gas prices in the second quarter of 2008 were also 28% higher than the $8.22 per Mcf realized during the first quarter of 2008. The 42% production increase and higher commodity prices caused second quarter 2008's oil and gas sales to increase 107% to $172.0 million from 2007's second quarter sales of $83.2 million. Operating cash flow from continuing operations (before changes in working capital accounts) generated by Comstock in 2008's second quarter of $134.3 million increased 147% over 2007's second quarter cash flow of $54.3 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses from continuing operations, increased 131% to $145.0 million in 2008's second quarter over 2007's second quarter EBITDAX from continuing operations of $62.8 million.
Comstock reported net income of $123.7 million or $2.72 per diluted share for the six months ended June 30, 2008 as compared to 2007's net income of $30.8 million or 69¢ per diluted share. Income from continuing operations was $99.8 million or $2.21 per diluted share as compared to income from continuing operations of $22.4 million or $0.51 per diluted share for the same period in 2007.
Financial results for the first half of 2008 also reflect higher oil and natural gas prices and the Company's strong production growth in 2008. Comstock's continuing onshore production in the first six months of 2008 increased 43% to 29.9 Bcfe as compared to production of 20.9 Bcfe in the first six months of 2007. Realized oil prices in the first six months of 2008 averaged $93.92 per barrel, 80% higher than the $52.10 per barrel realized in 2007. Natural gas prices in the first six months of 2008 averaged $9.39 per Mcf, or 32% higher than the $7.09 per Mcf realized in 2007. Oil and gas sales of $299.7 million for the first six months of 2008 increased 96% from 2007's first six months sales of $153.0 million. Operating cash flow (before changes in working capital accounts) generated by Comstock's continuing operations in 2008's first six months of $225.8 million increased 126% from 2007's first six months cash flow from continuing operations of $99.8 million. EBITDAX from continuing operations was $248.2 million in 2008's first six months, a 115% increase over 2007's first six months EBITDAX from continuing operations of $115.2 million.
The Company's income attributable to the discontinued offshore operations of Bois d'Arc Energy of $12.2 million or 26¢ per diluted share increased in the second quarter of 2008 as compared to $5.2 million (12¢ per diluted share) in the second quarter of 2007. For the six months ended June 30, 2008, Bois d'Arc Energy contributed $23.9 million or 51¢ per diluted share to net income as compared to $8.4 million or 18¢ per diluted share for the same period in 2007.
The offshore operations of Bois d'Arc Energy are reflected as discontinued operations due to the pending merger of Bois d'Arc Energy pursuant to which Stone will acquire Bois d'Arc Energy. Under the terms of the merger agreement, the Bois d'Arc Energy shareholders, including Comstock, will receive $13.65 in cash and 0.165 shares of Stone common stock for each share of Bois d'Arc Energy. 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 Energy. Completion of the transaction is subject to approval by the Bois d'Arc Energy and Stone stockholders at special meetings of their respective stockholders to be held on August 27, 2008. Comstock has entered into a stockholder agreement with Stone in which it has agreed to vote in favor of the merger.
The 2008 second quarter and six months financial results also include a $21.4 million gain ($13.9 million after tax or 31¢ per share) on the previously announced sales of properties in East and South Texas for $122.0 million which closed in June 2008. The estimated proved reserves attributable to the sold properties is 44.3 Bcfe. Production in the first half of 2008 attributable to Comstock's interest in these properties averaged 8.4 MMcfe per day.
Comstock also announced today that it has accepted offers whereby it intends to sell certain properties in its South Texas operating region for $16.4 million. The properties include Comstock's interests in the East White Point and Markham fields in South Texas. The sales are expected to close in August 2008. The estimated proved reserves attributable to the properties being sold are 15.3 Bcfe. Production in the first half of 2008 attributable to Comstock's interest in these properties was 0.9 MMcfe per day. Comstock expects to realize an after tax gain of $3.9 million on these sales.
Six Months 2008 Onshore Drilling Results
Comstock also announced the results of its 2008 onshore drilling program. In the first six months of 2008 Comstock drilled 62 wells (37.0 net). Sixty- one (36.5 net) of the wells drilled were successful and one (.5 net) was a dry hole.
Comstock drilled 52 successful wells (30.5 net) in its East Texas and North Louisiana region which have been tested at an average per well initial production rate of 2.6 Mmcfe per day. Wells drilled in the first half of 2008 include 19 wells (5.9 net) drilled in the Hico Knowles - Terryville area of North Louisiana. Seventeen of these wells have been completed and had initial production rates which have averaged 4.0 MMcfe per day. Comstock has also drilled 20 wells (17.8 net) in its Logansport field in North Louisiana. Sixteen of these wells have been completed with initial production rates which averaged 1.2 MMcfe per day. Comstock had ten wells in progress in this region at June 30, 2008.
Comstock has also drilled two successful horizontal Cotton Valley wells in its Waskom field in Harrison County, Texas in the second quarter. The Swift #13-H well was drilled to a total vertical depth of 9,540 feet with a 2,947 foot horizontal leg drilled in Taylor Cotton Valley sands. This well was successfully completed with a seven stage frac and was tested at an initial production rate of 8.0 million cubic feet of natural gas per day with flowing casing pressure of 850 pounds per square inch. Comstock has a 49% working interest in this well. The Bogue #A-4-H well was drilled to a total vertical depth of 9,600 feet with a 2,850 foot horizontal leg drilled in Taylor Cotton Valley sands. This well was successfully completed with a seven stage frac and was tested at an initial production rate of 10.1 million cubic feet of natural gas per day with flowing casing pressure of 1,150 pounds per quarter inch. Comstock has a 94% working interest in this well.
In South Texas, Comstock drilled six successful development wells (5.3 net) and two (.9 net) exploratory wells, one (.4 net) of which was successful, during the first six months of 2008. The successful wells had an average per well initial production rate of 3.8 Mmcfe per day. Two of the successful wells were in the Las Hermanitas field in Duval County, Texas, three were in the Javelina Field in Hidalgo County, one was in the Ball Ranch field, and one was in the Lorenz Ranch field. Comstock had two wells in progress in this region on June 30, 2008.
Comstock also had two (.3 net) successful wells drilled in the San Juan Basin in the first half of this year.
Comstock spent $145.9 million during the first six months of 2008 for its acquisition, exploration and development activities related to its continuing onshore operations, consisting of $21.5 million for lease acquisition, $121.7 million for development drilling and other development activity and $2.7 million for exploratory drilling.
Comstock announced today that it plans to increase its 2008 budget for its onshore drilling program to $410 million as compared to the Company's original budget for 2008 of $278 million. The increase is primarily attributable to increased spending in its East Texas and North Louisiana region on acreage acquisitions and anticipated drilling related to the Company's Haynesville shale program. Comstock's 2008 onshore drilling program now includes 133 (78.6 net) wells. Capital spending in the Company's East Texas/North Louisiana operating region is forecasted to be $292 million, which includes 101 total wells (60.8 net). Nine of these wells will be horizontal wells. Comstock also expects to spend $111 million in its South Texas operating region, to drill 24 wells (16.4 net). The remaining $7 million will be spent on Comstock's other onshore regions.
Comstock also announced that it estimates that it now has 80,593 (65,802 net) acres that are prospective for Haynesville shale development and commenced drilling its first Haynesville shale horizontal well in its Toledo North field. Comstock has an 88% working interest in the BSMC LA 7 HZ #1 well which is expected to be drilled to a vertical depth of 11,400 feet with a completed lateral length of 4,000 feet.
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 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 June 30, Six Months Ended June 30,
2008 2007 2008 2007
Revenues:
Oil and gas sales $172,022 $83,160 $299,743 $153,007
Gain on sale of assets 21,444 - 21,204 -
Operating expenses:
Oil and gas operating 23,362 17,624 44,564 31,679
Exploration - 1,878 2,238 2,276
Depreciation, depletion
and amortization 44,422 30,248 85,927 57,608
General and
administrative 6,922 5,588 13,086 11,838
Total operating expenses 74,706 55,338 145,815 103,401
Operating income from
continuing operations 118,760 27,822 175,132 49,606
Other income (expenses):
Other income 205 197 366 388
Interest income 36 39 58 77
Interest expense (8,546) (7,775) (18,497) (14,060)
Total other income
(expenses) (8,305) (7,539) (18,073) (13,595)
Income from continuing
operations before
income taxes 110,455 20,283 157,059 36,011
Provision for income
taxes (40,027) (7,312) (57,229) (13,641)
Income from continuing
operations 70,428 12,971 99,830 22,370
Income from discontinued
operations after income
taxes and minority
interest 12,199 5,246 23,892 8,405
Net income $82,627 $18,217 $123,722 $30,775
Basic net income per share:
Continuing operations $1.59 $0.30 $2.25 $0.52
Discontinued operations 0.28 0.12 0.54 0.19
$1.87 $0.42 $2.79 $0.71
Diluted net income per share:
Continuing operations $1.55 $0.29 $2.21 $0.51
Discontinued operations 0.26 0.12 0.51 0.18
$1.81 $0.41 $2.72 $0.69
Weighted average shares
outstanding:
Basic 44,287 43,374 44,296 43,369
Diluted 45,373 44,361 45,246 44,300
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)
Three Months Ended June 30, Six Months Ended June 30,
2008 2007 2008 2007
Cash flow from continuing
operations:
Net cash provided by
continuing operating
activities $146,373 $69,782 $200,730 $117,071
Excess tax benefit
from stock-based
compensation 7,962 434 8,632 600
Increase in accounts
receivable 9,651 6,379 25,316 10,839
Increase (decrease) in
other current assets 1,017 860 1,175 (57)
Decrease in accounts
payable and accrued
expenses (30,725) (23,187) (10,078) (28,687)
Cash flow from
continuing
operations $134,278 $54,268 $225,775 $99,766
EBITDAX:
Income from continuing
operations $70,428 $12,971 $99,830 $22,370
Gain on sale of
assets (21,444) - (21,204) -
Interest expense 8,546 7,775 18,497 14,060
Income tax expense 40,027 7,312 57,229 13,641
Depreciation, depletion
and amortization 44,422 30,248 85,927 57,608
Stock-based compensation 3,038 2,607 5,716 5,261
Exploration expense - 1,878 2,238 2,276
EBITDAX from continuing
operations $145,017 $62,791 $248,233 $115,216
As of June 30,
2008 2007
Balance Sheet Data:
Cash and cash equivalents $8,709 $27,167
Other current assets 89,266 51,596
Property and equipment, net 1,276,184 1,061,242
Assets of discontinued operations 1,031,982 977,319
Other 3,554 4,317
Total assets $2,409,695 $2,121,641
Accounts payable and accrued expenses $96,608 $108,476
Deferred unrealized hedging losses 40,080 -
Long-term debt 495,000 469,000
Deferred income taxes 132,198 85,178
Asset retirement obligation 7,555 9,474
Liabilities and minority interest of
discontinued operations 746,081 730,176
Stockholders' equity 892,173 719,337
Total liabilities and stockholders' equity $2,409,695 $2,121,641
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months Ended June 30, 2008
East Texas/
North South
Louisiana Texas Other Total
Oil production
(thousand barrels) 84 58 126 268
Gas production (million
cubic feet - Mmcf) 7,227 5,840 615 13,682
Total production (Mmcfe) 7,732 6,190 1,370 15,292
Oil sales $9,625 $6,988 $11,613 $28,226
Gas sales 78,746 62,840 6,594 148,180
Gas hedging losses - (4,384) - (4,384)
Total gas sales 78,746 58,456 6,594 143,796
Total oil and gas sales $88,371 $65,444 $18,207 $172,022
Average oil price
(per barrel) $114.58 $120.48 $92.17 $105.16
Average gas price (per
thousand cubic
feet - Mcf) $10.90 $10.76 $10.72 $10.83
Average gas price
including hedging
(per Mcf) $10.90 $10.01 $10.72 $10.51
Average price (per
Mcf equivalent) $11.43 $11.28 $13.29 $11.54
Average price including
hedging (per Mcf
equivalent) $11.43 $10.57 $13.29 $11.25
Lifting cost (1) $9,879 $8,032 $5,451 $23,362 (1)
Lifting cost (per
Mcf equivalent) $1.28 $1.30 $3.98 $1.53
Oil and Gas Capital
Expenditures:
Acquisitions $ - $ - $ - $ -
Leasehold costs 17,146 282 12 17,440
Exploratory drilling - 1 228 229
Development drilling 43,186 14,861 157 58,204
Other development 355 6,319 1,265 7,939
Total $60,687 $21,463 $1,662 $83,812
For the Three Months Ended June 30, 2007
East Texas/
North South
Louisiana Texas Other Total
Oil production
(thousand barrels) 39 54 162 255
Gas production (million
cubic feet - Mmcf) 6,072 2,423 720 9,215
Total production (Mmcfe) 6,305 2,744 1,697 10,746
Oil sales $2,398 $3,343 $8,570 $14,311
Gas sales 44,490 19,290 5,069 68,849
Gas hedging losses - - - -
Total gas sales 44,490 19,290 5,069 68,849
Total oil and gas sales $46,888 $22,633 $13,639 $83,160
Average oil price
(per barrel) $61.49 $61.91 $52.90 $56.10
Average gas price
(per thousand cubic
feet - Mcf) $7.33 $7.96 $7.04 $7.47
Average gas price
including hedging
(per Mcf) $7.33 $7.96 $7.04 $7.47
Average price (per
Mcf equivalent) $7.44 $8.25 $8.04 $7.74
Average price including
hedging (per Mcf
equivalent) $7.44 $8.25 $8.04 $7.74
Lifting cost (1) $8,311 $4,462 $4,851 $17,624 (1)
Lifting cost (per Mcf
equivalent) $1.32 $1.63 $2.86 $1.64
Oil and Gas Capital
Expenditures:
Acquisitions $ - $31,892 $ - $31,892
Leasehold costs 137 621 442 1,200
Exploratory drilling - 3,133 1,759 4,892
Development drilling 56,387 15,810 5,932 78,129
Other development 772 503 496 1,771
Total $57,296 $51,959 $8,629 $117,884
(1) Includes production taxes of $6,545 and $3,943 for the three months
ended June 30, 2008 and 2007, respectively.
For the Six Months Ended June 30, 2008
East Texas/
North South
Louisiana Texas Other Total
Oil production
(thousand barrels) 131 104 276 511
Gas production (million
cubic feet - Mmcf) 13,954 11,470 1,388 26,812
Total production (Mmcfe) 14,740 12,097 3,041 29,878
Oil sales $14,049 $11,508 $22,441 $47,998
Gas sales 134,477 108,975 12,921 256,373
Gas hedging losses - (4,628) - (4,628)
Total gas sales 134,477 104,347 12,921 251,745
Total oil and gas
sales $148,526 $115,855 $35,362 $299,743
Average oil price
(per barrel) $107.24 $110.65 $81.31 $93.92
Average gas price
(per thousand cubic
feet - Mcf) $9.64 $9.50 $9.31 $9.56
Average gas price
including hedging
(per Mcf) $9.64 $9.10 $9.31 $9.39
Average price (per Mcf
equivalent) $10.08 $9.96 $11.63 $10.19
Average price including
hedging (per Mcf
equivalent) $10.08 $9.58 $11.63 $10.03
Lifting cost (2) $18,648 $15,088 $10,828 $44,564 (2)
Lifting cost (per Mcf
equivalent) $1.27 $1.25 $3.56 $1.49
Oil and Gas Capital
Expenditures:
Acquisitions $ - $ - $ - $ -
Leasehold costs 20,007 1,406 61 21,474
Exploratory drilling - 2,357 351 2,708
Development drilling 82,559 26,264 1,546 110,369
Other development 1,285 7,036 2,981 11,302
Total $103,851 $37,063 $4,939 $145,853
For the Six Months Ended June 30, 2007
East Texas/
North South
Louisiana Texas Other Total
Oil production
(thousand barrels) 85 107 314 506
Gas production (million
cubic feet - Mmcf) 11,453 5,000 1,397 17,850
Total production (Mmcfe) 11,962 5,640 3,284 20,886
Oil sales $4,890 $6,301 $15,174 $26,365
Gas sales 79,991 37,391 9,260 126,642
Gas hedging losses - - - -
Total gas sales 79,991 37,391 9,260 126,642
Total oil and gas sales $84,881 $43,692 $24,434 $153,007
Average oil price
(per barrel) $57.53 $58.89 $48.32 $52.10
Average gas price (per
thousand cubic
feet - Mcf) $6.98 $7.48 $6.63 $7.09
Average gas price
including hedging
(per Mcf) $6.98 $7.48 $6.63 $7.09
Average price (per Mcf
equivalent) $7.10 $7.75 $7.44 $7.33
Average price including
hedging (per Mcf
equivalent) $7.10 $7.75 $7.44 $7.33
Lifting cost (2) $14,995 $7,784 $8,900 $31,679 (2)
Lifting cost (per Mcf
equivalent) $1.25 $1.38 $2.71 $1.52
Oil and Gas Capital
Expenditures:
Acquisitions $ - $31,965 $ - $31,965
Leasehold costs 535 1,364 2,842 4,741
Exploratory drilling - 5,388 2,201 7,589
Development drilling 111,094 27,487 15,941 154,522
Other development 1,014 986 1,318 3,318
Total $112,643 $67,190 $22,302 $202,135
(2) Includes production taxes of $12,779 and $6,502 for the six months
ended June 30, 2008 and 2007, respectively.
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 SGY)