Comstock Resources, Inc. Reports Second Quarter 2010 Financial and Operating Results
FRISCO, Texas, Aug 02, 2010 /PRNewswire via COMTEX/ --
Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months and six months ended June 30, 2010.
Financial Results for the Three Months and Six Months Ended June 30, 2010
Comstock reported a net loss of $1.6 million or 4 cents per diluted share for the three months ended June 30, 2010 as compared to a net loss of $11.5 million or 26 cents per share for the three months ended June 30, 2009. Comstock's production in the second quarter of 2010 grew 30% to 20.0 billion cubic feet of natural gas equivalent ("Bcfe") as compared to 15.3 Bcfe produced in the second quarter of 2009. Production in the second quarter of 2010 averaged 219 million cubic feet of natural gas equivalent ("MMcfe") per day. The increase in production is primarily attributable to Comstock's successful Haynesville shale drilling program. Production from Haynesville shale wells comprised 102 MMcfe per day (47%) of the Company's total production in the second quarter of 2010, as compared to only 27 MMcfe per day (16%) during the second quarter of 2009. Oil and natural gas prices improved in the second quarter of 2010 as compared to 2009's second quarter. Comstock's average realized natural gas price increased 5% to $4.09 per Mcf for the second quarter of 2010 as compared to $3.88 per Mcf for the second quarter of 2009. The Company's average realized oil price improved by 37% to $67.37 per barrel for the second quarter of 2010 as compared to $49.24 per barrel for the second quarter of 2009.
The higher sales volumes, combined with the higher oil and natural gas prices, resulted in sales increasing by 40% to $90.7 million in the second quarter of 2010 as compared to 2009's second quarter sales of $64.9 million. Operating cash flow (before changes in working capital accounts) increased to $55.9 million in the second quarter of 2010 as compared to 2009's second quarter operating cash flow of $42.1 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $62.9 million in 2010's second quarter as compared to 2009's second quarter EBITDAX of $42.2 million.
Comstock reported net income of $5.7 million or 12 cents per diluted share for the first six months of 2010 as compared to a net loss of $17.1 million or 38 cents per share in the first six months of 2009. The improvement in net income is mainly attributable to increased production and improved oil and natural gas prices. Comstock's production in the first half of 2010 increased 32% to 38.8 Bcfe as compared to the 29.4 Bcfe produced during the first half of 2009. Comstock averaged $4.68 per Mcf for sales of its natural gas production in the first six months of 2010, 9% higher than the $4.30 per Mcf realized during the first six months of 2009. Realized oil prices in the first six months of 2010 averaged $67.24 per barrel, 60% higher than the $41.95 per barrel in 2009's first six months.
Oil and gas sales for the first half of 2010 increased 48% to $196.8 million from $133.2 million in the first half of 2009. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2010's first six months of $127.5 million increased 47% from 2009's first six months operating cash flow of $86.8 million while EBITDAX increased 64% to $143.2 million in 2010's first six months from 2009's first six months EBITDAX of $87.5 million.
2010 Drilling Results
Comstock also reported on the results to date of its 2010 drilling program. The Company spent $244.2 million during the first six months of 2010 on its exploration and development activities. $181.8 million was spent on drilling activities and $62.4 million was spent to acquire leasehold to support future exploration activity. During the first six months of 2010, Comstock drilled 36 wells (22.7 net), 15 of which have been successfully completed as producing wells. As of June 30, 2010 the Company also had eight wells in the process of being drilled.
In the East Texas/North Louisiana region, Comstock drilled 35 wells (22.2 net) so far in 2010. Thirty-four of the wells are Haynesville shale wells. Eleven of the 24 operated Haynesville shale wells drilled in 2010 have been completed and were put on production at an average initial production rate of 12.5 MMcfe per day.
Since the Company's last operational update, Comstock has completed five operated wells in its East Texas/North Louisiana region. Three of the completed wells are in its North Toledo Bend field in DeSoto Parish, Louisiana, one is at its Logansport field in DeSoto Parish, Louisiana and one in its Beckville field in Harrison County, Texas. The wells at North Toledo Bend were tested an average per well initial production rate of 10 MMcfe per day, the Logansport well was tested at 16 MMcfe per day and the Beckville well in East Texas was tested at 9 MMcfe per day. These wells were drilled with horizontal laterals from 4,500 feet to 5,000 feet and were completed with 15 to 18 frac stages. The initial production rates reflect the Company's "choke back" program where new completions are being tested and produced with a tighter choke to maintain a higher reservoir pressure in the well for a longer time. The Company believes that the ultimate reserve recovery will improve for the wells under this program.
In addition to its Haynesville shale horizontal drilling program, Comstock has drilled two vertical wells during 2010. Comstock successfully completed a Cotton Valley well in its Blocker field in East Texas and also completed the Julian Pasture #4 in its Ball Ranch field in South Texas which was tested at an initial production rate of 8 MMcfe per day.
Due to the high demand for high pressure pumping services, the Company currently has 17 wells which are drilled and waiting on completion. Comstock is working with oil field service providers to address its backlog of wells awaiting completion but does not expect the situation to improve until late 2010 or early 2011. With the substantial delays in completions, Comstock now expects its production level to decrease in the third quarter from the second quarter.
During the second quarter of 2010, Comstock began an active lease acquisition program in the Eagle Ford shale play in South Texas. The Company has acquired or is in the process of acquiring leasehold interests in approximately 18,000 net acres which are prospective for Eagle Ford shale and plans on acquiring up to an additional 10,000 acres. Comstock expects to begin drilling operations in the Eagle Ford shale during the third quarter of 2010 by moving one of its drilling rigs from its East Texas/North Louisiana region. Comstock has also increased its leasehold position in the Haynesville shale and Bossier shale plays in North Louisiana and East Texas. Since the beginning of the year the Company has added approximately 5,000 net acres prospective for both the Haynesville and Bossier shales.
The Company expects to spend approximately $500 million in 2010 for exploration and development activities. $350 million will be spent to drill 69 wells (46.5 net) with $150 million to acquire exploratory acreage prospective for the Haynesville and Eagle Ford shale. All but three of the wells will be horizontal wells drilled to test either Haynesville or Eagle Ford shale.
Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, August 3,2010, to discuss the operational and financial results for the second quarter of 2010. Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-888-396-2298 (international dial-in use 617-847-8708) and provide access code 69569175 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.
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 June 30,
--------------
2010 2009
---- ----
Revenues:
Oil and gas sales $90,682 $64,875
Operating expenses:
Production taxes 4,806 2,516
Gathering and
transportation 3,679 1,350
Lease operating 13,988 13,619
Exploration 99 131
Depreciation, depletion
and amortization 57,398 50,796
Impairment of oil and
gas properties 28 -
General and
administrative 9,764 9,051
----- -----
Total operating
expenses 89,762 77,463
------ ------
Operating income (loss) 920 (12,588)
Other income
(expenses):
Interest income 119 10
Other income 25 29
Gain on sale of assets 4,895 -
Interest expense (7,599) (2,901)
------ ------
Total other income
(expenses) (2,560) (2,862)
------ ------
Income (loss) before
income taxes (1,640) (15,450)
Benefit from (provision
for) income taxes 21 3,975
--- -----
Net income (loss) $(1,61)9 $(11,475)
Net income (loss) per
share:
Basic $(0.04) $(0.26)
====== ======
Diluted $(0.04) $(0.26)
====== ======
Weighted average shares
outstanding:
Basic 45,579 45,000
====== ======
Diluted 45,579 (1) 45,000 (1)
====== ======
Six Months
Ended June
30,
-----------
2010 2009
---- ----
Revenues:
Oil and gas sales $196,771 $133,226
Operating expenses:
Production taxes 6,481 3,638
Gathering and
transportation 8,207 2,594
Lease operating 28,148 28,212
Exploration 1,268 144
Depreciation, depletion
and amortization 116,807 98,068
Impairment of oil and
gas properties 187 -
General and
administrative 19,565 18,870
------ ------
Total operating expenses 180,663 151,526
------- -------
Operating income (loss) 16,108 (18,300)
Other income (expenses):
Interest income 258 32
Other income 45 92
Gain on sale of assets 4,895 -
Interest expense (15,443) (5,063)
------- ------
Total other income
(expenses) (10,245) (4,939)
------- ------
Income (loss) before
income taxes 5,863 (23,239)
Benefit from (provision
for) income taxes (140) 6,107
---- -----
Net income (loss) $5,723 $(17,132)
Net income (loss) per
share:
Basic $0.12 $(0.38)
===== ======
Diluted $0.12 $(0.38)
===== ======
Weighted average shares
outstanding:
Basic 45,594 44,971
====== ======
Diluted 45,571 44,971 (1)
====== ======
(1) Basic and diluted shares are the same due to the net loss.
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)
Three Months
Ended June
30,
-------------
2010 2009
---- ----
OPERATING CASH FLOW:
Net income (loss) $(1,619) $(11,475)
Reconciling items:
Deferred income taxes 12 (1,263)
Depreciation, depletion
and amortization 57,398 50,796
Impairment of oil and
gas properties 28 -
Gain on sale of assets (4,895) -
Debt issuance costs and
discount amortization 624 202
Stock-based
compensation 4,309 3,820
Operating cash flow 55,857 42,080
Excess tax benefit from
stock-based
compensation (41) (245)
Decrease (increase) in
accounts receivable 3,332 3,625
Decrease (increase) in
other current assets 3,619 (889)
Increase (decrease) in
accounts payable and
accrued expenses 11,721 (15,588)
------ -------
Net cash provided by
operating activities $74,488 $28,983
======= =======
EBITDAX:
Net income (loss) $(1,619) $(11,475)
Interest expense 7,599 2,901
Income tax expense
(benefit) (21) (3,975)
Depreciation, depletion
and amortization 57,398 50,796
Impairment of oil and
gas properties 28 -
Gain on sale of assets (4,895) -
Stock-based
compensation 4,309 3,820
Exploration 99 131
--- ---
EBITDAX $62,898 $42,198
======= =======
Six Months
Ended June 30,
--------------
2010 2009
---- ----
OPERATING CASH FLOW:
Net income (loss) $5,723 $(17,132)
Reconciling items:
Deferred income taxes (43) (1,984)
Depreciation, depletion
and amortization 116,807 98,068
Impairment of oil and gas
properties 187 -
Gain on sale of assets (4,895) -
Debt issuance costs and
discount amortization 1,226 405
Stock-based compensation 8,542 7,487
Operating cash flow 127,547 86,844
Excess tax benefit from
stock-based
compensation (1,531) (924)
Decrease (increase) in
accounts receivable (1,454) 13,810
Decrease (increase) in
other current assets 49,436 (654)
Increase (decrease) in
accounts payable and
accrued expenses 25,226 (29,631)
------ -------
Net cash provided by
operating activities $199,224 $69,445
======== =======
EBITDAX:
Net income (loss) $5,723 $(17,132)
Interest expense 15,443 5,063
Income tax expense
(benefit) 140 (6,107)
Depreciation, depletion
and amortization 116,807 98,068
Impairment of oil and gas
properties 187 -
Gain on sale of assets (4,895) -
Stock-based compensation 8,542 7,487
Exploration 1,268 144
----- ---
EBITDAX $143,215 $87,523
======== =======
As of June 30,
--------------
2010 2009
---- ----
Balance Sheet Data:
Cash and cash
equivalents $42,651 $3,970
Derivative financial
instruments - 11,922
Income taxes receivable - 6,138
Current deferred income
tax asset 5,625 10,196
Marketable securities 53,535 36,099
Other current assets 45,303 36,616
Property and equipment,
net 1,715,099 1,521,578
Other 8,330 2,748
----- -----
Total assets $1,870,543 $1,629,267
========== ==========
Accounts payable and
accrued expenses $109,814 $80,280
Long-term debt 468,104 315,000
Deferred income taxes 224,484 182,975
Other non-current
liabilities 9,419 5,830
Stockholders' equity 1,058,722 1,045,182
--------- ---------
Total liabilities and
stockholders' equity $1,870,543 $1,629,267
========== ==========
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months Ended
June 30, 2010
--------------------------
East
Texas/
North South
Louisiana Texas
--------- -----
Oil production
(thousand
barrels) 50 39
Gas production
(MMcf) 14,288 3,790
Total
production
(MMcfe) 14,590 4,024
Oil sales $3,894 $2,953
Gas sales 57,381 16,334
Gas hedging
gains - -
--- ---
Total gas
sales 57,381 16,334
------ ------
Total oil and
gas sales $61,275 $19,287
======= =======
Average oil
price (per
barrel) $77.25 $75.57
Average gas
price (per
Mcf) $4.02 $4.31
Average gas
price
including
hedging (per
Mcf) $4.02 $4.31
Average price
(per Mcfe) $4.20 $4.79
Average price
including
hedging (per
Mcfe) $4.20 $4.79
Production
taxes $3,670 $526
Gathering and
transportation $3,339 $237
Lease
operating $6,814 $3,861
Production
taxes (per
Mcfe) $0.25 $0.13
Gathering and
transportation
(per Mcfe) $0.23 $0.06
Lease
operating
(per Mcfe) $0.47 $0.96
Oil and Gas
Capital
Expenditures:
Leasehold
costs $29,523 $22,844
Exploratory
drilling 6,407 -
Development
drilling 89,252 576
Other
development 841 694
--- ---
Total $126,023 $24,114
======== =======
For the Three Months Ended
June 30, 2010
--------------------------
Other Total
----- -----
Oil production
(thousand
barrels) 121 210
Gas production
(MMcf) 631 18,709
Total
production
(MMcfe) 1,356 19,970
Oil sales $7,309 $14,156
Gas sales 2,811 76,526
Gas hedging
gains - -
--- ---
Total gas
sales 2,811 76,526
----- ------
Total oil and
gas sales $10,120 $90,682
======= =======
Average oil
price (per
barrel) $60.59 $67.37
Average gas
price (per
Mcf) $4.45 $4.09
Average gas
price
including
hedging (per
Mcf) $4.45 $4.09
Average price
(per Mcfe) $7.46 $4.54
Average price
including
hedging (per
Mcfe) $7.46 $4.54
Production
taxes $610 $4,806
Gathering and
transportation $103 $3,679
Lease
operating $3,313 $13,988
Production
taxes (per
Mcfe) $0.45 $0.24
Gathering and
transportation
(per Mcfe) $0.08 $0.18
Lease
operating
(per Mcfe) $2.44 $0.71
Oil and Gas
Capital
Expenditures:
Leasehold
costs $72 $52,439
Exploratory
drilling - 6,407
Development
drilling - 89,828
Other
development 255 1,790
--- -----
Total $327 $150,464
==== ========
For the Three Months Ended
June 30, 2009
East
Texas/
North South
Louisiana Texas
Oil production
(thousand
barrels) 65 38
Gas production
(MMcf) 8,613 4,823
Total
production
(MMcfe) 9,008 5,052
Oil sales $3,408 $2,114
Gas sales 28,257 17,146
Gas hedging
gains - 7,114
--- -----
Total gas
sales 28,257 24,260
------ ------
Total oil and
gas sales $31,665 $26,374
======= =======
Average oil
price (per
barrel) $52.43 $55.63
Average gas
price (per
Mcf) $3.28 $3.56
Average gas
price
including
hedging (per
Mcf) $3.28 $5.03
Average price
(per Mcfe) $3.52 $3.81
Average price
including
hedging (per
Mcfe) $3.52 $5.22
Production
taxes $1,211 $910
Gathering and
transportation $536 $707
Lease
operating $7,002 $3,661
Production
taxes (per
Mcfe) $0.13 $0.18
Gathering and
transportation
(per Mcfe) $0.06 $0.14
Lease
operating
(per Mcfe) $0.78 $0.72
Oil and Gas
Capital
Expenditures:
Leasehold
costs $3,767 $60
Exploratory
drilling 30,034 81
Development
drilling 36,195 4,834
Other
development 1,814 312
----- ---
Total $71,810 $5,287
======= ======
For the Three Months Ended
June 30, 2009
Other Total
Oil production
(thousand
barrels) 102 205
Gas production
(MMcf) 672 14,108
Total
production
(MMcfe) 1,277 15,337
Oil sales $4,560 $10,082
Gas sales 2,276 47,679
Gas hedging
gains - 7,114
--- -----
Total gas
sales 2,276 54,793
----- ------
Total oil and
gas sales $6,836 $64,875
====== =======
Average oil
price (per
barrel) $44.71 $49.24
Average gas
price (per
Mcf) $3.39 $3.38
Average gas
price
including
hedging (per
Mcf) $3.39 $3.88
Average price
(per Mcfe) $5.35 $3.77
Average price
including
hedging (per
Mcfe) $5.35 $4.23
Production
taxes $395 $2,516
Gathering and
transportation $107 $1,350
Lease
operating $2,956 $13,619
Production
taxes (per
Mcfe) $0.31 $0.16
Gathering and
transportation
(per Mcfe) $0.08 $0.09
Lease
operating
(per Mcfe) $2.32 $0.89
Oil and Gas
Capital
Expenditures:
Leasehold
costs $103 $3,930
Exploratory
drilling - 30,115
Development
drilling 111 41,140
Other
development (36) 2,090
--- -----
Total $178 $77,275
==== =======
For the Six Months Ended
June 30, 2010
------------------------
East
Texas/
North South
Louisiana Texas
--------- -----
Oil production
(thousand
barrels) 87 81
Gas production
(MMcf) 27,267 7,903
Total
production
(MMcfe) 27,790 8,391
Oil sales $6,638 $6,137
Gas sales 123,848 40,059
Gas hedging
gains - -
--- ---
Total gas
sales 123,848 40,059
------- ------
Total oil and
gas sales $130,486 $46,196
======== =======
Average oil
price (per
barrel) $76.19 $75.39
Average gas
price (per
Mcf) $4.54 $5.07
Average gas
price
including
hedging (per
Mcf) $4.54 $5.07
Average price
(per Mcfe) $4.70 $5.51
Average price
including
hedging (per
Mcfe) $4.70 $5.51
Production
taxes $4,786 $608
Gathering and
transportation $6,999 $1,010
Lease
operating $14,762 $7,329
Production
taxes (per
Mcfe) $0.17 $0.07
Gathering and
transportation
(per Mcfe) $0.25 $0.12
Lease
operating
(per Mcfe) $0.54 $0.88
Oil and Gas
Capital
Expenditures:
Leasehold
costs $39,378 $22,844
Exploratory
drilling 23,438 -
Development
drilling 152,494 2,170
Other
development 1,875 1,323
----- -----
Total $217,185 $26,337
======== =======
For the Six Months Ended
June 30, 2010
------------------------
Other Total
----- -----
Oil production
(thousand
barrels) 218 386
Gas production
(MMcf) 1,333 36,503
Total
production
(MMcfe) 2,636 38,817
Oil sales $13,154 $25,929
Gas sales 6,935 170,842
Gas hedging
gains - -
--- ---
Total gas
sales 6,935 170,842
----- -------
Total oil and
gas sales $20,089 $196,771
======= ========
Average oil
price (per
barrel) $60.59 $67.24
Average gas
price (per
Mcf) $5.20 $4.68
Average gas
price
including
hedging (per
Mcf) $5.20 $4.68
Average price
(per Mcfe) $7.62 $5.07
Average price
including
hedging (per
Mcfe) $7.62 $5.07
Production
taxes $1,087 $6,481
Gathering and
transportation $198 $8,207
Lease
operating $6,057 $28,148
Production
taxes (per
Mcfe) $0.41 $0.17
Gathering and
transportation
(per Mcfe) $0.08 $0.21
Lease
operating
(per Mcfe) $2.30 $0.72
Oil and Gas
Capital
Expenditures:
Leasehold
costs $128 $62,350
Exploratory
drilling - 23,438
Development
drilling - 154,664
Other
development 501 3,699
--- -----
Total $629 $244,151
==== ========
For the Six Months Ended
June 30, 2009
East
Texas/
North South
Louisiana Texas
Oil production
(thousand
barrels) 128 89
Gas production
(MMcf) 15,792 9,734
Total
production
(MMcfe) 16,563 10,270
Oil sales $5,683 $4,193
Gas sales 59,575 38,110
Gas hedging
gains - 13,026
--- ------
Total gas
sales 59,575 51,136
------ ------
Total oil and
gas sales $65,258 $55,329
======= =======
Average oil
price (per
barrel) $44.40 $47.11
Average gas
price (per
Mcf) $3.77 $3.92
Average gas
price
including
hedging (per
Mcf) $3.77 $5.25
Average price
(per Mcfe) $3.94 $4.12
Average price
including
hedging (per
Mcfe) $3.94 $5.39
Production
taxes $1,354 $1,533
Gathering and
transportation $809 $1,562
Lease
operating $14,089 $7,685
Production
taxes (per
Mcfe) $0.08 $0.15
Gathering and
transportation
(per Mcfe) $0.05 $0.15
Lease
operating
(per Mcfe) $0.85 $0.75
Oil and Gas
Capital
Expenditures:
Leasehold
costs $7,168 $331
Exploratory
drilling 66,501 1,893
Development
drilling 67,852 23,786
Other
development 3,212 3,278
----- -----
Total $144,733 $29,288
======== =======
For the Six Months Ended
June 30, 2009
Other Total
Oil production
(thousand
barrels) 204 421
Gas production
(MMcf) 1,375 26,901
Total
production
(MMcfe) 2,592 29,425
Oil sales $7,767 $17,643
Gas sales 4,872 102,557
Gas hedging
gains - 13,026
--- ------
Total gas
sales 4,872 115,583
----- -------
Total oil and
gas sales $12,639 $133,226
======= ========
Average oil
price (per
barrel) $38.07 $41.95
Average gas
price (per
Mcf) $3.54 $3.81
Average gas
price
including
hedging (per
Mcf) $3.54 $4.30
Average price
(per Mcfe) $4.88 $4.08
Average price
including
hedging (per
Mcfe) $4.88 $4.53
Production
taxes $751 $3,638
Gathering and
transportation $223 $2,594
Lease
operating $6,438 $28,212
Production
taxes (per
Mcfe) $0.29 $0.12
Gathering and
transportation
(per Mcfe) $0.09 $0.09
Lease
operating
(per Mcfe) $2.48 $0.96
Oil and Gas
Capital
Expenditures:
Leasehold
costs $103 $7,602
Exploratory
drilling - 68,394
Development
drilling 111 91,749
Other
development 296 6,786
--- -----
Total $510 $174,531
==== ========
SOURCE Comstock Resources, Inc.