Comstock Resources, Inc. Reports Third Quarter 2004 Financial and Operating Results
FRISCO, Texas, Nov. 8 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. (NYSE: CRK - News; "Comstock" or the "Company") today reported financial and operating results for the quarter and nine months ended September 30, 2004.
Financial Results for The Three Months and Nine Months Ended
September 30, 2004
Comstock reported net income of $12.3 million, 34 cents per diluted share for the three months ended September 30, 2004 as compared to 2003's third quarter income of $12.9 million, 36 cents per diluted share. Third quarter 2004's oil and gas sales of $78.4 million increased 38% over 2003's third quarter sales of $56.9 million. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2004's third quarter of $56.6 million was 56% higher than 2003's third quarter cash flow of $36.2 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $60.5 million in 2004's third quarter, a 38% increase over 2003's third quarter EBITDAX of $43.8 million. Comstock's third quarter financial results include the operations of Bois d'Arc Energy, LLC's ("Bois d'Arc Energy") beginning in July 2004. Comstock owns 59.9% of Bois d'Arc Energy which is engaged in the exploration and production of oil and natural gas in the Gulf of Mexico. The third quarter financial results include a $1.6 million charge for costs incurred in connection with the formation of Bois d'Arc Energy.
For the nine months ended September 30, 2004, Comstock's oil and gas sales totaled $205.6 million, as compared to oil and gas sales of $182.6 million for the same period in 2003. Net income for the nine months ended September 30, 2004 was $31.0 million, 86 cents per diluted share, as compared to net income of $47.6 million, $1.36 per diluted share, excluding the cumulative effect of an accounting principle change for future abandonment costs. The results for the nine months ended September 30, 2004 include a charge of $19.6 million ($12.5 million after income taxes or 35 cents per diluted share) relating to the early retirement of the Company's 11 1/4% senior notes. Operating cash flow (before changes in working capital accounts) generated by Comstock in the first nine months of 2004 was $139.5 million, a 15% increase from cash flow of $121.5 million in the same period in 2003. For the nine months ended September 30, 2004, EBITDAX was $159.2 million as compared to EBITDAX of $144.4 million for the same period in 2003, representing a 10% increase.
Comstock's production in the third quarter of 2004 totaled 12.7 Bcf equivalent of natural gas ("Bcfe"), a 12% increase from production of 11.3 Bcfe in the third quarter of 2003. For the first nine months of 2004, Comstock produced 34.7 Bcfe, an increase of 5% as compared to production in the same period of 2003 of 33.0 Bcfe. Production was lower than expected mainly due to the effects of Hurricane Ivan which caused the Company's Gulf of Mexico production to be shut in for part of September. The Company's realized natural gas price averaged $5.85 per Mcf in 2004's third quarter as compared to $5.04 per Mcf in 2003's third quarter. Realized oil prices in the third quarter of 2004 averaged $42.46 per barrel as compared to $29.50 per barrel for 2003. For the first nine months of 2004, Comstock's realized natural gas price averaged $5.76 per Mcf as compared to 2003's average natural gas price of $5.65 per Mcf. For the first nine months of 2004, Comstock's realized oil price was $38.67 per barrel as compared to $30.79 per barrel for the same period in 2003.
Year to Date 2004 Drilling Results
In the first nine months of 2004, Comstock drilled 52 wells (25.2 net) as part of its 2004 development and exploration program. Forty-two (20.2 net) of the 52 wells drilled were successful and ten (5.2 net) were dry holes. Six (4.9 net) of the 52 wells were drilled by Bois d'Arc Energy in the third quarter of 2004. Three (2.8 net) of the Bois d'Arc Energy wells were successful and three (2.1 net) were dry holes.
Comstock drilled nine wells, 6.8 net wells, in its East Texas/ North Louisiana region in the first nine months of 2004. All of these wells were successful. Five of these wells were tested at an average per well rate of 2.0 million cubic feet of natural gas equivalent ("Mmcfe") per day. The remaining four are being completed. Comstock has three wells currently being drilled and expects to drill four additional wells in this region by the end of the year.
Comstock drilled 22 wells, 6.8 net wells, in its South Texas region in the first nine months of 2004. Sixteen of these wells were successful and six were dry holes. Fourteen of the successful South Texas wells were tested at an average per well rate of 4.3 million cubic feet of natural gas equivalent ("Mmcfe") per day. The remaining two are being completed. Comstock has two wells being drilled currently in South Texas and expects to drill two additional wells by the end of the year including an offset well to a discovery well in the Javelina field in Hidalgo County which is expected to be a 7.0 Mmcfe per day producer. Comstock has a 66% working interest in this well.
In its Southeast Texas region, Comstock is currently drilling the Collins #3 well to a depth of 15,500 feet. This field extension well is being drilled to the South of Comstock's other successful wells in the "Ross" prospect area in Polk County, Texas. Comstock plans to test its "Big Sandy" prospect which is further South of the "Ross" prospect area with an 18,000 foot exploratory well to be drilled in the fourth quarter.
Comstock drilled thirteen offshore wells (6.0 net) in its Gulf of Mexico region in the first half of 2004. These wells were drilled under its exploration program with Bois d'Arc Offshore Ltd. ("Bois d'Arc"), or as part of Comstock's redevelopment of its Ship Shoal 113 Unit. All but one of the offshore wells were successful. In July 2004 Comstock contributed its offshore Gulf of Mexico properties to Bois d'Arc Energy in exchange for 59.9% ownership of the new venture. Since its formation Bois d'Arc Energy has drilled six offshore wells. Three were successful and three were dry holes that were reported on last week. The successful wells include the OCS-G 00063 #3 well drilled at Ship Shoal Block 93 to test the "Goldfish" prospect. The well was drilled to a depth of 12,420 feet and encountered 58 feet of productive pay in three zones. Bois d'Arc Energy has a 80% working interest in this well. The SL 10830 #6 well drilled at Ship Shoal Block 66 was also successful. This field extensional test well was drilled to a depth of 10,830 feet and found 27 net feet of productive pay in three sands. Bois d'Arc Energy has a 100% working interest in this well. The third successful well was drilled at Vermilion Block 127. The OCS-G 22621 #1 was drilled to a depth of 7,020 feet and found 148 feet of net productive pay in eight commercial sands. Bois d'Arc is currently drilling three offshore wells and expects to drill an additional three wells by the end of the year.
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 that 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, 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 Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Oil and gas sales $ 78,353 $ 56,866 $205,622 $182,603
Operating expenses:
Oil and gas operating 15,409 11,812 40,515 33,708
Exploration 9,400 1,225 14,579 3,366
Depreciation, depletion
and amortization 20,503 15,163 52,040 44,867
General and
administrative, net 3,665 1,508 9,637 4,983
Total operating
expenses 48,977 29,708 116,771 86,924
Income from operations 29,376 27,158 88,851 95,679
Other income (expenses):
Interest income 46 16 80 59
Other income 43 73 129 167
Interest expense (4,803) (7,370) (15,594) (22,648)
Loss from early
extinguishment of debt --- --- (19,599) ---
Loss on derivatives (553) --- (553) (3)
Formation costs (1,641) --- (1,641) ---
Minority interests
in net income (3,221) --- (3,221) ---
Total other income
(expenses) (10,129) (7,281) (40,399) (22,425)
Income before income taxes
and cumulative effect
of change in accounting
principle 19,247 19,877 48,452 73,254
Provision for income taxes (6,929) (6,957) (17,443) (25,639)
Income before cumulative
effect of change in
accounting principle 12,318 12,920 31,009 47,615
Cumulative effect of change
in accounting principle,
net of income taxes --- --- --- 675
Net income 12,318 12,920 31,009 48,290
Preferred stock dividends --- --- --- (573)
Net income attributable
to common stock $ 12,318 $ 12,920 $ 31,009 $ 47,717
Net income per share before
cumulative change in
accounting principle:
Basic $ 0.36 $ 0.38 $ 0.91 $ 1.50
Diluted $ 0.34 $ 0.36 $ 0.86 $ 1.36
Net income per share:
Basic $ 0.36 $ 0.38 $ 0.91 $ 1.52
Diluted $ 0.34 $ 0.36 $ 0.86 $ 1.38
Weighted average common and
common stock equivalent
shares outstanding:
Basic 34,204 33,562 34,091 31,336
Diluted 35,979 35,398 36,037 34,964
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Cash flow from operations:
Net cash provided by
operating activities $ 61,729 $ 50,298 $129,548 $119,109
Increase (decrease)
in accounts receivable (1,363) (4,806) (6,036) 6,583
Increase (decrease) in
other current assets 1,641 (1,426) 802 (213)
Decrease (increase) in
accounts payable and
accrued expenses (5,370) (7,884) 15,226 (3,971)
Cash flow from
operations $ 56,637 $ 36,182 $139,540 $121,508
EBITDAX:
Income before
cumulative effect
of change in
accounting principle $ 12,318 $ 12,920 $ 31,009 $ 47,615
Interest expense 4,803 7,370 15,594 22,648
Loss from early
extinguishment of debt --- --- 19,599 ---
Income tax expense 6,929 6,957 17,443 25,639
Depreciation, depletion
and amortization 20,503 15,163 52,040 44,867
Stock-based compensation 1,118 120 3,494 239
Formation costs 1,641 --- 1,641 ---
Minority interests
in net income 3,221 --- 3,221 ---
Exploration expense 9,400 1,225 14,579 3,366
Unrealized losses
from derivatives 553 --- 553 3
EBITDAX $ 60,486 $ 43,755 $159,173 $144,377
As of September 30,
2004 2003
Balance Sheet Data:
Current assets $ 75,484 $ 50,362
Property and equipment, net 862,645 683,824
Other 12,600 6,329
Total assets $950,729 $740,515
Current liabilities $ 64,173 $ 54,487
Long-term debt 381,000 311,002
Other 173,216 94,923
Stockholders' equity 332,340 280,103
Total liabilities
and stockholders' equity $950,729 $740,515
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months ended September 30, 2004
Comstock
Resources (A) Bois d'Arc Consolidated
Oil production (thousand barrels) 107 447 554
Gas production (million
cubic feet - Mmcf) 6,233 3,150 9,383
Total production (Mmcfe) 6,875 5,832 12,707
Oil sales $ 4,539 $ 18,963 $ 23,502
Gas sales 36,058 18,793 54,851
Total oil and gas sales $ 40,597 $ 37,756 $ 78,353
Average oil price (per barrel) $ 42.46 $ 42.46 $ 42.46
Average gas price
(per thousand cubic feet - Mcf) $ 5.79 $ 5.97 $ 5.85
Average price (per Mcf equivalent) $ 5.90 $ 6.47 $ 6.17
Lifting cost $ 8,117 $ 7,292 $ 15,409
Lifting cost (per Mcf equivalent) $ 1.18 $ 1.25 $ 1.21
Development and
exploration expenditures $ 19,405 $ 19,485 $ 38,890
For the Nine Months ended September 30, 2004
Comstock
Resources (A) Bois d'Arc Consolidated
Oil production (thousand barrels) 969 447 1,416
Gas production (million
cubic feet - Mmcf) 23,051 3,150 26,201
Total production (Mmcfe) 28,865 5,832 34,697
Oil sales $ 35,783 $ 18,963 $ 54,746
Gas sales 132,083 18,793 150,876
Total oil and gas sales $167,866 $ 37,756 $205,622
Average oil price (per barrel) $ 36.93 $ 42.42 $ 38.67
Average gas price
(per thousand cubic feet - Mcf) $ 5.73 $ 5.97 $ 5.76
Average price (per Mcf equivalent) $ 5.82 $ 6.47 $ 5.93
Lifting cost $ 33,223 $ 7,292 $ 40,515
Lifting cost (per Mcf equivalent) $ 1.15 $ 1.25 $ 1.17
Development and exploration
expenditures $ 91,525 $ 19,485 $111,010
(A) Excludes Bois d'Arc Energy LLC.
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS (EXCLUDING BOIS D'ARC ENERGY, LLC)
(In thousands, except per unit amounts)
For the Three Months ended September 30, 2004
East Texas/
North Southeast
Louisiana Texas Other Total
Oil production (thousand barrels) 19 55 33 107
Gas production (million cubic
feet - Mmcf) 2,263 2,500 1,470 6,233
Total production (Mmcfe) 2,377 2,830 1,668 6,875
Oil sales $ 831 $2,330 $1,378 $4,539
Gas sales 12,084 15,047 8,927 36,058
Total oil and gas sales $12,915 $17,377 $10,305 $40,597
Average oil price (per barrel) $43.74 $42.36 $41.76 $42.46
Average gas price (per thousand
cubic feet - Mcf) $5.34 $6.02 $6.07 $5.79
Average price (per Mcf equivalent) $5.43 $6.14 $6.18 $5.91
Lifting cost $2,860 $2,981 $2,276 $8,117
Lifting cost (per Mcf equivalent) $1.20 $1.05 $1.36 $1.18
Development and exploration
expenditures $7,134 $857 $11,414 $19,405
For the Nine Months ended September 30, 2004
East Texas/
Gulf of North Southeast
Mexico Louisiana Texas Other Total
Oil production
(thousand barrels) 637 68 176 88 969
Gas production
(million cubic
feet - Mmcf) 3,594 7,144 7,593 4,720 23,051
Total production
(Mmcfe) 7,417 7,552 8,649 5,248 28,866
Oil sales $23,233 $2,518 $6,670 $3,362 $35,783
Gas sales 22,518 38,842 44,604 26,119 132,083
Total oil and
gas sales $45,751 $41,360 $51,274 $29,481 $167,866
Average oil price
(per barrel) $36.47 $37.03 $37.90 $38.20 $36.93
Average gas price
(per thousand cubic
feet - Mcf) $6.27 $5.44 $5.87 $5.53 $5.73
Average price
(per Mcf equivalent) $6.17 $5.48 $5.93 $5.62 $5.82
Lifting cost $10,431 $8,252 $8,223 $6,317 $33,223
Lifting cost
(per Mcf equivalent) $1.41 $1.09 $0.95 $1.20 $1.15
Development and
exploration
expenditures $53,536 $11,059 $5,472 $21,458 $91,525
SOURCE Comstock Resources, Inc.
CONTACT:
Roland O. Burns
Sr. Vice President and Chief Financial Officer
Comstock Resources, Inc.
+1-972-668-8800
http://www.comstockresources.com