Comstock Resources, Inc. Reports Third Quarter 2007 Financial and Operating Results
FRISCO, Texas, Nov. 5 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter and nine months ended September 30, 2007.
Financial Results for the Three Months and Nine Months Ended September 30, 2007
Comstock reported net income of $16.4 million or 37 cents per diluted share for the three months ended September 30, 2007 as compared to 2006's third quarter net income of $17.0 million or 39 cents per diluted share. The 2006 results include a $1.2 million unrealized gain on derivative financial instruments. Without this gain Comstock would have had net income of $16.3 million or 37 cents per diluted share. The third quarter results reflect strong production growth from the Company's successful drilling activities. Comstock's production in the third quarter of 2007 increased 35% to 23.1 billion cubic feet equivalent of natural gas ("Bcfe") as compared to production of 17.1 Bcfe in the third quarter of 2006. Onshore production has increased 38% and offshore production was up 31% from the third quarter of 2006. The third quarter average daily production rate of 251 million cubic feet of natural gas equivalent ("Mmcfe") also has increased 6% from the second quarter 2007 production rate of 236 Mmcfe per day. Oil prices also improved from the third quarter of 2006. Realized oil prices in the third quarter of 2007 averaged $72.57 per barrel, 10% higher than the $65.95 per barrel in 2006's third quarter. Natural gas prices realized in the third quarter of 2007 averaged $6.35 per Mcf, 4% lower than the $6.63 per Mcf for 2006. The 35% production increase caused third quarter 2007's oil and gas sales to increase 32% to $171.1 million from 2006's third quarter sales of $129.3 million. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2007's third quarter of $115.9 million increased 30% over 2006's third quarter cash flow of $89.3 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses increased 35% to $133.2 million in 2007's third quarter over 2006's third quarter EBITDAX of $98.8 million.
Comstock reported net income of $47.2 million or $1.05 per diluted share for the nine months ended September 30, 2007 as compared to 2006's net income of $62.3 million or $1.42 per diluted share. The 2006 results include a $11.3 million unrealized gain on derivative financial instruments. Without this gain, Comstock would have had net income of $54.7 million or $1.25 per diluted share.
Financial results for the first nine months of 2007 also reflect the Company's strong production growth in 2007. Comstock's production in the first nine months of 2007 increased 32% to 64.6 Bcfe as compared to production of 49.1 Bcfe in the first nine months of 2006. Onshore production has increased 25% and offshore production was up 40% over the first nine months of 2006. Realized oil prices in the first nine months of 2007 averaged $63.45 per barrel, slightly above the $63.06 per barrel realized in 2006. The production gains and higher crude oil prices for the first nine months of 2007 were offset in part by lower natural gas prices. The Company's realized natural gas price averaged $6.93 per Mcf in 2007's first nine months, 3% lower than the $7.13 per Mcf in 2006's first nine months. Oil and gas sales of $491.3 million for the first nine months of 2007 increased 28% from 2006's first nine months sales of $385.2 million. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2007's first nine months of $343.7 million increased 28% from 2006's first nine months cash flow of $267.7 million. EBITDAX was $388.0 million in 2007's first nine months, a 32% increase over 2006's first nine months EBITDAX of $294.7 million.
Nine Months 2007 Drilling Results
Comstock also announced the results to date of its 2007 drilling program. In the first nine months of 2007 Comstock drilled 142 wells (111.2 net). One hundred twenty-nine of the wells drilled were successful and thirteen were dry holes.
Comstock has spent $287.0 million during the first nine months of 2007 for its onshore acquisition, exploration and development activities, comprised of $31.2 million for acquisitions of producing properties, $255.6 million in capital expenditures for lease acquisition, drilling and other development activity and $0.2 million for seismic data acquisition and other geologic and geophysical costs. During the last quarter of 2007, the Company expects to make an additional $74.0 million in capital expenditures on its onshore properties.
Onshore, Comstock drilled 124 (97.5 net) development wells in the first nine months of 2007 with 122 (95.8 net) being successful. Of the four (2.7 net) onshore exploratory wells, one (0.6 net) was successful. Comstock drilled 95 successful wells (76.0 net) in its East Texas and North Louisiana region which have been tested at an average per well initial production rate of 1.3 Mmcfe per day. At September 30, 2007 Comstock had six additional wells in this region that were being drilled which are part of Comstock's 125 well drilling program planned in this region for 2007. Production in this region has increased 37% in the first nine months of 2007 as compared to the first nine months of 2006 as a result of this drilling program.
In South Texas, Comstock drilled eighteen successful wells (12.5 net) and one (0.1 net) unsuccessful well during the first nine months of 2007. The successful wells had an average per well initial production rate of 5.9 Mmcfe per day. Six of the successful wells were in the Las Hermanitas field in Duval County, Texas, five were in the Javelina Field in Hidalgo County, four were in the Company's Ball Ranch field, two were in the Double A Wells field and one was in the Tom East field. Comstock had two rigs drilling in this region on September 30, 2007.
Comstock drilled thirteen wells (11.5 net) in Mississippi during the first nine months of 2007, eleven of which were successful. Six of these wells were tested at an average per well initial production rate of 184 barrels of oil per day and two wells tested at 1.7 Mmcf of natural gas per day. Comstock also had one (0.2 net) successful well in the San Juan Basin.
Comstock's offshore operations are conducted by its 49% owned subsidiary, Bois d'Arc Energy, Inc. (NYSE: BDE) ("Bois d'Arc"). Bois d'Arc spent $172.1 million during the first nine months of 2007 for its exploration and development activities, comprised of $167.1 million in capital expenditures for lease acquisition, drilling, facilities and other development activity and $5.0 million for seismic data acquisition and other geologic and geophysical costs. Since the beginning of 2007, Bois d'Arc has drilled six (5.6 net) successful wells out of a total of fourteen (11.0 net) wells drilled. Despite the lower drilling success rate, Bois d'Arc has had successful results from its exploration focused drilling program. Bois d'Arc estimates that 2007 discoveries and the performance of its M-8 Sand water flood project at its Ship Shoal 113 unit have added in excess of 100 Bcfe of net proved reserves in 2007. During the last quarter of 2007, Bois d'Arc expects to make an additional $48.0 million in capital expenditures. Bois d'Arc is currently drilling a development well in the Ship Shoal 113 Unit and will then drill an 18,500 foot well to test its "Chinook" prospect in South Pelto block 21.
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, 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.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Oil and gas sales $ 171,074 $ 129,251 $ 491,309 $ 385,153
Operating expenses:
Oil and gas
operating 34,005 26,904 91,268 78,220
Exploration 5,710 8,069 36,709 16,662
Depreciation,
depletion and
amortization 62,420 40,709 178,887 104,457
Impairment 826 1,389 826 10,169
General and
administrative 8,676 7,370 26,540 22,738
Total operating
expenses 111,637 84,441 334,230 232,246
Income from
operations 59,437 44,810 157,079 152,907
Other income (expenses):
Interest income 410 258 1,041 724
Other income 154 187 505 616
Interest expense (11,225) (6,733) (29,880) (18,322)
Gain on derivatives - 1,180 - 10,608
Total other income
(expenses) (10,661) (5,108) (28,334) (6,374)
Income before income
taxes and minority
interest 48,776 39,702 128,745 146,533
Provision for income
taxes (21,570) (16,662) (55,955) (61,847)
Minority interest in
earnings of Bois d'Arc
Energy (10,778) (6,004) (25,587) (22,433)
Net income $ 16,428 $ 17,036 $ 47,203 $ 62,253
Net income per share:
Basic $ 0.38 $ 0.40 $ 1.09 $ 1.48
Diluted $ 0.37 $ 0.39 $ 1.05 $ 1.42
Weighted average common
and common stock
equivalent shares
outstanding:
Basic 43,379 42,243 43,372 42,128
Diluted 44,434 43,553 44,345 43,505
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Cash flow from
operations:
Net cash provided
by operating
activities $ 97,332 $ 98,236 $ 324,885 $ 274,300
Excess tax benefit
from stock-based
compensation 2 - 602 922
Increase (decrease)
in accounts
receivable (14,183) 2,366 1,230 (10,774)
Increase (decrease)
in other current
assets 24 (10,560) 2,588 139
Decrease (increase)
in accounts payable
and accrued expenses 32,735 (763) 14,346 3,153
Cash flow from
operations $ 115,910 $ 89,279 $ 343,651 $ 267,740
EBITDAX:
Net income $ 16,428 $ 17,036 $ 47,203 $ 62,253
Interest expense 11,225 6,733 29,880 18,322
Income tax expense 21,570 16,662 55,955 61,847
Depreciation,
depletion and
amortization 62,420 40,709 178,887 104,457
Impairment 826 1,389 826 10,169
Minority interest in
earnings of Bois d'Arc
Energy 10,778 6,004 25,587 22,433
Stock-based
compensation 4,280 3,342 12,910 9,834
Exploration expense 5,710 8,069 36,709 16,662
Unrealized gain on
derivatives - (1,180) - (11,311)
EBITDAX $ 133,237 $ 98,764 $ 387,957 $ 294,666
As of September 30,
2007 2006
Balance Sheet Data:
Cash and cash equivalents $ 17,032 $ 27,084
Other current assets 93,857 78,089
Property and equipment, net 2,020,736 1,682,758
Other 4,734 4,959
Total assets $2,136,359 $1,792,890
Current liabilities $ 132,878 $ 122,899
Long-term debt 597,000 455,000
Deferred income taxes 356,050 305,062
Asset retirement obligation 60,436 44,333
Minority interest in
Bois d'Arc Energy 251,443 212,683
Stockholders' equity 738,552 652,913
Total liabilities and
stockholders' equity $2,136,359 $1,792,890
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months Ended September 30, 2007
Bois d'Arc
Onshore(1) Energy Total
Oil production
(thousand barrels) 260 448 708
Gas production
(million cubic feet
-- Mmcf) 10,612 8,241 18,853
Total production
(Mmcfe) 12,170 10,930 23,100
Oil sales $ 16,628 $ 34,738 $ 51,366
Gas sales 66,459 53,249 119,708
Total oil and gas
sales $ 83,087 $ 87,987 $171,074
Average oil price
(per barrel) $ 64.06 $ 77.50 $ 72.57
Average gas price
(per thousand cubic
feet -- Mcf) $ 6.26 $ 6.46 $ 6.35
Average price (per
Mcf equivalent) $ 6.83 $ 8.05 $ 7.41
Lifting cost $ 17,030 $ 16,975 $ 34,005
Lifting cost (per
Mcf equivalent) $ 1.40 $ 1.55 $ 1.47
Oil and Gas Capital
Expenditures $ 84,669 $ 44,905 $129,574
For the Three Months Ended September 30, 2006
Bois d'Arc
Onshore(1) Energy Total
Oil production
(thousand barrels) 231 370 601
Gas production
(million cubic feet
-- Mmcf) 7,409 6,106 13,515
Total production
(Mmcfe) 8,792 8,328 17,120
Oil sales $ 13,696 $ 25,935 $ 39,631
Gas sales 48,559 41,061 89,620
Total oil and gas
sales $ 62,255 $ 66,996 $129,251
Average oil price
(per barrel) $ 59.42 $ 70.01 $ 65.95
Average gas price
(per thousand cubic
feet -- Mcf) $ 6.55 $ 6.72 $ 6.63
Average price (per
Mcf equivalent) $ 7.08 $ 8.04 $ 7.55
Lifting cost $ 13,366 $ 13,538 $ 26,904
Lifting cost (per
Mcf equivalent) $ 1.52 $ 1.63 $ 1.57
Oil and Gas Capital
Expenditures $120,656 $ 77,500 $198,156
For the Nine Months Ended September 30, 2007
Bois d'Arc
Onshore(1) Energy Total
Oil production
(thousand barrels) 766 1,233 1,999
Gas production
(million cubic feet
-- Mmcf) 28,462 24,136 52,598
Total production
(Mmcfe) 33,056 31,535 64,591
Oil sales $ 42,993 $ 83,844 $126,837
Gas sales 193,101 171,371 364,472
Total oil and gas
sales $236,094 $255,215 $491,309
Average oil price
(per barrel) $ 56.15 $ 67.99 $ 63.45
Average gas price
(per thousand cubic
feet -- Mcf) $ 6.78 $ 7.10 $ 6.93
Average price (per
Mcf equivalent) $ 7.14 $ 8.09 $ 7.61
Lifting cost $ 48,709 $ 42,559 $ 91,268
Lifting cost (per Mcf
equivalent) $ 1.47 $ 1.35 $ 1.41
Oil and Gas Capital
Expenditures $286,804 $167,069 $453,783
For the Nine Months Ended September 30, 2006
Bois d'Arc
Onshore(1) Energy Total
Oil production
(thousand barrels) 696 1,033 1,729
Gas production
(million cubic feet
-- Mmcf) 22,327 16,388 38,715
Total production
(Mmcfe) 26,501 22,587 49,088
Oil sales $ 39,808 $ 69,215 $109,023
Gas sales 156,909 119,221 276,130
Total oil and gas
sales $196,717 $188,436 $385,153
Average oil price
(per barrel) $ 57.22 $ 67.00 $ 63.06
Average gas price
(per thousand cubic
feet -- Mcf $ 7.03 $ 7.27 $ 7.13
Average price (per
Mcf equivalent) $ 7.42 $ 8.34 $ 7.85
Lifting cost $ 40,421 $ 37,799 $ 78,220
Lifting cost (per Mcf
equivalent) $ 1.53 $ 1.67 $ 1.59
Oil and Gas Capital
Expenditures $212,938 $191,798 $404,736
(1) Includes the onshore results of operations of Comstock Resources,
Inc.
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months Ended September 30, 2007
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production
(thousand barrels) 37 51 172 260
Gas production (million
cubic feet -- Mmcf) 6,395 3,426 791 10,612
Total production (Mmcfe) 6,616 3,735 1,819 12,170
Oil sales $ 2,610 $ 3,820 $ 10,198 $ 16,628
Gas sales 38,802 22,919 4,738 66,459
Total oil and gas
sales $ 41,412 $ 26,739 $ 14,936 $ 83,087
Average oil price
(per barrel) $ 70.54 $ 74.90 $ 59.29 $ 64.06
Average gas price
(per thousand cubic
feet -- Mcf) $ 6.07 $ 6.69 $ 5.99 $ 6.26
Average price (per Mcf
equivalent) $ 6.26 $ 7.16 $ 8.21 $ 6.83
Lifting cost(1) $ 7,822 $ 4,276 $ 4,932 $ 17,030
Lifting cost (per
Mcf equivalent) $ 1.18 $ 1.14 $ 2.71 $ 1.40
Oil and Gas Capital
Expenditures:
Acquisitions $ - $ (776) $ - $ (776)
Leasehold costs 2,266 460 75 2,801
Exploratory drilling - 2,607 229 2,836
Development drilling 48,045 22,333 6,971 77,349
Other development 808 642 1,009 2,459
Total $ 51,119 $ 25,266 $ 8,284 $ 84,669
For the Three Months Ended September 30, 2006
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production
(thousand barrels) 29 51 151 231
Gas production (million
cubic feet -- Mmcf) 4,507 2,065 837 7,409
Total production (Mmcfe) 4,679 2,371 1,742 8,792
Oil sales $ 1,906 $ 3,498 $ 8,292 $ 13,696
Gas sales 28,737 14,625 5,197 48,559
Total oil and gas
sales $ 30,643 $ 18,123 $ 13,489 $ 62,255
Average oil price
(per barrel) $ 65.72 $ 68.59 $ 54.91 $ 59.42
Average gas price
(per thousand cubic
feet -- Mcf) $ 6.38 $ 7.08 $ 6.61 $ 6.55
Average price (per Mcf
equivalent) $ 6.55 $ 7.64 $ 7.74 $ 7.08
Lifting cost(1) $ 5,568 $ 3,437 $ 4,361 $ 13,366
Lifting cost (per
Mcf equivalent) $ 1.19 $ 1.45 $ 2.50 $ 1.52
Oil and Gas Capital
Expenditures:
Acquisitions $ - $ 67,263 $ - $ 67,263
Leasehold costs 259 882 689 1,830
Exploratory drilling - - - -
Development drilling 39,066 6,296 732 46,094
Other development 3,149 353 1,967 5,469
Total $ 42,474 $ 74,794 $ 3,388 $120,656
(1) Includes production taxes of $4,009 and $2,487 for the three months
ended September 30, 2007 and 2006, respectively.
For the Nine Months Ended September 30, 2007
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production
(thousand barrels) 122 158 486 766
Gas production (million
cubic feet -- Mmcf) 17,848 8,426 2,188 28,462
Total production (Mmcfe) 18,578 9,375 5,103 33,056
Oil sales $ 7,500 $ 10,121 $ 25,372 $ 42,993
Gas sales 118,793 60,310 13,998 193,101
Total oil and gas
sales $126,293 $ 70,431 $ 39,370 $236,094
Average oil price
(per barrel) $ 61.48 $ 64.06 $ 52.21 $ 56.15
Average gas price
(per thousand cubic
feet -- Mcf) $ 6.66 $ 7.16 $ 6.40 $ 6.78
Average price (per Mcf
equivalent) $ 6.80 $ 7.51 $ 7.72 $ 7.14
Lifting cost(2) $ 22,817 $ 12,060 $ 13,832 $ 48,709
Lifting cost (per
Mcf equivalent) $ 1.23 $ 1.29 $ 2.71 $ 1.47
Oil and Gas Capital
Expenditures:
Acquisitions $ - $ 31,189 $ - $ 31,189
Leasehold costs 2,801 1,965 2,780 7,546
Exploratory drilling - 7,994 2,430 10,424
Development drilling 159,139 49,818 22,913 231,870
Other development 1,822 1,627 2,326 5,775
Total $163,762 $ 92,593 $ 30,449 $286,804
For the Nine Months Ended September 30, 2006
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production
(thousand barrels) 89 164 443 696
Gas production (million
cubic feet -- Mmcf) 13,075 6,728 2,524 22,327
Total production (Mmcfe) 13,609 7,715 5,177 26,501
Oil sales $ 5,637 $ 10,785 $ 23,386 $ 39,808
Gas sales 89,802 50,415 16,692 156,909
Total oil and gas
sales $ 95,439 $ 61,200 $ 40,078 $196,717
Average oil price
(per barrel) $ 63.34 $ 65.76 $ 52.79 $ 57.22
Average gas price
(per thousand cubic
feet -- Mcf) $ 6.87 $ 7.49 $ 6.21 $ 7.03
Average price (per Mcf
equivalent) $ 7.01 $ 7.93 $ 7.74 $ 7.42
Lifting cost(2) $ 17,229 $ 10,770 $ 12,422 $ 40,421
Lifting cost (per
Mcf equivalent) $ 1.27 $ 1.40 $ 2.40 $ 1.53
Oil and Gas Capital
Expenditures:
Acquisitions $ 912 $ 67,263 $ - $ 68,175
Leasehold costs 493 1,067 1,823 3,383
Exploratory drilling - 75 - 75
Development drilling 91,525 11,903 20,488 123,916
Other development 11,320 996 5,073 17,389
Total $104,250 $ 81,304 $ 27,384 $212,938
(2) Includes production taxes of $10,511 and $8,793 for the nine months
ended September 30, 2007 and 2006, 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)