UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of Earliest Event Reported): May
7, 2007
COMSTOCK
RESOURCES, INC.
(Exact
Name of Registrant as Specified in Charter)
|
STATE
OF NEVADA
|
000-16741
|
94-1667468
|
|
(State
or other
jurisdiction
incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer
Identification
Number)
|
5300
Town And Country Boulevard
Suite
500
Frisco,
Texas
75034
(Address
of principal executive offices)
(972)
668-8800
(Registrant's
Telephone No.)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Item
2.02. Results
of Operations and Financial Condition
The
information in this Form 8-K and the Exhibit attached hereto shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934,
nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, except as shall be expressly set forth by specific reference in
such filing.
On
May 7,
2007, Comstock Resources, Inc. ("Comstock") announced financial results for
the
three months ended March 31, 2007. A copy of the press release announcing
Comstock's earnings and operating results for the three months ended March
31, 2007 is attached hereto as Exhibit 99.1.
The
earnings press release contains financial measures that are not in accordance
with generally accepted accounting principles in the United States ("GAAP").
Comstock has provided reconciliations within the earnings release of the
non-GAAP financial measures to the most directly comparable GAAP financial
measures. Operating cash flow is presented in the earnings release because
management believes it to be useful to investors as a common alternative measure
of cash flows. EBITDAX is presented in the earnings release because management
believes that EBITDAX, which represents Comstock's results from operations
before interest, income taxes, and certain non-cash items, including
depreciation, depletion and amortization and exploration expense, is a common
alternative measure of operating performance used by certain investors and
financial analysts. The non-GAAP financial measures described above should
be
considered in addition to, but not as a substitute for, measures of financial
performance prepared in accordance with GAAP that are presented in the earnings
release.
Item
9.01. Financial
Statements and Exhibits
|
Exhibit
99.1
|
Press
Release dated May 7, 2007.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
COMSTOCK
RESOURCES, INC.
|
||
|
Dated:
May
7, 2007
|
By:
|
/s/
M. JAY ALLISON
|
|
M.
Jay Allison
|
||
|
President
and Chief Executive Officer
|
Exhibit
99.1
|
5300
Town and Country Blvd., Suite 500
|
|
 |
Frisco,
Texas 75034
|
|
Telephone:
(972) 668-8800
|
|
|
Contact:
Roland O. Burns
|
|
|
Sr.
Vice President and Chief Financial
Officer
|
|
|
Web
Site:
www.comstockresources.com
|
NEWS
RELEASE
For
Immediate Release
COMSTOCK
RESOURCES, INC. REPORTS
FIRST
QUARTER 2007 FINANCIAL AND OPERATING RESULTS
FRISCO,
TEXAS, May 7, 2007
-
Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today
reported financial and operating results for the quarter ended March 31, 2007.
First
Quarter 2007 Financial Results
Comstock
reported net income of $12.6 million or 28¢ per diluted share for the three
months ended March 31, 2007 as compared to 2006's first quarter net income
of
$29.6 million or 68¢ per diluted share. The 2006 results include an $8.2 million
unrealized gain on derivatives held for price risk management. Without the
unrealized gain, net income for the first quarter of 2006 would have been
approximately $23.9 million or 55¢ per diluted share.
The
first
quarter results reflect the success that the Company's onshore development
drilling program and offshore exploration activities have had in growing
production. Comstock's production in the first quarter of 2007 increased 28%
to
20.0 billion cubic feet equivalent of natural gas ("Bcfe") as compared to
production of 15.7 Bcfe in the first quarter of 2006. Onshore production has
increased 16% and offshore production was up 42% from the first quarter of
2006.
The first quarter average daily production rate of 223 million cubic feet of
natural gas equivalent ("Mmcfe") also has increased 13% from the fourth quarter
production rate of 198 Mmcfe per day. The production gains were offset in part
by lower oil and natural gas prices. The Company's realized natural gas price
averaged $6.89 per Mcf in 2007's first quarter, 14% lower than the $8.05 per
Mcf
in 2006's first quarter. Realized oil prices in the first quarter of 2007
averaged $54.15 per barrel, 6% lower than the $57.91 per barrel for 2006. First
quarter 2007's oil and gas sales of $146.0 million increased 11% from 2006's
first quarter sales of $131.7 million. Operating cash flow (before changes
in
working capital accounts) generated by Comstock in 2007's first quarter of
$100.5 million was 10% higher than 2006's first quarter cash flow of $91.5
million. EBITDAX or earnings before interest, taxes, depreciation, depletion,
amortization, exploration expense and other noncash expenses was $114.0 million
in 2007's first quarter, a 14% increase from 2006's first quarter EBITDAX of
$100.0 million.
First
Quarter 2007 Drilling Results
Comstock
also announced the results to date of its 2007 drilling program. In the first
three months of 2007 Comstock drilled 48 wells (38.3 net). Forty-five of
the
wells drilled were successful and three were dry holes.
Onshore,
Comstock drilled 44 (35.7 net) successful development wells in the first
quarter
of 2007. Comstock drilled 34 wells (27.4 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 March 31, 2007 Comstock had six
additional wells in this region that were being drilled which are part of
Comstock's 115 well Cotton Valley drilling program planned in this region
for
2007.
In
South
Texas, Comstock drilled four successful wells (2.7 net) during the first
quarter
of 2007, which had an average per well initial production rate of 7.5 Mmcfe
per
day. Two of the wells were in the Las Hermanitas field in Duval County, Texas
and one well was drilled in each of the Company's Ball Ranch and Javelina
fields. Comstock had two rigs drilling in this region on March 31, 2007.
Comstock drilled six wells (5.6 net) in its Laurel and Maxie fields in
Mississippi during the quarter. Three of these wells were tested at an average
per well initial production rate of 185 barrels of oil per day and one well
tested at 1.5 Mmcf of natural gas per day. Comstock had one rig drilling
in the
Laurel field at the end of the first quarter.
Comstock's
offshore operations are conducted by its 49% owned subsidiary, Bois d'Arc
Energy, Inc. (NYSE: BDE) ("Bois d'Arc"). Bois d'Arc has drilled three
exploratory wells, 1.8 net to Bois d'Arc's interest and one development
well
(0.8 net). Bois d'Arc's OCS-G 22738 #3 well at South Timbalier block 75
is its
second well to test the "Doc Holliday" prospect. To date this well has
been
drilled to a depth of 16,236 feet and has encountered pay in several new
reservoirs. Bois d'Arc has set protective casing and is deepening the well
to
test additional prospective targets. Bois d'Arc's OCS-G 22648 #2 well drilled
at
South Marsh Island block 220 and a well drilled at Vermillion Block 50 were
unsuccessful. Bois d'Arc also participated in another operator's deepwater
exploratory prospect which was not successful. In addition to the deepening
of
the second "Doc Holliday" well, Bois d'Arc is currently drilling an exploratory
well to test its "Dogbone" prospect at South Pelto block 7 and is participating
in a second, non-operated deepwater test.
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 March 31,
|
|||||||||
|
2007
|
2006
|
||||||||
|
Oil
and gas sales
|
$
|
146,029
|
$
|
131,724
|
|||||
|
Operating
expenses:
|
|||||||||
|
Oil
and gas operating
|
27,083
|
26,295
|
|||||||
|
Exploration
|
11,133
|
4,875
|
|||||||
|
Depreciation,
depletion and amortization
|
56,707
|
30,685
|
|||||||
|
General
and administrative
|
9,702
|
8,135
|
|||||||
|
Total
operating expenses
|
104,625
|
69,990
|
|||||||
|
Income
from operations
|
41,404
|
61,734
|
|||||||
|
Other
income (expenses):
|
|||||||||
|
Interest
income
|
296
|
237
|
|||||||
|
Other
income
|
130
|
54
|
|||||||
|
Interest
expense
|
(8,449
|
)
|
(5,483
|
)
|
|||||
|
Gain
(loss) on derivatives
|
—
|
8,125
|
|||||||
|
Total
other income (expenses)
|
(8,023
|
)
|
2,933
|
||||||
|
Income
before income taxes and minority interest
|
33,381
|
64,667
|
|||||||
|
Provision
for income taxes
|
(14,824
|
)
|
(26,299
|
)
|
|||||
|
Minority
interest in earnings of Bois d'Arc Energy
|
(5,999
|
)
|
(8,734
|
)
|
|||||
|
Net
income
|
$
|
12,558
|
$
|
29,634
|
|||||
|
Net
income per share:
|
|||||||||
|
Basic
|
$
|
0.29
|
$
|
0.70
|
|||||
|
Diluted
|
$
|
0.28
|
$
|
0.68
|
|||||
|
Weighted
average common and common stock equivalent shares
outstanding:
|
|||||||||
|
Basic
|
43,364
|
42,051
|
|||||||
|
Diluted
|
44,238
|
43,429
|
|||||||
COMSTOCK
RESOURCES, INC.
CONSOLIDATED
OPERATING RESULTS
(In
thousands)
|
Three
Months Ended March 31,
|
|||||||||
|
2007
|
2006
|
||||||||
|
Cash
flow from operations:
|
|||||||||
|
Net
cash provided by operating activities
|
$
|
78,746
|
$
|
85,539
|
|||||
|
Excess
tax benefit from stock based compensation
|
166
|
197
|
|||||||
|
Increase
(decrease) in accounts receivable
|
4,874
|
(13,685
|
)
|
||||||
|
Decrease
in other current assets
|
(2,013
|
)
|
(4,512
|
)
|
|||||
|
Decrease
in accounts payable and accrued expenses
|
18,771
|
23,953
|
|||||||
|
Cash
flow from operations
|
$
|
100,544
|
$
|
91,492
|
|||||
|
EBITDAX:
|
|||||||||
|
Net
income
|
$
|
12,558
|
$
|
29,634
|
|||||
|
Interest
expense
|
8,449
|
5,483
|
|||||||
|
Income
tax expense
|
14,824
|
26,299
|
|||||||
|
Depreciation,
depletion and amortization
|
56,707
|
30,685
|
|||||||
|
Minority
interest in earnings of Bois d'Arc Energy
|
5,999
|
8,734
|
|||||||
|
Stock-based
compensation
|
4,312
|
3,144
|
|||||||
|
Exploration
expense
|
11,133
|
4,875
|
|||||||
|
Unrealized
gain on derivatives
|
—
|
(8,828
|
)
|
||||||
|
EBITDAX
|
$
|
113,982
|
$
|
100,026
|
|||||
|
As
of March 31,
|
||||||||
|
2007
|
2006
|
|||||||
|
Balance
Sheet Data:
|
||||||||
|
Cash
and cash equivalents
|
$
|
12,003
|
$
|
10,913
|
||||
|
Other
current assets
|
90,974
|
68,895
|
||||||
|
Property
and equipment, net
|
1,857,521
|
1,431,289
|
||||||
|
Other
|
5,361
|
5,295
|
||||||
|
Total
assets
|
$
|
1,965,859
|
$
|
1,516,392
|
||||
|
Current
liabilities
|
$
|
147,153
|
$
|
103,896
|
||||
|
Long-term
debt
|
511,000
|
319,000
|
||||||
|
Deferred
income taxes
|
323,507
|
262,670
|
||||||
|
Asset
retirement obligation
|
58,113
|
39,069
|
||||||
|
Minority
interest in Bois d'Arc Energy
|
228,006
|
177,269
|
||||||
|
Stockholders'
equity
|
698,080
|
614,488
|
||||||
|
Total
liabilities and stockholders' equity
|
$
|
1,965,859
|
$
|
1,516,392
|
||||
COMSTOCK
RESOURCES, INC.
CONSOLIDATED
OPERATING RESULTS
($
In
thousands, except per unit amounts)
|
For
the Three Months ended March 31, 2007
|
|||||||||||
|
Onshore(1)
|
Bois
d'Arc Energy
|
Total
|
|||||||||
|
Oil
production (thousand barrels)
|
251
|
368
|
619
|
||||||||
|
Gas
production (million cubic feet - Mmcf)
|
8,635
|
7,701
|
16,336
|
||||||||
|
Total
production (Mmcfe)
|
10,140
|
9,909
|
20,049
|
||||||||
|
Oil
sales
|
$
|
12,054
|
$
|
21,468
|
$
|
33,522
|
|||||
|
Gas
sales
|
57,793
|
54,714
|
112,507
|
||||||||
|
Total
oil and gas sales
|
$
|
69,847
|
$
|
76,182
|
$
|
146,029
|
|||||
|
|
|||||||||||
|
Average
oil price (per barrel)
|
$
|
48.03
|
$
|
58.33
|
$
|
54.15
|
|||||
|
Average
gas price (per thousand cubic feet - Mcf)
|
$
|
6.69
|
$
|
7.10
|
$
|
6.89
|
|||||
|
Average
price (per Mcf equivalent)
|
$
|
6.89
|
$
|
7.69
|
$
|
7.28
|
|||||
|
Lifting
cost
|
$
|
14,055
|
$
|
13,028
|
$
|
27,083
|
|||||
|
Lifting
cost (per Mcf equivalent)
|
$
|
1.39
|
$
|
1.31
|
$
|
1.35
|
|||||
|
Oil
and gas capital expenditures
|
$
|
84,251
|
$
|
62,753
|
$
|
147,004
|
|||||
|
(1) Includes
the onshore results of operations of Comstock Resources,
Inc.
|
|
For
the Three Months ended March 31, 2006
|
|||||||||||
|
Onshore(1)
|
Bois
d'Arc Energy
|
Total
|
|||||||||
|
Oil
production (thousand barrels)
|
228
|
317
|
545
|
||||||||
|
Gas
production (million cubic feet - Mmcf)
|
7,369
|
5,065
|
12,434
|
||||||||
|
Total
production (Mmcfe)
|
8,740
|
6,968
|
15,708
|
||||||||
|
Oil
sales
|
$
|
12,265
|
$
|
19,337
|
$
|
31,602
|
|||||
|
Gas
sales
|
57,626
|
42,496
|
100,122
|
||||||||
|
Total
oil and gas sales
|
$
|
69,891
|
$
|
61,833
|
$
|
131,724
|
|||||
|
|
|||||||||||
|
Average
oil price (per barrel)
|
$
|
53.69
|
$
|
60.95
|
$
|
57.91
|
|||||
|
Average
gas price (per thousand cubic feet - Mcf)
|
$
|
7.82
|
$
|
8.39
|
$
|
8.05
|
|||||
|
Average
price (per Mcf equivalent)
|
$
|
8.00
|
$
|
8.87
|
$
|
8.39
|
|||||
|
Lifting
cost
|
$
|
13,855
|
$
|
12,440
|
$
|
26,295
|
|||||
|
Lifting
cost (per Mcf equivalent)
|
$
|
1.59
|
$
|
1.79
|
$
|
1.67
|
|||||
|
Oil
and gas capital expenditures
|
$
|
49,157
|
$
|
46,457
|
$
|
95,614
|
|||||
|
(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 March 31, 2007
|
East
Texas/
North
Louisiana
|
South
Texas
|
Other
|
Total
Onshore
|
|||||||||||||
|
Oil
production (thousand barrels)
|
46
|
53
|
152
|
251
|
||||||||||||
|
Gas
production (million cubic feet - Mmcf)
|
5,381
|
2,577
|
677
|
8,635
|
||||||||||||
|
Total
production (Mmcfe)
|
5,657
|
2,896
|
1,587
|
10,140
|
||||||||||||
|
Oil
sales
|
$
|
2,492
|
$
|
2,958
|
$
|
6,604
|
$
|
12,054
|
||||||||
|
Gas
sales
|
35,501
|
18,101
|
4,191
|
57,793
|
||||||||||||
|
Total
oil and gas sales
|
$
|
37,993
|
$
|
21,059
|
$
|
10,795
|
$
|
69,847
|
||||||||
|
Average
oil price (per barrel)
|
$
|
54.17
|
$
|
55.81
|
$
|
43.45
|
$
|
48.02
|
||||||||
|
Average
gas price (per thousand cubic
feet - Mcf)
|
$
|
6.60
|
$
|
7.02
|
$
|
6.19
|
$
|
6.69
|
||||||||
|
Average
price (per Mcf equivalent)
|
$
|
6.72
|
$
|
7.27
|
$
|
6.80
|
$
|
6.89
|
||||||||
|
Lifting
cost
|
$
|
6,684
|
$
|
3,322
|
$
|
4,049
|
$
|
14,055
|
||||||||
|
Lifting
cost (per Mcf equivalent)
|
$
|
1.18
|
$
|
1.15
|
$
|
2.55
|
$
|
1.39
|
||||||||
|
Oil
and Gas Capital Expenditures:
|
||||||||||||||||
|
Leasehold
costs
|
$
|
398
|
$
|
816
|
$
|
2,400
|
$
|
3,614
|
||||||||
|
Exploratory
drilling
|
—
|
2,255
|
442
|
2,697
|
||||||||||||
|
Development
drilling
|
54,707
|
11,677
|
10,009
|
76,393
|
||||||||||||
|
Other
development
|
242
|
483
|
822
|
1,547
|
||||||||||||
|
Total
|
$
|
55,347
|
$
|
15,231
|
$
|
13,673
|
$
|
84,251
|
||||||||
For
the Three Months ended March 31, 2006
|
East
Texas/
North
Louisiana
|
South
Texas
|
Other
|
Total
Onshore
|
|||||||||||||
|
Oil
production (thousand barrels)
|
29
|
56
|
143
|
228
|
||||||||||||
|
Gas
production (million cubic feet - Mmcf)
|
4,243
|
2,285
|
841
|
7,369
|
||||||||||||
|
Total
production (Mmcfe)
|
4,417
|
2,623
|
1,700
|
8,740
|
||||||||||||
|
Oil
sales
|
$
|
1,740
|
$
|
3,474
|
$
|
7,051
|
$
|
12,265
|
||||||||
|
Gas
sales
|
32,766
|
18,198
|
6,662
|
57,626
|
||||||||||||
|
Total
oil and gas sales
|
$
|
34,506
|
$
|
21,672
|
$
|
13,713
|
$
|
69,891
|
||||||||
|
Average
oil price (per barrel)
|
$
|
60.00
|
$
|
62.04
|
$
|
49.31
|
$
|
53.68
|
||||||||
|
Average
gas price (per thousand cubic
feet - Mcf)
|
$
|
7.72
|
$
|
7.96
|
$
|
7.92
|
$
|
7.82
|
||||||||
|
Average
price (per Mcf equivalent)
|
$
|
6.02
|
$
|
8.26
|
$
|
8.07
|
$
|
8.00
|
||||||||
|
Lifting
cost
|
$
|
5,926
|
$
|
3,649
|
$
|
4,280
|
$
|
13,855
|
||||||||
|
Lifting
cost (per Mcf equivalent)
|
$
|
1.34
|
$
|
1.39
|
$
|
2.52
|
$
|
1.59
|
||||||||
|
Oil
and Gas Capital Expenditures:
|
||||||||||||||||
|
Leasehold
costs
|
$
|
1,294
|
$
|
—
|
$
|
757
|
$
|
2,051
|
||||||||
|
Exploratory
drilling
|
—
|
75
|
—
|
75
|
||||||||||||
|
Development
drilling
|
21,056
|
—
|
17,351
|
38,407
|
||||||||||||
|
Other
development
|
6,641
|
—
|
1,983
|
8,624
|
||||||||||||
|
Total
|
$
|
28,991
|
$
|
75
|
$
|
20,091
|
$
|
49,157
|
||||||||