SEC Filing | Comstock Resources, Inc.

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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 4, 2009

COMSTOCK RESOURCES, INC.

(Exact Name of Registrant as Specified in Charter)

STATE OF NEVADA	001-03262	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 4, 2009, Comstock Resources, Inc. ("Comstock") announced financial results for the three months ended March 31, 2009. A copy of the press release announcing Comstock's earnings and operating results for the three months ended March 31, 2009 and other matters 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. Comstock has also included selected financial and operating data for the first quarter of 2008 which has been adjusted to exclude the results of oil and gas properties that were disposed of in 2008. Comstock believes this adjusted information will be useful to investors in performing comparative analyses of financial and operating results.

Item 9.01 Financial Statements and Exhibits

Exhibit 99.1

Press Release dated May 4, 2009.

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 4, 2009	By:	/s/ M. JAY ALLISON
		M. Jay Allison
		President and Chief Executive Officer

exhibit99pnt1.htm

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 2009 FINANCIAL AND OPERATING RESULTS

FRISCO, TEXAS, May 4, 2009 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the three months ended March 31, 2009. Reported results for the three months ended March 31, 2008 reflect the Company's offshore operations which were sold during 2008 as discontinued operations.

Financial Results for the Three Months Ended March 31, 2009

Comstock reported a net loss of $5.7 million or 12¢ per share for the first quarter of 2009 as compared to 2008's first quarter net income from continuing operations of $29.4 million or 64¢ per diluted share. The loss in the first quarter is attributable to the decline in oil and natural gas prices. Comstock averaged $4.75 per Mcf for sales of its natural gas production in the first quarter of 2009, 42% lower than the $8.22 per Mcf realized in 2008's first quarter. Realized oil prices in the first quarter of 2009 averaged $35.03 per barrel, 57% lower than the $81.49 per barrel in 2008's first quarter.

Comstock's production in the first quarter of 2009 increased 3% to 14.1 billion cubic feet equivalent of natural gas ("Bcfe") as compared to pro forma production of 13.7 Bcfe in the first quarter of 2008, which excludes production from properties sold during 2008. The first quarter average daily production rate of 157 million cubic feet of natural gas equivalent ("MMcfe") decreased 4% from the 2008 fourth quarter production rate of 164 MMcfe per day mainly due to operational problems at third party operated gas processing facilities as well as delays experienced by the Company in completing some of its horizontal Haynesville wells during the first quarter of 2009.

Weaker oil and natural gas prices caused first quarter 2009's oil and gas sales to decrease 46% to $68.4 million from 2008's first quarter sales of $127.7 million. Operating cash flow (before changes in working capital accounts) generated by Comstock's continuing operations in 2009's first quarter of $44.8 million decreased 51% from 2008's first quarter operating cash flow of $91.5 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses from continuing operations, decreased 56% to $45.3 million in 2009's first quarter from 2008's first quarter EBITDAX from continuing operations of $103.2 million.

2009 Drilling Results

Comstock also provided the results to date of its 2009 drilling program. Comstock spent $97.3 million during the first three months of 2009 on its exploration and development activities. Comstock expects to spend a total of $360.0 million in 2009 on its drilling program. In the first quarter of 2009, Comstock drilled 14 wells (11.6 net), all of which were successful. Nine of the 14 wells drilled in the first quarter were horizontal wells.

Comstock reported on its Haynesville Shale program in East Texas and North Louisiana. The Company is very encouraged with recent results from its horizontal wells after changing its completion techniques. Comstock's first Haynesville Shale horizontal wells utilized a formation stimulation process that utilized cross-linked heavier gel frac fluids and 20/40 ceramic proppants. Based on results that other operators had achieved, Comstock modified the formation stimulation process to primarily non-cross linked lighter frac fluids (slick water) and smaller 40/70 resin coated sand or ceramic proppants. Initial production results from wells using the new completion method were notably superior to wells using the old method.

The two wells drilled in the first quarter completed with the old method were the Bogue A #6H well drilled in the Waskom field in Harrison County, Texas and the Hart #1H drilled in the Logansport field in DeSoto Parish, Louisiana. The Bogue A #6H was drilled to a vertical depth of 10,858 feet with a 2,600 foot horizontal lateral. The well was completed with seven frac stages and was tested at an initial production rate of 7.4 MMcfe per day. Comstock has a 100% working interest in this well. The Hart #1H was drilled to a vertical depth of 11,553 feet with a 3,770 foot horizontal lateral. The well was completed with ten frac stages and was tested at an initial production rate of 7.2 MMcfe per day. Comstock has an 88% working interest in this well. The Moneyham #1H in the Longwood field in Caddo Parish, Louisiana used the cross-linked heavier gel frac fluids but used smaller 40/70 proppant. The Moneyham #1H was drilled to a vertical depth of 10,572 feet with a 3,840 foot horizontal lateral. The Moneyham was completed with ten frac stages, however during clean-out operations coiled tubing was lost in the well lateral. The well subsequently tested at an initial production rate of 6.6 MMcfe per day. Comstock has a 100% working interest in this well.

Comstock has completed three wells using the new completion method. The Headrick #1H and the Holmes A #1H were drilled in the Logansport field in the DeSoto Parish, Louisiana. The Headrick #1H was drilled to a vertical depth of 11,525 feet with a 4,060 foot horizontal lateral. The well was completed with ten frac stages and was tested at an initial production rate of 15.1 MMcfe per day. Comstock has a 100% working interest in this well. The Holmes A #1H was drilled to a vertical depth of 11,442 feet with a 4,010 foot horizontal lateral. The Holmes was completed with ten frac stages and was tested at an initial production rate of 16.2 MMcfe per day. Comstock has a 78% working interest in this well. Comstock's most recently completed Haynesville well is in its Toledo Bend North field in DeSoto Parish, Louisiana. The BSMC 12 #1H was drilled to a vertical depth of 11,535 feet with a 4,135 foot horizontal lateral. This well was completed with ten frac stages and was tested with an initial production rate of 11.6 MMcfe per day. Comstock has an 88% working interest in this well.

Comstock has scheduled the completion of four Haynesville horizontal wells, the Green #13H in Harrison County, Texas and the Broome #1H, Caraway #3H and the Colvin-Craner #2H in DeSoto Parish, Louisiana. Comstock currently has five operated horizontal Haynesville Shale wells drilling and is participating in four non-operated horizontal Haynesville Shale wells.

In addition to the Haynesville Shale wells drilled in the East Texas/North Louisiana region in the first quarter, Comstock drilled three (2.2 net) successful horizontal wells targeting the Cotton Valley Taylor Sands. These wells were drilled in the Blocker and Waskom fields in Harrison County, Texas and were tested at an average per well initial production rate of 4.2 MMcfe per day. Comstock also drilled two (1.4 net) successful vertical wells in its Logansport field in DeSoto Parish, Louisiana which were tested at an average per well initial production rate of 1.6 MMcfe per day.

In its South Texas region, Comstock drilled three successful wells (2.5 net) in the first quarter which had an average per well initial production rate of 8.5 MMcfe per day. Comstock drilled the Muzza #13 in the Fandango field to a 16,300 foot vertical depth and completed this well with an initial production rate of 7.3 MMcfe per day. The Trevino #3 also in the Fandango field was drilled to a vertical depth of 14,720 feet. This well was successfully completed with an initial production rate of 8.4 MMcfe per day. Comstock has a 100% working interest in these wells. The Santa Fe Julian Pasture #1 well in the Ball Ranch field was drilled to a total vertical depth of 13,388 feet and completed with an initial production rate of 9.9 MMcfe per day. Comstock has a 45% working interest in this well.

Comstock also announced that its bank group led by Bank of Montreal has redetermined the Company's borrowing base under its bank revolving credit facility to $550.0 million. At the end of the first quarter, Comstock had $90.0 million outstanding under its bank revolving credit facility.

Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, May 5, 2009 to discuss the operational and financial results for the first quarter of 2009. Investors wishing to participate should visit our website at www.comstockresources.com for a live web cast or dial 1-866-788-0540 and provide access code 48691066 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 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 March 31,
	2009			2008

Revenues:
Oil and gas sales	$	68,351		$	127,721

Operating expenses:
Oil and gas operating		16,959			21,202
Exploration		13			2,238
Depreciation, depletion and amortization		47,272			41,505
General and administrative		9,819			6,164
Loss on sales of assets		—			240

Total operating expenses		74,063			71,349

Operating income (loss) from continuing operations		(5,712	)		56,372

Other income (expenses):
Interest income		22			161
Other income		63			22
Interest expense		(2,162	)		(9,951	)

Total other income (expenses)		(2,077	)		(9,768	)

Income (loss) from continuing operations before income taxes		(7,789	)		46,604
Benefit from (provision for) income taxes		2,132			(17,202	)

Income (loss) from continuing operations		(5,657	)		29,402

Income from discontinued operations after income taxes and minority interest		—			11,693
Net income (loss)	$	(5,657	)	$	41,095

Basic net income (loss) per share:
Continuing operations	$	(0.12	)	$	0.65
Discontinued operations		—			0.26
	$	(0.12	)	$	0.91
Diluted net income (loss) per share:
Continuing operations	$	(0.12	)(1)	$	0.64
Discontinued operations		—			0.26
	$	(0.12	)(1)	$	0.90
Weighted average shares outstanding:
Basic		44,941			44,179
Diluted		44,941	(1)		44,567

(1) Basic and diluted are the same due to the net loss.

COMSTOCK RESOURCES, INC.

OPERATING RESULTS

(In thousands)

	Three Months Ended March 31,
	2009			2008


OPERATING CASH FLOW:
Net income (loss) from continuing operations	$	(5,657	)	$	29,402
Reconciling items:
Deferred income taxes		(721	)		15,232
Dry hole costs and lease impairments		—			2,238
Depreciation, depletion and amortization		47,272			41,505
Loss on sale of assets		—			240
Debt issuance cost amortization		203			202
Stock-based compensation		3,667			2,678
Operating cash flow		44,764			91,497
Excess tax benefit from stock-based compensation		(679	)		(670	)
Decrease (increase) in accounts receivable		10,185			(15,665	)
Decrease (increase) in other current assets		235			(158	)
Decrease in accounts payable and accrued expenses		(14,043	)		(20,647	)
Net cash provided by operating activities from continuing operations	$	40,462		$	54,357

EBITDAX:
Income (loss) from continuing operations	$	(5,657	)	$	29,402
Loss on sale of assets		—			240
Interest expense		2,162			9,951
Income tax expense (benefit)		(2,132	)		17,202
Depreciation, depletion and amortization		47,272			41,505
Stock-based compensation		3,667			2,678
Exploration		13			2,238
EBITDAX from continuing operations	$	45,325		$	103,216

	As of March 31,
	2009		2008

Balance Sheet Data:
Cash and cash equivalents	$	963	$	1,555
Derivative financial instruments		18,369		—
Other current assets		60,691		73,046
Marketable securities		15,351		—
Property and equipment, net		1,494,923		1,329,340
Assets of discontinued operations		—		1,011,934
Other		2,950		3,741
Total assets	$	1,593,247	$	2,419,616

Accounts payable and accrued expenses	$	96,035	$	63,780
Derivative financial instruments		—		17,658
Long-term debt		265,000		680,000
Deferred income taxes		184,484		105,064
Asset retirement obligation		5,678		7,827
Liabilities and minority interest of discontinued operations		—		738,226
Stockholders' equity		1,042,050		807,061
Total liabilities and stockholders' equity	$	1,593,247	$	2,419,616

COMSTOCK RESOURCES, INC.

REGIONAL OPERATING RESULTS

(In thousands, except per unit amounts)

	For the Three Months Ended March 31, 2009
	East Texas/
	North		South
	Louisiana		Texas		Other		Total
Oil production (thousand barrels)		63		51		102		216
Gas production (million cubic feet – Mmcf)		7,179		4,911		703		12,793
Total production (Mmcfe)		7,555		5,218		1,315		14,088

Oil sales	$	2,275	$	2,079	$	3,207	$	7,561
Gas sales		31,318		20,964		2,596		54,878
Gas hedging gains		—		5,912		—		5,912
Total gas sales		31,318		26,876		2,596		60,790
Total oil and gas sales	$	33,593	$	28,955	$	5,803	$	68,351

Average oil price (per barrel)	$	36.11	$	40.76	$	31.44	$	35.03
Average gas price (per thousand cubic feet – Mcf)	$	4.36	$	4.27	$	3.69	$	4.29
Average gas price including hedging (per Mcf)	$	4.36	$	5.27	$	3.69	$	4.75
Average price (per Mcf equivalent)	$	4.45	$	4.42	$	4.41	$	4.43
Average price including hedging (per Mcf equivalent)	$	4.45	$	5.55	$	4.41	$	4.85
Lifting cost(1)	$	7,503	$	5,502	$	3,954	$	16,959	(1)
Lifting cost (per Mcf equivalent)	$	0.99	$	1.05	$	3.01	$	1.20

Oil and Gas Capital Expenditures:
Leasehold costs	$	3,401	$	271	$	—	$	3,672
Exploratory drilling		36,467		1,812		—		38,279
Development drilling		31,657		18,952		—		50,609
Other development		1,398		2,966		332		4,696
Total	$	72,923	$	24,001	$	332	$	97,256

(1) Includes production taxes of $1,122.

COMSTOCK RESOURCES, INC.

REGIONAL OPERATING RESULTS

(In thousands, except per unit amounts)

	For the Three Months Ended March 31, 2008
	As Reported										Adjusted to Exclude 2008 Asset Sales
	East Texas/										East Texas/
	North		South								North		South
	Louisiana		Texas			Other		Total			Louisiana		Texas			Other		Total
Oil production (thousand barrels)		47		46			150		243			42		33			150		225
Gas production (million cubic feet – Mmcf)		6,727		5,630			773		13,130			6,281		5,330			773		12,384
Total production (Mmcfe)		7,008		5,907			1,671		14,586			6,535		5,527			1,671		13,733

Oil sales	$	4,424	$	4,520		$	10,828	$	19,772		$	3,981	$	3,235		$	10,828	$	18,044
Gas sales		55,731		46,135			6,327		108,193			52,657		43,799			6,327		102,783
Gas hedging losses		—		(244	)		—		(244	)		—		(244	)		—		(244	)
Total gas sales		55,731		45,891			6,327		107,949			52,657		43,555			6,327		102,539
Total oil and gas sales(4)	$	60,155	$	50,411		$	17,155	$	127,721		$	56,638	$	46,790		$	17,155	$	120,583	(4)

Average oil price (per barrel)	$	94.13	$	98.26		$	72.19	$	81.49		$	94.79	$	98.03		$	72.19	$	80.17
Average gas price (per thousand cubic feet – Mcf)	$	8.28	$	8.19		$	8.18	$	8.24		$	8.38	$	8.22		$	8.18	$	8.30
Average gas price including hedging (per Mcf)	$	8.28	$	8.15		$	8.18	$	8.22		$	8.38	$	8.17		$	8.18	$	8.28
Average price (per Mcf equivalent)	$	8.58	$	8.58		$	10.27	$	8.77		$	8.67	$	8.51		$	10.27	$	8.80
Average price including hedging (per Mcf equivalent)	$	8.58	$	8.53		$	10.27	$	8.76		$	8.67	$	8.47		$	10.27	$	8.78
Lifting cost(2)(3)(4)	$	8,769	$	7,056		$	5,377	$	21,202	(2)	$	7,833	$	6,125		$	5,377	$	19,335	(3)(4)
Lifting cost (per Mcf equivalent)	$	1.25	$	1.19		$	3.22	$	1.45		$	1.20	$	1.11		$	3.22	$	1.41

Oil and Gas Capital Expenditures:
Leasehold costs	$	2,861	$	1,124		$	49	$	4,034		$	2,861	$	1,124		$	49	$	4,034
Exploratory drilling		—		2,356			123		2,479			—		2,356			123		2,479
Development drilling		39,373		11,403			1,389		52,165			39,373		11,403			1,389		52,165
Other development(4)		930		717			1,716		3,363			782		545			1,716		3,043	(4)
Total(4)	$	43,164	$	15,600		$	3,277	$	62,041		$	43,016	$	15,428		$	3,277	$	61,721	(4)

(2) Includes production taxes of $6,233.

(3) Includes production taxes of $5,936.

(4) Excludes oil and gas revenues of $7,138, operating expenses of $1,867 and other development capital expenditures of $320 related to oil and gas properties sold during 2008.