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

COMSTOCK RESOURCES, INC.

(Exact Name of Registrant as Specified in Charter)

STATE OF NEVADA		001-03262		94-1667468
(State or other		(Commission File Number)		(I.R.S. Employer
jurisdiction incorporation)				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:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		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 October 31, 2011, Comstock Resources, Inc. (“Comstock”) announced financial results for the three months and nine months ended September 30, 2011 and its drilling capital budget for 2012. A copy of the press release announcing Comstock’s earnings and operating results for the three months and nine months ended September 30, 2011, its drilling capital budget for 2012 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.

Item 9.01 Financial Statements and Exhibits

     Exhibit 99.1       Press Release dated October 31, 2011.

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.

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
THIRD QUARTER 2011 FINANCIAL AND OPERATING RESULTS
AND 2012 DRILLING BUDGET

FRISCO, TEXAS, October 31, 2011 — Comstock Resources, Inc. (“Comstock” or the “Company”) (NYSE: CRK) today reported financial and operating results for the three months and nine months ended September 30, 2011.

Financial Results for the Three Months and Nine Months Ended September 30, 2011

Comstock reported net income of $1.3 million or 3¢ per diluted share for the three months ended September 30, 2011 as compared to a net loss of $4.7 million or 10¢ per share for the three months ended September 30, 2010. The financial results include a gain realized from the sale of marketable securities of $2.5 million ($1.6 million after tax or 4¢ per share) for the three months ended September 30, 2011.

Comstock produced 26.2 billion cubic feet of natural gas equivalent (“Bcfe”) in the third quarter of 2011, an increase of 53% over the 17.2 Bcfe produced in the third quarter of 2010. Comstock’s daily production rate, which averaged 285 million cubic feet of natural gas equivalent (“MMcfe”) per day, grew 8% over the production rate in the second quarter of 2011, which averaged 263 MMcfe per day. Production from the Company’s Haynesville shale operations increased 15% from the prior quarter, averaging 200 MMcfe per day in the third quarter and accounting for 70% of the Company’s total production.

Comstock’s average realized natural gas price decreased 4% to $4.09 per Mcf in the third quarter of 2011 as compared to $4.24 per Mcf in the third quarter of 2010. The Company’s average realized oil price improved by 35% to $87.55 per barrel in the third quarter of 2011 as compared to $64.97 per barrel in the third quarter of 2010. The higher production level allowed the Company’s oil and gas sales to increase by 50% to $119.4 million in the third quarter of 2011 as compared to 2010’s third quarter sales of $79.7 million. Operating cash flow (before changes in working capital accounts) increased 81% to $85.5 million in the third quarter of 2011 from $47.3 million in 2010’s third quarter and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses in the quarter was up 72% to $94.2 million from $54.6 million in 2010’s third quarter.

Comstock had net income of $7.7 million or 16¢ per diluted share for the first nine months of 2011 as compared to net income of $1.0 million or 2¢ per diluted share for the nine months ended September 30, 2010. The financial results for the nine months ended September 30, 2011 include a gain realized from the sale of marketable securities of $32.2 million ($20.9 million after tax or 46¢ per share), impairments of leasehold costs of $9.8 million ($6.4 million after tax or 14¢ per share) and a loss on early retirement of debt of $1.1 million ($0.7 million after taxes or 2¢ per share). Net income for the nine months ended September 30, 2010 included a gain realized from sale of marketable securities of $5.7 million ($3.7 million after tax or 8¢ per share).

Comstock’s production in the first nine months of 2011 of 70.1 billion Bcfe was 25% higher than the 56.0 Bcfe produced in the first nine months of 2010. Natural gas prices have been weaker in the first nine months of 2011 as compared to 2010’s first nine months. Comstock’s average realized natural gas price decreased 10% to $4.09 per Mcf for the first nine months of 2011 as compared to $4.55 per Mcf for the first nine months of 2010. The Company’s average realized oil price improved by 39% to $92.59 per barrel for the first three quarters of 2011 as compared to $66.54 per barrel for the first three quarters of 2010. With higher production and lower natural gas prices, oil and gas sales increased by 16% to $319.9 million in the first nine months of 2011 as compared to 2010’s first nine months sales of $276.5 million. Operating cash flow (before changes in working capital accounts) of $218.8 million in the first nine months of 2011 increased 25% from 2010’s first nine months operating cash flow of $174.8 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, increased 25% to $246.4 million in 2011’s first nine months from EBITDAX of $197.9 million for the same period in 2010.

2011 Drilling Results

Comstock reported on the results to date of its 2011 drilling program. During the first nine months of 2011, Comstock spent $443.4 million on its drilling program and $52.6 million to acquire acreage to support future exploration and development activity. The Company is expecting to spend a total of $575.0 million in 2011 to drill 88 wells (47.4 net) and to complete 35 (23.4 net) Haynesville shale wells drilled in 2010. Comstock expects to spend a total of $125.0 million on acreage acquisitions in 2011. In the first three quarters of 2011, Comstock has drilled 67 wells (33.9 net) and completed 77 wells (44.2 net). As of September 30, 2011 the Company also had nine wells (4.9 net) in the process of being drilled.

In the East Texas/North Louisiana region, Comstock has drilled 52 wells (21.6 net) in 2011, 51 of which were Haynesville or Bossier shale wells. During the first nine months of 2011, Comstock completed 65 (35.7 net) of its Haynesville or Bossier shale wells. Wells completed in the first nine months of the year were put on production at an average per well initial production rate of 10 MMcfe per day. As of September 30, 2011, Comstock had 21 (8.9 net) Haynesville or Bossier wells waiting on completion, down from 35 wells (23.4 net) at December 31, 2010.

In the South Texas region, the Company has drilled twelve Eagle Ford shale wells (12.0 net) in the first nine months of 2011. Comstock completed eight wells (8.0 net) including one well that was drilled in 2010. These wells had an average per well initial production rate of 683 barrels of oil equivalent (“BOE”) per day. In the third quarter of 2011, Comstock completed four wells in the Eagle Ford shale. The Cutter Creek #1H was drilled to a vertical depth of 9,970 feet with a 4,824 foot lateral. This well was tested at an initial rate of 575 barrels of oil per day and 0.2 MMcf of natural gas per day or 608 BOE per day. The Forrest Wheeler #1H was drilled to a vertical depth of 11,142 feet with a 5,458 foot lateral.

This well was tested at an initial rate of 480 barrels of oil per day and 0.7 MMcf of natural gas per day or 597 BOE per day. The Rancho Tres Hijos “A” #1H was drilled to a vertical depth of 10,911 feet with a 4,512 foot lateral. This well was tested at an initial rate of 465 barrels of oil per day and 0.6 MMcf of natural gas per day or 565 BOE per day. The Jupe “A” #1H was drilled to a vertical depth of 8,282 feet with a 7,101 foot lateral. This well was tested at an initial rate of 197 barrels of oil per day and 0.1 MMcf of natural gas per day or 218 BOE per day. All of the reported well results were obtained while following Comstock’s restricted choke program. Currently, Comstock also has five Eagle Ford shale wells that are being completed. Comstock has increased its Eagle Ford shale acreage in South Texas that is prospective for oil to approximately 28,000 net acres. Comstock completed lease acquisitions in the Eagle Ford shale that added approximately 6,000 net acres during October 2011.

2012 Capital Budget

Comstock also announced that it plans to spend approximately $396.0 million in 2012 for drilling and completion activities. Comstock expects to reduce the number of rigs drilling for natural gas in its Haynesville shale program to one from the three rigs that it is currently using. Comstock will add one drilling rig during 2012 to the two which are currently drilling for oil in its Eagle Ford shale development program in South Texas.

Comstock has budgeted to drill 71 wells (43.2 net) in 2012 as well as complete an additional 23 wells (20.3 net) which were drilled in 2011. Comstock plans to spend $104.0 million in its East Texas/North Louisiana operating region to drill 38 wells (13.3 net) which includes 37 (12.6 net) Haynesville or Bossier shale wells. $65.0 million will be spent to complete 17 wells (14.7 net) that were drilled in 2011. Comstock has budgeted to spend $207.0 million in its South Texas region to drill 32 (28.9 net) Eagle Ford shale horizontal wells in 2012 and $14.0 million to complete six wells (5.6 net) that were drilled in 2011. The remaining $6.0 million of expenditures in 2012 are budgeted for exploration and developmental activity on the Company’s other properties.

“Our 2012 drilling program will focus much of our drilling activity on growing our oil production while at the same time staying within the operating cash flow that we should generate,” stated M. Jay Allison, Chairman and Chief Executive Officer of Comstock. “To the extent that natural gas prices improve, we have the flexibility to increase our drilling activity in either the Eagle Ford shale or Haynesville shale depending on where we can generate the best returns.”

Comstock has planned a conference call for 9:30 a.m. Central Time on November 1, 2011, to discuss the operational and financial results for the third quarter of 2011. Investors wishing to participate should visit the Company’s website at www.comstockresources.com for a live web cast or dial 1-866-700-7101 (international dial-in use 617-213-8837) and provide access code 54819845 when prompted. A slide presentation on the financial results will be available on Comstock’s website at www.comstockresources.com. Click on “Presentations” to view the slides. 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. A replay of the conference call will be available beginning at 1:30 p.m. ET November 1, 2011 and will continue until 11:59 p.m. November 8, 2011. To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US). The conference call ID number is 60253347.

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 September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
Revenues:
Oil and gas sales		$	119,422			$	79,720			$	319,911			$	276,491
Operating expenses:
Production taxes			141				3,062				2,230				9,543
Gathering and transportation			8,101				4,101				20,340				12,308
Lease operating			12,527				13,002				36,512				41,150
Exploration			447				1,238				10,066				2,506
Depreciation, depletion and amortization			77,518				46,796				212,532				163,603
Impairment of oil and gas properties			—				26				—				213
(Gain) loss on sale of properties			(26	)			—				57				797
General and administrative			8,628				9,400				25,973				28,965
Total operating expenses			107,336				77,625				307,710				259,085
Operating income			12,086				2,095				12,201				17,406
Other income (expenses):
Interest and other income			187				105				580				408
Interest expense			(9,988	)			(7,108	)			(30,682	)			(22,551	)
Gain on sale of marketable securities			2,484				—				32,213				5,692
Total other income (expenses)			(7,317	)			(7,003	)			2,111				(16,451	)
Income (loss) before income taxes			4,769				(4,908	)			14,312				955
Benefit from (provision for) income taxes			(3,460	)			208				(6,650	)			68
Net income (loss)		$	1,309			$	(4,700	)		$	7,662			$	1,023
Net income (loss) per share:
Basic		$	0.03			$	(0.10	)		$	0.16			$	0.02
Diluted		$	0.03			$	(0.10	)		$	0.16			$	0.02
Weighted average shares outstanding:
Basic			46,011				45,623				45,992				45,537
Diluted			46,011				45,623				45,992				45,589

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2011				2010				2011				2010
OPERATING CASH FLOW:
Net income (loss)		$	1,309			$	(4,700	)		$	7,662			$	1,023
Reconciling items:
Deferred income taxes			3,972				174				6,593				131
Depreciation, depletion and amortization			77,518				46,796				212,532				163,603
Dry hole costs and lease impairments			365				—				9,819				—
Impairment of oil and gas properties			—				26				—				213
Gain on sale of assets			(2,510	)			—				(32,156	)			(4,895	)
Debt issuance costs and discount amortization			948				608				3,351				1,834
Stock-based compensation			3,946				4,388				10,958				12,930
Operating cash flow			85,548				47,292				218,759				174,839
Excess income taxes from stock-based compensation			—				28				612				(1,503	)
Decrease (increase) in accounts receivable			1,673				9,550				(4,958	)			8,096
Decrease (increase) in other current assets			10,729				(8	)			2,275				49,428
Increase (decrease) in accounts payable and accrued expenses			1,697				(6,850	)			861				18,376
Net cash provided by operating activities		$	99,647			$	50,012			$	217,549			$	249,236
EBITDAX:
Net income (loss)		$	1,309			$	(4,700	)		$	7,662			$	1,023
Interest expense			9,988				7,108				30,682				22,551
Income taxes expense (benefit)			3,460				(208	)			6,650				(68	)
Depreciation, depletion and amortization			77,518				46,796				212,532				163,603
Exploration			447				1,238				10,066				2,506
Impairment of oil and gas properties			—				26				—				213
Gain on sale of assets			(2,510	)			—				(32,156	)			(4,895	)
Stock-based compensation			3,946				4,388				10,958				12,930
EBITDAX		$	94,158			$	54,648			$	246,394			$	197,863

		As of September 30,
		2011				2010
BALANCE SHEET DATA:
Cash and cash equivalents		$	4,544			$	4,350
Marketable securities			31,707				70,661
Other current assets			53,477				35,761
Property and equipment, net			2,090,554				1,817,962
Other			15,863				7,856
Total assets		$	2,196,145			$	1,936,590
Current liabilities		$	153,352			$	104,577
Long-term debt			746,774				528,238
Deferred income taxes			223,237				224,686
Other non-current liabilities			9,649				9,575
Stockholders’ equity			1,063,133				1,069,514
Total liabilities and stockholders’ equity		$	2,196,145			$	1,936,590

COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)

		For the Three Months Ended September 30, 2011																For the Three Months Ended September 30, 2010
		East Texas/																East Texas/
		North				South												North				South
		Louisiana				Texas				Other				Total				Louisiana				Texas				Other				Total
Oil production (thousand barrels)			26				163				6				195				27				33				111				171
Gas production (MMcf)			21,710				2,714				633				25,057				12,134				3,404				616				16,154
Total production (MMcfe)			21,862				3,691				671				26,224				12,295				3,602				1,288				17,185
Oil sales		$	1,963			$	14,520			$	543			$	17,026			$	1,932			$	2,434			$	6,797			$	11,163
Gas sales			86,075				13,138				3,183				102,396				50,183				15,578				2,796				68,557
Total oil and gas sales		$	88,038			$	27,658			$	3,726			$	119,422			$	52,115			$	18,012			$	9,593			$	79,720
Average oil price (per barrel)		$	76.93			$	89.18			$	88.54			$	87.55			$	71.71			$	74.05			$	60.68			$	64.97
Average gas price (per Mcf)		$	3.96			$	4.84			$	5.03			$	4.09			$	4.14			$	4.58			$	4.54			$	4.24
Average price (per Mcfe)		$	4.03			$	7.49			$	5.55			$	4.55			$	4.24			$	5.00			$	7.45			$	4.64
Production taxes		$	(1,103	)		$	1,155			$	89			$	141			$	1,832			$	700			$	530			$	3,062
Gathering and transportation		$	7,630			$	369			$	102			$	8,101			$	3,574			$	433			$	94			$	4,101
Lease operating		$	8,188			$	3,464			$	875			$	12,527			$	7,076			$	3,031			$	2,895			$	13,002
Production taxes (per Mcfe)		$	(0.05	)		$	0.31			$	0.13			$	0.01			$	0.15			$	0.19			$	0.41			$	0.18
Gathering and transportation (per Mcfe)		$	0.35			$	0.10			$	0.15			$	0.31			$	0.29			$	0.12			$	0.07			$	0.24
Lease operating (per Mcfe)		$	0.37			$	0.94			$	1.31			$	0.47			$	0.58			$	0.85			$	2.25			$	0.75
Oil and Gas Capital Expenditures:
Leasehold costs		$	10,509			$	3,241			$	2,911			$	16,661			$	11,023			$	57,031			$	30			$	68,084
Exploratory drilling			4,201				7,721				—				11,922				26,423				6,376				—				32,799
Development drilling			64,350				50,969				757				116,076				44,992				(105	)			1,404				46,291
Other development			1,706				512				77				2,295				342				1,026				259				1,627
Total		$	80,766			$	62,443			$	3,745			$	146,954			$	82,780			$	64,328			$	1,693			$	148,801

		For the Nine Months Ended September 30, 2011																For the Nine Months Ended September 30, 2010
		East Texas/																East Texas/
		North				South												North				South
		Louisiana				Texas				Other				Total				Louisiana				Texas				Other				Total
Oil production (thousand barrels)			89				385				18				492				114				114				329				557
Gas production (MMcf)			56,706				8,494				1,962				67,162				39,401				11,307				1,949				52,657
Total production (MMcfe)			57,237				10,801				2,075				70,113				40,085				11,993				3,924				56,002
Oil sales		$	8,000			$	35,885			$	1,654			$	45,539			$	8,570			$	8,571			$	19,951			$	37,092
Gas sales			224,069				40,458				9,845				274,372				174,031				55,637				9,731				239,399
Total oil and gas sales		$	232,069			$	76,343			$	11,499			$	319,911			$	182,601			$	64,208			$	29,682			$	276,491
Average oil price (per barrel)		$	90.25			$	93.32			$	88.73			$	92.59			$	75.14			$	75.01			$	60.62			$	66.54
Average gas price (per Mcf)		$	3.95			$	4.76			$	5.02			$	4.09			$	4.42			$	4.92			$	4.99			$	4.55
Average price (per Mcfe)		$	4.05			$	7.07			$	5.54			$	4.56			$	4.56			$	5.35			$	7.56			$	4.94
Production taxes		$	(1,009	)		$	2,653			$	586			$	2,230			$	6,618			$	1,308			$	1,617			$	9,543
Gathering and transportation		$	18,840			$	1,182			$	318			$	20,340			$	10,573			$	1,443			$	292			$	12,308
Lease operating		$	23,183			$	10,451			$	2,878			$	36,512			$	21,838			$	10,360			$	8,952			$	41,150
Production taxes (per Mcfe)		$	(0.02	)		$	0.25			$	0.28			$	0.03			$	0.17			$	0.11			$	0.41			$	0.17
Gathering and transportation (per Mcfe)		$	0.33			$	0.11			$	0.15			$	0.29			$	0.26			$	0.12			$	0.07			$	0.22
Lease operating (per Mcfe)		$	0.41			$	0.96			$	1.39			$	0.52			$	0.54			$	0.86			$	2.29			$	0.73
Oil and Gas Capital Expenditures:
Leasehold costs		$	25,893			$	22,506			$	4,222			$	52,621			$	50,401			$	79,875			$	158			$	130,434
Exploratory drilling			31,091				46,516				—				77,607				49,861				6,376				—				56,237
Development drilling			283,377				75,310				1,530				360,217				197,486				2,065				1,404				200,955
Other development			3,557				1,621				369				5,547				2,217				2,349				760				5,326
Total		$	343,918			$	145,953			$	6,121			$	495,992			$	299,965			$	90,665			$	2,322			$	392,952