Comstock Resources, Inc. Reports Third Quarter 2006 Financial and Operating Results
FRISCO, Texas, Nov. 2 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. (NYSE: CRK) ("Comstock" or the "Company") today reported financial and operating results for the quarter and nine months ended September 30, 2006. During the third quarter of 2006, Comstock increased its ownership in Bois d'Arc Energy, Inc. (NYSE: BDE) ("Bois d'Arc Energy") by acquiring additional common shares of Bois d'Arc Energy and as a result changed its method of accounting for its ownership in Bois d'Arc Energy to consolidation from the equity method. Comstock has applied consolidation accounting for its ownership in Bois d'Arc Energy retroactively as of January 1, 2006. The inclusion of Bois d'Arc Energy as a consolidated subsidiary had no impact on Comstock's reported net income for the current or prior periods. Pro forma results for the three and nine months ended September 30, 2005 assuming Bois d'Arc Energy was included as a consolidated subsidiary have been provided to facilitate comparison of the 2006 results to 2005 results in this press release.
Financial Results for the Three Months and Nine Months Ended
September 30, 2006
Comstock reported net income of $17.0 million or 39 cents per diluted share for the three months ended September 30, 2006 as compared to net income of $14.1 million or 33 cents per diluted share in the same quarter of 2005. Results for the third quarter of 2006 include a $1.2 million unrealized gain on derivative financial instruments and results for the third quarter of 2005 include an unrealized loss on derivatives of $17.7 million. Without these items Comstock would have reported net income of $16.3 million or 37 cents per diluted share in the third quarter of 2006 and $25.6 million or 60 cents per diluted share for the third quarter of 2005. Oil and gas sales increased by 12% to $129.3 million in the three months ended September 30, 2006 as compared to pro forma consolidated sales of $115.1 million in the same period last year. Comstock generated $89.3 million in operating cash flow (before changes in working capital accounts) in 2006's third quarter, which represents a 6% increase over 2005's third quarter pro forma consolidated cash flow of $84.3 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $98.8 million in 2006's third quarter as compared to 2005's pro forma consolidated third quarter EBITDAX of $93.5 million.
For the nine months ended September 30, 2006, Comstock's oil and gas sales of $385.2 million increased $78 million or 25% from pro forma consolidated sales of $307.0 million for the same period last year. Net income for the nine months ended September 30, 2006 was $62.3 million, or $1.42 per diluted share, as compared to net income of $19.1 million or 47 cents per diluted share in 2005. Net income for the nine months ended September 30, 2006 includes a loss on the pending sale of the Company's Kentucky properties, unrealized gains on derivative financial instruments of $11.3 million and the impact of the new Texas business tax of $1.1 million. Without these items, Comstock would have reported net income of $61.1 million or $1.40 per diluted share. Excluding the one time adjustments to reflect Bois d'Arc's conversion to a corporation and its initial public offering and unrealized losses on derivatives, Comstock's net income for the nine months ended September 30, 2005 would have been $78.6 million, or $1.94 per diluted share. Operating cash flow (before changes in working capital accounts) generated by Comstock was $267.7 million for the first nine months of 2006 as compared to pro forma consolidated cash flow of $214.4 million for the same period in 2005. For the nine months ended September 30, 2006, EBITDAX was $293.7 million as compared to pro forma consolidated EBITDAX of $244.7 million for the same period in 2005.
Production in the third quarter of 2006 totaled 17.1 Bcf equivalent of natural gas ("Bcfe"), a 28% increase from 2005's third quarter pro forma consolidated production of 13.4 Bcfe. For the first nine months of 2006, production totaled 49.1 Bcfe, an increase of 19%, as compared to pro forma consolidated production in the same period of 2005 of 41.3 Bcfe.
The Company's realized natural gas price averaged $6.63 per Mcf in 2006's third quarter as compared to $8.41 per Mcf in 2005's third quarter. Realized oil prices in the third quarter of 2006 averaged $65.95 per barrel as compared to $56.63 per barrel for the third quarter of 2005. For the first nine months of 2006, Comstock's realized natural gas price averaged $7.13 per Mcf as compared to $7.16 per Mcf in the same period in 2005. For the first nine months of 2006, Comstock's realized oil price was $63.06 per barrel as compared to $50.65 per barrel in the third quarter of 2005.
Nine Months 2006 Drilling Results
Comstock also announced the results to date of its 2006 onshore drilling program. In the first nine months of 2006 Comstock drilled 76 wells (52.2 net). Seventy-four of the 76 wells drilled were successful, resulting in a drilling success rate of 97%.
During the first nine months of 2006, Comstock drilled 50 wells (38.9 net) in its East Texas and North Louisiana region. All of these wells were successful development wells. These wells have been tested at an average per well initial production rate of 1.4 Mmcfe per day. At September 30, 2006 Comstock had eight additional wells in this region that were being drilled. These wells are part of Comstock's 96 well Cotton Valley drilling program planned in this region for 2006. Comstock plans to have eight drilling rigs working in this region during the fourth quarter.
In South Texas, Comstock drilled seven successful wells (2.1 net) during the first nine months of 2006, which had an average per well initial production rate of 4.8 Mmcfe per day. Comstock drilled six wells (4.4 net) in its Mid Continent region, five of which (3.4 net) were successful and one (1.0 net) was a dry hole. Comstock drilled six wells (5.7 net) in its Laurel field in Mississippi. Four of these wells were tested at an average initial production rate of 193 barrels per day. Seven wells (1.1 net) were drilled in the San Juan Basin in New Mexico. Six wells (0.9 net) were successful, and one well (0.2 net) was a dry hole.
Bois d'Arc has also had successful results from its exploration focused offshore drilling program to date in 2006. Since the beginning of 2006, Bois d'Arc has drilled nine (7.7 net) successful wells out of a total of twelve (10.2 net) drilled for a 75% success rate. During the third quarter two of Bois d'Arc's largest 2006 discoveries began producing. The OCS-G 18054 #54 ST, which was drilled to test the "Sockeye" prospect at South Pelto 22, began producing at 17.0 Mmcfe per day in August 2006 and the OCS-G 24924 No. 1 ST drilled to test the "Steelhead" prospect at Ship Shoal block 111 began producing at 6.5 Mmcfe per day in September 2006.
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.
CONSOLIDATED OPERATING RESULTS
(In thousands, except per share amounts)
Three Months Ended September 30, 2005
2006 As Reported Pro Forma(A)
Oil and gas sales $129,251 $71,619 $115,053
Operating expenses:
Oil and gas operating 26,904 10,803 19,146
Exploration 8,069 2,423 5,249
Depreciation, depletion and
amortization 40,709 14,036 23,331
Impairment 1,389 3,400 3,400
Loss on disposal of assets --- --- ---
General and administrative, net 7,370 3,058 4,942
Total operating expenses 84,441 33,720 56,068
Income from operations 44,810 37,899 58,985
Other income (expenses):
Other income 187 37 (13)
Interest income 258 242 221
Interest expense (6,733) (4,982) (5,220)
Gain on sale of stock by
Bois d'Arc --- --- ---
Gain (loss) on derivatives 1,180 (17,814) (17,814)
Total other income (expenses) (5,108) (22,517) (22,826)
Income before income taxes,
minority interest and equity
in earnings of Bois d'Arc Energy 39,702 15,382 36,159
Provision for income taxes (16,662) (7,602) (15,120)
Equity in earnings (loss) of
Bois d'Arc Energy --- 6,358 ---
Minority interest in earnings
of Bois d'Arc Energy (6,004) --- (6,901)
Net income $17,036 $14,138 $14,138
Net income per share:
Basic $0.40 $0.35 $0.35
Diluted $0.39 $0.33 $0.33
Weighted average common and common
stock equivalent shares outstanding:
Basic 42,243 40,432 40,432
Diluted 43,553 42,380 42,380
Nine Months Ended September 30, 2005
2006 As Reported Pro Forma(A)
Oil and gas sales $385,153 $209,970 $307,035
Operating expenses:
Oil and gas operating 78,220 36,869 54,494
Exploration 16,662 19,709 27,399
Depreciation, depletion and
amortization 104,457 47,368 71,054
Impairment 2,235 3,400 3,400
Loss on disposal of assets 7,934 --- 89
General and administrative, net 22,738 11,015 15,437
Total operating expenses 232,246 118,361 171,873
Income from operations 152,907 91,609 135,162
Other income (expenses):
Other income 616 173 123
Interest income 724 1,449 407
Interest expense (18,322) (15,499) (15,904)
Gain on sale of stock by
Bois d'Arc --- 28,797 28,797
Gain (loss) on derivatives 10,608 (21,045) (21,045)
Total other income (expenses) (6,374) (6,125) (7,622)
Income before income taxes,
minority interest and equity
in earnings of Bois d'Arc Energy 146,533 85,484 127,540
Provision for income taxes (61,847) (11,469) (131,112)
Equity in earnings (loss) of
Bois d'Arc Energy --- (54,867) ---
Minority interest in earnings
of Bois d'Arc Energy (22,433) --- 22,720
Net income $62,253 $19,148 $19,148
Net income per share:
Basic $1.48 $0.50 $0.50
Diluted $1.42 $0.47 $0.47
Weighted average common and
common stock equivalent shares
outstanding:
Basic 42,128 38,417 38,417
Diluted 43,505 40,516 40,516
(A) Pro forma amounts include Bois d'Arc Energy as a consolidated
subsidiary.
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands)
Three Months Ended September 30, 2005
2006 As Reported Pro Forma(A)
Cash flow from operations:
Net cash provided by
operating activities $98,236 $55,657 $92,243
Excess tax benefit from
stock based compensation --- --- ---
Increase (decrease) in
accounts receivable 2,366 7,460 (5,990)
Increase (decrease) in
other current assets (10,560) (1,663) 2,227
Decrease (increase) in
accounts payable and
accrued expenses (763) (8,076) (4,136)
Cash flow from operations $89,279 $53,378 $84,344
EBITDAX:
Net income $17,036 $14,138 $14,138
Interest expense 6,733 4,982 5,220
Income tax expense 16,662 7,602 15,120
Depreciation, depletion and
amortization 40,709 14,036 23,331
Exploration expense 8,069 2,423 5,249
Other non-cash items:
Impairment 1,389 3,400 3,400
Loss on disposal of assets --- --- ---
Equity in earnings (loss) of
Bois d'Arc Energy --- (6,358) ---
Minority interests in earnings
of Bois d'Arc Energy 6,004 --- 6,901
Gain on sale of stock by
Bois d'Arc Energy --- --- ---
Stock-based compensation 3,342 1,017 2,438
Unrealized (gain) loss on
derivatives (1,180) 17,674 17,674
EBITDAX $98,764 $58,914 $93,471
Nine Months Ended September 30, 2005
2006 As Reported Pro Forma(A)
Cash flow from operations:
Net cash provided by operating
activities $274,300 $155,254 $228,997
Excess tax benefit from stock
based compensation 922 --- ---
Increase (decrease) in accounts
receivable (10,774) 4,741 8,403
Increase (decrease) in other
current assets 139 (1,659) 4,422
Decrease (increase) in accounts
payable and accrued expenses 3,153 (11,085) (27,433)
Cash flow from operations $267,740 $147,251 $214,389
EBITDAX:
Net income $62,253 $19,148 $19,148
Interest expense 18,322 15,499 15,904
Income tax expense 61,847 11,469 131,112
Depreciation, depletion and
amortization 104,457 47,368 71,054
Exploration expense 16,662 19,709 27,399
Other non-cash items:
Impairment 2,235 3,400 3,400
Loss on disposal of assets 7,934 --- 89
Equity in earnings (loss) of
Bois d'Arc Energy --- 54,867 ---
Minority interests in earnings
of Bois d'Arc Energy 22,433 --- (22,720)
Gain on sale of stock by
Bois d'Arc Energy --- (28,797) (28,797)
Stock-based compensation 8,912 4,195 7,192
Unrealized (gain) loss on
derivatives (11,311) 20,905 20,905
EBITDAX $293,744 $167,763 $244,686
As of September 30, 2005
2006 As Reported Pro Forma(A)
Balance Sheet Data:
Cash and cash equivalents $27,084 $1,847 $4,905
Other current assets 78,089 38,911 64,828
Property and equipment, net 1,676,234 695,430 1,300,664
Investment in
Bois d'Arc Energy --- 247,128 ---
Other 11,477 5,071 5,955
Total assets $1,792,884 $988,387 $1,376,352
Current liabilities $122,899 $70,846 $125,610
Long-term debt 455,000 282,000 306,000
Deferred income taxes 305,062 95,265 213,157
Asset retirement obligation 44,327 2,769 33,909
Other --- 4,245 4,245
Minority interest in
Bois d'Arc Energy 212,683 --- 160,169
Stockholders' equity 652,913 533,262 533,262
Total liabilities and
stockholders' equity $1,792,884 $988,387 $1,376,352
(A) Pro forma amounts include Bois d'Arc Energy as a consolidated
subsidiary.
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
($ In thousands, except per unit amounts)
For the Three Months Ended
September 30, 2006
Bois d'Arc
Onshore(A) 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 $7.75
Lifting cost $13,365 $13,538 $26,903
Lifting cost (per Mcf equivalent) $1.52 $1.63 $1.57
Oil and Gas Capital Expenditures $120,656 $77,500 $198,156
For the Three Months ended
September 30, 2005
Bois d'Arc Pro Forma
Onshore(A) Energy Total(B)
Oil production (thousand barrels) 208 245 453
Gas production (million cubic
feet - Mmcf 7,328 3,306 10,634
Total production (Mmcfe) 8,575 4,775 13,350
Oil sales $10,960 $14,683 $25,643
Gas sales 60,659 28,751 89,410
Total oil and gas sales $71,619 $43,434 $115,053
Average oil price (per barrel) $52.71 $59.96 $56.63
Average gas price (per thousand
cubic feet - Mcf) $8.28 $8.70 $8.41
Average price (per Mcf equivalent) $8.35 $9.10 $8.62
Lifting cost $10,803 $8,343 $19,146
Lifting cost (per Mcf equivalent) $1.26 $1.75 $1.43
Oil and Gas Capital Expenditures $47,714 $53,364 $101,078
For the Nine Months Ended
September 30, 2006
Bois d'Arc
Onshore(A) 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 $40,420 $37,799 $78,219
Lifting cost (per Mcf equivalent) $1.53 $1.67 $1.59
Oil and Gas Capital Expenditures $212,938 $191,798 $404,736
For the Nine Months ended
September 30, 2005
Bois d'Arc Pro Forma
Onshore(A) Energy Total(B)
Oil production (thousand barrels) 501 956 1,457
Gas production (million cubic
feet - Mmcf) 20,874 11,718 32,592
Total production (Mmcfe) 23,881 17,457 41,338
Oil sales $24,534 $49,294 $73,828
Gas sales 146,906 86,301 233,207
Total oil and gas sales $171,440 $135,595 $307,035
Average oil price (per barrel) $48.96 $51.54 $50.65
Average gas price (per thousand
cubic feet - Mcf) $7.04 $7.36 $7.16
Average price (per Mcf equivalent) $7.18 $7.77 $7.43
Lifting cost $30,170 $24,324 $54,494
Lifting cost (per Mcf equivalent) $1.26 $1.39 $1.32
Oil and Gas Capital Expenditures $296,398 $123,723 $420,121
(A) Includes the onshore results of operations of Comstock Resources,
Inc.
(B) Pro forma amounts include Bois d'Arc Energy as a consolidated
subsidiary.
COMSTOCK RESOURCES, INC.
REGIONAL ONSHORE OPERATING RESULTS
($ In thousands, except per unit amounts)
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 $6.21 $6.55
Average price (per Mcf
equivalent) $6.55 $7.64 $7.74 $7.08
Lifting cost(A) $5,568 $3,437 $4,360 $13,365
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
For the Three Months Ended September 30, 2005
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production (thousand
barrels) 23 50 135 208
Gas production (million cubic
feet - Mmcf) 3,930 2,412 986 7,328
Total production (Mmcfe) 4,069 2,711 1,795 8,575
Oil sales $1,230 $3,683 $6,047 $10,960
Gas sales 32,226 20,557 7,876 60,659
Total oil and gas sales $33,456 $24,240 $13,923 $71,619
Average oil price (per barrel) $53.48 $73.66 $44.79 $52.71
Average gas price (per
thousand cubic feet - Mcf) $8.20 $8.52 $7.99 $8.28
Average price (per Mcf
equivalent) $8.22 $8.94 $7.76 $8.35
Lifting cost(A) $3,061 $2,919 $4,822 $10,803
Lifting cost (per Mcf
equivalent) $0.75 $1.08 $2.69 $1.26
Oil and Gas Capital Expenditures:
Acquisitions $10,157 $--- $--- $10,157
Leasehold costs 347 399 295 1,041
Exploratory drilling --- 1,832 43 1,875
Development drilling 24,735 1,615 4,364 30,714
Other development 1,806 162 1,959 3,927
Total $37,045 $4,008 $6,661 $47,714
(A) Includes production taxes of $2,487 and $2,575 for the three months
ended September 30, 2006 and 2005, respectively.
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(B) $17,229 $10,770 $12,421 $40,420
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
For the Nine Months Ended September 30, 2005
East Texas/
North South Total
Louisiana Texas Other Onshore
Oil production (thousand
barrels) 63 178 260 501
Gas production (million cubic
feet - Mmcf) 9,854 8,147 2,873 20,874
Total production (Mmcfe) 10,232 9,215 4,434 23,881
Oil sales $3,183 $9,395 $11,956 $24,534
Gas sales 69,173 57,965 19,768 146,906
Total oil and gas sales $72,356 $67,360 $31,724 $171,440
Average oil price (per barrel) $50.52 $52.78 $45.98 $48.96
Average gas price (per
thousand cubic feet - Mcf) $7.02 $7.11 $6.88 $7.04
Average price (per Mcf
equivalent) $7.07 $7.31 $7.15 $7.18
Lifting cost(B) $11,700 $9,892 $8,578 $30,170
Lifting cost (per Mcf
equivalent) $1.14 $1.07 $1.93 $1.26
Oil and Gas Capital Expenditures:
Acquisitions $128,397 $--- $73,334 $201,731
Leasehold costs 612 969 1,107 2,688
Exploratory drilling --- 14,913 276 15,189
Development drilling 52,056 6,814 7,234 66,104
Other development 6,911 1,143 2,632 10,686
Total $187,976 $23,839 $84,583 $296,398
(B) Includes production taxes of $8,793 and $7,448 for the nine months
ended September 30, 2006 and 2005, respectively.
SOURCE Comstock Resources, Inc.
CONTACT:
Roland O. Burns
Sr. Vice President and Chief Financial Officer
Comstock Resources, Inc.
972-668-8800