View:
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): February 18, 2003
COMSTOCK RESOURCES, INC.
(Exact Name of Registrant as Specified in Charter)
STATE OF NEVADA 000-16741 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.)
Item 5. Other Events and Required FD Disclosure.
Comstock Resources, Inc. ("Comstock") announced in its press release dated
February 18, 2003, which is filed as Exhibit 99.1 to this Form 8-K, its
financial results for the fourth quarter and for the year ended December 31,
2002. Comstock also announced that it will restate its financial results for the
fiscal years 1998 through 2001. This restatement will not impact the financial
statements for the first three quarters 2002. Comstock expects to file restated
financial statements for the affected annual periods in connection with the
filing of its Annual Report on Form 10-K for the year ended December 31, 2002.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated February 18, 2003.
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: February 18, 2003 By:/s/ M. Jay Allison
---------------------
M. Jay Allison
President and Chief Executive Officer
EXHIBIT INDEX
Item
Number Description
------ -----------
99.1 Press Release dated February 18, 2003.
COMSTOCK RESOURCES, INC. REPORTS FOURTH QUARTER
AND YEAR END 2002 FINANCIAL RESULTS
Prior Years' Financial Statements To Be Restated
FRISCO, TEXAS, February 18, 2003 - Comstock Resources, Inc. (NYSE:CRK) today
reported financial and operating results for the fourth quarter and the year
ended 2002.
Comstock reported improved results in the fourth quarter of 2002 with net income
from continuing operations of $9.5 million, or 29(cent) per share, as compared
to a net loss from continuing operations of $4.1 million, or 14(cent) per share
in the fourth quarter of 2001. Total revenues for the quarter were $49.8
million, a 106% increase over revenues of $24.2 million in the fourth quarter of
2001. EBITDAX or earnings before interest expense, income taxes, depletion,
depreciation and amortization, exploration expense, other noncash expenses
including derivative mark-to-market adjustments and gains or losses on property
sales was $38.7 million in the fourth quarter of 2002 as compared to $15.0
million in the fourth quarter of 2001. Cash flow generated by operations before
changes in working capital in the fourth quarter of 2002 was $31.1 million as
compared to $13.0 million for the fourth quarter of 2001. Included in the fourth
quarter results was other income of $7.7 million related to refunds of severance
taxes paid in prior years. Also included was $2.1 million in exploration expense
which primarily related to the unsuccessful Vastar Fee #2 well drilled east of
Comstock's Hamman #1 discovery in Polk County, Texas.
For the year ended December 31, 2002, Comstock reported net income from
continuing operations of $11.0 million, or 37(cent) per share as compared to net
income from continuing operations of $32.9 million, or $1.00 per share for the
same period in 2001. The 2002 financial results were substantially lower than
the 2001 results due to a significant decrease in natural gas prices in 2002 as
compared to 2001. Total revenues for 2002 were $150.2 million as compared to
$166.8 million in 2001. EBITDAX was $109.4 million in 2002 as compared to $131.4
million in 2001. Cash flow generated by operations in 2002 was $79.7 million as
compared to $110.1 million in 2001. The 2002 results include a $1.1 million
after tax loss (4(cent) per share) from discontinued operations relating to
certain oil and gas properties that Comstock sold in 2002.
Comstock's production for the fourth quarter of 2002 increased 13% to
approximately 10.1 Bcfe as compared to 9.0 Bcfe for the fourth quarter of 2001.
Comstock's realized natural gas prices for the fourth quarter averaged $4.07 per
Mcf, which was 63% higher than average realized natural gas price for the fourth
quarter of 2001 of $2.49 per Mcf. Comstock's realized oil prices averaged $27.26
per barrel for the fourth quarter, a 40% increase compared to the fourth quarter
2001's average oil price of $19.48 per barrel. For the year ended December 31,
2002, Comstock's realized natural gas prices averaged $3.30 per Mcf and its
realized oil prices averaged $24.95 per barrel as compared to 2001's average
prices of $4.58 per Mcf for natural gas and $25.46 per barrel for oil.
Comstock also announced that it will restate its financial statements for fiscal
years 1998 through 2001. The restatement is due to the recharacterization of
certain advances made by Comstock to its joint venture partner under the
Company's joint exploration venture in the Gulf of Mexico with Bois d' Arc
Offshore, Ltd. ("Bois d' Arc").
Under the joint exploration venture Comstock makes advances to Bois d' Arc to
fund the acquisition of offshore leases and seismic data. Bois d' Arc generates
drilling prospects on the leases and Comstock is entitled to a 40% interest in
any prospects generated. The remaining portion of the prospect is retained by
Bois d'Arc and interest in the prospect wells sold to third parties. Upon sale
of the prospect, Comstock is reimbursed 100% of the costs advanced for leases
and paid a fee which allows Comstock to recover the amounts advanced for
seismic. Historically, Comstock has capitalized the costs associated with
acquiring the leases and seismic and offset these costs with the reimbursements
received from the sale of the prospects. Comstock's new independent auditors are
re-auditing the Company's financial statements for the years ended December 31,
2000 and 2001 as these financial statements had previously been audited by
Arthur Andersen, which is no longer reissuing its audit reports. In connection
with the re-audits, Comstock's new auditors advised that any unreimbursed
advances related to seismic data acquisition on the balance sheet should be
charged to exploration expense with the future reimbursements of such costs to
be offset against future exploration expense. After a review and analysis of
this issue by Comstock's management and its audit committee and further
discussions with its independent auditors, Comstock concluded that it should
change its accounting treatment for the advances used for seismic data and
restate its financial statements for 1998, 1999, 2000 and 2001, which will
result in a reduction to previously reported net income by $0.4 million, $0.3
million, $0.2 million and $1.6 million for the years 1998, 1999, 2000 and 2001,
respectively. There is no significant impact with using the new accounting
treatment on the previously reported financial results for the first three
quarters of 2002.
2001 2000 1999 1998
------- ------- ------- --------
As Previously Reported: (In thousands, except per share amounts)
Net income (loss) from continuing operations
attributable to common stock...................... $34,458 $38,705 $(4,866) $(17,201)
Income from discontinued operations.......... 396 227 197 33
------- ------- ------- --------
Net income (loss) attributable to common stock...... $34,854 $38,932 $(4,669) $(17,168)
======= ======= ======= ========
Net income (loss) per share:
Basic -
Net income (loss) from continuing
operations per share.................. $ 1.19 $ 1.47 $ (0.20) $ (0.71)
======= ======= ======= ========
Net income (loss) per share..................... $ 1.20 $ 1.48 $ (0.19) $ (0.71)
======= ======= ======= ========
Diluted -
Net income (loss) from continuing
operations per share.................. $ 1.04 $ 1.20
======= =======
Net income (loss) per share..................... $ 1.06 $ 1.21
======= =======
As Restated:
Net income (loss) from continuing operations
attributable to common stock...................... $32,902 $38,502 $(5,136) $(17,591)
Income from discontinued operations.......... 396 227 197 33
------- ------- ------- --------
Net income (loss) attributable to common stock...... $33,298 $38,729 $(4,939) $(17,558)
======= ======= ======= ========
Net income (loss) per share:
Basic -
Net income (loss) from continuing
operations per share.................. $ 1.13 $ 1.46 $ (0.21) $ (0.72)
======= ======= ======= ========
Net income (loss) per share..................... $ 1.15 $ 1.47 $ (0.20) $ (0.72)
======= ======= ======= ========
Diluted -
Net income (loss) from continuing
operations per share.................. $ 1.00 $ 1.19
======= =======
Net income (loss) per share..................... $ 1.01 $ 1.20
======= =======
"The restatement will result in earnings in certain years being slightly lower
than previously announced but will also result in slightly higher earnings in
the year that we recover expenses from our joint venture partner," commented M.
Jay Allison, Comstock's Chief Executive Officer. He further added, "We
understand that any restatement of our financial results may cause concern on
the part of our investors. However, I believe that a careful reading of today's
information will help assure our shareholders that our financial condition has
not been materially affected."
Comstock expects to file restated financial statements for the affected annual
periods with the Securities and Exchange Commission in connection with the
filing of its 2002 Annual Report on Form 10-K. Until Comstock issues its
restated financial statements, the financial information contained in Comstock's
previously filed annual reports on Form 10-K and the auditors' reports thereon
for the fiscal years ended December 31, 1998, 1999, 2000 and 2001 is qualified
by the information contained in this press release as to the impact of the
restatement described above.
Forward Looking Statements - Except for historical information, the statements
in this release, including statements regarding Comstock's review and
restatement of its financial statements and the implications thereof, are
forward-looking statements within the meaning of the federal securities laws.
These statements reflect management's current expectations and are subject to
numerous risks and uncertainties that could cause actual results to differ
materially, including, but not limited to, the risks and uncertainties
associated with the restatement (which could include material changes in
Comstock's financial statements, litigation, and increased volatility in
Comstock's common stock price), as well as the risks and uncertainties arising
out of economic, competitive, governmental and technological factors affecting
Comstock's operations, markets, and prices. We assume no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by law.
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.
OPERATING RESULTS
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
--------- --------- --------- ---------
Revenues: Restated Restated
Oil and gas sales ..................................... $ 42,041 $ 23,905 $ 142,085 $ 166,118
Other income .......................................... 7,762 330 8,089 711
--------- --------- --------- ---------
Total revenues...................................... 49,803 24,235 150,174 166,829
--------- --------- --------- ---------
Expenses:
Oil and gas operating ................................. 8,973 7,188 33,499 31,855
Exploration ........................................... 2,087 1,487 5,479 6,611
Depreciation, depletion and amortization .............. 13,694 12,611 54,405 48,790
Impairment of oil and gas properties .................. -- 1,400 -- 1,400
General and administrative, net ....................... 2,171 1,901 5,113 4,351
Interest .............................................. 7,615 5,258 30,002 20,737
Loss from derivatives ................................. 32 -- 2,326 --
--------- --------- --------- ---------
Total expenses...................................... 34,572 29,845 130,824 113,744
--------- --------- --------- ---------
Income (loss) from continuing operations
before income taxes ...................... 15,231 (5,610) 19,350 53,085
Income tax benefit (expense)........................... (5,331) 1,963 (6,773) (18,579)
--------- --------- --------- ---------
Net income (loss) from continuing operations............... 9,900 (3,647) 12,577 34,506
Preferred stock dividends.............................. (405) (405) (1,604) (1,604)
--------- --------- --------- ---------
Net income (loss) from continuing operations attributable
attributable to common stock.......................... 9,495 (4,052) 10,973 32,902
Income (loss) from discontinued operations, including
loss on disposal...................................... -- (15) (1,072) 396
--------- --------- --------- ---------
Net income (loss) attributable to common stock ............. $ 9,495 $ (4,067) $ 9,901 $ 33,298
========= ========= ========= =========
Net income (loss) per share:
Basic -
Net income (loss) from continuing operations per share.. $ 0.33 $ (0.14) $ 0.38 $ 1.13
========= ========= ========= =========
Net income (loss) per share............................. $ 0.33 $ (0.14) $ 0.34 $ 1.15
========= ========= ========= =========
Diluted -
Net income (loss) from continuing operations per share... $ 0.29 $ 0.37 $ 1.00
========= ========= =========
Net income (loss) per share.............................. $ 0.29 $ 0.34 $ 1.01
========= ========= =========
Weighted average shares outstanding:
Basic...................................................... 28,861 28,510 28,764 29,030
========= ========= ========= =========
Diluted.................................................... 34,112 33,558 33,901 34,552
========= ========= ========= =========
Cash flow from operations.................................... $ 31,122 $ 12,991 $ 79,656 $ 110,093
========= ========= ========= =========
EBITDAX:
Net income (loss) attributable to common stock............. $ 9,495 $ (4,067) $ 9,901 $ 33,298
Interest................................................... 7,615 5,258 30,002 20,737
Income tax expense (benefit)............................... 5,331 (1,963) 6,773 18,579
Depreciation, depletion and amortization................... 13,694 12,611 54,405 48,790
Impairment of oil and gas properties....................... -- 1,400 -- 1,400
Exploration................................................ 2,087 1,487 5,479 6,611
Preferred stock dividends.................................. 405 405 1,604 1,604
Unrealized (gains) losses from derivatives................. 70 (254) (119) (254)
Gains on sales of property.................................. -- -- -- (12)
Non-cash effect of discontinued operations ................ -- 114 1,395 614
--------- --------- --------- ---------
EBITDAX.............................................. $ 38,697 $ 14,991 $ 109,440 $ 131,367
========= ========= ========= =========
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months ended December 31, 2002
East Texas/ South/
North Gulf of Southeast Texas
Louisiana Mexico Texas Other Total
-------- -------- -------- -------- --------
Oil production (thousand barrels)............... 24 202 79 26 331
Gas production (million cubic feet - Mmcf)...... 2,891 1,653 2,455 1,119 8,118
Total production (Mmcfe)........................ 3,035 2,864 2,930 1,276 10,105
Oil sales ...................................... $ 638 $ 5,615 $ 2,123 $ 650 $ 9,026
Gas sales ...................................... 10,861 6,964 10,579 4,893 33,297
Loss from gas price hedges ..................... -- -- -- -- (282)
-------- -------- -------- -------- --------
Total oil and gas sales .................... $ 11,499 $ 12,579 $ 12,702 $ 5,543 $ 42,041
======== ======== ======== ======== ========
Average oil price (per barrel).................. $ 26.58 $ 27.80 $ 26.87 $ 25.00 $ 27.26
Average gas price (per thousand cubic feet - Mcf) $ 3.76 $ 4.21 $ 4.31 $ 4.37 $ 4.07
Average price (per Mcf equivalent).............. $ 3.79 $ 4.39 $ 4.34 $ 4.34 $ 4.16
Lifting cost.................................... $ 2,133 $ 3,348 $ 2,454 $ 1,038 $ 8,973
Lifting cost (per Mcf equivalent)............... $ 0.70 $ 1.17 $ 0.84 $ 0.81 $ 0.89
Capital expenditures............................ $ 5,615 $ 15,594 $ 1,769 $ 3,886 $ 26,864
For the Year ended December 31, 2002
East Texas/ South/
North Gulf of Southeast Texas
Louisiana Mexico Texas Other Total
-------- -------- -------- -------- --------
Oil production (thousand barrels)............ 105 788 318 91 1,302
Gas production (million cubic feet - Mmcf)... 11,841 7,549 8,869 4,912 33,171
Total production (Mmcfe)..................... 12,471 12,278 10,778 5,459 40,986
Oil sales.................................... $ 2,539 $ 19,860 $ 7,856 $ 2,251 $ 32,506
Gas sales.................................... 35,250 25,699 31,253 16,042 108,244
Gains from gas price hedges.................. -- -- -- -- 1,335
-------- -------- -------- -------- --------
Total oil and gas sales.................. $ 37,789 $ 45,559 $ 39,109 $ 18,293 $142,085
======== ======== ======== ======== ========
Average oil price (per barrel)............... $ 24.18 $ 25.20 $ 24.70 $ 24.74 $ 24.95
Average gas price (per thousand cubic feet - Mcf) $ 2.98 $ 3.40 $ 3.52 $ 3.27 $ 3.30
Average price (per Mcf equivalent)........... $ 3.03 $ 3.71 $ 3.63 $ 3.35 $ 3.47
Lifting cost................................. $ 9,169 $ 10,931 $ 7,894 $ 5,505 $ 33,499
Lifting cost (per Mcf equivalent)............ $ 0.74 $ 0.89 $ 0.73 $ 1.01 $ 0.82
Capital expenditures......................... $ 20,259 $ 45,973 $ 4,823 $ 13,147 $ 84,202
As of December 31,
2002 2001
-------- --------
Balance Sheet Data: Restated
Current assets ............................... $ 39,902 $ 38,272
Property and equipment, net .................. 664,208 636,274
Other ........................................ 6,943 6,223
-------- --------
Total assets ................................ $711,053 $680,769
======== ========
Current liabilities .......................... $ 49,797 $ 39,839
Long-term debt ............................... 366,002 372,235
Other ........................................ 69,254 55,454
Stockholders' equity ......................... 226,000 213,241
-------- --------
Total liabilities and stockholders' equity... $711,053 $680,769
======== ========