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Comstock Resources, Inc. Reports Third Quarter 2010 Financial and Operating Results

FRISCO, Texas, Nov. 1, 2010 /PRNewswire via COMTEX/ --

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, 2010.

Financial Results for the Three Months and Nine Months Ended September 30, 2010

Comstock reported a net loss of $4.7 million or 10 cents per diluted share for the three months ended September 30, 2010 as compared to a net loss of $12.6 million or 28 cents per share for the three months ended September 30, 2009.

Comstock's production in the third quarter of 2010 of 17.2 billion cubic feet of natural gas equivalent ("Bcfe") was slightly higher than the 17.0 Bcfe produced in the third quarter of 2009. Production from the Company's Haynesville shale wells of 84.7 million cubic feet of natural gas equivalent ("MMcfe") per day accounted for 45% of the Company's total production of 186.8 MMcfe per day in the third quarter of 2010, as compared to 57.8 MMcfe per day (31%) during the third quarter of 2009. The Company's Haynesville shale production declined in the third quarter of 2010 as compared to the second quarter of 2010 due to the unavailability of high pressure pumping services required to complete the Haynesville shale wells that have been drilled. As of September 30, 2010, Comstock had 26 operated Haynesville shale wells waiting on completion. Beginning in October the Company has obtained adequate high pressure pumping services to resume completing the wells which should provide for production growth from its Haynesville shale operations in the fourth quarter.

Oil and natural gas prices improved in the third quarter of 2010 as compared to 2009's third quarter. Comstock's average realized natural gas price increased 17% to $4.24 per Mcf for the third quarter of 2010 as compared to $3.63 per Mcf for the third quarter of 2009. The Company's average realized oil price improved by 12% to $64.97 per barrel for the third quarter of 2010 as compared to $57.96 per barrel for the third quarter of 2009. The improved oil and natural gas prices caused oil and gas sales to increase by 18% to $79.7 million in the third quarter of 2010 as compared to 2009's third quarter sales of $67.4 million. Operating cash flow (before changes in working capital accounts) was $47.3 million in the third quarter of 2010 and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $54.6 million.

Comstock reported net income of $1.0 million or 2 cents per diluted share for the first nine months of 2010 as compared to a net loss of $29.7 million or 66 cents per share in the first nine months of 2009. Comstock's production in the first nine months of 2010 increased 21% to 56.0 Bcfe as compared to the 46.4 Bcfe produced during the first nine months of 2009. Comstock averaged $4.55 per Mcf for sales of its natural gas production in the first nine months of 2010, 12% higher than the $4.05 per Mcf realized during the first nine months of 2009. Realized oil prices in the first nine months of 2010 averaged $66.54 per barrel, 43% higher than the $46.42 per barrel in 2009's first nine months. Oil and gas sales for the first nine months of 2010 increased 38% to $276.5 million as compared with $200.7 million in the first nine months of 2009. Operating cash flow (before changes in working capital accounts) generated by Comstock for the first nine months of 2010 was $174.8 million while EBITDAX was $197.9 million.

2010 Drilling Results

Comstock reported on the results to date of its 2010 drilling program. The Company has spent $393.0 million during the first nine months of 2010 on its exploration and development activities, $262.6 million of which was spent on drilling activities and $130.4 million of which was spent to acquire leasehold to support future exploration activity. During the first nine months of 2010, Comstock drilled 58 wells (35.3 net), 27 of which have been successfully completed as producing wells. As of September 30, 2010 the Company also had eight wells drilling, including seven in the Haynesville or Bossier shale and one in the Eagle Ford shale.

In the East Texas/North Louisiana region, Comstock has drilled 55 wells (33.6 net) so far in 2010. Fifty-four of the wells are Haynesville or Bossier shale wells. As of November 1, 2010, twenty-four of the 54 Haynesville or Bossier shale wells drilled in 2010 have been completed and were put on production at an average per well initial production rate of 10.8 MMcfe per day. Comstock expects to complete fourteen operated Haynesville or Bossier shale wells in the fourth quarter.

In addition to its Haynesville shale horizontal drilling program, Comstock has drilled two vertical wells during 2010. Comstock successfully completed a Cotton Valley well in its Blocker field in East Texas and also completed the Julian Pasture #4 in its Ball Ranch field in South Texas.

Comstock has initiated development of its Eagle Ford shale acreage in Atascosa, Karnes and McMullen counties in South Texas. Comstock has drilled the Rancho Tres Hijos #1H in McMullen county to a vertical depth of 11,020 feet with a 4,091 lateral and has drilled the NWR #1H in Atascosa county to a vertical depth of 8,715 feet with a 5,209 foot lateral. These wells are scheduled for completion in November. Comstock is currently drilling its third Eagle Ford shale well in Karnes county.

The Company's previously announced sale of its non-core oil and gas properties in Mississippi remains on schedule to close during the fourth quarter of 2010. Based on the sale price of $75.0 million, the Company expects to realize a net loss after income taxes of approximately $16.6 million on this divestiture.

Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, November 2,2010, to discuss the operational and financial results for the third quarter of 2010. Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-825-1692 (international dial-in use 617-213-8059) and provide access code 29796865 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 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,




2010



2009



2010



2009



















Revenues:

















Oil and gas sales


$

79,720



$

67,436



$

276,491



$

200,662



















Operating expenses:

















Production taxes



3,062




1,848




9,543




5,486


Gathering and transportation



4,101




1,368




12,308




3,962


Lease operating



13,002




12,803




41,150




41,015


Exploration



1,238




227




2,506




371


Depreciation, depletion and amortization



46,796




53,933




163,603




152,001


Impairment of oil and gas properties



26




115




213




115


General and administrative



9,400




8,689




28,965




27,559



















Total operating expenses



77,625




78,983




258,288




230,509



















Operating income (loss)



2,095




(11,547)




18,203




(29,847)



















Other income (expenses):

















Interest income



5




3




263




35


Other income



100




23




145




115


Gain on sale of assets



--




--




4,895




--


Interest expense



(7,108)




(3,244)




(22,551)




(8,307)



















Total other income (expenses)



(7,003)




(3,218)




(17,248)





(8,157)



















Income (loss) before income taxes



(4,908)




(14,765)




955




(38,004)


Benefit from income taxes



208




2,193




68




8,300


Net income (loss)


$

(4,700)



$

(12,572)



$

1,023



$

(29,704)



















Net income (loss) per share:

















Basic


$

(0.10)



$

(0.28)



$

0.02



$

(0.66)


Diluted


$

(0.10)



$

(0.28)



$

0.02



$

(0.66)



















Weighted average shares outstanding:

















Basic



45,623




45,032




45,537




44,992


Diluted



45,623

(1)



45,032

(1)



45,589




44,992

(1)


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

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)



Three Months Ended September30,



Nine Months Ended September30,




2010



2009



2010



2009



















OPERATING CASH FLOW:

















Net income (loss)


$

(4,700)



$

(12,572)



$

1,023



$

(29,704)


Reconciling items:

















Deferred income taxes



174




24,302




131




22,318


Depreciation, depletion and amortization



46,796




53,933




163,603




152,001


Impairment of oil and gas properties



26




115




213




115


Gain on sale of assets



--




--




(4,895)




--


Debt issuance costs and discount amortization



608




203




1,834




608


Stock-based compensation



4,388




4,046




12,930




11,533


Operating cash flow



47,292




70,027




174,839




156,871


Excess tax benefit from stock-based compensation



28




(50)




(1,503)




(974)


Decrease (increase) in accounts receivable



9,550




(1,767)




8,096




12,043


Decrease (increase) in other current assets



(8)




(22,724)




49,428




(23,378)


Increase (decrease) in accounts payable and accrued expenses



(6,850)




2,919




18,376




(26,712)



















Net cash provided by operating activities


$

50,012



$

48,405



$

249,236



$

117,850



















EBITDAX:

















Net income (loss)


$

(4,700)



$

(12,572)



$

1,023



$

(29,704)


Interest expense



7,108




3,244




22,551




8,307


Income tax benefit



(208)




(2,193)




(68)




(8,300)


Depreciation, depletion and amortization



46,796




53,933




163,603




152,001


Impairment of oil and gas properties



26




115




213




115


Gain on sale of assets



--




--




(4,895)




--


Stock-based compensation



4,388




4,046




12,930




11,533


Exploration



1,238




227




2,506




371



















EBITDAX


$

54,648



$

46,800



$

197,863



$

134,323























As of September 30,




2010



2009











BALANCE SHEET DATA:









Cash and cash equivalents


$

4,350



$

3,094


Derivative financial instruments



--




5,264


Income taxes receivable



--




37,796


Marketable securities



70,661




86,721


Other current assets



35,761




34,529


Property and equipment, net



1,817,962




1,546,745


Other



7,856




2,545











Total assets


$

1,936,590



$

1,716,694











Accounts payable and accrued expenses


$

104,577



$

93,036


Long-term debt



528,238




340,000


Deferred income taxes



224,686




212,327


Other non-current liabilities



9,575




6,030


Stockholders' equity



1,069,514




1,065,301











Total liabilities and stockholders' equity


$

1,936,590



$

1,716,694



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




For the Three Months Ended September 30, 2010



For the Three Months Ended September 30, 2009




East

Texas/












East

Texas/













North



South









North



South










Louisiana



Texas



Other



Total



Louisiana



Texas



Other



Total


Oil production (thousand barrels)



27




33




111




171




39




33




91




163


Gas production (MMcf)



12,134




3,404




616




16,154




10,486




4,831




659




15,976


Total production (MMcfe)



12,295




3,602




1,288




17,185




10,715




5,029




1,211




16,955



































Oil sales


$

1,932



$

2,434



$

6,797



$

11,163



$

2,502



$

2,117



$

4,836



$

9,455


Gas sales



50,183




15,578




2,796




68,557




31,434




17,183




2,058




50,675


Gas hedging gains



--




--




--




--




--




7,306




--




7,306


Total gas sales



50,183




15,578




2,796




68,557




31,434




24,489




2,058




57,981


Total oil and gas sales


$

52,115



$

18,012



$

9,593



$

79,720



$

33,936



$

26,606



$

6,894



$

67,436



































Average oil price (per barrel)


$

71.71



$

74.05



$

60.68



$

64.97



$

64.15



$

64.15



$

53.14



$

57.96


Average gas price (per Mcf)


$

4.14



$

4.58



$

4.54



$

4.24



$

3.00



$

3.56



$

3.12



$

3.17


Average gas price including hedging (per Mcf)


$

4.14



$

4.58



$

4.54



$

4.24



$

3.00



$

5.07



$

3.12



$

3.63


Average price (per Mcfe)


$

4.24



$

5.00



$

7.45



$

4.64



$

3.17



$

3.84



$

5.69



$

3.55


Average price including hedging
(per Mcfe)


$

4.24



$

5.00



$

7.45



$

4.64



$

3.17



$

5.29



$

5.69



$

3.98



































Production taxes


$

1,832



$

700



$

530



$

3,062



$

602



$

837



$

409



$

1,848


Gathering and transportation


$

3,574



$

433



$

94



$

4,101



$

635



$

624



$

109



$

1,368


Lease operating


$

7,076



$

3,031



$

2,895



$

13,002



$

6,400



$

3,373



$

3,030



$

12,803


Production taxes (per Mcfe)


$

0.15



$

0.19



$

0.41



$

0.18



$

0.06



$

0.17



$

0.34



$

0.11


Gathering and transportation
(per Mcfe)


$

0.29



$

0.12



$

0.07



$

0.24



$

0.06



$

0.12



$

0.09



$

0.08


Lease operating (per Mcfe)


$

0.58



$

0.85



$

2.25



$

0.75



$

0.59



$

0.67



$

2.50



$

0.75



































Oil and Gas Capital Expenditures:

































Leasehold costs


$

11,023



$

57,031



$

30



$

68,084



$

2,376



$

313



$

52



$

2,741


Exploratory drilling



26,423




6,376




--




32,799




22,416




39




--




22,455


Development drilling



44,992




(105)




1,404




46,291




49,335




2,647




10




51,992


Other development



342




1,026




259




1,627




824




954




30




1,808


Total


$

82,780



$

64,328



$

1,693



$

148,801



$

74,951



$

3,953



$

92



$

78,996












For the Nine Months Ended September 30, 2010



For the Nine Months Ended September 30, 2009




East Texas/












East Texas/













North



South









North



South










Louisiana



Texas



Other



Total



Louisiana



Texas



Other



Total


Oil production (thousand barrels)



114




114




329




557




167




122




295




584


Gas production (MMcf)



39,401




11,307




1,949




52,657




26,278




14,565




2,034




42,877


Total production (MMcfe)



40,085




11,993




3,924




56,002




27,278




15,299




3,803




46,380



































Oil sales


$

8,570



$

8,571



$

19,951



$

37,092



$

8,185



$

6,310



$

12,603



$

27,098


Gas sales



174,031




55,637




9,731




239,399




91,009




55,293




6,930




153,232


Gas hedging gains



--




--




--




--




--




20,332




--




20,332


Total gas sales



174,031




55,637




9,731




239,399




91,009




75,625




6,930




173,564


Total oil and gas sales


$

182,601



$

64,208



$

29,682



$

276,491



$

99,194



$

81,935



$

19,533



$

200,662



































Average oil price (per barrel)


$

75.14



$

75.01



$

60.62



$

66.54



$

49.01



$

51.72



$

42.72



$

46.42


Average gas price (per Mcf)


$

4.42



$

4.92



$

4.99



$

4.55



$

3.46



$

3.80



$

3.41



$

3.57


Average gas price including hedging (per Mcf)


$

4.42



$

4.92



$

4.99



$

4.55



$

3.46



$

5.19



$

3.41



$

4.05


Average price (per Mcfe)


$

4.56



$

5.35



$

7.56



$

4.94



$

3.64



$

4.03



$

5.14



$

3.89


Average price including hedging
(per Mcfe)


$

4.56



$

5.35



$

7.56



$

4.94



$

3.64



$

5.36



$

5.14



$

4.33



































Production taxes


$

6,618



$

1,308



$

1,617



$

9,543



$

1,956



$

2,370



$

1,160



$

5,486


Gathering and transportation


$

10,573



$

1,443



$

292



$

12,308



$

1,444



$

2,186



$

332



$

3,962


Lease operating


$

21,838



$

10,360



$

8,952



$

41,150



$

20,489



$

11,058



$

9,468



$

41,015


Production taxes (per Mcfe)


$

0.17



$

0.11



$

0.41



$

0.17



$

0.07



$

0.15



$

0.31



$

0.12


Gathering and transportation
(per Mcfe)


$

0.26



$

0.12



$

0.07



$

0.22



$

0.05



$

0.14



$

0.09



$

0.09


Lease operating (per Mcfe)


$

0.54



$

0.86



$

2.29



$

0.73



$

0.76



$

0.73



$

2.48



$

0.88



































Oil and Gas Capital Expenditures:

































Leasehold costs


$

50,401



$

79,875



$

158



$

130,434



$

9,544



$

644



$

155



$

10,343


Exploratory drilling



49,861




6,376




--




56,237




88,917




1,932




--




90,849


Development drilling



197,486




2,065




1,404




200,955




117,187




26,433




121




143,741


Other development



2,217




2,349




760




5,326




4,036




4,232




326




8,594


Total


$

299,965



$

90,665



$

2,322



$

392,952



$

219,684



$

33,241



$

602



$

253,527



SOURCE Comstock Resources, Inc.




5300 Town and Country Blvd.
Suite 500
Frisco, Texas 75034
(972) 668-8800
This website may contain forward-looking statements. Please review our forward-looking statement disclaimer here.