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Financial Results for the Three Months and Nine Months Ended September 30, 2009
Comstock reported a net loss of $12.6 million or 28 cents per share for the third quarter of 2009 as compared to 2008's third quarter net income from continuing operations of $54.8 million or $1.18 per diluted share. The loss in the third quarter is primarily attributable to lower oil and natural gas prices in 2009. Comstock averaged $3.63 per Mcf for sales of its natural gas production in the third quarter of 2009, 64% lower than the $10.16 per Mcf realized in 2008's third quarter. Realized oil prices in the third quarter of 2009 averaged $57.96 per barrel, 45% lower than the $105.15 per barrel in 2008's third quarter.
Comstock's production in the third quarter of 2009 increased 13% to 17.0 billion cubic feet equivalent of natural gas ("Bcfe") as compared to production of 15.0 Bcfe in the third quarter of 2008. The 2009 third quarter average daily production rate of 184.3 million cubic feet of natural gas equivalent ("MMcfe") increased 9% from the 2009 second quarter production rate of 168.6 MMcfe per day.
The lower oil and natural gas prices caused the third quarter of 2009's oil and gas sales to decrease 59% to $67.4 million as compared to 2008's third quarter sales of $163.9 million. Comstock's operating cash flow (before changes in working capital accounts) in the third quarter of 2009 of $70.0 million decreased 47% from 2008's third quarter operating cash flow from continuing operations of $133.0 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, decreased 66% to $46.8 million in 2009's third quarter from 2008's third quarter EBITDAX from continuing operations of $138.9 million.
Comstock reported a net loss of $29.7 million or 66 cents per share for the first nine months of 2009 as compared to net income from continuing operations of $154.6 million or $3.36 per diluted share in the first nine months of 2008. The loss for the first nine months of 2009 is also primarily attributable to the substantial decline in oil and natural gas prices. Comstock averaged $4.05 per Mcf for sales of its natural gas production in the first nine months of 2009, 58% lower than the $9.65 per Mcf realized in the first nine months of 2008. Realized oil prices in the first nine months of 2009 averaged $46.42 per barrel, 53% lower than the $97.74 per barrel in the first nine months of 2008. Comstock's production in the first nine months of 2009 increased 8% to 46.4 Bcfe as compared to pro forma production of 43.1 Bcfe in the first nine months of 2008, which excludes production from properties sold during 2008.
Oil and gas sales for the first nine months of 2009 decreased 57% to $200.7 million from $463.6 million in the first nine months of 2008. Operating cash flow (before changes in working capital accounts) generated by Comstock in the first nine months of 2009 of $156.9 million decreased 56% from operating cash flow from continuing operations of $358.8 million in the first nine months of 2008. EBITDAX decreased 65% to $134.3 million in the first nine months of 2009 from EBITDAX from continuing operations of $387.2 million in the first nine months of 2008.
2009 Drilling Results
During the first nine months of 2009, Comstock drilled 38 wells (28.2 net), all of which were successful. Thirty-one of the 38 wells drilled were horizontal wells. The Company's drilling program this year is primarily focused on developing its Haynesville shale properties in East Texas and North Louisiana. Through the end of the third quarter, the Company has drilled 28 horizontal wells (20.8 net) in the Haynesville or Bossier shale in 2009, 25 of which are currently producing. The remaining three are in the process of being completed. As of September 30, 2009, Comstock was drilling six horizontal wells and was also participating in the drilling of a non-operated horizontal well. All of these wells are targeting the Haynesville shale.
Since the Company's last operational update, Comstock has completed three additional successful operated Haynesville shale horizontal wells in DeSoto Parish in North Louisiana in addition to the seven reported on in the October 5, 2009 update. Two wells are in its Toledo Bend North field and the other is in the Logansport field.
In Toledo Bend North, the BSMC 8 #1H was drilled to a vertical depth of 11,577 feet with a 4,541 foot horizontal lateral. The well was completed with 12 frac stages and was tested at an initial production rate of 8.9 MMcfe per day. Comstock has an 88% working interest in this well. The BSMC 9 #1H was drilled to a vertical depth of 11,610 feet with a 4,401 foot horizontal lateral. The well was completed with 12 frac stages and was tested with an initial production rate of 10.4 MMcfe per day. Comstock has a 77% working interest in this well. In the Logansport field, the Brown HZ #1 well was drilled to a vertical depth of 11,491 feet with a 4,254 foot horizontal lateral. The well was completed with 12 frac stages and was tested at an initial production rate of 15.7 MMcfe per day. Comstock has a 76% working interest in this well. These ten third quarter operated Haynesville shale wells were tested at an average initial production rate of 14.5 MMcfe per day per well.
Comstock expects to spend $355.0 million on its 2009 drilling program. Costs to drill and complete wells have fallen since the beginning of the year which will allow Comstock to drill more wells than was anticipated in its original 2009 budget. Comstock now expects to drill 52 (38.4 net) wells in 2009 including 41 (30.6 net) horizontal Haynesville shale wells.
Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, November 3, 2009, to discuss the operational and financial results for the third quarter of 2009. Investors wishing to participate should visit our website at www.comstockresources.com for a live web cast or dial 1-800-299-9086 and provide access code 62422687 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 Nine Months
Ended Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Revenues: Oil and gas sales $67,436 $163,852 $200,662 $463,595
Gain on sale of assets - 5,356 - 26,560
Operating expenses:
Oil and gas operating 16,019 21,556 50,463 66,120
Exploration 227 2,794 371 5,032
Depreciation, depletion
and amortization 53,933 45,943 152,001 131,870
Impairment of oil and
gas properties 115 - 115 -
General and administrative 8,689 7,242 27,559 20,328
----- ----- ------ ------
Total operating expenses 78,983 77,535 230,509 223,350
------ ------ ------- -------
Operating income (loss) from
continuing operations (11,547) 91,673 (29,847) 266,805
Other income (expenses):
Interest income 3 587 35 953
Other income 23 29 115 87
Interest expense (3,244) (4,751) (8,307) (23,248)
----- ----- ----- ------
Total other income
(expenses) (3,218) (4,135) (8,157) (22,208)
----- ----- ----- ------
Income (loss) from continuing
operations before income taxes (14,765) 87,538 (38,004) 244,597
Benefit from (provision for)
income taxes 2,193 (32,774) 8,300 (90,003)
----- ------ ----- ------
Income (loss) from continuing
operations (12,572) 54,764 (29,704) 154,594
------ ------ ------ -------
Income from discontinued
operations after income taxes
and minority interest - 169,853 - 193,745
--- ------- --- ---
Net income (loss) $(12,572) $224,617 $(29,704) $348,339
======== ======== ======== ========
Basic net income (loss) per
share:
Continuing operations $(0.28) $1.19 $(0.66) $3.38
Discontinued operations - 3.69 - 4.24
--- --- --- ---
$(0.28) $4.88 $(0.66) $7.62
====== ===== ====== =====
Diluted net income (loss)
per share:
Continuing operations $(0.28) $1.18 $(0.66) $3.36
Discontinued operations - 3.67 - 4.21
--- --- --- ---
$(0.28) $4.85 $(0.66) $7.57
====== ===== ====== =====
Weighted average shares
outstanding:
Basic 45,032 44,748 44,992 44,448
====== ====== ====== ======
Diluted(1) 45,032 44,971 44,992 44,776
====== ====== ====== ======
(1) In 2009, basic and diluted shares are the same due to the net loss.
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)
Three Months Nine Months
Ended Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
OPERATING CASH FLOW:
Net income (loss) from
continuing operations $(12,572) $54,764 $(29,704) $154,594
Reconciling items:
Deferred income taxes 24,302 32,667 22,318 85,171
Dry hole costs and
lease impairments - 1,875 - 4,113
Depreciation, depletion
and amortization 53,933 45,943 152,001 131,870
Impairment of oil
and gas properties 115 - 115 -
Gain on sale of assets - (5,356) - (26,560)
Debt issuance cost
amortization 203 203 608 608
Stock-based compensation 4,046 3,252 11,533 8,968
Unrealized loss on
derivatives - (359) - -
--- --- --- ---
Operating cash flow 70,027 132,989 156,871 358,764
Excess tax benefit
from stock-based
compensation (50) (173) (974) (8,805)
(Increase) decrease
in accounts
receivable (1,767) 10,578 12,043 (14,738)
Increase in other
current assets (22,724) (7,583) (23,378) (8,758)
Increase (decrease)
in accounts payable
and accrued
expenses 2,919 (5,505) (26,712) 4,573
----- ----- ------ -----
Net cash provided
by operating
activities from
continuing
operations $48,405 $130,306 $117,850 $331,036
======= ======== ======== ========
EBITDAX:
Income (loss) from
continuing operations $(12,572) $54,764 $(29,704) $154,594
Gain on sale of assets - (5,356) - (26,560)
Interest expense 3,244 4,751 8,307 23,248
Income tax expense
(benefit) (2,193) 32,774 (8,300) 90,003
Depreciation, depletion
and amortization 53,933 45,943 152,001 131,870
Impairment of oil and
gas properties 115 - 115 -
Stock-based compensation 4,046 3,252 11,533 8,968
Exploration 227 2,794 371 5,032
--- ----- --- -----
EBITDAX from
continuing
operations $46,800 $138,922 $134,323 $387,155
======= ======== ======== ========
As of September 30,
-------------------
2009 2008
---- ----
Balance Sheet Data:
Cash and cash equivalents $3,094 $118,357
Derivative financial instruments 5,264 2,932
Other current assets 72,325 76,178
Marketable securities 86,721 181,858
Property and equipment, net 1,546,745 1,381,289
Other 2,545 3,349
----- -----
Total assets $1,716,694 $1,763,963
========== ==========
Accounts payable and accrued expenses $93,036 $282,247
Derivative financial instruments - 176
Long-term debt 340,000 175,000
Deferred income taxes 212,327 170,553
Asset retirement obligation 6,030 7,369
Stockholders' equity 1,065,301 1,128,618
--------- ---------
Total liabilities and stockholders'
equity $1,716,694 $1,763,963
========== ==========
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
For the Three Months Ended September 30, 2009
---------------------------------------------
East Texas/
North South
Louisiana Texas Other Total
--------- ----- ----- -----
Oil production (thousand
barrels) 39 33 91 163
Gas production (million cubic
feet -Mmcf) 10,486 4,831 659 15,976
Total production (Mmcfe) 10,715 5,029 1,211 16,955
Oil sales $2,502 $2,117 $4,836 $9,455
Gas sales 31,434 17,183 2,058 50,675
Gas hedging gains (losses) - 7,306 - 7,306
--- ----- --- -----
Total gas sales 31,434 24,489 2,058 57,981
------ ------ ----- ------
Total oil and gas sales $33,936 $26,606 $6,894 $67,436
======= ======= ====== =======
Average oil price (per barrel) $64.15 $64.15 $53.14 $57.96
Average gas price (per thousand
cubic feet -Mcf) $3.00 $3.56 $3.12 $3.17
Average gas price including
hedging (per Mcf) $3.00 $5.07 $3.12 $3.63
Average price (per Mcf
equivalent) $3.17 $3.84 $5.69 $3.55
Average price including
hedging (per Mcf equivalent) $3.17 $5.29 $5.69 $3.98
Lifting cost(1) $7,637 $4,834 $3,548 $16,019(1)
Lifting cost (per Mcf
equivalent) $0.71 $0.96 $2.93 $0.94
Oil and Gas Capital
Expenditures:
Leasehold costs $2,376 $313 $52 $2,741
Exploratory drilling 22,416 39 - 22,455
Development drilling 49,335 2,647 10 51,992
Other development 824 954 30 1,808
--- --- -- -----
Total $74,951 $3,953 $92 $78,996
======= ====== === =======
For the Three Months Ended September 30, 2008
---------------------------------------------
East Texas/
North South
Louisiana Texas Other Total
--------- ----- ----- -----
Oil production (thousand
barrels) 95 38 131 264
Gas production (million cubic
feet -Mmcf) 7,441 5,163 791 13,395
Total production (Mmcfe) 8,012 5,388 1,577 14,977
Oil sales $11,164 $4,504 $12,053 $27,721
Gas sales 77,978 54,018 6,865 138,861
Gas hedging gains (losses) - (2,730) - (2,730)
--- ------ --- ------
Total gas sales 77,978 51,288 6,865 136,131
------ ------ ----- -------
Total oil and gas sales $89,142 $55,792 $18,918 $163,852
======= ======= ======= ========
Average oil price (per barrel) $117.52 $118.53 $92.01 $105.15
Average gas price (per thousand
cubic feet -Mcf) $10.48 $10.46 $8.68 $10.37
Average gas price including
hedging (per Mcf) $10.48 $9.93 $8.68 $10.16
Average price (per Mcf
equivalent) $11.13 $10.86 $12.00 $11.12
Average price including
hedging (per Mcf equivalent) $11.13 $10.35 $12.00 $10.94
Lifting cost(1) $9,485 $7,224 $4,847 $21,556(1)
Lifting cost (per Mcf
equivalent) $1.18 $1.34 $3.07 $1.44
Oil and Gas Capital
Expenditures:
Leasehold costs $89,213 $206 $47 $89,466
Exploratory drilling - 426 44 470
Development drilling 54,784 16,769 460 72,013
Other development 166 1,032 328 1,526
--- ----- --- -----
Total $144,163 $18,433 $879 $163,475
======== ======= ==== ========
(1) Includes production taxes of $1,849 and $6,114 for the three months
ended September 30, 2009 and 2008, respectively.
For the Nine Months Ended September 30, 2009
--------------------------------------------
East Texas/
North South
Louisiana Texas Other Total
--------- ----- ----- -----
Oil production (thousand
barrels) 167 122 295 584
Gas production (million
cubic feet - Mmcf) 26,278 14,565 2,034 42,877
Total production (Mmcfe) 27,278 15,299 3,803 46,380
Oil sales $8,185 $6,310 $12,603 $27,098
Gas sales 91,009 55,293 6,930 153,232
Gas hedging gains (losses) - 20,332 - 20,332
--- ------ --- ------
Total gas sales 91,009 75,625 6,930 173,564
------ ------ ----- -------
Total oil and gas sales $99,194 $81,935 $19,533 $200,662
======= ======= ======= ========
Average oil price (per barrel) $49.01 $51.72 $42.72 $46.42
Average gas price (per thousand
cubic feet -Mcf) $3.46 $3.80 $3.41 $3.57
Average gas price including
hedging (per Mcf) $3.46 $5.19 $3.41 $4.05
Average price (per Mcf
equivalent) $3.64 $4.03 $5.14 $3.89
Average price including
hedging (per Mcf equivalent) $3.64 $5.36 $5.14 $4.33
Lifting cost(2) $23,889 $15,614 $10,960 $50,463(2)
Lifting cost (per Mcf
equivalent) $0.88 $1.02 $2.88 $1.09
Oil and Gas Capital
Expenditures:
Leasehold costs $9,544 $644 $155 $10,343
Exploratory drilling 88,917 1,932 - 90,849
Development drilling 117,187 26,433 121 143,741
Other development 4,036 4,232 326 8,594
----- ----- --- -----
Total $219,684 $33,241 $602 $253,527
======== ======= ==== ========
For the Nine Months Ended September 30, 2008
--------------------------------------------
East Texas/
North South
Louisiana Texas Other Total
--------- ----- ----- -----
Oil production (thousand
barrels) 226 142 407 775
Gas production (million
cubic feet - Mmcf) 21,395 16,633 2,179 40,207
Total production (Mmcfe) 22,752 17,485 4,618 44,855
Oil sales $25,213 $16,012 $34,494 $75,719
Gas sales 212,455 162,993 19,786 395,234
Gas hedging gains (losses) - (7,358) - (7,358)
--- ----- --- ------
Total gas sales 212,455 155,635 19,786 387,876
------- ------- ------ -------
Total oil and gas sales $237,668 $171,647 $54,280 $463,595
======== ======== ======= ========
Average oil price (per barrel) $111.56 $112.76 $84.75 $97.74
Average gas price (per
thousand cubic feet -Mcf) $9.93 $9.80 $9.08 $9.83
Average gas price including
hedging (per Mcf) $9.93 $9.36 $9.08 $9.65
Average price (per Mcf
equivalent) $10.45 $10.24 $11.75 $10.50
Average price including
hedging (per Mcf equivalent) $10.45 $9.82 $11.75 $10.34
Lifting cost(2) $28,133 $22,312 $15,675 $66,120(2)
Lifting cost (per Mcf
equivalent) $1.24 $1.28 $3.39 $1.47
Oil and Gas Capital
Expenditures:
Leasehold costs $109,220 $1,612 $108 $110,940
Exploratory drilling - 2,783 395 3,178
Development drilling 137,343 43,033 2,006 182,382
Other development 1,451 8,068 3,309 12,828
----- ----- ----- ------
Total $248,014 $55,496 $5,818 $309,328
======== ======= ====== ========
(2) Includes production taxes of $5,486 and $18,892 for the nine months
ended September 30, 2009 and 2008, respectively.
SOURCE Comstock Resources, Inc.
http://www.comstockresources.com
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