Comstock Resources, Inc. Reports Fourth Quarter and Annual 2011 Financial and Operating Results
FRISCO, Texas, Feb. 6, 2012 /PRNewswire/ -- Comstock Resources, Inc. ('Comstock' or the 'Company')
today reported financial and operating results for the three months and year ended December 31, 2011.Financial Results for the Three Months and Year Ended December 31, 2011
Comstock reported a net loss of $41.1 million or 89 cents per share for the three months ended December 31, 2011 as compared to a net loss of $20.6 million or 45 cents per share for the three months ended December 31, 2010. The fourth quarter 2011 financial results include an impairment charge to write-down proved oil and gas properties of $60.8 million ($39.5 million after tax or 86 cents per share) and a gain realized from the sale of marketable securities of $2.9 million ($1.9 million after tax or 4 cents per share). Financial results for the fourth quarter of 2010 included a loss on disposal of oil and gas properties of $25.8 million ($16.8 million after tax or 37 cents per share) and a gain on sale of marketable securities of $10.8 million ($7.0 million after tax, or 15 cents per share).
Comstock produced 25.5 billion cubic feet of natural gas equivalent ('Bcfe') in the fourth quarter of 2011, an increase of 48% over the 17.3 Bcfe produced in the fourth quarter of 2010. Daily average production increased to 277 million cubic feet of natural gas equivalent ('MMcfe') from 188 MMcfe per day in the fourth quarter of 2010. Crude oil production increased to 8% of total production in the fourth quarter of 2011 as compared to 4% in the third quarter of 2011. Production from the Company's Eagle Ford shale operations increased 123% from the third quarter of 2011, averaging 3,300 barrels of oil equivalent per day in the fourth quarter and accounting for 7% of the Company's total production. Production from the Company's Haynesville shale operations of 184 MMcfe per day in the fourth quarter of 2011 comprised 66% of the Company's total production.
Comstock's average realized natural gas price decreased 9% to $3.40 per Mcf in the fourth quarter of 2011 as compared to $3.73 per Mcf in the fourth quarter of 2010. The Company's average realized oil price improved by 34% to $100.18 per barrel in the fourth quarter of 2011 as compared to $74.75 per barrel in the fourth quarter of 2010. Oil and gas sales increased by 58% to $114.5 million in the fourth quarter of 2011 as compared to 2010's fourth quarter sales of $72.7 million. Operating cash flow (before changes in working capital accounts) increased 75% to $78.8 million in the fourth quarter of 2011 from $44.9 million in 2010's fourth quarter and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses in the quarter was up 75% to $89.9 million from $51.3 million in 2010's fourth quarter.
With weak natural gas prices and strong crude oil prices persisting, Comstock is redirecting most of its drilling activity to unconventional oil prospects. In 2012, 92% of the net wells drilled by the Company are expected to be oil wells. Comstock expects to spend 77% of its 2012 capital budget for oil prospects in its Eagle Ford shale properties in South Texas and its Permian basin properties in West Texas. On December 31, 2011, 16% of the Company's production (based on a six Mcf to one barrel conversion) is attributable to oil and approximately 2% is attributable to natural gas liquids. At the beginning of 2011 only 4% of the Company's production was oil.
Comstock reported a net loss of $33.5 million or 73 cents per share for the year ended December 31, 2011 as compared to a net loss of $19.6 million or 43 cents per share for the year ended December 31, 2010. The financial results for the year ended December 31, 2011 include impairment charges of $70.6 million ($45.9 million after tax or $1.00 per share), a gain realized from the sale of marketable securities of $35.1 million ($22.8 million after tax or 50 cents per share), and a loss on early retirement of debt of $1.1 million ($0.7 million after taxes or 2 cents per share). The net loss for the year ended December 31, 2010 included a loss on disposal of oil and gas properties of $25.8 million ($16.8 million after tax or 37 cents per share) and a gain realized from sale of marketable securities of $16.5 million ($10.7 million after tax or 24 cents per share).
Comstock's production in 2011 increased by 31% to 95.6 Bcfe as compared to the 73.3 Bcfe produced in 2010. Natural gas prices continued to weaken in 2011. Comstock's average realized natural gas price decreased 10% to $3.91 per Mcf for 2011 as compared to $4.35 per Mcf for 2010. Oil prices continued to be very strong in 2011 and the Company's average realized oil price increased by 40% to $95.73 per barrel as compared to $68.35 per barrel for 2010. The 31% increase in production and stronger oil prices overcame the lower natural gas prices, resulting in Comstock's oil and gas sales increasing by 24% to $434.4 million in 2011 as compared to 2010's sales of $349.1 million. Operating cash flow (before changes in working capital accounts) increased 35% to $297.6 million in 2011 from 2010's operating cash flow of $219.7 million. Higher sales and lower operating cost per Mcfe produced account for the operating cash flow growth. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, also increased 35% to $336.3 million in 2011 from EBITDAX of $249.1 million in 2010.
2011 Drilling Results
Comstock reported on the results of its 2011 drilling program. The Company spent $573.4 million in 2011 on its drilling activities. Also in 2011, Comstock spent $218.7 million to acquire 163.7 Bcfe in proved reserves primarily in the Permian basin in West Texas and $255.7 million to acquire exploratory acreage in the Permian basin, the Eagle Ford shale in South Texas, and the Haynesville shale in North Louisiana. In 2011, Comstock drilled 87 wells (47.7 net) and completed 105 wells (59.8 net). As of December 31, 2011 the Company also had three wells (1.6 net) in the process of being drilled.
In the East Texas/North Louisiana region, Comstock drilled 64 wells (28.3 net) during 2011, sixty-two of which were Haynesville or Bossier shale horizontal wells. During 2011, Comstock completed 84 (42.3 net) Haynesville or Bossier shale horizontal wells, including 33 wells (22.2 net) that were drilled in 2010. Wells drilled and completed in 2011 were put on production at an average per well initial production rate of 10.7 MMcfe per day. As of December 31, 2011, Comstock had 14 (9.8 net) Haynesville or Bossier horizontal wells waiting on completion.
In the South Texas region, the Company drilled 20 (19.2 net) horizontal Eagle Ford shale wells in 2011. Comstock completed 17 wells (17.0 net) including one well that was drilled in 2010. These wells had an average per well initial production rate of 820 barrels of oil equivalent ('BOE') per day. Four wells (3.2 net) were awaiting completion at year end. Since the last update, Comstock has completed four additional wells in its Eagle Ford shale program. The Gloria Wheeler 'A' #1H was drilled to a vertical depth of 11,358 feet with a 6,725 foot lateral. This well was tested at an initial rate of 1,070 barrels of oil per day and 1.1 MMcf of natural gas per day or 1,254 BOE per day. The Gloria Wheeler 'B' #1H was drilled to a vertical depth of 10,908 feet with a 5,175 foot lateral. This well was tested at an initial rate of 916 barrels of oil per day and 1.0 MMcf of natural gas per day or 1,085 BOE per day. The Donnell 'A' #1H was drilled to a vertical depth of 9,404 feet with a 6,481 foot lateral. This well was tested at an initial rate of 646 barrels of oil per day and 0.2 MMcf of natural gas per day or 686 BOE per day. The Cutter Creek #2H was drilled to a vertical depth of 10,013 feet with a 5,541 foot lateral. This well was tested at an initial rate of 471 barrels of oil per day and 0.4 MMcf of natural gas per day or 541 BOE per day. All of the reported well results were obtained while following Comstock's restricted choke program.
During December 2011, production from the wells acquired as part of Comstock's Permian basin acquisition averaged 1,000 barrels of oil and 1.9 MMcf of natural gas per day. At year end 2011 there were three wells (0.8 net) in the process of being drilled and four wells (2.5 net) that were awaiting completion on these West Texas properties.
Comstock has planned a conference call for 2:00 p.m. Eastern Time on February 6, 2012, to discuss the operational and financial results for the fourth quarter of 2011. Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 1-866-362-5158 (international dial-in use 617-597-5397) and provide access code 53956340 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 5:00 p.m. ET February 6, 2012 and will continue until 11:59 p.m. February 13, 2012. To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US). The conference call ID number is 11275509.
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 Year Ended
December December
31, 31,
------------- -----------
2011 2010 2011 2010
---- ---- ---- ----
Revenues:
Oil and gas
sales $114,456 $72,650 $434,367 $349,141
Operating
expenses:
Production
taxes 1,440 351 3,670 9,894
Gathering and
transportation 8,151 4,948 28,491 17,256
Lease operating 10,040 12,375 46,552 53,525
Exploration 82 99 10,148 2,605
Depreciation,
depletion and
amortization 78,244 50,206 290,776 213,809
Impairment of
oil and gas
properties 60,817 11 60,817 224
Loss on sale of
properties - 25,835 57 26,632
General and
administrative 9,199 8,235 35,172 37,200
----- ----- ------ ------
Total operating
expenses 167,973 102,060 475,683 361,145
------- ------- ------- -------
Operating loss (53,517) (29,410) (41,316) (12,004)
Other income
(expenses):
Interest and
other income 210 91 790 499
Interest
expense (12,006) (6,905) (42,688) (29,456)
Gain on sale of
marketable
securities 2,905 10,837 35,118 16,529
----- ------
Total other
income
(expenses) (8,891) 4,023 (6,780) (12,428)
------ ----- ------ -------
Loss before
income taxes (62,408) (25,387) (48,096) (24,432)
Benefit from
income taxes 21,274 4,778 14,624 4,846
------ ----- ------ -----
Net loss $(41,134) $(20,609) $(33,472) $(19,586)
Net loss per
share:
Basic $(0.89) $(0.45) $(0.73) $(0.43)
====== ====== ====== ======
Diluted $(0.89) $(0.45) $(0.73) $(0.43)
====== ====== ====== ======
Weighted
average shares
outstanding:
Basic 46,011 45,631 45,997 45,561
====== ====== ====== ======
Diluted 46,011 45,631 45,997 45,561
====== ====== ====== ======
COMSTOCK
RESOURCES, INC.
OPERATING
RESULTS
(In thousands)
Three
Months Year
Ended Ended
December December
31, 31,
--------- ---------
2011 2010 2011 2010
---- ---- ---- ----
OPERATING CASH
FLOW:
Net loss $(41,134) $(20,609) $(33,472) $(19,586)
Reconciling items:
Deferred income
taxes (21,245) (4,748) (14,652) (4,617)
Depreciation,
depletion and
amortization 78,244 50,206 290,776 213,809
Dry hole costs and
lease impairments - - 9,819 -
Impairment of oil
and gas
properties 60,817 11 60,817 224
(Gain) loss on
sale of assets (2,905) 14,998 (35,061) 10,103
Debt issuance
costs and
discount
amortization 949 602 4,300 2,436
Stock-based
compensation 4,074 4,447 15,032 17,377
Operating cash
flow 78,800 44,907 297,559 219,746
Excess income
taxes from stock-
based - 12 612 (1,491)
compensation
Increase in
accounts
receivable (4,088) (12,528) (9,046) (4,432)
Decrease
(increase) in
other current
assets 1,036 (1,358) 3,311 48,070
Increase
(decrease) in
accounts payable
and (8,393) 31,393 (7,532) 49,769
accrued expenses ------ ------ ------ ------
Net cash provided
by operating
activities $67,355 $62,426 $284,904 $311,662
======= ======= ======== ========
EBITDAX:
Net loss $(41,134) $(20,609) $(33,472) $(19,586)
Interest expense 12,006 6,905 42,688 29,456
Income tax benefit (21,274) (4,778) (14,624) (4,846)
Depreciation,
depletion and
amortization 78,244 50,206 290,776 213,809
Exploration 82 99 10,148 2,605
Impairment of oil
and gas
properties 60,817 11 60,817 224
(Gain) loss on
sale of assets (2,905) 14,998 (35,061) 10,103
Stock-based
compensation 4,074 4,447 15,032 17,377
----- ----- ------ ------
EBITDAX $89,910 $51,279 $336,304 $249,142
======= ======= ======== ========
As of
December
31,
---------
2011 2010
---- ----
BALANCE SHEET DATA:
Cash and cash equivalents $8,460 $1,732
Marketable securities 47,642 84,637
Other current assets 56, 988 49,362
Property and equipment, net 2,509,845 1,816,248
Other 16,949 12,235
------ ------
Total assets $2,639,884 $1,964,214
========== ==========
Current liabilities $187,207 $155,064
Long-term debt 1,196,908 513,372
Deferred income taxes 201,705 217,993
Other non-current
liabilities 16,439 9,254
Stockholders' equity 1,037,625 1,068,531
Total liabilities and
stockholders' equity $2,639,884 $1,964,214
========== ==========
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per
unit amounts)
For the
Three
For the Three Months
Months Ended Ended
December 31, December
2011 31, 2010
--------------
East East
Texas/ South West Other Total Texas/ South Other Total
----- ---- ----- ----- ----- ----- -----
North Texas Texas North Texas
----- ----- ----- ----- -----
Louisiana Louisiana
--------- ---------
Oil
production
(thousand 28 312 6 346 33 43 82 158
barrels)
Gas
production
(MMcf) 20,177 2,659 595 23,431 12,637 3,130 549 16,316
Total
production
(MMcfe) 20,348 4,537 624 25,509 12,835 3,383 1,042 17,260
Oil sales $2,614 $31,638 $453 $34,705 $2,667 $3,517 $5,573 $11,757
Gas sales 65,959 11,331 2,461 79,751 45,356 13,278 2,259 60,893
------ ------ ----- ------ ------ ------ ----- ------
Total oil
and gas
sales $68,573 $42,969 $2,914 $114,456 $48,023 $16,795 $7,832 $72,650
======= ======= ====== ======== ======= ======= ====== =======
Average oil
price (per
barrel) $92.25 $101.10 $88.26 $100.18 $80.63 $83.16 $68.03 $74.75
Average gas
price (per
Mcf) $3.27 $4.26 $4.14 $3.40 $3.59 $4.24 $4.11 $3.73
Average
price (per
Mcfe) $3.37 $9.47 $4.67 $4.49 $3.74 $4.96 $7.52 $4.21
Production
taxes $(949) $2,228 $161 $1,440 $(781) $682 $450 $351
Gathering
and
transportation $7,741 $294 $116 $8,151 $4,189 $643 $116 $4,948
Lease
operating $7,236 $1,992 $812 $10,040 $6,162 $3,667 $2,546 $12,375
Production
taxes (per
Mcfe) $(0.05) $0.49 $0.26 $0.06 $(0.06) $0.20 $0.43 $0.02
Gathering
and
transportation $0.38 $0.06 $0.19 $0.32 $0.33 $0.19 $0.11 $0.29
(per Mcfe)
Lease
operating
(per Mcfe) $0.36 $0.44 $1.30 $0.39 $0.48 $1.09 $2.45 $0.71
Oil and Gas
Capital
Expenditures:
Acquisitions $16,879 $ - $201,782 $ - $218,661 $ - $ - $ - $ -
Exploratory
leasehold 12,064 43,860 147,532 - 203,456 4,310 2,073 - 6,383
Development
leasehold 420 - - - 420 1,077 27 15 1,119
Exploratory
drilling 2,290 2,131 - - 4,421 9,718 19,185 - 28,903
Development
drilling 46,713 76,726 - 160 123,599 96,913 7,441 101 104,455
Other
development 532 345 - 92 969 34 210 78 322
--- --- --- --- --- --- --- --- ---
Total $78,898 $123,062 $349,314 $252 $551,526 $112,052 $28,936 $194 $141,182
======= ======== ======== ==== ======== ======== ======= ==== ========
For the Year
For the Year Ended
Ended December December
31, 2011 31, 2010
--------------
East East
Texas/ South West Other Total Texas/ South Other Total
----- ---- ----- ----- ----- ----- -----
North Texas Texas North Texas
----- ----- ----- ----- -----
Louisiana Louisiana
--------- ---------
Oil
production
(thousand 117 697 24 838 147 157 411 715
barrels)
Gas
production
(MMcf) 76,883 11,153 2,557 90,593 52,038 14,437 2,498 68,973
Total
production
(MMcfe) 77,585 15,338 2,699 95,622 52,920 15,376 4,966 73,262
Oil sales $10,614 $67,523 $2,107 $80,244 $11,237 $12,088 $25,524 $48,849
Gas sales 290,028 51,789 12,306 354,123 219,387 68,915 11,990 300,292
------- ------ ------ ------- ------- ------ ------ -------
Total oil
and gas
sales $300,642 $119,312 $14,413 $434,367 $230,624 $81,003 $37,514 $349,141
======== ======== ======= ======== ======== ======= ======= ========
Average oil
price (per
barrel) $90.74 $96.81 $88.63 $95.73 $76.37 $77.21 $62.10 $68.35
Average gas
price (per
Mcf) $3.77 $4.64 $4.81 $3.91 $4.22 $4.77 $4.80 $4.35
Average
price (per
Mcfe) $3.87 $7.78 $5.34 $4.54 $4.36 $5.27 $7.55 $4.77
Production
taxes $(1,958) $4,881 $747 $3,670 $5,837 $1,990 $2,067 $9,894
Gathering
and
transportation $26,581 $1,476 $434 $28,491 $14,762 $2,086 $408 $17,256
Lease
operating $30,419 $12,443 $3,690 $46,552 $28,000 $14,027 $11,498 $53,525
Production
taxes (per
Mcfe) $(0.03) $0.32 $0.28 $0.04 $0.11 $0.13 $0.42 $0.14
Gathering
and
transportation $0.34 $0.10 $0.16 $0.30 $0.28 $0.14 $0.08 $0.24
(per Mcfe)
Lease
operating
(per Mcfe) $0.40 $0.81 $1.37 $0.48 $0.53 $0.91 $2.31 $0.72
Oil and Gas
Capital
Expenditures:
Acquisitions $16,879 $ - $201,782 $ - $218,661 $ - $ - $ - $ -
Exploratory
leasehold 37,682 66,263 151,754 - 255,699 53,288 81,440 - 134,728
Development
leasehold 695 103 - - 798 2,500 535 173 3,208
Exploratory
drilling 33,381 48,647 - - 82,028 59,579 25,561 - 85,140
Development
drilling 330,090 152,036 - 1,690 483,816 294,399 9,506 1,505 305,410
Other
development 4,089 1,966 - 461 6,516 2,251 2,559 838 5,648
----- ----- --- --- ----- ----- ----- --- -----
Total $422,816 $269,015 $353,536 $2,151 $1,047,518 $412,017 $119,601 $2,516 $534,134
======== ======== ======== ====== ========== ======== ======== ====== ========
Comstock Resources, Inc.
CONTACT: Roland O. Burns, Sr. Vice President and Chief Financial Officer,
+1-972-668-8800
Web site: http://www.comstockresources.com/
