Exhibit 99.1
5300 Town and Country Blvd., Suite 500 | |
![]() | Frisco, Texas 75034 |
Telephone: (972) 668-8800 | |
Contact: Roland O. Burns | |
Sr. Vice President and Chief Financial Officer | |
Web Site: www.comstockresources.com |
NEWS RELEASE
For Immediate Release
COMSTOCK RESOURCES, INC. REPORTS
FIRST QUARTER 2008 FINANCIAL AND OPERATING RESULTS
FRISCO, TEXAS, May 5, 2008 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended March 31, 2008.
First Quarter 2008 Financial Results
Comstock reported net income of $41.1 million or 91¢ per diluted share for the three months ended March 31, 2008 as compared to 2007's first quarter net income of $12.6 million or 28¢ per diluted share.
The outstanding first quarter financial results reflect strong market prices for oil and natural gas and the Company's production growth from acquisitions, onshore development drilling and offshore exploration activities. Comstock's production in the first quarter of 2008 increased 25% to 25.1 billion cubic feet equivalent of natural gas ("Bcfe") as compared to production of 20.0 Bcfe in the first quarter of 2007. Onshore production has increased 44% and offshore production was up 6% from the first quarter of 2007. The first quarter average daily production rate of 275 million cubic feet of natural gas equivalent ("Mmcfe") also has increased 11% from the fourth quarter production rate of 249 Mmcfe per day. The Company's realized natural gas price averaged $8.46 per Mcf in 2008's first quarter, 23% higher than the $6.89 per Mcf in 2007's first quarter and $1.17 per Mcfe above the natural gas price realized in the fourth quarter of 2007. Realized oil prices in the first quarter of 2008 averaged $93.93 per barrel, 73% higher than the $54.15 per barrel for 2007 and $7.92 per barrel above the oil price realized in the fourth quarter of 2007. Driven by the 25% increase in production and the much stronger oil and natural gas prices, first quarter 2008's oil and gas sales of $241.0 million increased 65% from 2007's first quarter sales of $146.0 million. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2008's first quarter of $170.5 million was 70% higher than 2007's first quarter cash flow of $100.5 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $199.5 million in 2008's first quarter, a 75% increase from 2007's first quarter EBITDAX of $114.0 million.
First Quarter 2008 Drilling Results
Comstock announced the results to date of its 2008 drilling program. In the first three months of 2008 Comstock drilled 36 wells (23.2 net). Thirty-five of the wells drilled were successful and one was a dry hole.
Onshore, Comstock drilled 31 (19.6 net) successful development wells in the first quarter of 2008. Comstock drilled 26 successful wells (16.3 net) in its East Texas/North Louisiana region which have been tested at an average per well initial production rate of 2.1 Mmcfe per day. At March 31, 2008 Comstock had four additional wells in this region that were being drilled which are part of Comstock's 84 well drilling program planned in this region for 2008. In South Texas, Comstock drilled four successful wells (3.5 net) and had one exploratory dry hole (0.5 net) during the first quarter of 2008. The successful wells were tested at an average per well initial production rate of 3.9 Mmcfe per day. Three of the wells were in the Javelina field and the other was a successful exploratory well. Comstock also drilled two successful wells (0.3 net) in the San Juan Basin in New Mexico during the first quarter.
Comstock also announced that it plans to increase its 2008 budget for its onshore drilling program to $322 million from the $278 million previously announced. The increase is primarily attributable to increased spending in its East Texas/North Louisiana region on acreage acquisitions and drilling related to the Company's Haynesville shale program. The Company estimates that it has 65,500 (50,400 net) acres that are prospective for Haynesville shale development. The onshore drilling program now includes 105 (70.2 net) development wells and 12 (7.7) exploratory wells. Capital spending in the Company's East Texas/North Louisiana operating region is forecasted to be $200 million, which includes 84 total wells (57.6 net), nine of which will be horizontal wells. Comstock also expects to spend $115 million in its South Texas operating region, including 28 wells (19.5 net). The remaining $7 million will be spent on Comstock's other onshore regions.
Comstock's offshore operations are conducted by its 49% owned subsidiary, Bois d'Arc Energy, Inc. (NYSE: BDE). Bois d'Arc has drilled three successful wells (2.6 net) so far in 2008. The OCS-G 24922 #1 at Ship Shoal block 97 was drilled to a depth of 12,983 feet and encountered 71 net feet of pay in two high quality sands. This well was put on production in February at a rate of 10.3 MMcfe per day. Bois d'Arc has a 78% working interest in this well. The OCS-G 24926 #1 was drilled to test the "Perch" prospect at Ship Shoal block 120. This well was drilled to a depth of 5,000 feet and encountered 94 feet of pay in eight commercial sands. First production for the well is expected in the second quarter. Bois d'Arc has a 100% working interest in this well. Bois d'Arc also drilled the OCS-G 24977 #1 at South Pelto block 21 to test the "Chinook" prospect. This exploratory well was drilled to a depth of 18,250 feet and encountered 38 feet of pay in the objective sand. First production for the well is expected July 1, 2008. Bois d'Arc has a 79% working interest in this well. Bois d'Arc is currently drilling a 16,500 foot exploratory well to test its "Kelsie" prospect at Ship Shoal block 95. Bois d'Arc has a 100% working interest in this well.
Proposed Sale of Bois d'Arc Energy
As previously announced, on April 30, 2008 Bois d'Arc Energy entered into a definitive merger agreement with Stone Energy Corporation ("Stone") (NYSE: SGY) pursuant to which Stone will acquire Bois d'Arc. Under the terms of the merger agreement, Bois d'Arc shareholders, including Comstock, will receive $13.65 in cash and 0.165 shares of Stone common stock for each share of Bois d'Arc. Comstock will receive $440 million in cash and 5,317,069 shares of the common stock of Stone for its stake in Bois d'Arc. Completion of the transaction is subject to approval by the Bois d'Arc and Stone stockholders, regulatory approvals, and other customary conditions. Concurrent with the execution of the merger agreement, Comstock entered into a stockholder agreement in which it has agreed to vote in favor of the merger.
Property Divestiture
Comstock also announced today that it has accepted offers whereby it intends to sell certain properties in East and South Texas for $122.0 million. The properties include Comstock's interests in the J.C. Martin, AWP and East Seven Sisters fields in South Texas and the Gilmer field in East Texas. Comstock owns net profit interests in these fields which are operated by other parties. The sales are expected to close in June 2008 with an effective date of April 1, 2008. The estimated proved reserves attributable to the properties being sold are 44.3 Bcfe. Production in the first quarter of 2008 attributable to Comstock's interest in these properties was 8.5 MMcfe per day. Comstock expects to realize an after tax gain of $16.6 million on these sales. Scotia Waterous (USA) Inc. acted as financial advisor to Comstock with respect to these sales.
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 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 March 31, | ||||||||
2008 | 2007 | |||||||
Oil and gas sales | $ | 240,987 | $ | 146,029 | ||||
Operating expenses: | ||||||||
Oil and gas operating | 36,640 | 27,083 | ||||||
Exploration | 8,655 | 11,133 | ||||||
Depreciation, depletion and amortization | 70,562 | 56,707 | ||||||
General and administrative | 9,339 | 9,702 | ||||||
Loss on disposal of assets | 240 | — | ||||||
Total operating expenses | 125,436 | 104,625 | ||||||
Income from operations | 115,551 | 41,404 | ||||||
Other income (expenses): | ||||||||
Interest income | 244 | 296 | ||||||
Other income | 157 | 130 | ||||||
Interest expense | (11,314 | ) | (8,449 | ) | ||||
Total other income (expenses) | (10,913 | ) | (8,023 | ) | ||||
Income before income taxes and minority interest | 104,638 | 33,381 | ||||||
Provision for income taxes | (44,073 | ) | (14,824 | ) | ||||
Minority interest in earnings of Bois d'Arc Energy | (19,470 | ) | (5,999 | ) | ||||
Net income | $ | 41,095 | $ | 12,558 | ||||
Net income per share: | ||||||||
Basic | $ | 0.93 | $ | 0.29 | ||||
Diluted | $ | 0.91 | $ | 0.28 | ||||
Weighted average common and common stock equivalent shares outstanding: | ||||||||
Basic | 44,179 | 43,364 | ||||||
Diluted | 44,994 | 44,238 |
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
(In thousands)
Three Months Ended March 31, | |||||||||
2008 | 2007 | ||||||||
Cash flow from operations: | |||||||||
Net cash provided by operating activities | $ | 128,181 | $ | 78,746 | |||||
Excess tax benefit from stock based compensation | 670 | 166 | |||||||
Increase in accounts receivable | 22,112 | 4,874 | |||||||
Decrease in other current assets | 1,392 | 1,237 | |||||||
Decrease in accounts payable and accrued expenses | 18,124 | 15,521 | |||||||
Cash flow from operations | $ | 170,479 | $ | 100,544 | |||||
EBITDAX: | |||||||||
Net income | $ | 41,095 | $ | 12,558 | |||||
Interest expense | 11,314 | 8,449 | |||||||
Income tax expense | 44,073 | 14,824 | |||||||
Depreciation, depletion and amortization | 70,562 | 56,707 | |||||||
Loss on disposal of assets | 240 | — | |||||||
Minority interest in earnings of Bois d'Arc Energy | 19,470 | 5,999 | |||||||
Stock-based compensation | 4,052 | 4,312 | |||||||
Exploration expense | 8,655 | 11,133 | |||||||
EBITDAX | $ | 199,461 | $ | 113,982 | |||||
As of March 31, | ||||||||
2008 | 2007 | |||||||
Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 15,520 | $ | 12,003 | ||||
Other current assets | 125,609 | 90,974 | ||||||
Property and equipment, net | 2,271,982 | 1,857,521 | ||||||
Other | 6,505 | 5,361 | ||||||
Total assets | $ | 2,419,616 | $ | 1,965,859 | ||||
Current liabilities | $ | 129,804 | $ | 147,153 | ||||
Long-term debt | 736,000 | 511,000 | ||||||
Deferred income taxes | 400,964 | 323,507 | ||||||
Other long-term liabilities | 57,968 | 58,113 | ||||||
Minority interest in Bois d'Arc Energy | 287,819 | 228,006 | ||||||
Stockholders' equity | 807,061 | 698,080 | ||||||
Total liabilities and stockholders' equity | $ | 2,419,616 | $ | 1,965,859 |
COMSTOCK RESOURCES, INC.
CONSOLIDATED OPERATING RESULTS
($ In thousands, except per unit amounts)
For the Three Months ended March 31, 2008 | |||||||||||
Onshore(1) | Bois d'Arc Energy | Total | |||||||||
Oil production (thousand barrels) | 243 | 427 | 670 | ||||||||
Gas production (million cubic feet – Mmcf) | 13,130 | 7,927 | 21,057 | ||||||||
Total production (Mmcfe) | 14,586 | 10,486 | 25,072 | ||||||||
Oil sales | $ | 19,772 | $ | 43,091 | $ | 62,863 | |||||
Gas sales | 108,193 | 70,175 | 178,368 | ||||||||
Realized hedging losses | (244 | ) | — | (244 | ) | ||||||
Total gas sales | 107,949 | 70,175 | 178,124 | ||||||||
Total oil and gas sales | $ | 127,721 | $ | 113,266 | $ | 240,987 | |||||
Average oil price (per barrel) | $ | 81.49 | $ | 101.01 | $ | 93.93 | |||||
Average gas price excluding realized hedging losses (per thousand cubic feet – Mcf) | $ | 8.24 | $ | 8.85 | $ | 8.47 | |||||
Average gas price including hedging losses (per thousand cubic feet – Mcf) | $ | 8.22 | $ | 8.85 | $ | 8.46 | |||||
Average price excluding hedging losses (per Mcf equivalent) | $ | 8.77 | $ | 10.80 | $ | 9.62 | |||||
Average price including hedging losses (per Mcf equivalent) | $ | 8.76 | $ | 10.80 | $ | 9.61 | |||||
Lifting cost | $ | 21,202 | $ | 15,438 | $ | 36,640 | |||||
Lifting cost (per Mcf equivalent) | $ | 1.45 | $ | 1.47 | $ | 1.46 | |||||
Oil and gas capital expenditures | $ | 62,041 | $ | 58,315 | $ | 120,356 | |||||
(1) Includes the onshore results of operations of Comstock Resources, Inc. |
For the Three Months ended March 31, 2007 | |||||||||||
Onshore(1) | Bois d'Arc Energy | Total | |||||||||
Oil production (thousand barrels) | 251 | 368 | 619 | ||||||||
Gas production (million cubic feet – Mmcf) | 8,635 | 7,701 | 16,336 | ||||||||
Total production (Mmcfe) | 10,140 | 9,909 | 20,049 | ||||||||
Oil sales | $ | 12,054 | $ | 21,468 | $ | 33,522 | |||||
Gas sales | 57,793 | 54,714 | 112,507 | ||||||||
Total oil and gas sales | $ | 69,847 | $ | 76,182 | $ | 146,029 | |||||
Average oil price (per barrel) | $ | 48.03 | $ | 58.33 | $ | 54.15 | |||||
Average gas price (per thousand cubic feet – Mcf) | $ | 6.69 | $ | 7.10 | $ | 6.89 | |||||
Average price (per Mcf equivalent) | $ | 6.89 | $ | 7.69 | $ | 7.28 | |||||
Lifting cost | $ | 14,055 | $ | 13,028 | $ | 27,083 | |||||
Lifting cost (per Mcf equivalent) | $ | 1.39 | $ | 1.31 | $ | 1.35 | |||||
Oil and gas capital expenditures | $ | 84,251 | $ | 62,753 | $ | 147,004 | |||||
(1) Includes the onshore results of operations of Comstock Resources, Inc. |
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
($ In thousands, except per unit amounts)
For the Three Months ended March 31, 2008
East Texas/ North Louisiana | South Texas | Other | Total Onshore | |||||||||||||
Oil production (thousand barrels) | 47 | 46 | 150 | 243 | ||||||||||||
Gas production (million cubic feet – Mmcf) | 6,727 | 5,630 | 773 | 13,130 | ||||||||||||
Total production (Mmcfe) | 7,008 | 5,907 | 1,671 | 14,586 | ||||||||||||
Oil sales | $ | 4,424 | $ | 4,520 | $ | 10,828 | $ | 19,772 | ||||||||
Gas sales | 55,731 | 46,135 | 6,327 | 108,193 | ||||||||||||
Realized hedging losses | — | (244 | ) | — | (244 | ) | ||||||||||
Total gas sales | 55,731 | 45,891 | 6,327 | 107,949 | ||||||||||||
Total oil and gas sales | $ | 60,155 | $ | 50,411 | $ | 17,155 | $ | 127,721 | ||||||||
Average oil price (per barrel) | $ | 94.13 | $ | 98.26 | $ | 72.19 | $ | 81.49 | ||||||||
Average gas price excluding hedging losses (per thousand cubic feet – Mcf) | $ | 8.28 | $ | 8.19 | $ | 8.18 | $ | 8.24 | ||||||||
Average gas price including hedging losses (per Mcf) | $ | 8.28 | $ | 8.15 | $ | 8.18 | $ | 8.22 | ||||||||
Average price excluding hedging losses (per Mcf equivalent) | $ | 8.58 | $ | 8.58 | $ | 10.27 | $ | 8.77 | ||||||||
Average price including hedging losses (per Mcf equivalent) | $ | 8.58 | $ | 8.53 | $ | 10.27 | $ | 8.76 | ||||||||
Lifting cost | $ | 8,769 | $ | 7,056 | $ | 5,377 | $ | 21,202 | ||||||||
Lifting cost (per Mcf equivalent) | $ | 1.25 | $ | 1.19 | $ | 3.22 | $ | 1.45 | ||||||||
Oil and Gas Capital Expenditures: | ||||||||||||||||
Leasehold costs | $ | 2,861 | $ | 1,124 | $ | 49 | $ | 4,034 | ||||||||
Exploratory drilling | — | 2,356 | 123 | 2,479 | ||||||||||||
Development drilling | 39,373 | 11,403 | 1,389 | 52,165 | ||||||||||||
Other development | 930 | 717 | 1,716 | 3,363 | ||||||||||||
Total | $ | 43,164 | $ | 15,600 | $ | 3,277 | $ | 62,041 | ||||||||
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
($ In thousands, except per unit amounts)
For the Three Months ended March 31, 2007
East Texas/ North Louisiana | South Texas | Other | Total Onshore | |||||||||||||
Oil production (thousand barrels) | 46 | 53 | 152 | 251 | ||||||||||||
Gas production (million cubic feet – Mmcf) | 5,381 | 2,577 | 677 | 8,635 | ||||||||||||
Total production (Mmcfe) | 5,657 | 2,896 | 1,587 | 10,140 | ||||||||||||
Oil sales | $ | 2,492 | $ | 2,958 | $ | 6,604 | $ | 12,054 | ||||||||
Gas sales | 35,501 | 18,101 | 4,191 | 57,793 | ||||||||||||
Total oil and gas sales | $ | 37,993 | $ | 21,059 | $ | 10,795 | $ | 69,847 | ||||||||
Average oil price (per barrel) | $ | 54.17 | $ | 55.81 | $ | 43.45 | $ | 48.03 | ||||||||
Average gas price (per thousand cubic feet – Mcf) | $ | 6.60 | $ | 7.02 | $ | 6.19 | $ | 6.69 | ||||||||
Average gas price (per thousand cubic feet – Mcf equivalent) | $ | 6.72 | $ | 7.27 | $ | 6.80 | $ | 6.89 | ||||||||
Lifting cost | $ | 6,684 | $ | 3,322 | $ | 4,049 | $ | 14,055 | ||||||||
Lifting cost (per Mcf equivalent) | $ | 1.18 | $ | 1.15 | $ | 2.55 | $ | 1.39 | ||||||||
Oil and Gas Capital Expenditures: | ||||||||||||||||
Leasehold costs | $ | 398 | $ | 816 | $ | 2,400 | $ | 3,614 | ||||||||
Exploratory drilling | — | 2,255 | 442 | 2,697 | ||||||||||||
Development drilling | 54,707 | 11,677 | 10,009 | 76,393 | ||||||||||||
Other development | 242 | 483 | 822 | 1,547 | ||||||||||||
Total | $ | 55,347 | $ | 15,231 | $ | 13,673 | $ | 84,251 |