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
THIRD QUARTER 2009 FINANCIAL AND OPERATING RESULTS
FRISCO, TEXAS, November 2, 2009 – 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, 2009. Reported results for the three months and nine months ended September 30, 2008 reflect the Company's offshore operations, which were sold during 2008, as discontinued operations.
Financial Results for the Three Months and Nine Months Ended September 30, 2009
Comstock reported a net loss of $12.6 million or 28¢ 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¢ 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 Ended September 30, | Nine Months Ended 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 Ended September 30, | Nine Months Ended 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 | For the Three Months Ended September 30, 2008 | ||||||||||||||||||||||||||||||||
East Texas/ | East Texas/ | ||||||||||||||||||||||||||||||||
North | South | North | South | ||||||||||||||||||||||||||||||
Louisiana | Texas | Other | Total | Louisiana | Texas | Other | Total | ||||||||||||||||||||||||||
Oil production (thousand barrels) | 39 | 33 | 91 | 163 | 95 | 38 | 131 | 264 | |||||||||||||||||||||||||
Gas production (million cubic feet – Mmcf) | 10,486 | 4,831 | 659 | 15,976 | 7,441 | 5,163 | 791 | 13,395 | |||||||||||||||||||||||||
Total production (Mmcfe) | 10,715 | 5,029 | 1,211 | 16,955 | 8,012 | 5,388 | 1,577 | 14,977 | |||||||||||||||||||||||||
Oil sales | $ | 2,502 | $ | 2,117 | $ | 4,836 | $ | 9,455 | $ | 11,164 | $ | 4,504 | $ | 12,053 | $ | 27,721 | |||||||||||||||||
Gas sales | 31,434 | 17,183 | 2,058 | 50,675 | 77,978 | 54,018 | 6,865 | 138,861 | |||||||||||||||||||||||||
Gas hedging gains (losses) | — | 7,306 | — | 7,306 | — | (2,730 | ) | — | (2,730 | ) | |||||||||||||||||||||||
Total gas sales | 31,434 | 24,489 | 2,058 | 57,981 | 77,978 | 51,288 | 6,865 | 136,131 | |||||||||||||||||||||||||
Total oil and gas sales | $ | 33,936 | $ | 26,606 | $ | 6,894 | $ | 67,436 | $ | 89,142 | $ | 55,792 | $ | 18,918 | $ | 163,852 | |||||||||||||||||
Average oil price (per barrel) | $ | 64.15 | $ | 64.15 | $ | 53.14 | $ | 57.96 | $ | 117.52 | $ | 118.53 | $ | 92.01 | $ | 105.15 | |||||||||||||||||
Average gas price (per thousand cubic feet – Mcf) | $ | 3.00 | $ | 3.56 | $ | 3.12 | $ | 3.17 | $ | 10.48 | $ | 10.46 | $ | 8.68 | $ | 10.37 | |||||||||||||||||
Average gas price including hedging (per Mcf) | $ | 3.00 | $ | 5.07 | $ | 3.12 | $ | 3.63 | $ | 10.48 | $ | 9.93 | $ | 8.68 | $ | 10.16 | |||||||||||||||||
Average price (per Mcf equivalent) | $ | 3.17 | $ | 3.84 | $ | 5.69 | $ | 3.55 | $ | 11.13 | $ | 10.86 | $ | 12.00 | $ | 11.12 | |||||||||||||||||
Average price including hedging (per Mcf equivalent) | $ | 3.17 | $ | 5.29 | $ | 5.69 | $ | 3.98 | $ | 11.13 | $ | 10.35 | $ | 12.00 | $ | 10.94 | |||||||||||||||||
Lifting cost(1) | $ | 7,637 | $ | 4,834 | $ | 3,548 | $ | 16,019 | (1) | $ | 9,485 | $ | 7,224 | $ | 4,847 | $ | 21,556 | (1) | |||||||||||||||
Lifting cost (per Mcf equivalent) | $ | 0.71 | $ | 0.96 | $ | 2.93 | $ | 0.94 | $ | 1.18 | $ | 1.34 | $ | 3.07 | $ | 1.44 | |||||||||||||||||
Oil and Gas Capital Expenditures: | |||||||||||||||||||||||||||||||||
Leasehold costs | $ | 2,376 | $ | 313 | $ | 52 | $ | 2,741 | $ | 89,213 | $ | 206 | $ | 47 | $ | 89,466 | |||||||||||||||||
Exploratory drilling | 22,416 | 39 | — | 22,455 | — | 426 | 44 | 470 | |||||||||||||||||||||||||
Development drilling | 49,335 | 2,647 | 10 | 51,992 | 54,784 | 16,769 | 460 | 72,013 | |||||||||||||||||||||||||
Other development | 824 | 954 | 30 | 1,808 | 166 | 1,032 | 328 | 1,526 | |||||||||||||||||||||||||
Total | $ | 74,951 | $ | 3,953 | $ | 92 | $ | 78,996 | $ | 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. |
COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)
For the Nine Months Ended September 30, 2009 | For the Nine Months Ended September 30, 2008 | |||||||||||||||||||||||||||||||
East Texas/ | East Texas/ | |||||||||||||||||||||||||||||||
North | South | North | South | |||||||||||||||||||||||||||||
Louisiana | Texas | Other | Total | Louisiana | Texas | Other | Total | |||||||||||||||||||||||||
Oil production (thousand barrels) | 167 | 122 | 295 | 584 | 226 | 142 | 407 | 775 | ||||||||||||||||||||||||
Gas production (million cubic feet – Mmcf) | 26,278 | 14,565 | 2,034 | 42,877 | 21,395 | 16,633 | 2,179 | 40,207 | ||||||||||||||||||||||||
Total production (Mmcfe) | 27,278 | 15,299 | 3,803 | 46,380 | 22,752 | 17,485 | 4,618 | 44,855 | ||||||||||||||||||||||||
Oil sales | $ | 8,185 | $ | 6,310 | $ | 12,603 | $ | 27,098 | $ | 25,213 | $ | 16,012 | $ | 34,494 | $ | 75,719 | ||||||||||||||||
Gas sales | 91,009 | 55,293 | 6,930 | 153,232 | 212,455 | 162,993 | 19,786 | 395,234 | ||||||||||||||||||||||||
Gas hedging gains (losses) | — | 20,332 | — | 20,332 | — | (7,358 | ) | — | (7,358 | ) | ||||||||||||||||||||||
Total gas sales | 91,009 | 75,625 | 6,930 | 173,564 | 212,455 | 155,635 | 19,786 | 387,876 | ||||||||||||||||||||||||
Total oil and gas sales | $ | 99,194 | $ | 81,935 | $ | 19,533 | $ | 200,662 | $ | 237,668 | $ | 171,647 | $ | 54,280 | $ | 463,595 | ||||||||||||||||
Average oil price (per barrel) | $ | 49.01 | $ | 51.72 | $ | 42.72 | $ | 46.42 | $ | 111.56 | $ | 112.76 | $ | 84.75 | $ | 97.74 | ||||||||||||||||
Average gas price (per thousand cubic feet – Mcf) | $ | 3.46 | $ | 3.80 | $ | 3.41 | $ | 3.57 | $ | 9.93 | $ | 9.80 | $ | 9.08 | $ | 9.83 | ||||||||||||||||
Average gas price including hedging (per Mcf) | $ | 3.46 | $ | 5.19 | $ | 3.41 | $ | 4.05 | $ | 9.93 | $ | 9.36 | $ | 9.08 | $ | 9.65 | ||||||||||||||||
Average price (per Mcf equivalent) | $ | 3.64 | $ | 4.03 | $ | 5.14 | $ | 3.89 | $ | 10.45 | $ | 10.24 | $ | 11.75 | $ | 10.50 | ||||||||||||||||
Average price including hedging (per Mcf equivalent) | $ | 3.64 | $ | 5.36 | $ | 5.14 | $ | 4.33 | $ | 10.45 | $ | 9.82 | $ | 11.75 | $ | 10.34 | ||||||||||||||||
Lifting cost(2) | $ | 23,889 | $ | 15,614 | $ | 10,960 | $ | 50,463 | (2) | $ | 28,133 | $ | 22,312 | $ | 15,675 | $ | 66,120 | (2) | ||||||||||||||
Lifting cost (per Mcf equivalent) | $ | 0.88 | $ | 1.02 | $ | 2.88 | $ | 1.09 | $ | 1.24 | $ | 1.28 | $ | 3.39 | $ | 1.47 | ||||||||||||||||
Oil and Gas Capital Expenditures: | ||||||||||||||||||||||||||||||||
Leasehold costs | $ | 9,544 | $ | 644 | $ | 155 | $ | 10,343 | $ | 109,220 | $ | 1,612 | $ | 108 | $ | 110,940 | ||||||||||||||||
Exploratory drilling | 88,917 | 1,932 | — | 90,849 | — | 2,783 | 395 | 3,178 | ||||||||||||||||||||||||
Development drilling | 117,187 | 26,433 | 121 | 143,741 | 137,343 | 43,033 | 2,006 | 182,382 | ||||||||||||||||||||||||
Other development | 4,036 | 4,232 | 326 | 8,594 | 1,451 | 8,068 | 3,309 | 12,828 | ||||||||||||||||||||||||
Total | $ | 219,684 | $ | 33,241 | $ | 602 | $ | 253,527 | $ | 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. |