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. RESTATES
THIRD QUARTER 2004 FINANCIAL RESULTS
FRISCO, TEXAS, January 27, 2005 — Comstock Resources, Inc. (“Comstock” or the “Company”) (NYSE: CRK) today reported that it is restating its financial statements for the quarter and nine months ended September 30, 2004.
In January 2005, the Company determined that it had incorrectly accounted for its ownership interest in Bois d’Arc Energy during the three month period ended September 30, 2004. Upon formation of Bois d’Arc Energy, the Company started consolidating Bois d’Arc Energy. Pursuant to the terms of Bois d’Arc Energy’s operating agreement, the Company jointly shares management of Bois d’Arc Energy with the principals of Bois d’Arc Resources. Upon further consideration of Bois d’Arc Energy’s formation documents, the Company has concluded that consolidation is precluded due to its inability to control Bois d’Arc Energy pursuant to Bois d’Arc Energy’s operating agreement. Consequently, the Company has restated the financial statements to account for the company’s 59.9% interest in Bois d’Arc Energy under the proportionate consolidation method. The restatement did not have any impact on the Company’s consolidated stockholders’ equity, net income or earnings per share for any periods presented.
The effect of the restatement on the consolidated balance sheet as of September 30, 2004, the consolidated statement of operations for the three month and nine month periods ended September 30, 2004 and the consolidated statement of cash flows for the nine month period ended September 30, 2004 is as follows:
Balance Sheet Data:
As Previously | ||||||||||||
Reported | Adjustments | As Restated | ||||||||||
ASSETS: | (In thousands) | |||||||||||
Current assets | $ | 75,484 | $ | (14,792 | ) | $ | 60,692 | |||||
Net Property and Equipment | 862,645 | (121,236 | ) | 741,409 | ||||||||
Receivable from Bois d’Arc Energy | — | 60,657 | 60,657 | |||||||||
Other Assets | 12,600 | 579 | 13,179 | |||||||||
$ | 950,729 | $ | (74,792 | ) | $ | 875,937 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||||||||
Current liabilities | $ | 64,688 | $ | (11,764 | ) | $ | 52,924 | |||||
Long-Term Debt, less current portion | 381,000 | — | 381,000 | |||||||||
Deferred Taxes Payable | 91,911 | — | 91,911 | |||||||||
Reserve for Future Abandonment Costs | 28,406 | (10,644 | ) | 17,762 | ||||||||
Minority Interests | 52,384 | (52,384 | ) | — | ||||||||
Total stockholders’ equity | 332,340 | — | 332,340 | |||||||||
$ | 950,729 | $ | (74,792 | ) | $ | 875,937 | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, 2004 | September 30, 2004 | |||||||||||||||||||||||
As | As | |||||||||||||||||||||||
Previously | As | Previously | ||||||||||||||||||||||
Income Statement Data: | Reported | Adjustments | Restated | Reported | Adjustments | As Restated | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Oil and gas sales | $ | 78,353 | (15,151 | ) | $ | 63,202 | $ | 205,622 | (15,151 | ) | $ | 190,471 | ||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Oil and gas operating | 15,409 | (2,927 | ) | 12,482 | 40,515 | (2,927 | ) | 37,588 | ||||||||||||||||
Exploration | 9,400 | (2,672 | ) | 6,728 | 14,579 | (2,672 | ) | 11,907 | ||||||||||||||||
Depreciation, depletion and amortization | 20,503 | (4,902 | ) | 15,601 | 52,040 | (4,902 | ) | 47,138 | ||||||||||||||||
General and administrative, net | 3,665 | (321 | ) | 3,344 | 9,637 | (321 | ) | 9,316 | ||||||||||||||||
Total operating expenses | 48,977 | (10,822 | ) | 38,155 | 116,771 | (10,822 | ) | 105,949 | ||||||||||||||||
Income from operations | 29,376 | (4,329 | ) | 25,047 | 88,851 | (4,329 | ) | 84,522 | ||||||||||||||||
Other income (expenses): | ||||||||||||||||||||||||
Interest income | 46 | 449 | 495 | 80 | 449 | 529 | ||||||||||||||||||
Other income | 43 | — | 43 | 129 | — | 129 | ||||||||||||||||||
Interest expense | (4,803 | ) | — | (4,803 | ) | (15,594 | ) | — | (15,594 | ) | ||||||||||||||
Loss on early extinguishment of debt | — | — | — | (19,599 | ) | — | (19,599 | ) | ||||||||||||||||
Loss on derivatives | (553 | ) | — | (553 | ) | (553 | ) | — | (553 | ) | ||||||||||||||
Formation costs | (1,641 | ) | 659 | (982 | ) | (1,641 | ) | 659 | (982 | ) | ||||||||||||||
Minority interests in net income before income taxes | (3,221 | ) | 3,221 | — | (3,221 | ) | 3,221 | — | ||||||||||||||||
Total other income (expenses) | (10,129 | ) | 4,329 | (5,800 | ) | (40,399 | ) | 4,329 | (36,070 | ) | ||||||||||||||
Income before income taxes | 19,247 | — | 19,247 | 48,452 | — | 48,452 | ||||||||||||||||||
Provision for income taxes | (6,929 | ) | — | (6,929 | ) | (17,443 | ) | — | (17,443 | ) | ||||||||||||||
Net income | $ | 12,318 | $ | — | $ | 12,318 | $ | 31,009 | $ | — | $ | 31,009 | ||||||||||||
Nine Months Ended | ||||||||||||
September 30, 2004 | ||||||||||||
As | ||||||||||||
Previously | As | |||||||||||
Statement of Cash Flows Data: | Reported | Adjustments | Restated | |||||||||
(In thousands) | ||||||||||||
Net cash flows from operating activities | $ | 124,460 | $ | (5,707 | ) | $ | 118,753 | |||||
Net cash flows used for investing activities | (157,323 | ) | (2,067 | ) | (159,390 | ) | ||||||
Net cash flows from financing | 56,599 | — | 56,599 |
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 that 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.