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Comstock Resources, Inc. Reports Third Quarter 2011 Financial and Operating Results and 2012 Drilling Budget

October 31, 2011

FRISCO, Texas, Oct. 31, 2011 /PRNewswire/ — 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, 2011.

Financial Results for the Three Months and Nine Months Ended September 30, 2011

Comstock reported net income of $1.3 million or 3 cents per diluted share for the three months ended September 30, 2011 as compared to a net loss of $4.7 million or 10 cents per share for the three months ended September 30, 2010. The financial results include a gain realized from the sale of marketable securities of $2.5 million ($1.6 million after tax or 4 cents per share) for the three months ended September 30, 2011.

Comstock produced 26.2 billion cubic feet of natural gas equivalent (“Bcfe”) in the third quarter of 2011, an increase of 53% over the 17.2 Bcfe produced in the third quarter of 2010. Comstock’s daily production rate, which averaged 285 million cubic feet of natural gas equivalent (“MMcfe”) per day, grew 8% over the production rate in the second quarter of 2011, which averaged 263 MMcfe per day. Production from the Company’s Haynesville shale operations increased 15% from the prior quarter, averaging 200 MMcfe per day in the third quarter and accounting for 70% of the Company’s total production.

Comstock’s average realized natural gas price decreased 4% to $4.09 per Mcf in the third quarter of 2011 as compared to $4.24 per Mcf in the third quarter of 2010. The Company’s average realized oil price improved by 35% to $87.55 per barrel in the third quarter of 2011 as compared to $64.97 per barrel in the third quarter of 2010. The higher production level allowed the Company’s oil and gas sales to increase by 50% to $119.4 million in the third quarter of 2011 as compared to 2010′s third quarter sales of $79.7 million. Operating cash flow (before changes in working capital accounts) increased 81% to $85.5 million in the third quarter of 2011 from $47.3 million in 2010′s third quarter and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses in the quarter was up 72% to $94.2 million from $54.6 million in 2010′s third quarter.

Comstock had net income of $7.7 million or 16 cents per diluted share for the first nine months of 2011 as compared to net income of $1.0 million or 2 cents per diluted share for the nine months ended September 30, 2010. The financial results for the nine months ended September 30, 2011 include a gain realized from the sale of marketable securities of $32.2 million ($20.9 million after tax or 46 cents per share), impairments of leasehold costs of $9.8 million ($6.4 million after tax or 14 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). Net income for the nine months ended September 30, 2010 included a gain realized from sale of marketable securities of $5.7 million ($3.7 million after tax or 8 cents per share).

Comstock’s production in the first nine months of 2011 of 70.1 billion Bcfe was 25% higher than the 56.0 Bcfe produced in the first nine months of 2010. Natural gas prices have been weaker in the first nine months of 2011 as compared to 2010′s first nine months. Comstock’s average realized natural gas price decreased 10% to $4.09 per Mcf for the first nine months of 2011 as compared to $4.55 per Mcf for the first nine months of 2010. The Company’s average realized oil price improved by 39% to $92.59 per barrel for the first three quarters of 2011 as compared to $66.54 per barrel for the first three quarters of 2010. With higher production and lower natural gas prices, oil and gas sales increased by 16% to $319.9 million in the first nine months of 2011 as compared to 2010′s first nine months sales of $276.5 million. Operating cash flow (before changes in working capital accounts) of $218.8 million in the first nine months of 2011 increased 25% from 2010′s first nine months operating cash flow of $174.8 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, increased 25% to $246.4 million in 2011′s first nine months from EBITDAX of $197.9 million for the same period in 2010.

2011 Drilling Results

Comstock reported on the results to date of its 2011 drilling program. During the first nine months of 2011, Comstock spent $443.4 million on its drilling program and $52.6 million to acquire acreage to support future exploration and development activity. The Company is expecting to spend a total of $575.0 million in 2011 to drill 88 wells (47.4 net) and to complete 35 (23.4 net) Haynesville shale wells drilled in 2010. Comstock expects to spend a total of $125.0 million on acreage acquisitions in 2011. In the first three quarters of 2011, Comstock has drilled 67 wells (33.9 net) and completed 77 wells (44.2 net). As of September 30, 2011 the Company also had nine wells (4.9 net) in the process of being drilled.

In the East Texas/North Louisiana region, Comstock has drilled 52 wells (21.6 net) in 2011, 51 of which were Haynesville or Bossier shale wells. During the first nine months of 2011, Comstock completed 65 (35.7 net) of its Haynesville or Bossier shale wells. Wells completed in the first nine months of the year were put on production at an average per well initial production rate of 10 MMcfe per day. As of September 30, 2011, Comstock had 21 (8.9 net) Haynesville or Bossier wells waiting on completion, down from 35 wells (23.4 net) at December 31, 2010.

In the South Texas region, the Company has drilled twelve Eagle Ford shale wells (12.0 net) in the first nine months of 2011. Comstock completed eight wells (8.0 net) including one well that was drilled in 2010. These wells had an average per well initial production rate of 683 barrels of oil equivalent (“BOE”) per day. In the third quarter of 2011, Comstock completed four wells in the Eagle Ford shale. The Cutter Creek #1H was drilled to a vertical depth of 9,970 feet with a 4,824 foot lateral. This well was tested at an initial rate of 575 barrels of oil per day and 0.2 MMcf of natural gas per day or 608 BOE per day. The Forrest Wheeler #1H was drilled to a vertical depth of 11,142 feet with a 5,458 foot lateral. This well was tested at an initial rate of 480 barrels of oil per day and 0.7 MMcf of natural gas per day or 597 BOE per day. The Rancho Tres Hijos “A” #1H was drilled to a vertical depth of 10,911 feet with a 4,512 foot lateral. This well was tested at an initial rate of 465 barrels of oil per day and 0.6 MMcf of natural gas per day or 565 BOE per day. The Jupe “A” #1H was drilled to a vertical depth of 8,282 feet with a 7,101 foot lateral. This well was tested at an initial rate of 197 barrels of oil per day and 0.1 MMcf of natural gas per day or 218 BOE per day. All of the reported well results were obtained while following Comstock’s restricted choke program. Currently, Comstock also has five Eagle Ford shale wells that are being completed. Comstock has increased its Eagle Ford shale acreage in South Texas that is prospective for oil to approximately 28,000 net acres. Comstock completed lease acquisitions in the Eagle Ford shale that added approximately 6,000 net acres during October 2011.

2012 Capital Budget

Comstock also announced that it plans to spend approximately $396.0 million in 2012 for drilling and completion activities. Comstock expects to reduce the number of rigs drilling for natural gas in its Haynesville shale program to one from the three rigs that it is currently using. Comstock will add one drilling rig during 2012 to the two which are currently drilling for oil in its Eagle Ford shale development program in South Texas.

Comstock has budgeted to drill 71 wells (43.2 net) in 2012 as well as complete an additional 23 wells (20.3 net) which were drilled in 2011. Comstock plans to spend $104.0 million in its East Texas/North Louisiana operating region to drill 38 wells (13.3 net) which includes 37 (12.6 net) Haynesville or Bossier shale wells. $65.0 million will be spent to complete 17 wells (14.7 net) that were drilled in 2011. Comstock has budgeted to spend $207.0 million in its South Texas region to drill 32 (28.9 net) Eagle Ford shale horizontal wells in 2012 and $14.0 million to complete six wells (5.6 net) that were drilled in 2011. The remaining $6.0 million of expenditures in 2012 are budgeted for exploration and developmental activity on the Company’s other properties.

“Our 2012 drilling program will focus much of our drilling activity on growing our oil production while at the same time staying within the operating cash flow that we should generate,” stated M. Jay Allison, Chairman and Chief Executive Officer of Comstock. “To the extent that natural gas prices improve, we have the flexibility to increase our drilling activity in either the Eagle Ford shale or Haynesville shale depending on where we can generate the best returns.”

Comstock has planned a conference call for 9:30 a.m. Central Time on November 1, 2011, to discuss the operational and financial results for the third quarter of 2011. Investors wishing to participate should visit the Company’s website at www.comstockresources.com for a live web cast or dial 1-866-700-7101 (international dial-in use 617-213-8837) and provide access code 54819845 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 1:30 p.m. ET November 1, 2011 and will continue until 11:59 p.m. November 8, 2011. To hear the replay, call 888-286-8010 (617-801-6888 if calling from outside the US). The conference call ID number is 60253347.

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 managements 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 Companys 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                    Nine
                                Months                   Months
                                 Ended                    Ended
                               September                September
                                       30,                           30,
                                     ----------                        ----------
                               2011               2010           2011                2010
                               ----               ----           ----                ----

    Revenues:
        Oil and gas sales  $119,422            $79,720       $319,911            $276,491

    Operating
     expenses:
        Production taxes        141              3,062          2,230               9,543
        Gathering and
         transportation       8,101              4,101         20,340              12,308
        Lease operating      12,527             13,002         36,512              41,150
        Exploration             447              1,238         10,066               2,506
        Depreciation,
         depletion and
         amortization        77,518             46,796        212,532             163,603
        Impairment of oil
         and gas
         properties               -                 26              -                 213
        (Gain) loss on
         sale of
         properties             (26)                 -             57                 797
        General and
         administrative       8,628              9,400         25,973              28,965
                              -----              -----         ------              ------

           Total operating
            expenses        107,336             77,625        307,710             259,085
                            -------             ------        -------             -------

    Operating income         12,086              2,095         12,201              17,406

    Other income
     (expenses):
        Interest and
         other income           187                105            580                 408
        Interest expense     (9,988)            (7,108)       (30,682)            (22,551)
        Gain on sale of
         marketable
         securities           2,484                  -         32,213               5,692
                              -----                ---

           Total other
            income
            (expenses)       (7,317)            (7,003)         2,111             (16,451)
                             ------             ------          -----             -------

    Income (loss)
     before income
     taxes                    4,769             (4,908)        14,312                 955
    Benefit from
     (provision for)
     income taxes            (3,460)               208         (6,650)                 68
                             ------                ---         ------                 ---
    Net income (loss)        $1,309            $(4,700)        $7,662              $1,023

    Net income (loss)
     per share:
        Basic                 $0.03             $(0.10)         $0.16               $0.02
                              =====             ======          =====               =====
        Diluted               $0.03             $(0.10)         $0.16               $0.02
                              =====             ======          =====               =====

    Weighted average
     shares
     outstanding:
        Basic                46,011             45,623         45,992              45,537
                             ======             ======         ======              ======
        Diluted              46,011             45,623         45,992              45,589
                             ======             ======         ======              ======


                                         COMSTOCK
                                        RESOURCES,
                                           INC.
                                        OPERATING
                                          RESULTS
                                      (In thousands)

                                      Three
                                     Months                    Nine Months
                                      Ended                       Ended
                                    September                   September
                                            30,                         30,
                                          ----------                          ------------
                            2011               2010           2011                2010
                            ----               ----            ----                ----

    OPERATING CASH
     FLOW:
       Net income
        (loss)                      $1,309           $(4,700)          $7,662              $1,023
        Reconciling
         items:
         Deferred income
          taxes                      3,972               174            6,593                 131
         Depreciation,
          depletion and
          amortization              77,518            46,796          212,532             163,603
         Dry hole costs
          and lease
          impairments                  365                 -            9,819                   -
         Impairment of
          oil and gas
          properties                     -                26                -                 213
         Gain on sale of
          assets                    (2,510)                -          (32,156)             (4,895)
         Debt issuance
          costs and
          discount
          amortization                 948               608            3,351               1,834
         Stock-based
          compensation               3,946             4,388           10,958              12,930
           Operating cash
            flow                    85,548            47,292          218,759             174,839
             Excess income
              taxes from
              stock-based
              compensation               -                28              612              (1,503)
             Decrease
              (increase) in
              accounts
              receivable             1,673             9,550           (4,958)              8,096
             Decrease
              (increase) in
              other current
              assets                10,729                (8)           2,275              49,428
             Increase
              (decrease) in
              accounts
              payable and
              accrued
              expenses       1,697       (6,850)         861     18,376
                                     -----            ------              ---              ------

               Net cash
                provided by
                operating
                activities         $99,647           $50,012         $217,549            $249,236
                                   =======           =======         ========            ========

    EBITDAX:
        Net income
         (loss)                     $1,309           $(4,700)          $7,662              $1,023
        Interest
         expense                     9,988             7,108           30,682              22,551
        Income taxes
         expense
         (benefit)                   3,460              (208)           6,650                 (68)
        Depreciation,
         depletion and
         amortization               77,518            46,796          212,532             163,603
        Exploration                    447             1,238           10,066               2,506
        Impairment of
         oil and gas
         properties                      -                26                -                 213
        Gain on sale of
         assets                     (2,510)                -          (32,156)             (4,895)
        Stock-based
         compensation                3,946             4,388           10,958              12,930
                                     -----             -----           ------              ------

               EBITDAX             $94,158           $54,648         $246,394            $197,863
                                   =======           =======         ========            ========


                                                    As of
                                                  September
                                                          30,
                                                      ----------
                                                2011                  2010
                                                ----                  ----

    BALANCE SHEET DATA:

      Cash and cash equivalents               $4,544                $4,350
      Marketable securities                   31,707                70,661
      Other current assets                    53,477                35,761
      Property and equipment, net          2,090,554             1,817,962
      Other                                   15,863                 7,856
                                              ------                 -----

         Total assets                     $2,196,145            $1,936,590
                                          ==========            ==========

      Current liabilities                   $153,352              $104,577
      Long-term debt                         746,774               528,238
      Deferred income taxes                  223,237               224,686
      Other non-current
       liabilities                             9,649                 9,575
      Stockholders' equity                 1,063,133             1,069,514

         Total liabilities and
          stockholders' equity            $2,196,145            $1,936,590
                                          ==========            ==========


                                                COMSTOCK RESOURCES, INC.
                                               REGIONAL OPERATING RESULTS
                                                (In thousands, except per
                                                      unit amounts)

                                      For the                                               For the
                                       Three                                                 Three
                                       Months                                                Months
                                       Ended                                                 Ended
                                     September                                             September
                                     30, 2011                                              30, 2010
                                    ----------

                         East                                                                                     East
                        Texas/                                                                                   Texas/
                        North     South                                            North             South
                      Louisiana   Texas            Other             Total       Louisiana           Texas             Other        Total
                      ---------   -----            -----             -----       ---------           -----             -----        -----

    Oil production
     (thousand
     barrels)                 26        163                6                 195             27                 33              111            171
    Gas production
     (MMcf)               21,710      2,714              633              25,057         12,134              3,404              616         16,154
    Total production
     (MMcfe)              21,862      3,691              671              26,224         12,295              3,602            1,288         17,185

    Oil sales             $1,963    $14,520             $543             $17,026         $1,932             $2,434           $6,797        $11,163
    Gas sales             86,075     13,138            3,183             102,396         50,183             15,578            2,796         68,557
        Total oil and
         gas sales       $88,038    $27,658           $3,726            $119,422        $52,115            $18,012           $9,593        $79,720
                         =======    =======           ======            ========        =======            =======           ======        =======

    Average oil
     price (per
     barrel)              $76.93     $89.18           $88.54              $87.55         $71.71             $74.05           $60.68         $64.97
    Average gas
     price (per Mcf)       $3.96      $4.84            $5.03               $4.09          $4.14              $4.58            $4.54          $4.24
    Average price
     (per Mcfe)            $4.03      $7.49            $5.55               $4.55          $4.24              $5.00            $7.45          $4.64

    Production taxes     $(1,103)    $1,155              $89                $141         $1,832               $700             $530         $3,062
    Gathering and
     transportation       $7,630       $369             $102              $8,101         $3,574               $433              $94         $4,101
    Lease operating       $8,188     $3,464             $875             $12,527         $7,076             $3,031           $2,895        $13,002
    Production taxes
     (per Mcfe)           $(0.05)     $0.31            $0.13               $0.01          $0.15              $0.19            $0.41          $0.18
    Gathering and
     transportation
     (per Mcfe)            $0.35      $0.10            $0.15               $0.31          $0.29              $0.12            $0.07          $0.24
    Lease operating
     (per Mcfe)            $0.37      $0.94            $1.31               $0.47          $0.58              $0.85            $2.25          $0.75

    Oil and Gas
     Capital
     Expenditures:
      Leasehold costs    $10,509     $3,241           $2,911             $16,661        $11,023            $57,031              $30        $68,084
      Exploratory
       drilling            4,201      7,721                -              11,922         26,423              6,376                -         32,799
      Development
       drilling           64,350     50,969              757             116,076         44,992               (105)           1,404         46,291
      Other
       development         1,706        512               77               2,295            342              1,026              259          1,627
                           -----        ---              ---               -----            ---              -----              ---          -----
        Total            $80,766    $62,443           $3,745            $146,954        $82,780            $64,328           $1,693       $148,801
                         =======    =======           ======            ========        =======            =======           ======       ========


                                   For the Nine                                       For the Nine
                                   Months Ended                                       Months Ended
                                    September                                          September
                                     30, 2011                                           30, 2010
                                        ------------

                         East                                                                                  East
                        Texas/                                                                                Texas/
                         North         South                                   North             South
                      Louisiana        Texas         Other      Total       Louisiana            Texas           Other        Total
                      ---------        -----         -----      -----       ---------            -----           -----        -----
    Oil
     production
     (thousand
     barrels)                  89            385             18         492             114                114             329           557
    Gas
     production
     (MMcf)                56,706          8,494          1,962      67,162          39,401             11,307           1,949        52,657
    Total
     production
     (MMcfe)               57,237         10,801          2,075      70,113          40,085             11,993           3,924        56,002

    Oil sales              $8,000        $35,885         $1,654     $45,539          $8,570             $8,571         $19,951       $37,092
    Gas sales             224,069         40,458          9,845     274,372         174,031             55,637           9,731       239,399
        Total oil and
         gas sales       $232,069        $76,343        $11,499    $319,911        $182,601            $64,208         $29,682      $276,491
                         ========        =======        =======    ========        ========            =======         =======      ========

    Average oil
     price (per
     barrel)               $90.25         $93.32         $88.73      $92.59          $75.14             $75.01          $60.62        $66.54
    Average gas
     price (per
     Mcf)                   $3.95          $4.76          $5.02       $4.09           $4.42              $4.92           $4.99         $4.55
    Average price
     (per Mcfe)             $4.05          $7.07          $5.54       $4.56           $4.56              $5.35           $7.56         $4.94

    Production
     taxes                $(1,009)        $2,653           $586      $2,230          $6,618             $1,308          $1,617        $9,543
    Gathering and
     transportation       $18,840         $1,182           $318     $20,340         $10,573             $1,443            $292       $12,308
    Lease
     operating            $23,183        $10,451         $2,878     $36,512         $21,838            $10,360          $8,952       $41,150
    Production
     taxes (per
     Mcfe)                 $(0.02)         $0.25          $0.28       $0.03           $0.17              $0.11           $0.41         $0.17
    Gathering and
     transportation
     (per Mcfe)             $0.33          $0.11          $0.15       $0.29           $0.26              $0.12           $0.07         $0.22
    Lease
     operating
     (per Mcfe)             $0.41          $0.96          $1.39       $0.52           $0.54              $0.86           $2.29         $0.73

    Oil and Gas
     Capital
     Expenditures:
      Leasehold
       costs              $25,893        $22,506         $4,222     $52,621         $50,401            $79,875            $158      $130,434
      Exploratory
       drilling            31,091         46,516              -      77,607          49,861              6,376               -        56,237
      Development
       drilling           283,377         75,310          1,530     360,217         197,486              2,065           1,404       200,955
      Other
       development          3,557          1,621            369       5,547           2,217              2,349             760         5,326
                            -----          -----            ---       -----           -----              -----             ---         -----
        Total            $343,918       $145,953         $6,121    $495,992        $299,965            $90,665          $2,322      $392,952
                         ========       ========         ======    ========        ========            =======          ======      ========

SOURCE Comstock Resources, Inc.


Source: PR Newswire