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Comstock Resources, Inc. Reports Third Quarter 2010 Financial and Operating Results

November 1, 2010

FRISCO, Texas, Nov. 1, 2010 /PRNewswire-FirstCall/ — 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, 2010.

Financial Results for the Three Months and Nine Months Ended September 30, 2010

Comstock reported a net loss of $4.7 million or 10 cents per diluted share for the three months ended September 30, 2010 as compared to a net loss of $12.6 million or 28 cents per share for the three months ended September 30, 2009.

Comstock’s production in the third quarter of 2010 of 17.2 billion cubic feet of natural gas equivalent (“Bcfe”) was slightly higher than the 17.0 Bcfe produced in the third quarter of 2009. Production from the Company’s Haynesville shale wells of 84.7 million cubic feet of natural gas equivalent (“MMcfe”) per day accounted for 45% of the Company’s total production of 186.8 MMcfe per day in the third quarter of 2010, as compared to 57.8 MMcfe per day (31%) during the third quarter of 2009. The Company’s Haynesville shale production declined in the third quarter of 2010 as compared to the second quarter of 2010 due to the unavailability of high pressure pumping services required to complete the Haynesville shale wells that have been drilled. As of September 30, 2010, Comstock had 26 operated Haynesville shale wells waiting on completion. Beginning in October the Company has obtained adequate high pressure pumping services to resume completing the wells which should provide for production growth from its Haynesville shale operations in the fourth quarter.

Oil and natural gas prices improved in the third quarter of 2010 as compared to 2009′s third quarter. Comstock’s average realized natural gas price increased 17% to $4.24 per Mcf for the third quarter of 2010 as compared to $3.63 per Mcf for the third quarter of 2009. The Company’s average realized oil price improved by 12% to $64.97 per barrel for the third quarter of 2010 as compared to $57.96 per barrel for the third quarter of 2009. The improved oil and natural gas prices caused oil and gas sales to increase by 18% to $79.7 million in the third quarter of 2010 as compared to 2009′s third quarter sales of $67.4 million. Operating cash flow (before changes in working capital accounts) was $47.3 million in the third quarter of 2010 and EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $54.6 million.

Comstock reported net income of $1.0 million or 2 cents per diluted share for the first nine months of 2010 as compared to a net loss of $29.7 million or 66 cents per share in the first nine months of 2009. Comstock’s production in the first nine months of 2010 increased 21% to 56.0 Bcfe as compared to the 46.4 Bcfe produced during the first nine months of 2009. Comstock averaged $4.55 per Mcf for sales of its natural gas production in the first nine months of 2010, 12% higher than the $4.05 per Mcf realized during the first nine months of 2009. Realized oil prices in the first nine months of 2010 averaged $66.54 per barrel, 43% higher than the $46.42 per barrel in 2009′s first nine months. Oil and gas sales for the first nine months of 2010 increased 38% to $276.5 million as compared with $200.7 million in the first nine months of 2009. Operating cash flow (before changes in working capital accounts) generated by Comstock for the first nine months of 2010 was $174.8 million while EBITDAX was $197.9 million.

2010 Drilling Results

Comstock reported on the results to date of its 2010 drilling program. The Company has spent $393.0 million during the first nine months of 2010 on its exploration and development activities, $262.6 million of which was spent on drilling activities and $130.4 million of which was spent to acquire leasehold to support future exploration activity. During the first nine months of 2010, Comstock drilled 58 wells (35.3 net), 27 of which have been successfully completed as producing wells. As of September 30, 2010 the Company also had eight wells drilling, including seven in the Haynesville or Bossier shale and one in the Eagle Ford shale.

In the East Texas/North Louisiana region, Comstock has drilled 55 wells (33.6 net) so far in 2010. Fifty-four of the wells are Haynesville or Bossier shale wells. As of November 1, 2010, twenty-four of the 54 Haynesville or Bossier shale wells drilled in 2010 have been completed and were put on production at an average per well initial production rate of 10.8 MMcfe per day. Comstock expects to complete fourteen operated Haynesville or Bossier shale wells in the fourth quarter.

In addition to its Haynesville shale horizontal drilling program, Comstock has drilled two vertical wells during 2010. Comstock successfully completed a Cotton Valley well in its Blocker field in East Texas and also completed the Julian Pasture #4 in its Ball Ranch field in South Texas.

Comstock has initiated development of its Eagle Ford shale acreage in Atascosa, Karnes and McMullen counties in South Texas. Comstock has drilled the Rancho Tres Hijos #1H in McMullen county to a vertical depth of 11,020 feet with a 4,091 lateral and has drilled the NWR #1H in Atascosa county to a vertical depth of 8,715 feet with a 5,209 foot lateral. These wells are scheduled for completion in November. Comstock is currently drilling its third Eagle Ford shale well in Karnes county.

The Company’s previously announced sale of its non-core oil and gas properties in Mississippi remains on schedule to close during the fourth quarter of 2010. Based on the sale price of $75.0 million, the Company expects to realize a net loss after income taxes of approximately $16.6 million on this divestiture.

Comstock has planned a conference call for 9:30 a.m. Central Time on Tuesday, November 2, 2010, to discuss the operational and financial results for the third quarter of 2010. Investors wishing to participate should visit the Company’s website at www.comstockresources.com for a live web cast or dial 1-866-825-1692 (international dial-in use 617-213-8059) and provide access code 29796865 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 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 Months
                                             Ended
                                         September 30,
                                         -------------
                                       2010                2009
                                       ----                ----

    Revenues:
        Oil and gas sales           $79,720             $67,436

    Operating expenses:
        Production taxes              3,062               1,848
        Gathering and
         transportation               4,101               1,368
        Lease operating              13,002              12,803
        Exploration                   1,238                 227
        Depreciation, depletion
         and amortization            46,796              53,933
        Impairment of oil and
         gas properties                  26                 115
        General and
         administrative               9,400               8,689
                                      -----               -----

           Total operating expenses  77,625              78,983
                                     ------              ------

    Operating income (loss)           2,095             (11,547)

    Other income (expenses):
        Interest income                   5                   3
        Other income                    100                  23
        Gain on sale of assets            -                   -
        Interest expense             (7,108)             (3,244)
                                     ------              ------

           Total other income
            (expenses)               (7,003)             (3,218)
                                     ------              ------

    Income (loss) before
     income taxes                    (4,908)            (14,765)
    Benefit from income
     taxes                              208               2,193
                                        ---               -----
    Net income (loss)               $(4,700)           $(12,572)

    Net income (loss) per
     share:
        Basic                        $(0.10)             $(0.28)
                                     ======              ======
        Diluted                      $(0.10)             $(0.28)
                                     ======              ======

    Weighted average shares
     outstanding:
        Basic                        45,623              45,032
                                     ======              ======
        Diluted                      45,623    (1)       45,032  (1)
                                     ======              ======


                                             Nine Months
                                                Ended
                                            September 30,
                                               -------------
                                    2010              2009
                                    ----              ----

    Revenues:
        Oil and gas sales                $276,491            $200,662

    Operating expenses:
        Production taxes                    9,543               5,486
        Gathering and
         transportation                    12,308               3,962
        Lease operating                    41,150              41,015
        Exploration                         2,506                 371
        Depreciation, depletion
         and amortization                 163,603             152,001
        Impairment of oil and
         gas properties                       213                 115
        General and
         administrative                    28,965              27,559
                                           ------              ------

           Total operating expenses       258,288             230,509
                                          -------             -------

    Operating income (loss)                18,203             (29,847)

    Other income (expenses):
        Interest income                       263                  35
        Other income                          145                 115
        Gain on sale of assets              4,895                   -
        Interest expense                  (22,551)             (8,307)
                                          -------              ------

           Total other income
            (expenses)                    (17,248)
                                          -------              (8,157)
                                                               ------

    Income (loss) before
     income taxes                             955             (38,004)
    Benefit from income
     taxes                                     68               8,300
                                              ---               -----
    Net income (loss)                      $1,023            $(29,704)

    Net income (loss) per
     share:
        Basic                               $0.02              $(0.66)
                                            =====              ======
        Diluted                             $0.02              $(0.66)
                                            =====              ======

    Weighted average shares
     outstanding:
        Basic                              45,537              44,992
                                           ======              ======
        Diluted                            45,589              44,992  (1)
                                           ======              ======

    (1)  Basic and diluted shares are the same due to the net loss.

             COMSTOCK RESOURCES, INC.
                OPERATING RESULTS
                  (In thousands)
                                             Three Months
                                                Ended
                                            September 30,
                                            -------------
                                         2010               2009
                                         ----               ----

    OPERATING CASH FLOW:
       Net income (loss)                        $(4,700)           $(12,572)
       Reconciling items:
        Deferred income taxes                       174              24,302
        Depreciation, depletion
         and amortization                        46,796              53,933
        Impairment of oil and
         gas properties                              26                 115
        Gain on sale of assets                        -                   -
        Debt issuance costs and
         discount amortization                      608                 203
        Stock-based
         compensation                             4,388               4,046
           Operating cash flow                   47,292              70,027
             Excess tax benefit from
              stock-based
              compensation                           28                 (50)
             Decrease (increase) in
              accounts receivable                 9,550              (1,767)
             Decrease (increase) in
              other current assets                   (8)            (22,724)
             Increase (decrease) in
              accounts payable and
              accrued expenses                   (6,850)              2,919
                                                 ------               -----

               Net cash provided by
                operating activities            $50,012             $48,405
                                                =======             =======

    EBITDAX:
        Net income (loss)                       $(4,700)           $(12,572)
        Interest expense                          7,108               3,244
        Income tax benefit                         (208)             (2,193)
        Depreciation, depletion
         and amortization                        46,796              53,933
        Impairment of oil and
         gas properties                              26                 115
        Gain on sale of assets                        -                   -
        Stock-based
         compensation                             4,388               4,046
        Exploration                               1,238                 227
                                                  -----                 ---

               EBITDAX                          $54,648             $46,800
                                                =======             =======


                                              Nine Months
                                                 Ended
                                             September 30,
                                               -------------
                                         2010                2009
                                         ----                ----

    OPERATING CASH FLOW:
       Net income (loss)                          $1,023            $(29,704)
       Reconciling items:
        Deferred income taxes                        131              22,318
        Depreciation, depletion
         and amortization                        163,603             152,001
        Impairment of oil and
         gas properties                              213                 115
        Gain on sale of assets                    (4,895)                  -
        Debt issuance costs and
         discount amortization                     1,834                 608
        Stock-based
         compensation                             12,930              11,533
           Operating cash flow                   174,839             156,871
             Excess tax benefit from
              stock-based
              compensation                        (1,503)               (974)
             Decrease (increase) in
              accounts receivable                  8,096              12,043
             Decrease (increase) in
              other current assets                49,428             (23,378)
             Increase (decrease) in
              accounts payable and
              accrued expenses                    18,376             (26,712)
                                                  ------             -------

               Net cash provided by
                operating activities            $249,236            $117,850
                                                ========            ========

    EBITDAX:
        Net income (loss)                         $1,023            $(29,704)
        Interest expense                          22,551               8,307
        Income tax benefit                           (68)             (8,300)
        Depreciation, depletion
         and amortization                        163,603             152,001
        Impairment of oil and
         gas properties                              213                 115
        Gain on sale of assets                    (4,895)                  -
        Stock-based
         compensation                             12,930              11,533
        Exploration                                2,506                 371
                                                   -----                 ---

               EBITDAX                          $197,863            $134,323
                                                ========            ========


                                             As of
                                           September
                                                  30,
                                              ----------
                                    2010                  2009
                                    ----                  ----

    BALANCE SHEET DATA:
      Cash and cash equivalents                $4,350                $3,094
      Derivative financial
       instruments                                  -                 5,264
      Income taxes receivable                       -                37,796
      Marketable securities                    70,661                86,721
      Other current assets                     35,761                34,529
      Property and equipment,
       net                                  1,817,962             1,546,745
      Other                                     7,856                 2,545
                                                -----                 -----

         Total assets                      $1,936,590            $1,716,694
                                           ==========            ==========

      Accounts payable and
       accrued expenses                      $104,577               $93,036
      Long-term debt                          528,238               340,000
      Deferred income taxes                   224,686               212,327
      Other non-current
       liabilities                              9,575                 6,030
      Stockholders' equity                  1,069,514             1,065,301
                                            ---------             ---------

         Total liabilities and
          stockholders' equity             $1,936,590            $1,716,694
                                           ==========            ==========


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

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

                        East
                       Texas/
                       North           South
                      Louisiana        Texas            Other         Total
                      ---------        -----            -----         -----
    Oil production
     (thousand
     barrels)                 27              33          111             171
     Gas production
      (MMcf)              12,134           3,404          616          16,154
    Total
     production
     (MMcfe)              12,295           3,602        1,288          17,185

    Oil sales             $1,932          $2,434       $6,797         $11,163
    Gas sales             50,183          15,578        2,796          68,557
    Gas hedging
     gains                     -               -            -               -
                             ---             ---          ---             ---
       Total gas
        sales             50,183          15,578        2,796          68,557
                          ------          ------        -----          ------
        Total oil and
         gas sales       $52,115         $18,012       $9,593         $79,720
                         =======         =======       ======         =======

    Average oil
     price (per
     barrel)              $71.71          $74.05       $60.68          $64.97
    Average gas
     price (per
     Mcf)                  $4.14           $4.58        $4.54           $4.24
    Average gas
     price
     including
     hedging (per
     Mcf)                  $4.14           $4.58        $4.54           $4.24
    Average price
     (per Mcfe)            $4.24           $5.00        $7.45           $4.64
    Average price
     including
     hedging               $4.24           $5.00        $7.45           $4.64
    (per Mcfe)

    Production
     taxes                $1,832            $700         $530          $3,062
    Gathering and
     transportation       $3,574            $433          $94          $4,101
    Lease
     operating            $7,076          $3,031       $2,895         $13,002
    Production
     taxes (per
     Mcfe)                 $0.15           $0.19        $0.41           $0.18
    Gathering and
     transportation        $0.29           $0.12        $0.07           $0.24
    (per Mcfe)
    Lease
     operating
     (per Mcfe)            $0.58           $0.85        $2.25           $0.75

    Oil and Gas
     Capital
     Expenditures:
      Leasehold
       costs             $11,023         $57,031          $30         $68,084
      Exploratory
       drilling           26,423           6,376            -          32,799
      Development
       drilling           44,992            (105)       1,404          46,291
      Other
       development           342           1,026          259           1,627
                             ---           -----          ---           -----
        Total            $82,780         $64,328       $1,693        $148,801
                         =======         =======       ======        ========

                                    For the Three Months
                                  Ended September 30, 2009
                                  ------------------------
                         East
                       Texas/
                        North          South
                      Louisiana        Texas            Other      Total
    Oil production
     (thousand
     barrels)                 39              33            91          163
     Gas production
      (MMcf)              10,486           4,831           659       15,976
    Total
     production
     (MMcfe)              10,715           5,029         1,211       16,955

    Oil sales             $2,502          $2,117        $4,836       $9,455
    Gas sales             31,434          17,183         2,058       50,675
    Gas hedging
     gains                     -           7,306             -        7,306
                             ---           -----           ---        -----
       Total gas
        sales             31,434          24,489         2,058       57,981
                          ------          ------         -----       ------
        Total oil and
         gas sales       $33,936         $26,606        $6,894      $67,436
                         =======         =======        ======      =======

    Average oil
     price (per
     barrel)              $64.15          $64.15        $53.14       $57.96
    Average gas
     price (per
     Mcf)                  $3.00           $3.56         $3.12        $3.17
    Average gas
     price
     including
     hedging (per
     Mcf)                  $3.00           $5.07         $3.12        $3.63
    Average price
     (per Mcfe)            $3.17           $3.84         $5.69        $3.55
    Average price
     including
     hedging               $3.17           $5.29         $5.69        $3.98
    (per Mcfe)

    Production
     taxes                  $602            $837          $409       $1,848
    Gathering and
     transportation         $635            $624          $109       $1,368
    Lease
     operating            $6,400          $3,373        $3,030      $12,803
    Production
     taxes (per
     Mcfe)                 $0.06           $0.17         $0.34        $0.11
    Gathering and
     transportation        $0.06           $0.12         $0.09        $0.08
    (per Mcfe)
    Lease
     operating
     (per Mcfe)            $0.59           $0.67         $2.50        $0.75

    Oil and Gas
     Capital
     Expenditures:
      Leasehold
       costs              $2,376            $313           $52       $2,741
      Exploratory
       drilling           22,416              39             -       22,455
      Development
       drilling           49,335           2,647            10       51,992
      Other
       development           824             954            30        1,808
                             ---             ---           ---        -----
        Total            $74,951          $3,953           $92      $78,996
                         =======          ======           ===      =======

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

                          East
                        Texas/
                         North          South
                      Louisiana         Texas             Other      Total
                      ---------         -----             -----      -----
    Oil production
     (thousand
     barrels)                 114             114          329         557
     Gas production
      (MMcf)               39,401          11,307        1,949      52,657
    Total
     production
     (MMcfe)               40,085          11,993        3,924      56,002

    Oil sales              $8,570          $8,571      $19,951     $37,092
    Gas sales             174,031          55,637        9,731     239,399
    Gas hedging
     gains                      -               -            -           -
                              ---             ---          ---         ---
       Total gas
        sales             174,031          55,637        9,731     239,399
                          -------          ------        -----     -------
        Total oil and
         gas sales       $182,601         $64,208      $29,682    $276,491
                         ========         =======      =======    ========

    Average oil
     price (per
     barrel)               $75.14          $75.01       $60.62      $66.54
    Average gas
     price (per
     Mcf)                   $4.42           $4.92        $4.99       $4.55
    Average gas
     price
     including
     hedging (per
     Mcf)                   $4.42           $4.92        $4.99       $4.55
    Average price
     (per Mcfe)             $4.56           $5.35        $7.56       $4.94
    Average price
     including
     hedging                $4.56           $5.35        $7.56       $4.94
    (per Mcfe)

    Production
     taxes                 $6,618          $1,308       $1,617      $9,543
    Gathering and
     transportation       $10,573          $1,443         $292     $12,308
    Lease
     operating            $21,838         $10,360       $8,952     $41,150
    Production
     taxes (per
     Mcfe)                  $0.17           $0.11        $0.41       $0.17
    Gathering and
     transportation         $0.26           $0.12        $0.07       $0.22
    (per Mcfe)
    Lease
     operating
     (per Mcfe)             $0.54           $0.86        $2.29       $0.73

    Oil and Gas
     Capital
     Expenditures:
      Leasehold
       costs              $50,401         $79,875         $158    $130,434
      Exploratory
       drilling            49,861           6,376            -      56,237
      Development
       drilling           197,486           2,065        1,404     200,955
      Other
       development          2,217           2,349          760       5,326
                            -----           -----          ---       -----
        Total            $299,965         $90,665       $2,322    $392,952
                         ========         =======       ======    ========

                                     For the Nine Months Ended
                                         September 30, 2009

                          East
                        Texas/
                         North          South
                      Louisiana         Texas             Other      Total
    Oil
     production
     (thousand
     barrels)                 167             122         295            584
     Gas
      production
      (MMcf)               26,278          14,565       2,034         42,877
    Total
     production
     (MMcfe)               27,278          15,299       3,803         46,380

    Oil sales              $8,185          $6,310     $12,603        $27,098
    Gas sales              91,009          55,293       6,930        153,232
    Gas hedging
     gains                      -          20,332           -         20,332
                              ---          ------         ---         ------
       Total gas
        sales              91,009          75,625       6,930        173,564
                           ------          ------       -----        -------
        Total oil and
         gas sales        $99,194         $81,935     $19,533       $200,662
                          =======         =======     =======       ========

    Average oil
     price (per
     barrel)               $49.01          $51.72      $42.72         $46.42
    Average gas
     price (per
     Mcf)                   $3.46           $3.80       $3.41          $3.57
    Average gas
     price
     including
     hedging (per
     Mcf)                   $3.46           $5.19       $3.41          $4.05
    Average price
     (per Mcfe)             $3.64           $4.03       $5.14          $3.89
    Average price
     including
     hedging                $3.64           $5.36       $5.14          $4.33
    (per Mcfe)

    Production
     taxes                 $1,956          $2,370      $1,160         $5,486
    Gathering and
     transportation        $1,444          $2,186        $332         $3,962
    Lease
     operating            $20,489         $11,058      $9,468        $41,015
    Production
     taxes (per
     Mcfe)                  $0.07           $0.15       $0.31          $0.12
    Gathering and
     transportation         $0.05           $0.14       $0.09          $0.09
    (per Mcfe)
    Lease
     operating
     (per Mcfe)             $0.76           $0.73       $2.48          $0.88

    Oil and Gas
     Capital
     Expenditures:
      Leasehold
       costs               $9,544            $644        $155        $10,343
      Exploratory
       drilling            88,917           1,932           -         90,849
      Development
       drilling           117,187          26,433         121        143,741
      Other
       development          4,036           4,232         326          8,594
                            -----           -----         ---          -----
        Total            $219,684         $33,241        $602       $253,527
                         ========         =======        ====       ========

SOURCE Comstock Resources, Inc.


Source: newswire



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