COMSTOCK
RESOURCES, INC. REPORTS
SECOND QUARTER 2017 FINANCIAL AND OPERATING
RESULTS
FRISCO, TEXAS,
August 7, 2017 - Comstock Resources, Inc. ("Comstock" or the
"Company") (NYSE: CRK) today reported financial and operating
results for the three months and six months ended June 30,
2017.
Financial Results for the Three Months Ended June 30,
2017
Comstock produced 17.3 billion cubic
feet of natural gas and 243,000 barrels of oil or 18.8 billion
cubic feet of natural gas equivalent ("Bcfe") in the second quarter
of 2017. Natural gas production averaged 190 million cubic
feet ("MMcf") per day, reflecting growth of 37% from pro forma
natural gas production in the second quarter of 2016 (excluding
divestitures completed in 2016). Natural gas production in
the second quarter was also 22% higher than the first quarter of
2017. The growth in natural gas production is attributable to
Comstock's successful Haynesville shale drilling program. The
second quarter production rate was impacted by severe storms and
tornadoes in the Company's Haynesville operating area in May 2017,
causing electric power outages in the region. These power outages
caused certain natural gas treating facilities to go off line,
making it necessary for Comstock to shut-in wells during the
quarter. Shut-in production, net to the Company's interest, related
to the power outages and to wells that were shut-in for offset frac
activity averaged 8.2 MMcf per day in the second quarter. Oil
production in the second quarter of 2017, which averaged 2,674
barrels of oil per day, declined by 31% from the 3,900 barrels per
day produced in the second quarter of 2016. The decrease in
oil production is the result of the lack of drilling in the
Company's South Texas Eagle Ford shale properties.
Oil and natural gas prices improved
in the second quarter of 2017. Comstock's average realized
natural gas price, including hedging gains, increased 50% to $2.99
per Mcf in the second quarter of 2017 as compared to $1.99 per Mcf
realized in the second quarter of 2016. The Company's average
realized oil price increased by 7% to $45.34 per barrel in the
second quarter of 2017 as compared to $42.21 per barrel in the
second quarter of 2016. The higher realized prices and the
growth in natural gas production caused oil and gas sales to
increase by 50% in the second quarter of 2017 to $62.9 million
(including realized hedging gains) as compared to 2016's second
quarter sales of $41.8 million. EBITDAX, or earnings before
interest, taxes, depreciation, depletion, amortization, exploration
expense and other noncash expenses, was $43.8 million in the second
quarter of 2017, more than double the EBITDAX of $19.3 million
generated in the second quarter of 2016. Operating cash flow
generated in the second quarter of 2017 was $25.9 million as
compared to an operating cash flow deficit of $8.3 million in the
second quarter of 2016.
Comstock reported a net loss of
$21.4 million or $1.45 per share for the second quarter of 2017 as
compared to net income of $4.9 million or $0.41 per diluted share
for the second quarter of 2016. The second quarter of 2017
results include an unrealized gain from derivative financial
instruments of $3.9 million and $9.5 million of non-cash interest
expense associated with the discounts recognized and costs incurred
on the debt exchange that occurred in 2016. Financial results
for the second quarter of 2016 included a net gain on
extinguishment of debt of $56.2 million, impairments on unevaluated
acreage and oil and gas properties of $1.7 million, a $1.6 million
loss on sale of oil and gas properties, an unrealized loss from
derivative financial instruments of $1.1 million, and a charge of
$0.1 million to reflect a change in state tax law. Excluding
these items from each year's results, the net loss for the second
quarter of 2017 would have been $15.8 million or $1.07 per share as
compared to a net loss of $46.8 million or $4.05 per share in the
second quarter of 2016.
Comstock produced 31.3 billion
cubic feet of natural gas and 508,000 barrels of oil or 34.4
billion cubic feet of natural gas equivalent in the first six
months of 2017 compared to 27.3 Bcf of natural gas and 772,000
barrels of oil or 32.0 Bcfe in the first six months of 2016.
Natural gas production averaged 173 million cubic feet per
day in the first six months of 2017, an increase of 24% over pro
forma 2016 natural gas production, excluding divestitures completed
in 2016. Oil production in the first six months of 2017
declined by 34% from the first six months of 2016.
Comstock's average realized
natural gas price, including hedging gains, increased 54% to $2.98
per Mcf in the first six months of 2017 as compared to $1.94 per
Mcf realized in the first six months of 2016. The Company's
average realized oil price increased by 40% to $47.04 per barrel in
the first six months of 2017 as compared to $33.69 per barrel in
the first six months of 2016. The higher realized prices and
the growth in natural gas production caused oil and gas sales to
increase by 48% to $117.2 million (including realized hedging
gains) as compared to $79.0 million in the first six months of
2016. EBITDAX of $78.0 million in the first six months of
2017 was 129% higher than the EBITDAX of $34.0 million generated in
the first six months of 2016. Operating cash flow generated
in the first six months of 2017 was $41.9 million as compared to an
operating cash flow deficit of $22.3 million in the first six
months of 2016.
Comstock reported a net loss of
$44.4 million or $3.06 per share for the first six months of 2017
as compared to a net loss of $51.7 million or $4.82 per share for
the first six months of 2016. The results for 2017 include an
unrealized gain from derivative financial instruments of $11.3
million and $14.9 million of non-cash interest expense associated
with the discounts recognized and costs incurred on the debt
exchange that occurred in 2016. Financial results for the
first six months of 2016 included impairments on oil and gas
properties and unevaluated leases of $32.2 million, a loss on sales
of oil and gas properties of $0.9 million, an income tax charge to
reflect a change in state law of $4.5 million, an unrealized gain
from derivative financial instruments of $1.4 million and a net
gain on extinguishment of debt of $89.6 million. Excluding
these items from results for each period, the net loss for the
first six months of 2017 would have been $40.7 million or $2.81 per
share as compared to a net loss of $102.2 million, or $9.52 per
share in the first six months of 2016.
2017 First Six Months Drilling Results
During the first six months of
2017, Comstock spent $86.6 million on its development and
exploration activities and drilled ten horizontal natural gas wells
(8.1 net) and had four wells (2.0 net) drilling at June 30,
2017. Since the last operational update, Comstock has
completed five operated Haynesville shale wells. The average
initial production rate of these wells was 27 MMcf per day.
One of the wells set new a Company record for initial production
rates. The Headrick 14-11 #2 well in Desoto Parish, Louisiana
was drilled to a total vertical depth of 11,539 feet with a 6,861
foot lateral. This well was tested with an initial production
rate of 37 MMcf per day. The Nash 19-18 #1 well was drilled
in Desoto Parish, Louisiana to a total vertical depth of 11,514
feet with a 5,382 foot lateral. This well was tested with an
initial production rate of 26 MMcf per day. Drilled from the same
pad, the Nash 19-18 #2 well was drilled to a total vertical depth
of 11,524 feet with a 5,347 foot lateral, and was tested with an
initial production rate of 25 MMcf per day. The Powell 28 #2
well in Desoto Parish, Louisiana was drilled to a total vertical
depth of 11,099 feet with a 4,453 foot lateral. This well was
tested with an initial production rate of 20 MMcf per day.
The Pace 8-17 #1 well in Desoto Parish, Louisiana was drilled to a
total vertical depth of 11,183 feet with a 7,471 foot
lateral. This well was tested with an initial production rate
of 25 MMcf per day. Comstock is currently completing the
Grantham 30-31 #1 and the Headrick 14-11 #1, which have 7,500 foot
laterals, and has three wells waiting to be completed.
In order to protect the returns
that the Haynesville shale drilling program can generate, the
Company has hedged, in the aggregate, 100 MMcf per day of its 2017
third and fourth quarter natural gas production at a NYMEX
equivalent of $3.38 per Mcf and has hedged approximately 29 MMcf
per day of natural gas production in the first quarter of 2018 at
$3.38 per Mcf.
Other
Comstock has planned a conference
call for 10:00 a.m. Central Time on August 7, 2017, to discuss the
operational and financial results for the second quarter of
2017. Investors wishing to participate should visit the
Company's website at www.comstockresources.com for a live web cast
or dial 844-776-7840 (international dial-in use 661-378-9538) and
provide access code 53521618 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. A
replay of the conference call will be available beginning at 1:00
p.m. CT August 7, 2017 and will continue until 1:00 p.m. August 14,
2017. To hear the replay, call 855-859-2056 (404-537-3406 if
calling from outside the US). The conference call access code
is 53521618.
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.
CRK Q2 2017 Financials
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Comstock Resources, Inc via Globenewswire
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