COMSTOCK
RESOURCES, INC. REPORTS
2016 FOURTH QUARTER AND ANNUAL
FINANCIAL
AND OPERATING RESULTS
FRISCO, TEXAS,
February 24, 2017 - Comstock Resources, Inc. ("Comstock" or the
"Company") (NYSE: CRK) today reported financial and operating
results for the quarter and year ended December 31, 2016.
Comstock produced 62 Bcfe or 169
million cubic feet equivalent ("MMcfe") per day during 2016.
Natural gas production grew 13% in 2016 to 53.7 Bcf while oil
production decreased by 55% to 1.4 million barrels. Natural
gas comprised 87% of Comstock's 2016 total production as compared
to 72% of total production in 2015. Production in the fourth
quarter of 2016 was 14 Bcfe or 153 MMcfe per day, which was
comprised of 3,217 barrels of oil and 133 million cubic feet
("MMcf") of natural gas. The production decline in the fourth
quarter was primarily attributable to the suspension of the
drilling program in June 2016, which was restarted in the fourth
quarter, the Company's divestiture of certain natural gas
properties in the fourth quarter, and the shut-in of certain of the
Company's Haynesville shale production for offset completion
activity.
Oil and natural gas prices
remained low in 2016 and continued to negatively impact the
Company's financial results. Comstock's average realized natural
gas price, including realized hedging gains, of $2.32 per thousand
cubic feet ("Mcf") in the year ended December 31, 2016 was
comparable to the $2.33 per Mcf realized in the year ended December
31, 2015. The Company's average realized oil price decreased
by 17% to $38.24 per barrel in the year ended December 31, 2016 as
compared to $46.19 per barrel in the year ended December 31,
2015. Oil and gas sales (including realized gains or losses
from hedging) in the year ended December 31, 2016 of $177.8 million
decreased by 30% as compared to $253.7 million in the year ended
December 31, 2015. EBITDAX, or earnings before interest,
taxes, depreciation, depletion, amortization, exploration expense
and other noncash expenses, decreased 40% to $90.9 million in the
year ended December 31, 2016 from EBITDAX of $150.4 million in the
year ended December 31, 2015.
In the fourth quarter of 2016, oil
and natural gas prices improved as compared to the fourth quarter
of 2015. Comstock's average realized natural gas price,
including realized hedging gains, increased 41% to $2.85 per Mcf in
the fourth quarter of 2016 as compared to $2.02 per Mcf realized in
the fourth quarter of 2015. The Company's average realized
oil price increased by 27% to $45.96 per barrel in the fourth
quarter of 2016 as compared to $36.26 per barrel in the fourth
quarter of 2015. Oil and gas sales in the quarter (including
realized gains from hedging) increased by 1% to $48.5 million as
compared to 2015's fourth quarter sales of $48.1 million.
EBITDAX was $27.2 million in the fourth quarter of 2016 as compared
to EBITDAX of $27.0 million in the fourth quarter of 2015.
Comstock reported a net loss of
$135.1 million, or $11.52 per share, for the year ended December
31, 2016 as compared to a net loss of $1.0 billion, or $113.53 per
share, for the year ended December 31, 2015. Excluding nonrecurring
items from each period's results, the net loss for the year ended
December 31, 2016 would have been $171.4 million, or $14.61 per
share, as compared to a net loss of $189.2 million, or $20.51 per
share, in the year ended December 31, 2015. The nonrecurring items
impacting 2016 results include impairments on oil and gas
properties and unevaluated leases and losses realized from
divestitures of $125.5 million, an unrealized loss from derivative
financial instruments of $7.5 million, an income tax charge to
reflect a change in state law of $7.2 million, and a gain of $176.5
million from extinguishment of debt, less the amortization of the
original issue discount from the notes issued in the debt exchange
completed in September 2016. Financial results for the year
ended December 31, 2015 included impairments on oil and gas
properties and unevaluated leases and losses realized from
divestitures of $982.4 million, a valuation allowance on deferred
tax assets of $283.6 million, unrealized gain from derivative
financial instruments of $1.4 million, a net gain on extinguishment
of debt of $78.7 million, and drilling rig termination fees of $1.7
million.
For the fourth quarter of 2016,
Comstock reported a net loss of $54.9 million, or $4.48 per share,
as compared to a net loss of $288.5 million, or $31.26 per share,
for the fourth quarter of 2015. Excluding nonrecurring items
from each period's results, the net loss for the fourth quarter of
2016 would have been $31.6 million, or $2.58 per share, as compared
to a net loss of $42.2 million, or $4.57 per share, in the fourth
quarter of 2015. The nonrecurring items impacting the fourth
quarter 2016 results include impairments on oil and gas properties
and unevaluated leases and losses realized from divestitures of
$2.8 million, an unrealized loss from derivative financial
instruments of $6.0 million, an income tax charge to reflect a
change in state law of $3.4 million, and charges associated with
the debt exchange totaling $11.1 million. Financial results
for the fourth quarter of 2015 included impairments on oil and gas
properties and unevaluated leases and losses realized from
divestitures of $254.9 million, a valuation allowance on deferred
tax assets of $93.4 million, an unrealized gain from derivative
financial instruments of $0.1 million, and a gain on extinguishment
of debt of $23.2 million.
2016 Drilling Program
The highlight of 2016 was the
successful results from the Company's Haynesville shale drilling
program. Despite a limited drilling budget in 2016, Comstock
added 286 Bcfe of new proved oil and natural gas reserves primarily
related to its Haynesville shale properties. In addition, the
Company experienced 144 Bcfe in upward revisions primarily related
to the strong performance of the Haynesville shale wells drilled in
2015 and 2016.
Comstock spent $59.5 million for
its drilling activities in 2016. Comstock drilled 13 wells
(7.9 net) in 2016; 11 (7.8 net) of the wells were Haynesville shale
wells drilled in North Louisiana and the remaining two (0.1 net)
were non-operated Eagle Ford shale wells. Comstock's 2016
"all-in" finding costs were approximately $0.14 per Mcfe.
Eleven (6.3 net) of the wells drilled in 2016 have been
completed. The remaining two (1.6 net) wells will be
completed in March 2017.
The average initial production
rate of the six completed operated Haynesville wells was 24 MMcf
per day. Three of these wells have been completed since the
Company's operational update. The Pace James 5-8 #1 well in
Logansport, Louisiana was drilled to a total vertical depth of
11,245 feet with a 7,593 foot lateral. This well targeted the
Haynesville shale and was tested with an initial production rate of
25 MMcf per day. The second well, the Claybrook 15 #2 was
drilled in Desoto Parish, Louisiana to a total vertical depth of
11,359 feet with a 4,389 foot lateral. This well targeted the
Haynesville shale and was tested with an initial production rate of
24 MMcf per day. The third well, the Halsey 14 #1 was drilled
in Desoto Parish, Louisiana to a total vertical depth of 11,417
feet with a 4,476 foot lateral. This well targeted the
Haynesville shale and was tested with an initial production rate of
21 MMcf per day.
The two (0.1 net) non-operated
Eagle Ford shale wells that the Company participated in achieved
initial production rates of 1,826 and 1,639 barrels of oil per
day. The wells had 10,000 foot laterals and were drilled 350
feet apart. The results are very encouraging and supportive
of the Company resuming development of its Eagle Ford shale
properties where it has 336 identified future locations based on
similar well spacing.
Comstock currently plans to drill
20 (15.5 net) additional Haynesville shale wells in 2017 and
complete the 2016 wells at an estimated capital outlay of $142.9
million. Comstock has budgeted an additional $7.0 million for
other non-drilling expenditures. The Company also has
tentatively budgeted an additional $17.6 million for two (1.7 net)
Bossier shale wells that may be drilled in late 2017 depending on
natural gas prices. These wells would further prove up the
Bossier shale potential of its properties demonstrated by the
successful Jordan well drilled in 2015.
In order to lock in the returns
that the Haynesville shale drilling program can generate, the
Company has, in the aggregate, hedged 72 million cubic feet per day
of its 2017 natural gas production at a NYMEX equivalent of $3.38
per Mcf.
Conference Call
Comstock has planned a conference
call for 10:00 a.m. central time on February 24, 2017 to discuss
the 2016 operational and financial results. 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
62045538 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 2:00 p.m.
central time on February 24, 2017 and will continue until 2:00 p.m.
March 3, 2017. To hear the replay, call 855-859-2056
(404-537-3406 if calling from outside the United States). The
conference call access code is 62045538.
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 4Q2016 Results
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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