COMSTOCK
RESOURCES, INC. REPORTS
THIRD QUARTER 2017 FINANCIAL AND OPERATING
RESULTS
FRISCO, TEXAS,
November 2, 2017 - 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,
2017.
Financial Results for the Three Months Ended September 30,
2017
Comstock produced 20.0 billion cubic
feet of natural gas and 229,000 barrels of oil or 21.4 billion
cubic feet of natural gas equivalent ("Bcfe") in the third quarter
of 2017. Natural gas production averaged 217.3 million cubic
feet ("MMcf") per day, reflecting growth of 51% from pro forma
natural gas production in the third quarter of 2016 (excluding the
divestitures completed in 2016). Natural gas production in
the quarter also increased 14% from the second quarter of
2017. The growth in natural gas production is being driven by
Comstock's successful Haynesville shale drilling program. Oil
production in the third quarter of 2017, which averaged 2,491
barrels of oil per day, declined by 28% from the 3,482 barrels per
day produced in the third quarter of 2016. The decrease in
oil production was 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 third quarter of 2017. Comstock's average
realized natural gas price, including hedging gains, increased 14%
to $2.98 per Mcf in the third quarter of 2017 as compared to $2.62
per Mcf realized in the third quarter of 2016. The Company's
average realized oil price increased by 10% to $46.45 per barrel in
the third quarter of 2017 as compared to $42.07 per barrel in the
third quarter of 2016. The higher realized prices and the
growth in natural gas production caused oil and gas sales to
increase by 40% in the third quarter of 2017 to $70.3 million
(including realized hedging gains) as compared to 2016's third
quarter sales of $50.3 million. EBITDAX, or earnings before
interest, taxes, depreciation, depletion, amortization, exploration
expense and other noncash expenses, was $50.3 million in the third
quarter of 2017, an increase of 69% over EBITDAX of $29.7 million
generated in the third quarter of 2016. Operating cash flow
generated in the third quarter of 2017 was $32.2 million as
compared to operating cash flow of $4.9 million in the third
quarter of 2016.
Comstock reported a net loss of
$24.7 million or $1.67 per share for the third quarter of 2017 as
compared to a net loss of $28.5 million or $2.32 per share for the
third quarter of 2016. The third quarter 2017 results include
an unrealized loss from derivative financial instruments of $2.0
million, loss on sale of oil and gas properties of $1.0 million and
$9.9 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 third quarter of
2016 included impairments on oil and gas properties and undeveloped
leases of $76.5 million, a net loss on the sale of oil and gas
properties of $13.2 million, a net gain on debt extinguishment of
$97.5 million related to the debt exchange and an income tax
benefit to reflect a change in state law of $0.8 million.
Excluding these items from each year's results, the net loss for
the third quarter of 2017 would have been $11.8 million or $0.80
per share as compared to a net loss of $37.1 million or $3.02 per
share in the third quarter of 2016.
Comstock produced 51.3 billion
cubic feet of natural gas and 737,000 barrels of oil or 55.7
billion cubic feet of natural gas equivalent in the first nine
months of 2017 compared to 41.4 Bcf of natural gas and 1.1 million
barrels of oil or 48.0 Bcfe in the first nine months of 2016.
Natural gas production averaged 187.9 million cubic feet per
day in the first nine months of 2017, an increase of 33% over pro
forma 2016 natural gas production, excluding the divestitures
completed in 2016. Oil production in the first nine months of
2017 declined by 33% from the first nine months of 2016.
Comstock's average realized
natural gas price, including hedging gains, increased 37% to $2.98
per Mcf in the first nine months of 2017 as compared to $2.17 per
Mcf realized in the first nine months of 2016. The Company's
average realized oil price increased by 30% to $46.86 per barrel in
the first nine months of 2017 as compared to $36.15 per barrel in
the first nine months of 2016. The higher realized prices and
the growth in natural gas production caused oil and gas sales to
increase by 45% to $187.4 million (including realized hedging
gains) as compared to $129.3 million in the first nine months of
2016. EBITDAX of $128.3 million in the first nine months of
2017 was 101% higher than the EBITDAX of $63.7 million generated in
the first nine months of 2016. Operating cash flow generated
in the first nine months of 2017 was $74.1 million as compared to
an operating cash flow deficit of $17.4 million in the first nine
months of 2016.
Comstock reported a net loss of
$69.1 million or $4.74 per share for the first nine months of 2017
as compared to a net loss of $80.2 million or $7.13 per share for
the first nine months of 2016. The results for 2017 include
an unrealized gain from derivative financial instruments of $9.2
million, loss on sale of oil and gas properties of $1.0 million and
$24.8 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 nine months
of 2016 included impairments on oil and gas properties and
unevaluated leases of $108.8 million, a loss on sale and exchanges
of oil and gas properties of $14.1 million, an income tax charge to
reflect a change in state law of $3.7 million, an unrealized loss
from derivative financial instruments of $1.4 million and a net
gain on extinguishment of debt of $187.1 million. Excluding
these items from results for each period, the net loss for the
first nine months of 2017 would have been $52.5 million or $3.60
per share as compared to a net loss of $139.3 million, or $12.38
per share in the first nine months of 2016.
2017 First Nine months Drilling Results
During the first nine months of
2017, Comstock spent $129.8 million on its development and
exploration activities and drilled 18 horizontal natural gas wells
(13.0 net) and had three operated wells (1.0 net) drilling at
September 30, 2017. Since the last operational update,
Comstock has completed three operated Haynesville shale
wells. The average initial production rate of these wells was
29 MMcf per day. The Headrick 14-11 #1 well in Desoto Parish,
Louisiana was drilled to a total vertical depth of 11,618 feet with
a 7,168 foot lateral. This well was tested with an initial
production rate of 33 MMcf per day. The Headrick 14-23 #2
well was drilled in Desoto Parish, Louisiana to a total vertical
depth of 11,496 feet with a 7,429 foot lateral. This well was
tested with an initial production rate of 35 MMcf per day.
The Grantham 30-31 #1 well was drilled to a total vertical
depth of 11,198 feet with a 8,456 foot lateral, and was tested with
an initial production rate of 20 MMcf per day. The initial
rate on the Grantham had to be limited due to certain operational
constraints. Comstock is currently completing the Derrick 21
#2 and the Derrick 21 #3 wells which have 4,550 foot laterals and
the BSMC 18-7 #1 Bossier shale well that has a 7,489 foot lateral
and has seven additional Haynesville shale horizontal wells waiting
to be completed.
The Company also announced
preliminary drilling plans for 2018. The Company's current
plans are to run three operated drilling rigs through 2018 subject
to natural gas prices and industry conditions. Two of the
rigs will focus primarily on the properties being jointly developed
with USG Properties Haynesville, LLC with the third rig focused on
the Company's legacy Haynesville shale properties in DeSoto Parish,
Louisiana. In total the Company currently plans to drill 26 wells
or 13.8 wells net to the Company's interest in 2018. The Company's
preliminary 2018 capital plan also includes two in-liner refracs of
existing Haynesville shale wells. Total capital expenditures
for 2018 are estimated at $170 million. The drilling budget
will be adjusted upward or downward in response to natural gas
prices as the program is intended to be funded by operating cash
flow. The Company estimates 2018 natural gas production based
on the current drilling plan could approximate 88 to 92
Bcf.
In order to protect the returns
that the Haynesville shale drilling program can generate, the
Company has hedged, in the aggregate, 99 MMcf per day of its 2017
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. The Company is currently establishing a hedge position
for its 2018 drilling program.
Comstock also reported today that
it has retained BMO Capital Markets Corp. as its exclusive advisor
with respect to the potential sale of its South Texas Eagle Ford
shale assets that include approximately 18,433 net acres and 191
producing oil wells. During the third quarter, these assets
produced 2,866 barrels of oil equivalent per day. The Company
plans to use the proceeds of the asset sale to reduce long-term
debt and increase liquidity.
Other
Comstock has planned a conference
call for 10:00 a.m. Central Time on November 2, 2017, to discuss
the operational and financial results for the third 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 99199618 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 November 2, 2017 and will continue until 1:00 p.m. November
9, 2017. To hear the replay, call 855-859-2056 (404-537-3406
if calling from outside the US). The conference call access
code is 99199618.
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 - Q3 2017 Operating
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
Comstock Resources (NYSE:CRK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Comstock Resources (NYSE:CRK)
Historical Stock Chart
From Apr 2023 to Apr 2024