Comstock Resources, Inc. Reports Second Quarter 2007 Financial and Operating Results

FRISCO, Texas, Aug. 6 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. ("Comstock" or the "Company") today reported financial and operating results for the quarter and six months ended June 30, 2007.

Financial Results for the Three Months and Six Months Ended June 30, 2007

Comstock reported net income of $18.2 million or 41 cents per diluted share for the three months ended June 30, 2007 as compared to 2006's second quarter net income of $15.6 million or 35 cents per diluted share. The 2006 results include a $1.3 million gain on derivative financial instruments. Without this gain Comstock would have had net income of $14.7 million or 34 cents per diluted share. The second quarter results continue to reflect the success that the Company's onshore drilling program and offshore activities have had in growing production. Comstock's production in the second quarter of 2007 increased 32% to 21.4 billion cubic feet equivalent of natural gas ("Bcfe") as compared to production of 16.3 Bcfe in the second quarter of 2006. Onshore production has increased 20% and offshore production was up 47% from the second quarter of 2006. The second quarter average daily production rate of 236 million cubic feet of natural gas equivalent ("Mmcfe") also has increased 6% from the first quarter 2007 production rate of 223 Mmcfe per day. Natural gas prices also improved from the second quarter of 2006. The Company's realized natural gas price averaged $7.60 per Mcf in 2007's second quarter, 12% higher than the $6.77 per Mcf in 2006's second quarter. Realized oil prices in the second quarter of 2007 averaged $62.42 per barrel, 4% lower than the $64.90 per barrel for 2006. The substantial production gains caused second quarter 2007's oil and gas sales to increase 40% to $174.2 million from 2006's second quarter sales of $124.2 million. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2007's second quarter of $127.2 million was 46% higher than 2006's second quarter cash flow of $87.0 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses also increased 47% to $140.7 million in 2007's second quarter, from 2006's second quarter EBITDAX of $95.9 million.

Comstock reported net income of $30.8 million or 69 cents per diluted share for the six months ended June 30, 2007 as compared to 2006's net income of $45.2 million or $1.03 per diluted share. The 2006 results include a $10.1 million unrealized gain on derivative financial instruments. Without this gain, Comstock would have had net income of $38.6 million or 88 cents per diluted share.

Financial results for the first six months of 2007 also reflect the Company's strong production growth. Comstock's production in the first six months of 2007 increased 30% to 41.5 Bcfe as compared to production of 32.0 Bcfe in the first six months of 2006. Onshore production has increased 18% and offshore production was up 45% from the first six months of 2006. The production gains for the first half of 2007 were offset in part by lower oil and natural gas prices. The Company's realized natural gas price averaged $7.25 per Mcf in 2007's first six months, 2% lower than the $7.40 per Mcf in 2006's first six months. Realized oil prices in the first six months of 2007 averaged $58.46 per barrel, 5% lower than the $61.52 per barrel for 2006. Oil and gas sales of $320.2 million for the first six months of 2007 increased 25% from 2006's first six months sales of $255.9 million. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2007's first six months of $227.7 million increased 28% from 2006's first six months cash flow of $178.5 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $254.7 million in 2007's first six months, a 30% increase from 2006's first six months EBITDAX of $195.9 million.

Six Months 2007 Drilling Results

Comstock also announced the results to date of its 2007 drilling program. In the first six months of 2007 Comstock drilled 97 wells (77.3 net). Eighty-five of the wells drilled were successful and twelve were dry holes.

Onshore, Comstock drilled 83 (66.5 net) development wells in the first six months of 2007 with 81 (64.8 net) being successful. Only one (0.6 net) of the three (2.6 net) exploratory wells were successful. Comstock drilled 66 successful wells (53.3 net) in its East Texas and North Louisiana region which have been tested at an average per well initial production rate of 1.3 Mmcfe per day. At June 30, 2007 Comstock had three additional wells in this region that were being drilled which are part of Comstock's 120 well drilling program planned in this region for 2007. Production in this region has increased 34% in the first six months of 2007 as compared to the first half of 2006 as a result of this drilling program. Comstock plans to drill its first horizontal Cotton Valley well in the third quarter. The Bell #11A-H well will be drilled in the Waskom field in Harrison County, Texas and is expected to cost $6.3 million. Comstock will have a 69% working interest in the well. If successful, Comstock plans to incorporate additional horizontal wells in its development drilling activity in this region.

In South Texas, Comstock drilled nine successful wells (6.4 net) during the first six months of 2007, which had an average per well initial production rate of 6.5 Mmcfe per day. Three of the wells were in the Las Hermanitas field in Duval County, Texas, three were in the Javelina Field in Hidalgo County, two were in the Company's Ball Ranch field and one was in the Tom East field. Comstock's latest well drilled in its Las Hermanitas field in Duval County in South Texas, the Shovlin-Vehle #2, is currently producing 7.5 Mmcfe per day from a lower sand completion. Comstock also drilled the Reithmeyer #3 in the Javelina field in Hidalgo County in South Texas which is currently producing 7.4 Mmcfe from its two stage completion. Comstock had three rigs drilling in this region on June 30, 2007.

Comstock drilled eight wells (7.3 net) in its Laurel and Maxie fields in Mississippi during the first six months of 2007, six of which were successful. Five of these wells were tested at an average per well initial production rate of 183 barrels of oil per day and one well tested at 1.5 Mmcf of natural gas per day. Comstock had one rig drilling in the Laurel field at the end of June. The first two exploratory wells drilled to test the Company's Pine Hollow prospect in Mississippi were unsuccessful.

Comstock's offshore operations are conducted by its 49% owned subsidiary, Bois d'Arc Energy, Inc. ("Bois d'Arc"). During the first six months of 2007, Bois d'Arc has drilled six exploratory wells, 3.8 net to Bois d'Arc's interest and five development wells (4.4 net). One of these exploratory wells (0.8 net) and two development wells (2.0 net) were successful. During the second quarter of 2007, Bois d'Arc participated in three unsuccessful exploratory wells (two wells, net to its interest). Bois d'Arc's OCS-G 27166 #1 well at South Pelto block 7 to test the "Dog Bone" prospect was unsuccessful as was the OCS-G 23903 #1 well at Ship Shoal block 163. Bois d'Arc also participated in another operator's deepwater exploratory prospect in the second quarter but has elected not to participate in the well's completion. Bois d'Arc is currently drilling the OCS-G-0063 #8ST1 at Ship Shoal block 93 to test its "Walleye" prospect. Bois d'Arc plans to drill the well to a total depth of 15,000 feet and is currently setting protective pipe in the well below 13,000 feet. Five prospective reservoirs have been encountered so far and the well looks to be successful. Bois d'Arc is also drilling its ultra deep "Butch Cassidy" prospect, which is now drilling below 15,000 feet.

During the second quarter Comstock completed an acquisition of additional working interests in the Javelina field in Hildalgo County in South Texas for $32.0 million. Comstock estimates that the additional interests acquired have proved reserves of approximately 10.6 billion cubic feet ("Bcf") of natural gas. In addition to the proved reserves, Comstock estimates that the properties being acquired have additional probable and possible reserves of 8.1 Bcf.

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 a growing independent energy company based in Frisco, Texas and is engaged in oil and gas acquisitions, exploration and development primarily in Texas, Louisiana and the Gulf of Mexico. The Company's stock is traded on the New York Stock Exchange under the symbol CRK.

COMSTOCK RESOURCES, INC. CONSOLIDATED OPERATING RESULTS (In thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Oil and gas sales $174,206 $124,178 $320,235 $255,902 Operating expenses: Oil and gas operating 30,180 25,021 57,263 51,316 Exploration 19,866 3,718 30,999 8,593 Depreciation, depletion and amortization 59,760 33,063 116,467 63,748 Impairment - 8,780 - 8,780 General and administrative 8,162 7,233 17,864 15,368 Total operating expenses 117,968 77,815 222,593 147,805 Income from operations 56,238 46,363 97,642 108,097 Other income (expenses): Interest income 335 229 631 466 Other income 221 375 351 429 Interest expense (10,206) (6,106) (18,655) (11,589) Gain on derivatives - 1,303 - 9,428 Total other income (expenses) (9,650) (4,199) (17,673) (1,266) Income before income taxes and minority interest 46,588 42,164 79,969 106,831 Provision for income taxes (19,561) (18,886) (34,385) (45,185) Minority interest in earnings of Bois d'Arc Energy (8,810) (7,695) (14,809) (16,429) Net income $18,217 $15,583 $30,775 $45,217 Net income per share: Basic $ 0.42 $ 0.37 $ 0.71 $ 1.07 Diluted $ 0.41 $ 0.35 $ 0.69 $ 1.03 Weighted average common and common stock equivalent shares outstanding: Basic 43,374 42,077 43,369 42,070 Diluted 44,361 43,521 44,300 43,481 COMSTOCK RESOURCES, INC. CONSOLIDATED OPERATING RESULTS (In thousands) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Cash flow from operations: Net cash provided by operating activities $148,807 $90,525 $227,553 $176,064 Excess tax benefit from stock-based compensation 434 725 600 922 Increase (decrease) in accounts receivable 10,539 545 15,413 (13,140) Decrease in other current assets 1,327 5,461 2,564 949 Decrease (increase) in accounts payable and accrued expenses (33,910) (10,287) (18,389) 13,666 Cash flow from operations $127,197 $86,969 $227,741 $178,461 EBITDAX: Net income $ 18,217 $15,583 $ 30,775 $ 45,217 Interest expense 10,206 6,106 18,655 11,589 Income tax expense 19,561 18,886 34,385 45,185 Depreciation, depletion and amortization 59,760 33,063 116,467 63,748 Impairment - 8,780 - 8,780 Minority interest in earnings of Bois d'Arc Energy 8,810 7,695 14,809 16,429 Stock-based compensation 4,318 3,348 8,630 6,492 Exploration expense 19,866 3,718 30,999 8,593 Unrealized gain on derivatives - (1,303) - (10,131) EBITDAX $140,738 $95,876 $254,720 $195,902 As of June 30, 2007 2006 Balance Sheet Data: Cash and cash equivalents $ 48,882 $ 8,031 Other current assets 110,604 84,142 Property and equipment, net 1,957,176 1,499,871 Other 4,979 5,043 Total assets $2,121,641 $1,597,087 Current liabilities $ 170,290 $ 124,282 Long-term debt 594,000 333,000 Deferred income taxes 339,554 277,727 Asset retirement obligation 59,605 41,345 Minority interest in Bois d'Arc Energy 238,855 186,520 Stockholders' equity 719,337 634,213 Total liabilities and stockholders' equity $2,121,641 $1,597,087 COMSTOCK RESOURCES, INC. CONSOLIDATED OPERATING RESULTS ($ In thousands, except per unit amounts) For the Three Months Ended June 30, 2007 Onshore(1) Bois d'Arc Total Energy Oil production (thousand barrels) 255 417 672 Gas production (million cubic feet - Mmcf) 9,215 8,194 17,409 Total production (Mmcfe) 10,746 10,696 21,442 Oil sales $ 14,311 $27,638 $ 41,949 Gas sales 68,849 63,408 132,257 Total oil and gas sales $ 83,160 $91,046 $174,206 Average oil price (per barrel) $ 56.10 $ 66.28 $ 62.42 Average gas price (per thousand cubic feet - Mcf) $ 7.47 $ 7.74 $ 7.60 Average price (per Mcf equivalent) $ 7.74 $ 8.51 $ 8.12 Lifting cost $ 17,624 $12,556 $ 30,180 Lifting cost (per Mcf equivalent) $ 1.64 $ 1.17 $ 1.41 Oil and Gas Capital Expenditures $117,884 $59,411 $177,295 For the Three Months Ended June 30, 2006 Onshore(1) Bois d'Arc Total Energy Oil production (thousand barrels) 237 345 582 Gas production (million cubic feet - Mmcf) 7,549 5,218 12,767 Total production (Mmcfe) 8,969 7,290 16,259 Oil sales $13,847 $23,943 $ 37,790 Gas sales 50,724 35,664 86,388 Total oil and gas sales $64,571 $59,607 $124,178 Average oil price (per barrel) $ 58.47 $ 69.31 $ 64.90 Average gas price (per thousand cubic feet - Mcf) $ 6.72 $ 6.84 $ 6.77 Average price (per Mcf equivalent) $ 7.20 $ 8.18 $ 7.64 Lifting cost $13,200 $11,821 $ 25,021 Lifting cost (per Mcf equivalent) $ 1.47 $ 1.62 $ 1.54 Oil and Gas Capital Expenditures $43,125 $67,841 $110,966 For the Six Months Ended June 30, 2007 Onshore(1) Bois d'Arc Total Energy Oil production (thousand barrels) 506 785 1,291 Gas production (million cubic feet - Mmcf) 17,850 15,895 33,745 Total production (Mmcfe) 20,886 20,605 41,491 Oil sales $ 26,365 $ 49,106 $ 75,471 Gas sales 126,642 118,122 244,764 Total oil and gas sales $153,007 $167,228 $320,235 Average oil price (per barrel) $ 52.10 $ 62.55 $ 58.46 Average gas price (per thousand cubic feet - Mcf) $ 7.09 $ 7.43 $ 7.25 Average price (per Mcf equivalent) $ 7.33 $ 8.12 $ 7.72 Lifting cost $ 31,679 $ 25,584 $ 57,263 Lifting cost (per Mcf equivalent) $ 1.52 $ 1.24 $ 1.38 Oil and Gas Capital Expenditures $202,135 $122,164 $324,299 For the Six Months Ended June 30, 2006 Onshore(1) Bois d'Arc Total Energy Oil production (thousand barrels) 465 663 1,128 Gas production (million cubic feet - Mmcf) 14,918 10,282 25,200 Total production (Mmcfe) 17,709 14,259 31,968 Oil sales $ 26,112 $ 43,280 $ 69,392 Gas sales 108,350 78,160 186,510 Total oil and gas sales $134,462 $121,440 $255,902 Average oil price (per barrel) $ 56.12 $ 65.31 $ 61.52 Average gas price (per thousand cubic feet - Mcf) $ 7.26 $ 7.60 $ 7.40 Average price (per Mcf equivalent) $ 7.59 $ 8.52 $ 8.01 Lifting cost $ 27,055 $ 24,261 $ 51,316 Lifting cost (per Mcf equivalent) $ 1.53 $1.70 $ 1.61 Oil and Gas Capital Expenditures $ 92,282 $114,298 $206,580 (1) Includes the onshore results of operations of Comstock Resources, Inc. COMSTOCK RESOURCES, INC. REGIONAL OPERATING RESULTS ($ In thousands, except per unit amounts) For the Three Months Ended June 30, 2007 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 39 54 162 255 Gas production (million cubic feet - Mmcf) 6,072 2,423 720 9,215 Total production (Mmcfe) 6,305 2,744 1,697 10,746 Oil sales $ 2,398 $ 3,343 $ 8,570 $ 14,311 Gas sales 44,490 19,290 5,069 68,849 Total oil and gas sales $ 46,888 $ 22,633 $ 13,639 $ 83,160 Average oil price (per barrel) $ 61.49 $ 61.91 $ 52.90 $ 56.10 Average gas price (per thousand cubic feet - Mcf) $ 7.33 $ 7.96 $ 7.04 $ 7.47 Average price (per Mcf equivalent) $ 7.44 $ 8.25 $ 8.04 $ 7.74 Lifting cost(1) $ 8,311 $ 4,462 $ 4,851 $ 17,624 (1) Lifting cost (per Mcf equivalent) $ 1.32 $ 1.63 $ 2.86 $ 1.64 Oil and Gas Capital Expenditures: Acquisitions $ - $ 31,892 $ - $ 31,892 Leasehold costs 137 621 442 1,200 Exploratory drilling - 3,133 1,759 4,892 Development drilling 56,387 15,810 5,932 78,129 Other development 772 503 496 1,771 Total $ 57,296 $ 51,959 $ 8,629 $117,884 For the Three Months Ended June 30, 2006 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 31 57 149 237 Gas production (million cubic feet - Mmcf) 4,325 2,378 846 7,549 Total production (Mmcfe) 4,513 2,721 1,735 8,969 Oil sales $ 1,991 $ 3,813 $ 8,043 $ 13,847 Gas sales 28,299 17,592 4,833 50,724 Total oil and gas sales $ 30,290 $ 21,405 $ 12,876 $ 64,571 Average oil price (per barrel) $ 64.23 $ 66.89 $ 53.98 $ 58.47 Average gas price (per thousand cubic feet - Mcf) $ 6.54 $ 7.40 $ 5.71 $ 6.72 Average price (per Mcf equivalent) $ 6.71 $ 7.87 $ 7.42 $ 7.20 Lifting cost(1) $ 5,735 $ 3,684 $ 3,781 $ 13,200 (1) Lifting cost (per Mcf equivalent) $ 1.27 $ 1.35 $ 2.18 $ 1.47 Oil and Gas Capital Expenditures: Acquisitions $ 912 $ - $ - $ 912 Leasehold costs 47 95 467 609 Exploratory drilling - - - - Development drilling 30,296 2,541 5,471 38,308 Other development 1,530 532 1,234 3,296 Total $ 32,785 $ 3,168 $ 7,172 $ 43,125 (1) Includes production taxes of $3,943 and $2,847 for the three months ended June 30, 2007 and 2006, respectively. For the Six Months Ended June 30, 2007 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 85 107 314 506 Gas production (million cubic feet - Mmcf) 11,453 5,000 1,397 17,850 Total production (Mmcfe) 11,962 5,640 3,284 20,886 Oil sales $ 4,890 $ 6,301 $ 15,174 $ 26,365 Gas sales 79,991 37,391 9,260 126,642 Total oil and gas sales $ 84,881 $ 43,692 $ 24,434 $ 153,007 Average oil price (per barrel) $ 57.53 $ 58.89 $ 48.32 $ 52.10 Average gas price (per thousand cubic feet - Mcf) $ 6.98 $ 7.48 $ 6.63 $ 7.09 Average price (per Mcf equivalent) $ 7.10 $ 7.75 $ 7.44 $ 7.33 Lifting cost(2) $ 14,995 $ 7,784 $ 8,900 $ 31,679 (2) Lifting cost (per Mcf equivalent) $ 1.25 $ 1.38 $ 2.71 $ 1.52 Oil and Gas Capital Expenditures: Acquisitions $ - $ 31,965 $ - $ 31,965 Leasehold costs 535 1,364 2,842 4,741 Exploratory drilling - 5,388 2,201 7,589 Development drilling 111,094 27,487 15,941 154,522 Other development 1,014 986 1,318 3,318 Total $ 112,643 $ 67,190 $ 22,302 $ 202,135 For the Six Months Ended June 30, 2006 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 60 113 292 465 Gas production (million cubic feet - Mmcf) 8,568 4,663 1,687 14,918 Total production (Mmcfe) 8,930 5,344 3,435 17,709 Oil sales $ 3,731 $ 7,287 $ 15,094 $ 26,112 Gas sales 61,065 35,790 11,495 108,350 Total oil and gas sales $ 64,796 $ 43,077 $ 26,589 $134,462 Average oil price (per barrel) $ 62.18 $ 64.49 $ 51.69 $ 56.12 Average gas price (per thousand cubic feet - Mcf) $ 7.13 $ 7.68 $ 6.81 $ 7.26 Average price (per Mcf equivalent) $ 7.26 $ 8.06 $ 7.74 $ 7.59 Lifting cost(2) $ 11,661 7,333 $ 8,061 $ 27,055 (2) Lifting cost (per Mcf equivalent) $ 1.31 $ 1.37 $ 2.35 $ 1.53 Oil and Gas Capital Expenditures: Acquisitions $ 912 $ - $ - $ 912 Leasehold costs 234 185 1,134 1,553 Exploratory drilling - 75 - 75 Development drilling 52,459 5,607 19,756 77,822 Other development 8,171 643 3,106 11,920 Total $ 61,776 $ 6,510 $ 23,996 $ 92,282 (2) Includes production taxes of $6,502 and $6,306 for the six months ended June 30, 2007 and 2006, respectively.