For the nine months ended September 30, 2004, Comstock's oil and gas sales totaled $205.6 million, as compared to oil and gas sales of $182.6 million for the same period in 2003. Net income for the nine months ended September 30, 2004 was $31.0 million, 86 cents per diluted share, as compared to net income of $47.6 million, $1.36 per diluted share, excluding the cumulative effect of an accounting principle change for future abandonment costs. The results for the nine months ended September 30, 2004 include a charge of $19.6 million ($12.5 million after income taxes or 35 cents per diluted share) relating to the early retirement of the Company's 11 1/4% senior notes. Operating cash flow (before changes in working capital accounts) generated by Comstock in the first nine months of 2004 was $139.5 million, a 15% increase from cash flow of $121.5 million in the same period in 2003. For the nine months ended September 30, 2004, EBITDAX was $159.2 million as compared to EBITDAX of $144.4 million for the same period in 2003, representing a 10% increase.
Comstock's production in the third quarter of 2004 totaled 12.7 Bcf equivalent of natural gas ("Bcfe"), a 12% increase from production of 11.3 Bcfe in the third quarter of 2003. For the first nine months of 2004, Comstock produced 34.7 Bcfe, an increase of 5% as compared to production in the same period of 2003 of 33.0 Bcfe. Production was lower than expected mainly due to the effects of Hurricane Ivan which caused the Company's Gulf of Mexico production to be shut in for part of September. The Company's realized natural gas price averaged $5.85 per Mcf in 2004's third quarter as compared to $5.04 per Mcf in 2003's third quarter. Realized oil prices in the third quarter of 2004 averaged $42.46 per barrel as compared to $29.50 per barrel for 2003. For the first nine months of 2004, Comstock's realized natural gas price averaged $5.76 per Mcf as compared to 2003's average natural gas price of $5.65 per Mcf. For the first nine months of 2004, Comstock's realized oil price was $38.67 per barrel as compared to $30.79 per barrel for the same period in 2003.
Year to Date 2004 Drilling Results
In the first nine months of 2004, Comstock drilled 52 wells (25.2 net) as part of its 2004 development and exploration program. Forty-two (20.2 net) of the 52 wells drilled were successful and ten (5.2 net) were dry holes. Six (4.9 net) of the 52 wells were drilled by Bois d'Arc Energy in the third quarter of 2004. Three (2.8 net) of the Bois d'Arc Energy wells were successful and three (2.1 net) were dry holes.
Comstock drilled nine wells, 6.8 net wells, in its East Texas/ North Louisiana region in the first nine months of 2004. All of these wells were successful. Five of these wells were tested at an average per well rate of 2.0 million cubic feet of natural gas equivalent ("Mmcfe") per day. The remaining four are being completed. Comstock has three wells currently being drilled and expects to drill four additional wells in this region by the end of the year.
Comstock drilled 22 wells, 6.8 net wells, in its South Texas region in the first nine months of 2004. Seventeen of these wells were successful and six were dry holes. Fourteen of the successful South Texas wells were tested at an average per well rate of 4.3 million cubic feet of natural gas equivalent ("Mmcfe") per day. The remaining two are being completed. Comstock has two wells being drilled currently in South Texas and expects to drill two additional wells by the end of the year including an offset well to a discovery well in the Javelina field in Hidalgo County which is expected to be a 7.0 Mmcfe per day producer. Comstock has a 66% working interest in this well.
In its Southeast Texas region, Comstock is currently drilling the Collins #3 well to a depth of 15,500 feet. This field extension well is being drilled to the South of Comstock's other successful wells in the "Ross" prospect area in Polk County, Texas. Comstock plans to test its "Big Sandy" prospect which is further South of the "Ross" prospect area with an 18,000 foot exploratory well to be drilled in the fourth quarter.
Comstock drilled thirteen offshore wells (6.0 net) in its Gulf of Mexico region in the first half of 2004. These wells were drilled under its exploration program with Bois d'Arc Offshore Ltd. ("Bois d'Arc"), or as part of Comstock's redevelopment of its Ship Shoal 113 Unit. All but one of the offshore wells were successful. In July 2004 Comstock contributed its offshore Gulf of Mexico properties to Bois d'Arc Energy in exchange for 59.9% ownership of the new venture. Since its formation Bois d'Arc Energy has drilled six offshore wells. Three were successful and three were dry holes that were reported on last week. The successful wells include the OCS-G 00063 #3 well drilled at Ship Shoal Block 93 to test the "Goldfish" prospect. The well was drilled to a depth of 12,420 feet and encountered 58 feet of productive pay in three zones. Bois d'Arc Energy has a 80% working interest in this well. The SL 10830 #6 well drilled at Ship Shoal Block 66 was also successful. This field extensional test well was drilled to a depth of 10,830 feet and found 27 net feet of productive pay in three sands. Bois d'Arc Energy has a 100% working interest in this well. The third successful well was drilled at Vermilion Block 127. The OCS-G 22621 #1 was drilled to a depth of 7,020 feet and found 148 feet of net productive pay in eight commercial sands. Bois d'Arc is currently drilling three offshore wells and expects to drill an additional three wells by the end of the year.
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