Comstock's Q2 Profit Edges Upward

Comstock Resources (NYSE: CRK) 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. (NYSE: BDE - News; "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.

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