Comstock Resources Sees Increase in 1Q06 Net Income
Comstock Resources, Inc. (NYSE: CRK) reported financial and operating results for the quarter ended March 31, 2006. As of March 31, 2006, Comstock owns 29,935,761 shares of Bois d'Arc Energy, Inc. (NYSE: BDE), which represents 48% of the shares that Bois d'Arc Energy, Inc. has outstanding. The Company accounts for its investment in Bois d'Arc Energy, Inc. in 2006 using the equity method. The 2005 financial results include proportionate consolidation of Comstock's 60% ownership in Bois d'Arc Energy, LLC, the predecessor to Bois d'Arc Energy, Inc.
First Quarter 2006 Financial Results
Comstock reported net income of $29.6 million or 68 cents per diluted share for the three months ended March 31, 2006 as compared to 2005's first quarter net income of $15.9 million or 43 cents per diluted share. First quarter 2006's oil and gas sales of $69.9 million were increased slightly from 2005's first quarter sales of $69.8 million despite the inclusion of $26.0 million in sales related to Comstock's 60% ownership of Bois d'Arc Energy in the first quarter 2005 results. Oil and gas sales from Comstock's onshore operations of $69.9 million in the first quarter of 2006 increased 60% from onshore oil and gas sales of $43.8 million in 2005's first quarter. Operating cash flow (before changes in working capital accounts) generated by Comstock in 2006's first quarter of $47.2 million was 1% higher than 2005's first quarter cash flow of $46.5 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $52.3 million in 2006's first quarter, a 5% decrease from 2005's first quarter EBITDAX of $55.1 million. The 2006 results no longer include the Company's share of the operating cash flow or EBITDAX related to Bois d'Arc Energy's operations. The 2006 results include a $8.8 million unrealized gain on derivatives held for price risk management and the 2005 results includes a $3.2 million unrealized loss related to derivatives. Without the unrealized gain and loss, net income for the first quarter of 2006 would have been approximately $24.0 million or 55 cents per diluted share as compared to $18.0 million or 48 cents per diluted share for the first quarter of 2005.
Comstock's onshore production in the first quarter of 2006 increased 26% to 8.7 billion cubic feet equivalent of natural gas ("Bcfe") as compared to onshore production of 7.0 Bcfe in the first quarter of 2005. The Company's onshore realized natural gas price averaged $7.82 per Mcf in 2006's first quarter as compared to $6.16 per Mcf in 2005's first quarter. Realized oil prices for onshore operations in the first quarter of 2006 averaged $53.69 per barrel as compared to $47.81 per barrel for 2005.
First Quarter 2006 Drilling Results
Comstock also announced the results to date of its 2006 drilling program. Thirty of the 32 wells drilled in 2006 have been completed as producing wells with only two dry holes for a success rate of 94%.
In the first quarter of 2006, Comstock drilled 17 wells (11.2 net) in the East Texas and North Louisiana region. All of these wells were successful development wells. These wells have been tested at a per well average rate of 1.4 Mmcfe per day. These wells are part of Comstock's 96 well drilling program planned in this region for 2006. Comstock also drilled 15 wells (8.6 net) in South Texas and in its other regions in the first quarter of 2006. All but two of these wells were successful.
In South Texas, Comstock drilled two successful wells (.7 net) which had an average per well initial production rate of 3.2 Mmcfe per day. Comstock drilled six wells, (4.4 net) in the Mid Continent region, five (3.4 net) were successful and one (1.0 net) was a dry hole. The initial production rate for the successful wells averaged 0.4 Mmcfe per day per well. Comstock drilled three successful wells (2.9 net) in its Laurel field in Mississippi. These wells are in the process of completion. Four wells (.7 net) were drilled in the San Juan Basin in New Mexico. Three (.5 net) were successful and one (.2 net) was a dry hole. The successful wells are in the process of completion.
Comstock currently has four rigs drilling in East Texas/North Louisiana,
one rig drilling in the Laurel field in Mississippi and two rigs drilling in
South Texas. Three additional rigs are expected to be added in East
Texas/North Louisiana in June.
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