Comstock Resources, Inc. Reports Fourth Quarter and Annual 2006 Financial and Operating Results

FRISCO, Texas, Feb. 12 /PRNewswire-FirstCall/ -- Comstock Resources, Inc. ("Comstock" or the "Company") today reported financial and operating results for the quarter and year ended December 31, 2006. The financial results include the operations of Bois d'Arc Energy, Inc. ("Bois d'Arc Energy") effective January 1, 2006. Pro forma results for the three months and year ended December 31, 2005 assuming Bois d'Arc Energy was included as a consolidated subsidiary have been provided to facilitate comparison of the 2006 results to 2005 results in this press release.

Financial Results for the Three Months and Year Ended December 31, 2006

Comstock reported net income of $8.4 million or 19 cents per diluted share for the three months ended December 31, 2006 as compared to net income of $41.3 million or 96 cents per diluted share in the same quarter of 2005. Results for the fourth quarter of 2005 include an unrealized gain on derivatives of $9.8 million. Without this item Comstock would have reported net income of $35.5 million or 82 cents per diluted share for the fourth quarter of 2005. Lower natural gas prices caused oil and gas sales in the fourth quarter of 2006 to decrease by 11% to $126.8 million as compared to pro forma consolidated sales of $142.2 million in the same period last year. Comstock generated $80.8 million in consolidated operating cash flow (before changes in working capital accounts) in 2006's fourth quarter, which represents an 18% decrease from 2005's fourth quarter pro forma consolidated cash flow of $98.4 million. EBITDAX or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses was $92.7 million in 2006's fourth quarter as compared to 2005's pro forma consolidated third quarter EBITDAX of $107.4 million.

For the year ended December 31, 2006, Comstock's oil and gas sales increased $62.7 million or 14% to $511.9 million from pro forma consolidated sales of $449.2 million in 2005. Net income for the year ended December 31, 2006 was $70.7 million, or $1.61 per diluted share, as compared to net income of $60.5 million or $1.47 per diluted share in 2005. Net income for the year ended December 31, 2006 includes unrealized gains on derivative financial instruments of $11.2 million and the impact of the new Texas business tax of $1.3 million. Without these items, Comstock would have reported net income of $64.6 million or $1.48 per diluted share. Excluding the one time adjustments to reflect Bois d'Arc Energy's conversion to a corporation and its initial public offering and unrealized losses on derivatives, Comstock's net income for the year ended December 31, 2005 would have been $91.0 million, or $2.21 per diluted share. Operating cash flow (before changes in working capital accounts) generated by Comstock was $348.5 million during 2006 as compared to pro forma consolidated cash flow of $312.8 million for the same period in 2005. For the year ended December 31, 2006, EBITDAX was $387.4 million as compared to pro forma consolidated EBITDAX of $352.1 million for 2005.

Production in the fourth quarter of 2006 totaled 18.2 Bcf equivalent of natural gas ("Bcfe"), a 33% increase from 2005's pro forma consolidated production of 13.6 Bcfe. For the year ended December 31, 2006 production totaled 67.3 Bcfe, an increase of 22%, as compared to pro forma consolidated production in 2005 of 55.0 Bcfe.

The Company's realized natural gas price averaged $6.47 per Mcf in 2006's fourth quarter which was significantly lower than the average price of $10.75 per Mcf in 2005's fourth quarter. Realized oil prices in the fourth quarter of 2006 averaged $54.51 per barrel as compared to $54.36 per barrel for the fourth quarter of 2005. For the year ended December 31, 2006, Comstock's realized natural gas price averaged $6.95 per Mcf as compared to $8.06 per Mcf in 2005. Comstock's realized oil price in 2006 was $60.93 per barrel as compared to $51.50 per barrel in 2005.

2006 Drilling Results

Comstock made capital expenditures of $288.7 million during 2006 for its onshore acquisition, exploration and development activities and spent an additional $1.1 million on other exploration costs. Onshore, Comstock drilled 122 onshore wells (89.6 net) in 2006. 117 (85.7 net) of the wells drilled were development wells and five (4.0 net) were exploratory. 113 of the development wells were successful and three (2.0 net) of the exploratory wells were successful. Comstock's drilling success rate for its onshore drilling program was 95% in 2006.

Comstock drilled 88 wells (69.3 net) in its East Texas/North Louisiana region. All but two of these were successful. These wells have been tested at a per well average rate of 1.4 million cubic feet of gas equivalent ("Mmcfe") per day. In 2007, Comstock plans to drill 116 (88.6 net) development wells in this region and currently has seven drilling rigs working in this region. In its South Texas region, Comstock drilled ten (4.3 net) successful wells in 2006. These wells have been tested at a per well average rate of 5.6 Mmcfe per day. In 2007, Comstock plans to drill 21 (11.5 net) wells in this region. Comstock drilled 24 wells (16.0 net) in its other regions during 2006. Seven (1.1 net) of the wells drilled were coal bed methane wells in the San Juan Basin in New Mexico. All but one of these were successful. These wells have been tested at a per well average rate of 0.9 Mmcfe per day. Comstock drilled eleven (10.5 net) wells in Mississippi. Nine of the eleven were successful and two were dry holes. These wells have been tested at a per well average rate of 153 barrels of oil per day. The remaining six (4.4 net) successful wells were drilled in Arkansas and Oklahoma. All but one of these were successful. In 2007, Comstock plans to drill 18 (16.4 net) wells in Mississippi and 15 (2.4 net) wells in certain of its other fields.

Comstock's offshore operations are conducted exclusively through its ownership of Bois d'Arc Energy. Bois d'Arc Energy made capital expenditures of $244.6 million during 2006 for its acquisition, exploration and development activities and spent an additional $4.6 million on geological and geophysical costs primarily for 3-D seismic data acquisition. Bois d'Arc successfully replaced 166% of 2006's production primarily through its 2006 drilling program. In 2006, Bois d'Arc Energy drilled ten (8.7 net) successful wells out of a total of 13 (11.2 net) wells drilled with three (2.5 net) dry holes. The largest discoveries made in 2006 included a well drilled at South Pelto 22, which proved up the "Sockeye" prospect and a discovery at Ship Shoal block 111, which proved up the "Steelhead" prospect.

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 through its ownership in Bois d'Arc Energy, Inc. 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 Twelve Months Ended December 31, Ended December 31, 2005 2005 As Pro As Pro 2006 Reported Forma(A) 2006 Reported Forma(A) Oil and gas sales $126,775 $93,366 $142,207 $511,928 $303,336 $449,242 Operating expenses: Oil and gas operating 29,083 14,097 26,862 107,303 50,966 81,356 Exploration 3,470 16 6,294 20,132 19,725 33,693 Depreciation, depletion and amortization 49,465 15,970 24,923 153,922 63,338 95,977 Impairment 275 --- 590 10,444 3,400 3,990 General and administrative, net 9,031 5,518 8,580 31,769 16,533 24,017 Total operating expenses 91,324 35,601 67,249 323,570 153,962 239,033 Income from operations 35,451 57,765 74,958 188,358 149,374 210,209 Other income (expenses): Interest income 288 155 203 1,012 1,604 610 Other income 165 36 86 781 209 209 Interest expense (9,107) (4,773) (5,461) (27,429) (20,272) (21,365) Loss on disposal of assets --- --- --- --- --- (89) Gain on sale of stock by Bois d'Arc Energy --- --- --- --- 28,797 28,797 Gain (loss) on derivatives 108 7,489 7,489 10,716 (13,556) (13,556) Total other income (expenses) (8,546) 2,907 2,317 (14,920) (3,218) (5,394) Income before income taxes, minority interest and equity in earnings of Bois d'Arc Energy 26,905 60,672 77,275 173,438 146,156 204,815 Provision for income taxes (12,492) (24,346) (30,511) (74,339) (35,815) (161,623) Equity in (earnings) loss of Bois d'Arc Energy --- 5,005 --- --- (49,862) --- Minority interest in earnings (loss) of Bois d'Arc Energy (6,001) --- (5,433) (28,434) --- 17,287 Net income $ 8,412 $41,331 $41,331 $70,665 $60,479 $60,479 Net income per share: Basic $ 0.20 $ 0.99 $ 0.99 $ 1.67 $ 1.54 $ 1.54 Diluted $ 0.19 $ 0.96 $ 0.96 $ 1.61 $ 1.47 $ 1.47 Weighted average common and common stock equivalent shares outstanding: Basic 42,493 41,652 41,652 42,220 39,216 39,216 Diluted 43,707 43,114 43,114 43,556 41,154 41,154 (A) Pro forma amounts include Bois d'Arc Energy as a consolidated subsidiary. COMSTOCK RESOURCES, INC. CONSOLIDATED OPERATING RESULTS (In thousands) Three Months Twelve Months Ended December 31, Ended December 31, 2005 2005 As Pro As Pro 2006 Reported Forma(A) 2006 Reported Forma(A) Cash flow from operations: Net cash provided by operating activities $90,305 $62,700 $93,747 $364,605 $217,954 $322,744 Excess tax benefit from stock based compensation 5,296 --- --- 6,218 --- --- Increase in accounts receivable 13,691 8,289 23,813 2,917 13,030 32,216 Increase (decrease) in other current assets (3,665) 1,043 (2,303) (3,526) (616) 2,119 Increase in accounts payable and accrued expenses (24,819) (2,994) (16,882) (21,666) (14,079) (44,315) Cash flow from operations $80,808 $69,038 $98,375 $348,548 $216,289 $312,764 EBITDAX: Net income $ 8,412 $41,331 $41,331 $70,665 $60,479 $60,479 Interest expense 9,107 4,773 5,461 27,429 20,272 21,365 Income tax expense 12,492 24,346 30,511 74,339 35,815 161,623 Depreciation, depletion and amortization 49,465 15,970 24,923 153,922 63,338 95,977 Exploration expense 3,470 16 6,294 20,132 19,725 33,693 Other non-cash items: Impairment 275 --- 590 10,444 3,400 3,990 Loss on disposal of assets --- --- --- --- --- 89 Minority interest in earnings (loss) of Bois d'Arc Energy 6,001 --- 5,433 28,434 --- (17,287) Equity in (earnings) loss of Bois d'Arc Energy --- (5,005) --- --- 49,862 --- Gain on sale of stock by Bois d'Arc Energy --- --- --- --- (28,797) (28,797) Stock-based compensation 3,415 1,224 2,693 13,249 5,419 9,885 Unrealized (gain) loss on derivatives 69 (9,818) (9,818) (11,242) 11,087 11,087 EBITDAX $92,706 $72,837 $107,418 $387,372 $240,600 $352,104 As of December 31, 2005 2006 As Reported Pro Forma(A) Balance Sheet Data: Cash and cash equivalents $ 10,715 $ 89 $ 12,132 Other current assets 88,113 52,681 90,686 Property and equipment, net 1,773,626 706,928 1,368,859 Investment in Bois d'Arc Energy --- 252,134 --- Other 5,671 4,831 5,630 Total assets $ 1,878,125 $ 1,016,663 $ 1,477,307 Current liabilities $ 151,861 $ 68,117 $ 134,399 Long-term debt 455,000 243,000 312,000 Deferred income taxes 311,236 119,481 242,737 Asset retirement obligation 57,116 3,206 38,240 Minority interest in Bois d'Arc Energy 220,349 --- 167,072 Stockholders' equity 682,563 582,859 582,859 Total liabilities and stockholders' equity $ 1,878,125 $ 1,016,663 $ 1,477,307 (A) Pro forma amounts include Bois d'Arc Energy as a consolidated subsidiary. COMSTOCK RESOURCES, INC. OPERATING RESULTS ($ In thousands, except per unit amounts) Pro Forma Consolidated For the Three Months For the Three Months Ended December 31, 2006 Ended December 31, 2005 Bois Bois Pro d'Arc d'Arc Forma Onshore(A) Energy Total Onshore(A) Energy Total(B) Oil production (thousand barrels) 225 350 575 234 199 433 Gas production (million cubic feet - Mmcf) 7,944 6,795 14,739 7,868 3,178 11,046 Total production (Mmcfe) 9,296 8,894 18,190 9,270 4,368 13,638 Oil sales $11,147 $20,206 $31,353 $11,725 $11,770 $23,495 Gas sales 49,354 46,068 95,422 81,641 37,071 118,712 Total oil and gas sales $60,501 $66,274 $126,775 $93,366 $48,841 $142,207 Average oil price (per barrel) $49.46 $57.77 $54.51 $50.17 $59.29 $54.36 Average gas price (per thousand cubic feet - Mcf) $6.21 $6.78 $6.47 $10.38 $11.67 $10.75 Average price (per Mcf equivalent) $6.51 $7.45 $6.97 $10.07 $11.18 $10.43 Lifting cost $13,482 $15,601 $29,083 $14,097 $12,765 $26,862 Lifting cost (per Mcf equivalent) $1.45 $1.75 $1.60 $1.52 $2.92 $1.97 Oil and Gas Capital Expenditures $75,790 $52,812 $128,602 $26,864 $63,839 $90,703 Pro Forma Consolidated For the Year Ended For the Year Ended December 31, 2006 December 30, 2005 Bois Bois Pro d'Arc d'Arc Forma Onshore (A) Energy Total Onshore(A) Energy Total(B) Oil production (thousand barrels) 921 1,383 2,304 735 1,155 1,890 Gas production (million cubic feet - Mmcf) 30,271 23,183 53,454 28,742 14,896 43,638 Total production (Mmcfe) 35,797 31,481 67,278 33,151 21,825 54,976 Oil sales $50,955 $89,421 $140,376 $36,259 $61,064 $97,323 Gas sales 206,263 165,289 371,552 228,547 123,372 351,919 Total oil and gas sales $257,218 $254,710 $511,928 $264,806 $184,436 $449,242 Average oil price (per barrel) $55.32 $64.66 $60.93 $49.34 $52.88 $51.50 Average gas price (per thousand cubic feet - Mcf) $6.81 $7.13 $6.95 $7.95 $8.28 $8.06 Average price (per Mcf equivalent) $7.19 $8.09 $7.61 $7.99 $8.45 $8.17 Lifting cost $53,903 $53,400 $107,303 $44,267 $37,089 $81,356 Lifting cost (per Mcf equivalent) $1.51 $1.70 $1.59 $1.34 $1.70 $1.48 Oil and Gas Capital Expenditures $288,729 $244,610 $533,339 $323,953 $187,562 $511,515 (A) Includes the onshore results of operations of Comstock Resources, Inc. (B) Pro forma amounts include Bois d'Arc Energy as a consolidated subsidiary. COMSTOCK RESOURCES, INC. REGIONAL ONSHORE OPERATING RESULTS ($ In thousands, except per unit amounts) For the Three Months ended December 31, 2006 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 28 45 152 225 Gas production (million cubic feet - Mmcf) 4,775 2,345 824 7,944 Total production (Mmcfe) 4,941 2,613 1,742 9,296 Oil sales $1,658 $2,547 $6,942 $11,147 Gas sales 29,304 15,179 4,871 49,354 Total oil and gas sales $30,962 $17,726 $11,813 $60,501 Average oil price (per barrel) $59.21 $56.60 $45.67 $49.46 Average gas price (per thousand cubic feet - Mcf) $6.14 $6.47 $5.91 $6.21 Average price (per Mcf equivalent) $6.27 $6.78 $6.78 $6.51 Lifting cost (A) $5,878 $3,842 $3,762 $13,482 Lifting cost (per Mcf equivalent) $1.19 $1.47 $2.16 $1.45 Oil and Gas Capital Expenditures: Acquisitions $--- $--- $--- $--- Leasehold costs 127 (1,266) 1,132 (7) Exploratory drilling --- 5,964 1,737 7,701 Development drilling 53,511 2,634 8,070 64,215 Other development 1,987 1,378 516 3,881 Total $55,625 $8,710 $11,455 $75,790 For the Three Months Ended December 31, 2005 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 34 61 139 234 Gas production (million cubic feet - Mmcf) 4,276 2,008 1,584 7,868 Total production (Mmcfe) 4,478 2,371 2,421 9,270 Oil sales $2,060 $3,562 $6,103 $11,725 Gas sales 45,013 21,755 14,873 81,641 Total oil and gas sales $47,073 $25,317 $20,976 $93,366 Average oil price (per barrel) $60.59 $58.39 $43.91 $50.17 Average gas price (per thousand cubic feet - Mcf) $10.53 $10.83 $9.39 $10.38 Average price (per Mcf equivalent) $10.51 $10.68 $8.66 $10.07 Lifting cost(A) $6,123 $4,955 $3,019 $14,097 Lifting cost (per Mcf equivalent) $1.37 $2.09 $1.25 $1.52 Oil and Gas Capital Expenditures: Acquisitions $58 $--- $--- $58 Leasehold costs 803 463 423 1,689 Exploratory drilling --- 20 1 21 Development drilling 19,460 3,289 (1,553) 21,196 Other development 1,721 424 1,755 3,900 Total $22,042 $4,196 $626 $26,864 (A) Includes production taxes of $2,551 and $3,893 for the three months ended December 31, 2006 and 2005, respectively For the Year ended December 31, 2006 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 117 209 595 921 Gas production (million cubic feet - Mmcf) 17,850 9,073 3,348 30,271 Total production (Mmcfe) 18,550 10,328 6,919 35,797 Oil sales $7,295 $13,332 $30,328 $50,955 Gas sales 119,106 65,594 21,563 206,263 Total oil and gas sales $126,401 $78,926 $51,891 $257,218 Average oil price (per barrel) $62.35 $63.79 $50.97 $55.32 Average gas price (per thousand cubic feet - Mcf) $6.67 $7.23 $6.44 $6.81 Average price (per Mcf equivalent) $6.81 $7.64 $7.50 $7.19 Lifting cost (B) $23,107 $14,612 $16,184 $53,903 Lifting cost (per Mcf equivalent) $1.25 $1.41 $2.34 $1.51 Oil and Gas Capital Expenditures: Acquisitions $912 $60,707 $--- $61,619 Leasehold costs 620 6,358 2,955 9,933 Exploratory drilling --- 6,039 1,737 7,776 Development drilling 145,036 14,537 28,558 188,131 Other development 13,307 2,374 5,589 21,270 Total $159,875 $90,015 $38,839 $288,729 For the Year Ended December 31, 2005 East Texas/ North South Total Louisiana Texas Other Onshore Oil production (thousand barrels) 97 239 399 735 Gas production (million cubic feet - Mmcf) 14,130 10,155 4,457 28,742 Total production (Mmcfe) 14,710 11,586 6,855 33,151 Oil sales $5,243 $12,957 $18,059 $36,259 Gas sales 114,186 79,720 34,641 228,547 Total oil and gas sales $119,429 $92,677 $52,700 $264,806 Average oil price (per barrel) $54.05 $54.21 $45.26 $49.34 Average gas price (per thousand cubic feet - Mcf) $8.08 $7.85 $7.77 $7.95 Average price (per Mcf equivalent) $8.12 $8.00 $7.69 $7.99 Lifting cost (B) $17,823 $14,847 $11,597 $44,267 Lifting cost (per Mcf equivalent) $1.21 $1.28 $1.69 $1.34 Oil and Gas Capital Expenditures: Acquisitions $128,455 $--- $73,334 $201,789 Leasehold costs 1,415 2,123 1,530 5,068 Exploratory drilling --- 14,933 277 15,210 Development drilling 71,516 10,103 5,681 87,300 Other development 8,632 1,567 4,387 14,586 Total $210,018 $28,726 $85,209 $323,953 (B) Includes production taxes of $11,341 and $11,344 for the years ended December 31, 2006 and 2005, respectively.