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COMSTOCK RESOURCES, INC. REPORTS FIRST QUARTER 2020 FINANCIAL AND OPERATING RESULTS

FRISCO, TX, May 06, 2020 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (CRK) today reported financial and operating results for the quarter ended March 31, 2020. On July 16, 2019, Comstock completed the acquisition of Covey Park Energy LLC ("Covey Park"). The Company's financial results include the results of operations of Covey Park in the first quarter of 2020.

Financial Results for the Three Months Ended March 31, 2020

For the first quarter of 2020, Comstock reported net income available to common stockholders of $30.0 million or $0.15 per diluted share. Net income available to common stockholders as adjusted to exclude certain items not related to normal operating activities for the first quarter of 2020 was $23.6 million or $0.12 per diluted share. These items included $5.3 million in non-cash interest amortization resulting from adjusting debt assumed in the Covey Park acquisition to fair value; $2.5 million of non-cash accretion resulting from adjusting the preferred stock issued in connection with the Covey Park acquisition to fair value; and $16.5 million in unrealized hedging gains.

Comstock produced 122.8 billion cubic feet ("Bcf") of natural gas and 454,495 barrels of oil or 125.5 billion cubic feet of natural gas equivalent ("Bcfe") in the first quarter of 2020. Natural gas production averaged 1,349 million cubic feet ("MMcf") per day, an increase of 270% over natural gas production in the first quarter of 2019. The growth in natural gas production was primarily attributable to the Covey Park acquisition and the successful results from Comstock's Haynesville shale drilling activities in 2019 and 2020. Oil production in the first quarter of 2020 decreased to 4,994 barrels of oil per day from 9,005 barrels per day produced in the first quarter of 2019 due primarily to expected production declines from the Bakken Shale properties acquired in 2018.

Comstock's average realized natural gas price in the first quarter of 2020, including hedging, decreased to $2.04 per Mcf as compared to $2.87 per Mcf realized in the first quarter of 2019. The Company's average realized oil price in the first quarter of 2020, including hedging, increased to $46.31 per barrel as compared to $45.78 per barrel in the first quarter of 2019. Oil and gas sales were $271.3 million (including realized hedging gains) in the first quarter of 2020 as compared to sales of $132.3 million in the first quarter of 2019. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, of $201.6 million in the first quarter of 2020 increased by 108% over EBITDAX of $96.9 million for the first quarter of 2019. The Company's operating cash flow generated in the first quarter of 2020 of $156.0 million increased 120% over operating cash flow of $70.8 million in the first quarter of 2019.

Drilling Results

Total expenditures in the first quarter of 2020 for drilling and development activities were $130.5 million. Comstock spent $128.3 million to develop its Haynesville and Bossier shale properties, including $122.1 million on drilling and completing wells and an additional $6.2 million on other development activity. Comstock drilled 13 (9.6 net) horizontal operated Haynesville shale wells during the first three months of 2020, which had an average lateral length of approximately 9,200 feet. Comstock also participated in 7 (0.4 net) non-operated Haynesville shale wells in the first quarter of 2020. During the first quarter of 2020, Comstock had 21 (11.5 net) Haynesville shale wells turn to sales and had 32 (13.5 net) wells in the process of being completed or waiting to be completed.

Since its last operational update, Comstock reported on an additional twenty Haynesville shale wells. The average initial production rate of these wells was 24 MMcf per day. The wells had completed lateral lengths ranging from 4,574 feet to 9,885 feet, with an average completed lateral length of 8,758 feet. Each well was tested at initial production rates of 15 to 32 MMcf per day.

Other Matters

“Our natural gas operations in East Texas and North Louisiana have not been adversely impacted by COVID-19 virus pandemic”, stated M. Jay Allison, Chief Executive Officer of the Company. “We have modified our procedures and practices to minimize unnecessary risk of exposure and prevent infection among our employees and our contractors. Our operations team has continued to execute on our drilling program with little disruption and production operations have not been impacted. While natural gas prices are expected to remain low in the near-term as we manage through an oversupplied market resulting from the winter heating season, we anticipate a much healthier supply and demand balance for natural gas later this year and in 2021. Our improved outlook for the natural gas markets is primarily driven by our expectation for significant declines in natural gas supply in 2020 and 2021 due to a continued reduction in natural gas directed drilling and completion activity and less associated gas production from reduced activity in oil basins driven by the very low oil prices post COVID-19.”

Following the end of the quarter, the Company completed its scheduled semi-annual borrowing base redetermination under its revolving bank credit facility, resulting in the bank group decreasing the borrowing base from $1.575 billion to $1.4 billion. The commitment level was reduced from $1.5 billion to $1.4 billion. The decrease is related to lowered oil and natural gas prices that the banks used to determine the borrowing base.

Comstock has planned a conference call for 10:00 a.m. Central Time on May 7, 2020, to discuss the first quarter of 2020 operational and financial results. Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live web cast or dial 844-776-7840 (international dial-in use 661-378-9538) and provide access code 8355627 when prompted. If you are unable to participate in the original conference call, a web replay will be available approximately 24 hours following the completion of the call on Comstock's website at www.comstockresources.com. The web replay will be available for approximately one week. A replay of the conference call will be available beginning at 1:00 p.m. CT May 7, 2020 and will continue until 1:00 p.m. May 14, 2020. To hear the replay, call 855-859-2056 (404-537-3406 if calling from outside the US). The conference call access code is 8355627.

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 an independent energy company based in Frisco, Texas engaged in oil and gas acquisitions, exploration and development, and its assets are primarily located in Texas, Louisiana and North Dakota. The Company's stock is traded on the New York Stock Exchange under the symbol CRK.


COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per share amounts)

Three Months Ended March 31,

2020

2019

Revenues:

Natural gas sales

$

207,239

$

90,132

Oil sales

18,639

36,749

Total oil and gas sales

225,878

126,881

Operating expenses:

Production taxes

5,567

5,939

Gathering and transportation

28,411

7,430

Lease operating

28,712

14,885

Exploration

27

Depreciation, depletion and amortization

110,425

37,590

General and administrative

8,719

7,814

Gain on sale of oil and gas properties

(1

)

Total operating expenses

181,861

73,657

Operating income

44,017

53,224

Other income (expenses):

Gain (loss) from derivative financial instruments

61,899

(7,657

)

Other income

313

93

Interest expense

(52,810

)

(27,851

)

Total other income (expenses)

9,402

(35,415

)

Income before income taxes

53,419

17,809

Provision for income taxes

(11,391

)

(4,234

)

Net income

42,028

13,575

Preferred stock dividends and accretion

(12,072

)

Net income available to common stockholders

$

29,956

$

13,575

Net income per share:

Basic

$

0.16

$

0.13

Diluted

$

0.15

$

0.13

Weighted average shares outstanding:

Basic

188,916

105,457

Diluted

285,166

105,457

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands)

Three Months Ended March 31,

OPERATING CASH FLOW:

2020

2019

Net income

$

42,028

$

13,575

Reconciling items:

Deferred and non-current income taxes

11,330

4,352

Depreciation, depletion and amortization

110,425

37,590

Unrealized (gain) loss from derivative financial instruments

(16,483

)

13,045

Amortization of debt discount, premium and issuance costs

7,199

1,574

Stock-based compensation

1,430

648

Exploration

27

Gain on sale of oil and gas properties

(1

)

Operating cash flow

155,956

70,783

Decrease in accounts receivable

54,297

10,783

(Increase) decrease in other current assets

(3,828

)

1,577

Decrease in accounts payable and accrued expenses

(56,306

)

(8,428

)

Net cash provided by operating activities

$

150,119

$

74,715

EBITDAX:

Net income

$

42,028

$

13,575

Interest expense

52,810

27,851

Income taxes

11,391

4,234

Depreciation, depletion, and amortization

110,425

37,590

Unrealized (gain) loss from derivative financial instruments

(16,483

)

13,045

Exploration

27

Stock-based compensation

1,430

648

Gain on sale of oil and gas properties

(1

)

Total EBITDAX

$

201,628

$

96,942

As of

As of

BALANCE SHEET:

March 31, 2020

December 31, 2019

Cash and cash equivalents

$

15,527

$

18,532

Derivative financial instruments

108,656

89,192

Other current assets

150,489

195,849

Property and equipment, net

4,029,113

4,008,803

Other

339,956

344,746

Total assets

$

4,643,741

$

4,657,122

Current liabilities

$

327,619

$

392,376

Derivative financial instruments

4,380

4,220

Long-term debt

2,507,284

2,500,132

Deferred income taxes

223,104

211,772

Asset retirement obligation

18,613

18,151

Other non-current liabilities

6,265

7,866

Preferred stock

382,083

379,583

Stockholders' equity

1,174,393

1,143,022

Total liabilities and stockholders' equity

$

4,643,741

$

4,657,122

COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)

For the Three Months Ended March 31, 2020

Haynesville

Bakken

Other

Total

Gas production (MMcf)

115,585

2,348

4,853

122,786

Oil production (Mbbls)

3

426

25

454

Total Production (MMcfe)

115,601

4,908

5,004

125,513

Natural gas sales

$

198,146

$

962

$

8,131

$

207,239

Natural gas hedging settlements (a)

43,005

Total natural gas including hedging

198,146

962

8,131

250,244

Oil sales

114

17,472

1,053

18,639

Oil hedging settlements (a)

2,410

Total oil including hedging

114

17,472

1,053

21,049

Total oil and gas sales including hedging

$

198,260

$

18,434

$

9,184

$

271,293

Average gas price (per Mcf)

$

1.71

$

0.41

$

1.68

$

1.69

Average gas price including hedging (per Mcf)

$

2.04

Average oil price (per barrel)

$

43.48

$

40.96

$

42.13

$

41.01

Average oil price including hedging (per barrel)

$

46.31

Average price (per Mcfe)

$

1.72

$

3.76

$

1.84

$

1.80

Average price including hedging (per Mcfe)

$

2.16

Production taxes

$

3,011

$

1,902

$

654

$

5,567

Gathering and transportation

$

26,293

$

$

2,118

$

28,411

Lease operating

$

18,157

$

4,430

$

6,125

$

28,712

Production taxes (per Mcfe)

$

0.03

$

0.39

$

0.13

$

0.04

Gathering and transportation (per Mcfe)

$

0.23

$

$

0.42

$

0.23

Lease operating (per Mcfe)

$

0.15

$

0.90

$

1.23

$

0.23

Oil and Gas Capital Expenditures:

Development leasehold

$

3,747

$

8

$

126

$

3,881

Development drilling and completion

122,058

122,058

Other development

2,481

1,264

816

4,561

Total

$

128,286

$

1,272

$

942

$

130,500

(a) Included in gain from derivative financial instruments in operating results.


COMSTOCK RESOURCES, INC.
REGIONAL OPERATING RESULTS
(In thousands, except per unit amounts)

For the Three Months Ended March 31, 2019

Haynesville

Bakken

Other

Total

Gas production (MMcf)

31,364

768

1,017

33,149

Oil production (Mbbls)

799

11

810

Total Production (MMcfe)

31,364

5,562

1,086

38,012

Natural gas sales

$

85,738

$

1,500

$

2,894

$

90,132

Natural gas hedging settlements (a)

5,033

Total natural gas including hedging

85,738

1,500

2,894

95,165

Oil sales

4

36,147

598

36,749

Oil hedging settlements (a)

355

Total oil including hedging

4

36,147

598

37,104

Total oil and gas sales including hedging

$

85,742

$

37,647

$

3,492

$

132,269

Average gas price (per Mcf)

$

2.73

$

1.95

$

2.85

$

2.72

Average gas price including hedging (per Mcf)

$

2.87

Average oil price (per barrel)

$

49.47

$

45.24

$

54.36

$

45.34

Average oil price including hedging (per barrel)

$

45.78

Average price (per Mcfe)

$

2.73

$

6.77

$

3.22

$

3.34

Average price including hedging (per Mcfe)

$

3.48

Production taxes

$

1,732

$

4,073

$

134

$

5,939

Gathering and transportation

$

7,273

$

$

157

$

7,430

Lease operating

$

4,933

$

6,519

$

3,433

$

14,885

Production taxes (per Mcfe)

$

0.06

$

0.73

$

0.12

$

0.16

Gathering and transportation (per Mcfe)

$

0.23

$

$

0.14

$

0.20

Lease operating (per Mcfe)

$

0.15

$

1.17

$

3.17

$

0.38

Oil and Gas Capital Expenditures:

Development leasehold

$

1,857

$

1,857

Development drilling and completion

82,638

(953

)

5,648

87,333

Other development

3,279

3,279

Total

$

87,774

$

(953

)

$

5,648

$

92,469

(a) Included in gain from derivative financial instruments in operating results.

Ron Mills
VP of Finance and Investor Relations
972-668-8834
rmills@comstockresources.com