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Comstock Resources' CEO Discusses Q3 2011 Results - Earnings Call Transcript

Please refer to Slide 2 in our presentations. And note that our discussions today will include forward-looking statements within the meaning of securities laws. While we believe the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct.

If you'll turn to Page 3 of the presentation, this is the 2011 third quarter highlights. Please refer to Page 3 of the presentation where we will summarize the third quarter results. We have improved our financial results this year despite weak natural gas prices by increasing production and lowering our operating cost. We reported revenues of $119 million, generated EBITDAX of $94 million and had operating cash flow of $86 million or $1.79 per share. The gain we recognized from selling some of our Stone Energy shares allowed us to make a slight profit this quarter of $1.3 million or $0.03 per share.

Our production increased 53% over the third quarter of last year and 8% over our strong second quarter. The Haynesville program is driving the production gains this year, as we have caught up on completions of wells we drilled in 2010, but were not completed due to the lack of frac services. We're very pleased with the results of our 2011 drilling program. This year, we drilled 67 successful wells, including 51 Haynesville shale wells and 12 Eagle Ford shale wells.

In the Eagle Ford, we have probed up our acreage in this oil-rich play and have increased our holdings to 28,000 net acres. Our dedicated completion crew started working in south Texas in the third quarter. We put 4 new Eagle Ford wells on production and are currently completing 5 more.

Our balance sheet continues to be very strong. We continue to have good liquidity and currently, have approximately $460 million in cash or marketable securities available borrowings on our credit facility. We will also talk about our preliminary plans for 2012 on this call, when we plan to fund our drilling program with operating cash flow to protect our strong balance sheet.

Stock quotes in this article: CRK 

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