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Comstock Resources' CEO Discusses Q4 2011 Results - Earnings Call Transcript

Our Haynesville production in the quarter decreased 184 million per day, as compared to the 200 million a day we had in the prior quarter because we had very little completion activity in the fourth quarter. Next quarter, we expect our Haynesville production to increase as we're completing the 14 wells that we carried over from last year.

Production from our Cotton Valley wells decreased slightly in the quarter to 37 million per day. In the South Texan--, the South Texas region, when you exclude the Eagle Ford, also decreased slightly to 29 million per day, and our other regions remained unchanged at 7 million per day.

Looking to this year, we believe production will come in between 106 and 110 Bcfe in 2012, which is 11% to 15% higher than 2011's production. More importantly, we estimate that 14% to 16% of 2012's production will be oil, that's compared to only 5% in 2011. This will give us stronger revenue growth in 2012 than we had in 2011.

Oil prices continued to be very strong in the fourth quarter, which we cover on Slide 5. Our realized average oil price increased 34% in the fourth quarter of 2011 to $100.18 per barrel as compared to $74.75 per barrel in the fourth quarter of 2010. For all of 2011, our average oil price was $95.73, which was 40% higher than our average oil price of $68.35 in 2010.

Our realized oil prices in the fourth quarter averaged 107% of the average benchmark NYMEX WTI price. Improvements to our Eagle Ford differentials account for this premium to WTI. Our Eagle Ford oil is being priced more on the Louisiana Gulf Coast market than it is to the WTI index prices. And then as the Brent prices and WTI come back closer together, we expect this premium will come down in future quarters.

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