OR
Commission file No. 0-16741
COMSTOCK RESOURCES, INC.
(Exact name of registrant as specified in its charter)
| NEVADA | 94-1667468 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer (Identification Number) |
5300 Town and Country Blvd., Suite 500, Frisco, Texas 75034
(Address of principal executive offices)
Telephone No.:(972) 668-8800
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No | |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |X| No | |
The number of shares outstanding of the registrant’s common stock, par value, $.50, as of August 11, 2003 was 33,460,236.
| PART I. Financial Information | Page | ||||
|---|---|---|---|---|---|
| Item 1. Financial Statements: | |||||
| Consolidated Balance Sheets - | |||||
| June 30, 2003 and December 31, 2002 | 4 | ||||
| Consolidated Statements of Operations - | |||||
| Three Months and Six Months ended June 30, 2003 and 2002 | 5 | ||||
| Consolidated Statement of Stockholders' Equity - | |||||
| Six Months ended June 30, 2003 | 6 | ||||
| Consolidated Statements of Cash Flows - | |||||
| Six Months ended June 30, 2003 and 2002 | 7 | ||||
| Notes to Consolidated Financial Statements | 8 | ||||
| Independent Accountants' Review Report | 16 | ||||
| Item 2. Management's Discussion and Analysis of Financial | |||||
| Condition and Results of Operations | 17 | ||||
| Item 3. Quantitative and Qualitative Disclosure About Market Risks | 20 | ||||
| Item 4. Controls and Procedures | 21 | ||||
| PART II. Other Information | |||||
| Item 4. Submission of Matters to a Vote of Security Holders | 22 | ||||
| Item 6. Exhibits and Reports on Form 8-K | 22 | ||||
2
ITEM 1. FINANCIAL STATEMENTS
3
| June 30, 2003 |
December 31, 2002 | |||||||
|---|---|---|---|---|---|---|---|---|
| (Unaudited) | ||||||||
| (In thousands) | ||||||||
| Cash and Cash Equivalents | $ | 738 | $ | 1,682 | ||||
| Accounts Receivable: | ||||||||
| Oil and gas sales | 41,385 | 30,135 | ||||||
| Joint interest operations | 5,546 | 5,407 | ||||||
| Other Current Assets | 3,891 | 2,678 | ||||||
| Total current assets | 51,560 | 39,902 | ||||||
| Property and Equipment: | ||||||||
| Unevaluated oil and gas properties | 17,509 | 14,880 | ||||||
| Oil and gas properties, successful efforts method | 997,844 | 961,562 | ||||||
| Other | 3,697 | 2,570 | ||||||
| Accumulated depreciation, depletion and amortization | (340,657 | ) | (314,804 | ) | ||||
| Net property and equipment | 678,393 | 664,208 | ||||||
| Derivatives | -- | 3 | ||||||
| Other Assets | 6,559 | 6,940 | ||||||
| $ | 736,512 | $ | 711,053 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Portion of Long-Term Debt | $ | 1,272 | $ | 270 | ||||
| Accounts Payable and Accrued Expenses | 45,557 | 49,470 | ||||||
| Derivatives | 70 | 57 | ||||||
| Total current liabilities | 46,899 | 49,797 | ||||||
| Long-Term Debt, less current portion | 336,002 | 366,002 | ||||||
| Deferred Taxes Payable | 72,974 | 52,577 | ||||||
| Reserve for Future Abandonment Costs | 15,554 | 16,677 | ||||||
| Convertible Preferred Stock | -- | 17,573 | ||||||
| Stockholders' Equity: | ||||||||
| Common stock--$0.50 par, 50,000,000 shares authorized, | ||||||||
| 33,458,236 and 28,919,561 shares outstanding at | ||||||||
| June 30, 2003 and December 31, 2002, respectively | 16,729 | 14,460 | ||||||
| Additional paid-in capital | 153,307 | 133,828 | ||||||
| Retained earnings | 96,460 | 61,663 | ||||||
| Deferred compensation-restricted stock grants | (1,368 | ) | (1,487 | ) | ||||
| Accumulated other comprehensive loss | (45 | ) | (37 | ) | ||||
| Total stockholders' equity | 265,083 | 208,427 | ||||||
| $ | 736,512 | $ | 711,053 | |||||
The accompanying notes are an integral part of these statements.
4
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 |
2003 |
2002 | |||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| Oil and gas sales | $ | 57,161 | $ | 38,004 | $ | 125,737 | $ | 64,494 | ||||||
| Operating expenses: | ||||||||||||||
| Oil and gas operating | 10,531 | 8,467 | 21,896 | 16,582 | ||||||||||
| Exploration | 505 | 1,028 | 2,141 | 2,981 | ||||||||||
| Depreciation, depletion and amortization | 15,117 | 14,057 | 30,304 | 27,515 | ||||||||||
| General and administrative, net | 1,947 | 1,077 | 3,475 | 2,007 | ||||||||||
| Total operating expenses | 28,100 | 24,629 | 57,816 | 49,085 | ||||||||||
| Income from operations | 29,061 | 13,375 | 67,921 | 15,409 | ||||||||||
| Other income (expenses): | ||||||||||||||
| Interest income | 23 | 10 | 43 | 19 | ||||||||||
| Interest expense | (7,370 | ) | (7,702 | ) | (14,678 | ) | (14,512 | ) | ||||||
| Loss from derivatives | -- | (204 | ) | (3 | ) | (2,168 | ) | |||||||
| Other income | 44 | 69 | 94 | 180 | ||||||||||
| (7,303 | ) | (7,827 | ) | (14,544 | ) | (16,481 | ) | |||||||
| Income (loss) from continuing operations | ||||||||||||||
| before income taxes | 21,758 | 5,548 | 53,377 | (1,072 | ) | |||||||||
| Provision for income taxes | (7,615 | ) | (1,942 | ) | (18,682 | ) | 375 | |||||||
| Net income (loss) from continuing operations | 14,143 | 3,606 | 34,695 | (697 | ) | |||||||||
| Discontinued operations including loss on | ||||||||||||||
| disposal, net of income taxes | -- | (403 | ) | -- | (1,129 | ) | ||||||||
| Cumulative effect of change in accounting principle | -- | -- | 675 | -- | ||||||||||
| Net income (loss) | 14,143 | 3,203 | 35,370 | (1,826 | ) | |||||||||
| Preferred stock dividends | (178 | ) | (400 | ) | (573 | ) | (795 | ) | ||||||
| Net income (loss) attributable to common stock | $ | 13,965 | $ | 2,803 | $ | 34,797 | $ | (2,621 | ) | |||||
| Basic net income (loss) per share: | ||||||||||||||
| From continuing operations | $ | 0.44 | $ | 0.11 | $ | 1.13 | $ | (0.05 | ) | |||||
| Discontinued operations | -- | (0.01 | ) | -- | (0.04 | ) | ||||||||
| Cumulative effect of change in accounting principle | -- | -- | 0.02 | -- | ||||||||||
| $ | 0.44 | $ | 0.10 | $ | 1.15 | $ | (0.09 | ) | ||||||
| Diluted net income (loss) per share: | ||||||||||||||
| From continuing operations | $ | 0.40 | $ | 0.11 | $ | 1.00 | ||||||||
| Discontinued operations | -- | (0.02 | ) | -- | ||||||||||
| Cumulative effect of change in accounting principle | -- | -- | 0.02 | |||||||||||
| $ | 0.40 | $ | 0.09 | $ | 1.02 | |||||||||
| Weighted average common and common stock | ||||||||||||||
| equivalent shares outstanding: | ||||||||||||||
| Basic | 31,473 | 28,776 | 30,205 | 28,678 | ||||||||||
| Diluted | 35,010 | 34,042 | 34,719 | |||||||||||
The accompanying notes are an integral part of these statements.
5
| Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Deferred Compensation- Restricted Stock Grants |
Accumulated Other Comprehensive Income (Loss) |
Total | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands) | ||||||||||||||||||||
| Balance at December 31, 2002 | $ | 14,460 | $ | 133,828 | $ | 61,663 | $ | (1,487 | ) | $ | (37 | ) | $ | 208,427 | ||||||
| Restricted stock grants | -- | -- | -- | 119 | -- | 119 | ||||||||||||||
| Value of warrants issued for | ||||||||||||||||||||
| exploration prospects, net of taxes | -- | 3,253 | -- | -- | -- | 3,253 | ||||||||||||||
| Exercise of stock options | 72 | 850 | -- | -- | -- | 922 | ||||||||||||||
| Conversion of preferred stock | 2,197 | 15,376 | -- | -- | -- | 17,573 | ||||||||||||||
| Preferred stock dividends | -- | -- | (573 | ) | -- | -- | (573 | ) | ||||||||||||
| Net income | -- | -- | 35,370 | -- | -- | 35,370 | ||||||||||||||
| Unrealized hedge loss | -- | -- | -- | -- | (8 | ) | (8 | ) | ||||||||||||
| Comprehensive income | 35,362 | |||||||||||||||||||
| Balance at June 30, 2003 | $ | 16,729 | $ | 153,307 | $ | 96,460 | $ | (1,368 | ) | $ | (45 | ) | $ | 265,083 | ||||||
The accompanying notes are an integral part of these statements.
6
| Six Months Ended June 30, |
||||||||
|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 | |||||||
| (In thousands) | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 35,370 | $ | (1,826 | ) | |||
| Adjustments to reconcile net income (loss) to net | ||||||||
| cash provided by operating activities: | ||||||||
| Compensation paid in common stock | 119 | 118 | ||||||
| Dry hole costs | 1,526 | 2,981 | ||||||
| Depreciation, depletion and amortization | 30,304 | 27,515 | ||||||
| Deferred income taxes | 18,682 | (375 | ) | |||||
| Unrealized losses from derivatives | -- | 2,499 | ||||||
| Non-cash effect of discontinued operations, net | ||||||||