Domestic energy explorer
Comstock Resources Inc.
) reported weak fourth quarter 2012 results, hamstrung by
continued depressed natural gas prices.
The predominantly natural gas-focused exploration and production
firm reported adjusted loss per share of 55 cents in the quarter,
almost double the Zacks Consensus Estimate of a loss of 30 cents.
Comstock's performance also deteriorated considerably from the
year-ago adjusted loss of 7 cents per share.
Total revenues were down 6.9% year over year to $106.6 million,
missing the Zacks Consensus Estimate of $119.0 million.
Comstock recorded a quarterly volume decline of 16.5% year over
year to 21.3 billion cubic feet equivalent (Bcfe), of which 84%
was natural gas. The downtrend reflects output shrinkage from its
East Texas/North Louisiana operations that made up almost
three-fourths of the total volume.
Production in the East Texas/North Louisiana operating region
decreased 24.3% to 15.4 Bcfe (99% gas). Elsewhere, output from
the South Texas, West Texas and Other properties came in at 4.2
Bcfe, 1.1 Bcfe and 0.5 Bcfe, respectively.
Average oil price realization (before hedging) was $92.46 per
barrel (versus $100.18 per barrel in the fourth quarter of 2011)
and average natural gas realization was $3.05 per thousand cubic
feet/Mcf (compared with $3.40 per Mcf in the year-earlier
Comstock's high natural gas exposure raises its sensitivity to
gas price fluctuations, compared to its more-diversified
independent peers with a balanced oil/gas production profile. The
company saw its results suffer in the wake of a sharp drop in gas
Costs & Expenses
Gathering and transportation costs and lease operating costs came
in at $5.7 million (down 30.1% year over year) and $16.4 million
(up 63.6%) respectively, while total operating expenses increased
24.2% over the fourth quarter of 2012 to $208.6 million.
Cash Flow & EBITDAX
Comstock generated operating cash flow from continuing operations
of $36.5 million, reflecting a decrease of 45.8% from the
year-earlier quarter. Quarterly EBITDAX (earnings before
interest, taxes, depreciation, depletion, amortization,
exploration expense and other non-cash expenses) was down 8.3%
year over year to $82.4 million.
Capital Expenditure & Balance Sheet
During the fourth quarter of 2012, Comstock spent $86.5 million
on exploration/development drilling activities. As of Dec 31,
2012, Comstock had approximately $4.5 million in cash and cash
equivalents and $1,324.4 million in long-term debt.
Debt-to-capitalization at the end of the quarter was 58.7%.
Stocks to Consider
Comstock currently carries a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can look at other domestic energy explorers like
Cabot Oil & Gas Corp.
Memorial Production Partners L.P.
Penn Virginia Corp.
) as attractive investments. All these firms - sporting a Zacks
Rank #1 (Strong Buy) - offer value and are worth accumulating at
CABOT OIL & GAS (COG): Free Stock Analysis
COMSTOCK RESOUR (CRK): Free Stock Analysis
MEMORIAL PRODUC (MEMP): Free Stock Analysis
PENN VIRGINIA (PVA): Free Stock Analysis
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