Looking Statements. Section 27A of the Securities Act of 1933 and Section 21E of the Securities. Forward

Transcription

1 1st Quarter 2012 Results NYSE:CRK

2 Forward Looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of Forward-looking statements give our current expectations or forecasts of future events. These statements include estimates of future natura al gas and oil reserves, expected natural gas and oil production and future expenses, assumptions regarding future natural gas and oil prices, budgeted capital expenditures and other anticipated cash outflows, as well as statements concerning anticipated cash flow and liquidity, business strategy and other plans and objectives for future operations. Factors that could cause actual results to differ materially from expected results are described under Risk Factors in our 2011 Form 10-K filed with the U.S. Securities and Exchange Commission. Our production forecasts are dependent upon many assumptions, including estimates of production de ecline rates from existing wells and the outcome of future drilling activity. Although we believe the expectations and forecasts reflected in these and other forward-looking statemen ts are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. 2

3 st Quarter Highlights Growing oil production helps offset very weak natural gas prices to improve financial results Oil & Gas Sales - $110 million EBITDAX - $79 million Cash Flow From Operations - $67 million ($1.39 per share) Net Income - $6.9 million (14 per share) Strong production growth in the quarter Production increased 28% over 2011 s first quarter Oil production up 267% and now makes up 12% of total production compared to 4% in the first quarter of 2011 Successful drilling program in out of 22 wells drilled were successful Recent drilling resultss in Wolfbone play in West Texas are very strong Working to improve liquidity idit in face of declining i natural gas prices Property divestitures and sales of marketable securities help fund drilling budget and pay down debt Committed to a conservative financial profile to improve balance sheet 3

4 Oil Production MBbls / day Q 2Q 3Q 4Q 1Q MBbls (-23%) Sold 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q MBbls (-8%) MBbls (+17%) Other Wolfbone Eagle Ford MBbls (+267% over 2011 Q1) 2012 oil production estimated to be 2.4 MMBbls to 2.6 MMMbls (+190 to 210%) 4

5 Natural Gas Production MMcf / day Q 2Q 3Q 4Q 1Q Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Bcf (+13%) Sold Bcf (+13%) Bcf (+31%) Other Cotton Valley South Texas Haynesville Bcf (+17% over 2011 Q1) 2012 gas production estimated to be 85 Bcf to 88 Bcf (-6 to -2%) 5

6 Ae Ave erage Oil Price Per Barrel Without Hedging With Hedging $ $ $ $ $89.94 $ % increase over 2011 s first quarter 2011 Q Q1 NYMEX 2011 Q Q1 NYMEX 101% of NYMEX 71% Hedged 6

7 Oil Hedges As of April 1, 2012 Oil Swaps: Volume (Bbls/day) NYMEX price (Bbl) (a) 2012 Q2, Q3, Q4 5,000 $ ,000 $ (a) The index price for the oil contracts are based on the NYMEX-West Texas Intermediate monthly average future prices. 7

8 $3.96 Aer Aver rage Gas Price Per Mcf $2.63 $ % decrease from 2011 s first quarter 2011 Q Q1 NYMEX 96% of NYMEX 8

9 Oil & Gas Sales $ in millions $110 $88 25% increase over 2011 s first quarter 2011 Q Q1 14% 0il 47% 0il 9

10 EBITDAX $ in millions $79 $65 21%i increase over 2011 s first quarter 2011 Q Q1 10

11 Opera ating Cash Flow $ in millions $56 $67 19%i increase over 2011 s first quarter 2011 Q Q1 11

12 Earnings $ in millions (e except per share amounts) $6. 9 Unusual Items in First Quarter: Pre Tax 2012 After Tax Per Share Gain on Sale of SGY $ 26.6 $ 17.3 $ 0.37 Gain on sale of properties Impairments (1.3) (0.9) (0.02) Total $ 32.0 $ 20.8 $ 0.44 $2.4 Pre Tax 2011 After Tax Per Share Gain on Sale of SGY $ 21.2 $ 13.8 $ 0.30 Impairments (9.5) (6.1) (0.13) Q1 Q1 Per Share 5 14 Early Extinguishment of Debt (1.1) (0.7) (0.02) Total $ 10.6 $ 7.0 $

13 Co osts per Mcfe Lifting $1.03 $1..13 $0.90 $0.85 $0.31 $0.79 $0.77 $0.90 $0.28 $0.28 $0.31 $0.32 $0.14 $0.04 $0.06 $ $0.06 $0.58 $0.51 $0.58 $0.47 $ Q Lifting Q Q Production Taxes Q Q Transportation 13

14 $0.26 A Co osts per Mcfe General & Administrative $0. 21 $0.18 $0.20 $ Q 2Q 3Q 4Q 1Q Excludes Stock-based Compensation 14

15 Co osts per Mcfe Depreciation, Depletion & Amortization $3.03 $3.12 $2.96 $3.07 $ Q Q Q Q Q 15

16 Drillin ng Expenditures $ in millions $178 $158 $38 $34 $68 Includes $13 million in 2011 and $7 million in 2012 for Exploration Acreage $124 $72 West Texas South Texas Q1 Q1 East Texas / North Louisiana 16

17 2012 Drilling Program $ in millions Field East Texas/North Louisiana: Logansport Mansfield Toledo Bend North Toledo Bend South Other Completion of 2011 Wells South Texas: Eagle Ford Shale Other Completion of 2011 Wells West Texas: Delaware Basin Gross WI Net Budget Wells Wells $ Drilling Expenditures $573 $458 $ Net Wells TOTAL $

18 Cash $ in millions Restricted Cash Marketable Securitie Total Bank Credit Facility Borrowing Base Ba alance Sheet As of Pro Forma March 31, March 31, $ 4 $ es (1) $ 30 $ 21 $ 610 $ %A Available 7¾% Senior Notes 8⅜% Senior Notes Total Debt Total Stockholders Equity Total Capitalization Debt / Total Capitalization 15% $ 1,207 1,027 $ 2,234 54% 26% $ 1,084 1,027 $ 2,111 51% (1) Includes 600,000 shares of Stone Energy Corporation. 18

19 Maintaining a Conservative Financial Profile We plan to supplement our operating cash flow in 2012 with proceeds from planned divestitures Selling certain properties which is generating net proceeds of $123 million whichh will be used to reduce borrowings on May 1st Will continue to m onetize our investment in Stone Energy shares Will continue to hedge 70% of our oil production Will maintain flexibility in drilling budget Reduced drilling activity in early 2012 in response to low natural gas prices Looking to enhance liquidity by $100 to $150 million May term out some of the bank debt in the bond market Considering gjoint ventures in oil drilling gprogram 19

20 East Texas / North N Louisiana Region g Cotton Valley Haynesville Shale Cotton Valley Bossieer Shale Haynesville/Bossier Shale D ill d 7 wells ll (3.4 (3 4 neet) t) in i 1st quarter t Drilled w natural gas prices Reducing activity with low Gross Acres 96,000 Net Acres 82,000 Resource R Potential 7.3 Tcfe 20

21 West Texas Region 90,000 gross (56,000 net) acres Over 900 net vertical locations targeting the Wolfbone play Total resource potential of 178,000 MBOE Horizontal development upside in the Wolfcamp shale 21

22 First Q Quarter Activityy City of Pecos 13 #1 (206 BOE/day) BOE/d ) Paladin 43 #1 (211 BOE/day) 3 Non-Operated (322 BOE/day) Monroe 28 #2 (371 BOE/day) Jessie James 4 #1 (539 BOE/day) Dale Evans 196 #1 (478 BOE/day) Lone Ranger 192 #1 (428 BOE/day) Pistola 186 #2 (193 BOE/day) Drilled d 8 (5.7 net) wells in 1st quarter All vertical Wolfbone wells Competed 10 wells Averagge per well IP 347 BOE/day 22

23 Comstock s Wolfbone Wells Well 1 Pistola 186 #1 2 Balmorrea Ranch 41 #1 3 City of Pecos 15 #1 4 Bell 213 A #2 5 Monroe 28 #1 6 Pecos Bill 203 #1 7 Roy Rogers 21 #1 8 Monroe 39 #1 9 Bell 213 A #3 10 Capps 214 A #2 11 City of Pecos 16 #1 12 Doc Holiday 23 #1 13 Billy the Kid 31 #1 14 Wyatt Earp 22 #1 15 Bell 213 A #4 16 Wild Bill Hickock 205 #1 17 Sky King 47 #1 18 Annie Oakley 23 #1 19 Paladin 43 #1 20 City of Pecos 13 #1 21 Monroe 28 #2 22 Dale Evans 196 #1 23 Jessie James 4 #1 24 Lone Ranger 192 #1 25 Pistola 186 #2 24hr IP, BOEPD 30-day IP, BOEPD 90-day IP, BOEPD 1st Production % of IP % of IP 5/14/ % % 9/23/ % % 11/9/ % % 1/14/ % 71 26% 1/15/ % % 3/20/ % % 4/14/ % % 4/26/ % % 5/21/ % % 5/26/ % % 6/29/ % % 7/19/ % % 8/11/ % 9/3/ % 10/10/ % 11/21/ % 11/22/ % 12/18/ % 1/24/ % 1/24/ % 2/21/ % 3/10/ % 3/13/ % 3/29/ /5/ % % 23

24 Comstock s Wolfbone Wells Jessie James D l Evans Dale E Lone Ranger operated p Wolfbone wells All vertical wells Averaage per well IP 297 BOE/day 24

25 2012 Drillingg Program g Drilling Completing p g To be Drilled in 2012 Producing 25

26 Target g Rich R Environment 26

27 South Texas Region Atascosa Karnes Frio LaSalle McMullen Gross Acres 35,000 Net Acres 28,000 Net Locations 216 Gross EUR 500 MBOE Resource 80 MMBOE* Potential *Assumes 26% Royalty Interest 27

28 Comstock s Eagle Ford Shale Wells Well County 1 NWR #1H Atascosa 2 RTH #1H McMullenM 3 Coates A #1H Karnes 4 Carlson A #1H McMullen 5 Swenson #1H McMullen 6 Hill #1H McMullen 7 Cutter Creek #1H McMullen 8 Forest Wheeler #1H McMullen 9 RTH A #1H McMullen 10 Jupe A #1H Atascosa 11 Hill A #1H McMullen 12 Hill B #4H McMullen 13 Hill #2H McMullen 14 Hill B #3H McMullen 15 Hill A #2H McMullen 16 Cutter Creek #2H McMullenM 17 Donnell A #1H McMullen 18 Gloria Wheeler B #1H McMullen 19 Gloria Wheeler A #1H McMullen 20 Schorp #3H LaSalle 21 Lucas A #1H Atascosa 22 Cortez B #1H LaSalle 23 Cortez A #1H McMullen 24 Cortez A #2H LaSalle 25 Cortez B #2H LaSalle 26 Carlson B #1H McMullen 27 Donnell B #1H McMullen Working Interest % 1st Production 24hr IP, BOEPD 30-day IP, BOEPD % of IP 90-day IP, BOEPD % of IP 100% 12/3/ % % 100% 2/4/ % % 100% 2/25/ % % 100% 4/13/ % % 100% 7/3/2011 1, % % 100% 8/7/2011 1, % % 100% 8/12/ % % 100% 8/27/ % % 100% 10/3/ % % 100% 11/1/ % % 100% 11/3/2011 1, % % 100% 11/8/ % % 100% 11/15/ % % 100% 11/18/ % % 100% 11/18/2011 1, % % 100% 12/9/ % % 100% 12/9/ % % 100% 12/14/2011 1, % % 100% 12/15/2011 1,254 1,039 83% % % % 75% 2/28/ % 75% 3/1/ % 83% 4/10/ % 4/3/ % 4/4/ % 3/30/ % 4/4/ % 4/10/ % % 28

29 Comstock s Eagle Ford Shale Wells Frio Atascosa 21 3 Karnes LaSalle McMullen Completed 27 wells (25.8 net) All horizontal wells Average per well IP 698 BOE/day 29

30 Strong oil growth in Outlook Oil to comprise 15 to 18% of 2012 production and over 20% of production at the end of the year 92% of the net wells drilled in 2012 will be oil wells and 77% of the 2012 drilling budget will be spent on oil projects Oil focused Eagle Ford shale program expected to be largest contributor to production growth in 2012 Plan to drill 24 wells in oil window of the Eagle Ford shale Wolfbone program substantial growth longer term Adds low risk vertical oil focused drilling gprogram Plan to drill 43 wells in the Wolfbone field in West Texas in 2012 Upside in future horizontal development Low cost structure in West Texas has potential to fuel in oil reserves and production in the Comstock continues to have one of fthe lowest overall costs structures t in the industry Focus on maintaining a conservative financial profile Reducing leverage in 2012 with assets divestitures Plan to maintain adequate liquidity in 2012 Utilizing an oil price hedging strategy in 2012 to protect the recent acquisition and our oil focused drilling program 30