Comstock Loss Widens, Revs Lag Est
Domestic energy explorer Comstock Resources Inc. (CRK) reported weak first quarter 2013 results, hamstrung by lower operating cash flow and output.
The predominantly natural gas-focused exploration and production company reported adjusted loss per share of 48 cents in the quarter, wider than the Zacks Consensus Estimate of a loss of 44 cents. Comstock’s performance also deteriorated considerably from the year-ago adjusted loss of 27 cents per share.
Total revenue from continuing operations decreased 14.0% year over year to $95.0 million, missing the Zacks Consensus Estimate of $117.0 million.
Volume Analysis
Comstock’s quarterly volume contracted 26.8% year over year to 18.2 billion cubic feet equivalent (Bcfe), of which 86% 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 29.9% to 13.5 Bcfe (99% gas). Elsewhere, output from the South Texas and Other properties came in at 4.2 Bcfe and 0.5 Bcfe, respectively.
Price Realizations
Average oil price realization (before hedging) was $105.82 per barrel (versus $105.19 per barrel in the first quarter of 2012) and average natural gas realization was $3.15 per thousand cubic feet/Mcf (compared with $2.61 per Mcf in the year-earlier quarter).
Costs & Expenses
Gathering and transportation costs and lease operating costs came in at $4.2 million (down 45.5% year over year) and $13.2 million (down 1.9%) respectively, while total operating expenses increased 3.5% over the first quarter of 2012 to $115.9 million.
Cash Flow & EBITDAX
Comstock generated operating cash flow from continuing operations of $73.8 million, reflecting a decrease of 36.7% from the year-earlier quarter. EBITDAX (earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other non-cash expenses) was almost flat year over year at $72.5 million.
Capital Expenditure & Balance Sheet
During the first quarter of 2013, Comstock spent $53.8 million on exploration/development drilling activities. As of Mar 31, 2013, Comstock had approximately $6.8 million in cash and cash equivalents and $1,335.0 million in long-term debt. Debt-to-capitalization at the end of the quarter was 59.7%.
Zacks Rating
Comstock currently retains 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, there are certain other exploration and production companies in the energy sector that are expected to perform better in the short term. These include Zacks Ranked #1 (Strong Buy) EPL Oil & Gas Inc. (EPL), Harvest Natural Resources Inc. (HNR) and McMoRan Exploration Co. (MMR).
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