SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
(root) THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
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 (I.R.S. Employer
incorporation or organization) Identification Number)
5005 LBJ Freeway, Suite 1000, Dallas, Texas 75244
(Address of principal executive offices)
Telephone No.: (214) 701-2000
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
filing requirements for the past 90 days.
Yes [root] No
The number of shares outstanding of Registrant's common stock, par value
$.50, as of August 14, 1996 was 15,747,254.
<PAGE>
COMSTOCK RESOURCES, INC.
QUARTERLY REPORT
FOR THE QUARTER ENDED JUNE 30, 1996
INDEX
PART I. Financial Information Page No.
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995.....................................4
Consolidated Statements of Operations -
Three Months and Six Months ended June 30, 1996 and 1995................5
Consolidated Statement of Stockholders' Equity -
Six Months ended June 30, 1996..........................................6
Consolidated Statements of Cash Flows -
Six Months ended June 30, 1996 and 1995.................................7
Notes to Consolidated Financial Statements................................8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...........................11
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders..............14
Item 6. Exhibits and Reports on Form 8-K.................................15
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
3
<PAGE>
<TABLE>
<CAPTION>
COMSTOCK RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1996 1995
------------- -------------
(Unaudited)
<S> <C> <C>
Cash and Cash Equivalents $ 8,693,877 $ 1,916,648
Accounts Receivable:
Oil and gas sales 12,843,359 5,385,000
Gas marketing sales 8,768,528 8,450,794
Joint interest operations 2,289,541 1,230,403
Other Current Assets 545,719 264,232
------------- -------------
Total current assets 33,141,024 17,247,077
------------- -------------
Property and Equipment:
Oil and gas properties,
successful efforts method 247,979,050 154,843,663
Other 2,797,690 2,717,625
Accumulated depreciation, depletion
and amortization (57,603,565) (55,445,097)
------------- -------------
Net property and equipment 193,173,175 102,116,191
------------- -------------
Other Assets 661,727 735,398
------------- -------------
$226,975,926 $120,098,666
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Portion of Long-term Debt $ 217,262 $ 18,677,181
Accounts Payable and Accrued Expenses 23,825,144 16,511,219
------------- -------------
Total current liabilities 24,042,406 35,188,400
------------- -------------
Long-term Debt, less current portion 160,037,501 53,133,751
Deferred Revenue 215,002 430,000
Other Noncurrent Liabilities 1,155,264 1,218,742
Stockholders' Equity:
Preferred stock - $10.00 par, 5,000,000 shares
authorized, 3,100,000 shares outstanding at
June 30, 1996 and December 31, 1995 31,000,000 31,000,000
Common stock - $.50 par, 30,000,000 shares
authorized, 13,724,754 and 12,926,672 shares
outstanding at June 30, 1996 and 6,463,336
December 31, 1995, respectively 6,862,378
Additional paid-in capital 40,391,779 38,182,398
Retained deficit (36,675,123) (45,444,055)
Less: Deferred compensation -
restricted stock grants (53,281) (73,906)
------------- -------------
Total stockholders' equity 41,525,753 30,127,773
------------- -------------
$226,975,926 $120,098,666
============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
<TABLE>
<CAPTION>
COMSTOCK RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales $16,222,008 $ 4,556,342 $25,777,149 $ 8,372,425
Gas marketing sales 19,243,208 12,755,385 44,669,109 23,255,456
Gas gathering and processing 209,756 145,781 363,367 336,526
Gain on sales of properties 1,527,575 - 1,527,575 -
Other income 102,326 51,387 232,271 133,315
------------ ------------ ------------ -----------
Total revenues 37,304,873 17,508,895 72,569,471 32,097,722
------------ ------------ ------------ -----------
Costs and Expenses:
Oil and gas operating 3,317,852 1,282,251 5,841,039 2,767,351
Exploration 285,364 - 285,364 -
Natural gas purchases 18,902,249 12,462,664 43,695,842 22,677,327
Gas gathering and processing 73,283 38,799 130,229 86,039
Depreciation, depletion
and amortization 4,483,782 2,065,193 7,105,140 3,862,787
General and administrative,net 472,533 482,419 884,366 981,579
Interest 2,743,797 942,564 4,592,267 1,919,197
------------ ------------ ------------ ------------
Total costs and expenses 30,278,860 17,273,890 62,534,247 32,294,280
------------ ------------ ------------ ------------
Income (loss) before income
taxes 7,026,013 235,005 10,035,224 (196,558)
Provision for income taxes - - - -
------------ ------------ ------------ ------------
Net income (loss) 7,026,013 235,005 10,035,224 (196,558)
Preferred stock dividends (633,146) (337,321) (1,266,292) (626,431)
------------ ------------ ------------ ------------
Net income (loss) attributable
to common stock $ 6,392,867 $ (102,316) $ 8,768,932 $ (822,989)
============ ============ ============ ============
Net income (loss) attributable
to common stock per share -
Primary $ 0.45 $ (0.01) $ 0.63 $ (0.07)
============ ============ ============ ===========
Fully diluted $ 0.34 $ (0.01) $ 0.49 $ (0.07)
============ ============ ============ ===========
Weighted average number of common
and common stock equivalent
shares outstanding -
Primary 14,184,036 12,478,302 13,868,183 12,412,040
============ ============ ============ ==========
Fully diluted 20,632,632 - 20,380,776 -
============ ============ ============= ==========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
<TABLE>
<CAPTION>
COMSTOCK RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the Six Months Ended June 30, 1996
(Unaudited)
Deferred
Additional Retained Compensation-
Preferred Common Paid-In Earnings Restricted
Stock Stock Capital (Deficit) Stock Grants Total
------------ ------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $31,000,000 $ 6,463,336 $38,182,398 $(45,444,055) $ (73,906) $30,127,773
Issuance of common stock - 399,042 2,209,381 - - 2,608,423
Restricted stock grants - - - - 20,625 20,625
Net income attributable
to common stock - - - 8,768,932 - 8,768,932
------------ ------------ ------------ ------------- ------------ ------------
Balance at June 30, 1996 $31,000,000 $ 6,862,378 $40,391,779 $(36,675,123) $ (53,281) $41,525,753
============ ============ ============ ============= ============ ============
The accompanying notes are an integral part of these statements.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
COMSTOCK RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30,
(Unaudited)
1996 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 10,035,224 $ (196,558)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Compensation paid in common stock 174,875 133,625
Exploration 285,364 -
Depreciation, depletion and amortization 7,105,140 3,862,787
Deferred revenue (214,998) 430,000
Gain on sales of properties (1,527,575) (18,035)
-------------- --------------
Working capital provided by operations 15,858,030 4,211,819
Increase in accounts receivable (8,835,231) (211,360)
Increase in other current assets (281,487) (62,180)
Increase (decrease) in accounts payable
and accrued expenses 7,022,030 (1,777,764)
-------------- --------------
Net cash provided by operating activities 13,763,342 2,160,515
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of properties 8,969,029 98,035
Capital expenditures and acquisitions (105,878,749) (8,916,606)
-------------- --------------
Net cash used for investing activities (96,909,720) (8,818,571)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from preferred stock issuance - 15,000,000
Proceeds from common stock issuance 1,487,500 -
Stock issuance costs (7,724) (43,683)
Borrowings 172,149,671 7,403,139
Principal payments on debt (83,705,840) (18,566,197)
-------------- --------------
Net cash provided by financing activities 89,923,607 3,793,259
-------------- --------------
Net increase (decrease) in cash and 6,777,229 (2,864,797)
cash equivalents
Cash and cash equivalents, beginning of year 1,916,648 3,425,248
-------------- --------------
Cash and cash equivalents, end of period $ 8,693,877 $ 560,451
============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
COMSTOCK RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996 and 1995
(Unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES -
Basis of Presentation -
In management's opinion, the accompanying consolidated financial statements
contain all adjustments (consisting solely of normal recurring adjustments)
necessary to present fairly the financial position of Comstock Resources, Inc.
and subsidiaries (the "Company") as of June 30, 1996 and the related results of
operations for the three months and six months ended June 30, 1996 and 1995 and
cash flows for the six months ended June 30, 1996 and 1995.
The accompanying unaudited financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to those rules and regulations, although the Company believes
that the disclosures made are adequate to make the information presented not
misleading. These financial statements should be read in conjunction with the
Company's financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995.
The results of operations for the six months ended June 30, 1996 and 1995,
are not necessarily an indication of the results expected for the full year.
Supplementary Information with Respect to the Statements of Cash Flows -
The Company paid cash for interest of $4,261,729 and $1,919,197 during the
six months ended June 30, 1996 and 1995, respectively. No cash for income taxes
was paid in the six months ended June 30, 1996 and 1995.
The following is a summary of the significant noncash investing and
financing activities:
For the Six Months
Ended June 30,
1996 1995
-------- ---------
Common stock issued for director compensation $154,250 $113,000
Common stock issued for preferred stock dividends $974,397 $626,431
8
<PAGE>
COMSTOCK RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Earnings Per Share -
Net income (loss) attributable to common stock represents net income (loss)
less preferred stock dividend requirements of $633,146 and $337,321 for the
three months ended June 30, 1996 and 1995, respectively and $1,266,292 and
$626,431 for the six months ended June 30, 1996 and 1995, respectively. Net
income (loss) attributable to common stock per share is computed by dividing net
income (loss) attributable to common stock by the weighted average number of
common shares and common stock equivalents outstanding during each period.
Common stock equivalents include, when applicable, dilutive stock options and
warrants using the treasury stock method. Fully diluted net income (loss)
attributable to common stock per share includes the dilutive effect of the
Company's convertible preferred stock using the "if converted" method and
dilutive stock options and warrants using the treasury stock method.
(2) OIL & GAS PROPERTY ACQUISITION -
On May 1 and May 2, 1996, the Company completed a $104 million purchase of
working interests in the Double A Wells field in Polk County, Texas. The Company
acquired 100% of the capital stock of Black Stone Oil Company, the operator of
the field, together with additional interests held by other working interest
owners in nineteen producing oil and gas properties as well as interests in
adjacent undeveloped oil and gas leases. The interests were acquired effective
January 1, 1996. Accordingly, revenues from the properties net of operating and
development costs attributable to the period January 1, 1996 to April 30, 1996
were recorded as a reduction of the purchase price paid for the properties. The
net proved oil and natural gas reserves attributable to the interests acquired
are estimated at 5.3 million barrels of oil and 98.5 billion cubic feet of
natural gas as of January 1, 1996.
(3) LONG-TERM DEBT -
In connection with the $104 million oil and gas property acquisition closed
in May 1996, the Company entered into a $176 million credit facility with two
banks, consisting of a $166 million revolving credit commitment and a $10
million short-term bridge loan. The new revolving credit facility converts to a
two year term loan on May 1, 1999. The Company financed the $104 million
acquisition and refinanced $68.7 million outstanding under its existing bank
credit facility with borrowings under the new bank credit facility. On May 15,
1996, the Company repaid the $10 million bridge loan primarily from proceeds
from certain asset sales.
As of June 30, 1996, the Company had $160 million outstanding under the new
bank revolving credit facility. Borrowings under the new bank credit facility
cannot exceed a borrowing base determined semiannually by the banks. The
borrowing base at June 30, 1996 was $166 million. Amounts outstanding under the
new bank credit facility bear interest at a floating rate based on The First
National Bank of Chicago's base rate (as defined) plus 1/2% or, at the Company's
option, at a fixed rate for up to six months based on the London Interbank
Offered Rate ("LIBOR") plus 2%. As of June 30, 1996, the Company had placed the
outstanding advances under the revolving credit facility under fixed rate loans
based on LIBOR at an average rate of approximately 7.51% per annum.
9
<PAGE>
COMSTOCK RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
(4) SALE OF OIL AND GAS PROPERTIES -
In May 1996, the Company sold certain oil and gas properties for
approximately $9 million. The properties sold include interests in 145 producing
wells located in Oklahoma, Arkansas, Nebraska and Kansas as well as the
Company's interests in the Chapman Ranch field in South Texas. The properties
sold were non-strategic assets to the Company and were located out of the
Company's primary operating areas. A gain from the sales of $1.5 million is
included in the accompanying statement of operations.
(5) SUBSEQUENT EVENT -
On July 10, 1996, the Company converted the 1,000,000 shares of the 1994
Series B Convertible Preferred Stock, $10 par value, into 2,000,000 shares of
common stock of the Company. The conversion of the 1994 Series B Convertible
Preferred Stock into common stock will reduce the dividends paid on the
preferred stock in the future by $625,000 per annum.
10
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Revenues
Oil and gas sales increased $11.7 million (256%) in the second quarter of
1996, to $16.2 million from $4.6 million in 1995's second quarter due primarily
to a 176% increase in gas production and a 203% increase in oil production. The
production increases are principally related to oil and gas property
acquisitions that were completed in July 1995 and May 1996. The increase in oil
and gas sales in the second quarter of 1996 is also partially due to a 32%
increase in the Company's average gas price and a 13% increase in the Company's
average oil price realized for the quarter.
For the six months ended June 30, 1996, oil and gas sales increased $17.4
million (208%) to $25.8 million from $8.4 million in 1995. Gas production
increased 134% and oil production increased 142% in the first six months of
1996. Production increases from the acquisitions combined with a 37% increase in
the Company's average gas price and a 15% increase in the average oil price
account for the 208% increase in oil and gas sales.
The following table below reflects the Company's oil and gas production and
its average oil and gas prices for the three months and six months ended June
30, 1996 and 1995:
Three Months Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
------ ------ ------ ------
PRODUCTION:
Oil (MBbls) 239 79 345 143
Gas (MMcf) 4,867 1,767 7,976 3,403
AVERAGE PRICES:
Oil (per Bbl) $20.45 $18.09 $19.92 $17.37
Gas (per Mcf) $ 2.33 $ 1.77 $ 2.37 $ 1.73
Gas marketing net margins (revenues less expenses) increased $48,000 (16%)
to $341,000 in the second quarter of 1996 from $293,000 in 1995's second
quarter. For the six months ended June 30, 1996 net margins increased $395,000
(68%) to $973,000 from $578,000 in the six months ended June 30, 1995. The
increase over 1995 is attributable to higher first quarter 1996 margins which
reflected the Company's ability to capitalize on short-term volatility in
natural gas prices during 1996's first quarter.
Gas gathering and processing net margins (revenues less expenses)
increased $29,000 (28%) to $136,000 in the second quarter of 1996 from $107,000
in 1995's second quarter. For the six months ended June 30, 1996 net margins
decreased $17,000 (7%) to $233,000 from $250,000 in the six months ended June
30, 1995.
Other income increased $51,000 (99%) to $102,000 in the second quarter of
1996 from $51,000 in second quarter of 1995. Other income for the six months
ended June 30, 1996 increased $99,000 (74%) to $232,000 from $133,000 for the
six months ended June 30, 1995. The increase is due primarily to interest income
earned on short-term cash deposits.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(continued)
Costs and Expenses
Oil and gas operating expenses, including production taxes, increased $2
million (159%) to $3.3 million in the second quarter of 1996 from $1.3 million
in the second quarter of 1995 due primarily to the 181% increase in oil and gas
production (on an equivalent Mcf basis) resulting from the 1995 and 1996
property acquisitions. Oil and gas operating expenses per Mcf produced decreased
8% to 53 cent in the second quarter of 1996 from 57 cent in the second quarter
of 1995. Oil and gas operating costs for the six months ended June 30, 1996
increased $3 million (111%) to $5.8 million from $2.8 million for the six months
ended June 30, 1995. Oil and gas operating expenses per Mcf produced decreased
11% to 58 cent for six months ended June 30, 1996 from 65 cent in 1995. The
decrease results from lower lifting costs associated with the Double A Wells
field acquired in May 1996.
General and administrative expenses decreased $10,000 (2%) to $473,000 in
the second quarter of 1996 from $482,000 in 1995's second quarter. For the first
six months of 1996, general and administrative expenses decreased $97,000 (10%)
to $884,000 from $982,000 in the six months ended June 30, 1995.
Depreciation, depletion and amortization increased $2.4 million (117%) to
$4.5 million in the second quarter of 1996 from $2.1 million in the second
quarter of 1995 due primarily to the 181% increase in oil and gas production (on
an equivalent Mcf basis). Amortization per Mcfe produced decreased by 22% to
69 cent for the three months ended June 30, 1996 from 89 cent for the three
months ended June 30, 1995 due to the lower acquisition costs associated with
the properties acquired in 1995. For the six months ended June 30, 1996,
depreciation, depletion and amortization increased $3.2 million (84%) to $7.1
million from $3.9 million for the six months ended June 30, 1995. Amortization
per Mcfe decreased by 22% to 68 cent for the six months ended June 30, 1996
from 88 cent for the six months ended June 30, 1995.
Interest expense increased $1.8 million (191%) to $2.7 million for three
months ended June 30, 1996 from $943,000 for the three months ended June 30,
1995. Interest expense for the six months ended June 30, 1996 increased $2.7
million (139%) to $4.6 million in 1996 from $1.9 million for the six months
ended June 30, 1995. The increases are related to an increase in the average
outstanding advances under the Company's bank credit facility. The weighted
average annual interest rate paid under the bank credit facility decreased to
9.0% in 1996's first half as compared to 10.5% in the first half of 1995.
Net Income
For the second quarter of 1996, the Company reported net income of $7
million before preferred stock dividends of $633,000 as compared to net income
of $235,000 before preferred stock dividends of $337,000 for three months ended
June 30, 1995. Net income per share for the second quarter of 1996 was 45 cent
(34 cent on a fully diluted basis) on weighted average shares outstanding of
14.2 million (20.6 million on a fully diluted basis) as compared to a net loss
of 1 cent per share for the second quarter of 1995 on weighted average shares
outstanding of 12.5 million. The second quarter net income included a $1.5
million gain from the sale of certain oil and gas properties and a charge for an
exploratory dry hole of $285,000.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(continued)
Net income for the six months ended June 30, 1996 was $10 million before
preferred stock dividends of $1.3 million as compared to a loss of $197,000
before preferred stock dividends of $626,000 for the six months ended June 30,
1995. Net income per share for the year ended June 30, 1996 was 63 cent
(49 cent on a fully diluted basis) on weighted average shares outstanding of
13.9 million (20.4 million on a fully diluted basis) as compared to a net loss
of 7 cent per share for the six months ended June 30, 1995 on weighted average
shares outstanding of 12.4 million.
Capital Expenditures
On May 1 and May 2, 1996, the Company completed its largest acquisition to
date with the $104 million purchase of working interests in the Double A Wells
field in Polk County, Texas. The Company acquired 100% of the capital stock of
Black Stone Oil Company, the operator of the field, together with additional
interests held by other working interest owners in nineteen producing oil and
gas properties as well as interests in adjacent undeveloped oil and gas leases.
The interests were acquired effective January 1, 1996. Accordingly, revenues
from the properties net of operating and development costs attributable to the
period January 1, 1996 to April 30, 1996 were recorded as a reduction of the
purchase price paid for the properties.
The following table summaries the Company's capital expenditure activity
for the six months ended June 30, 1996 and 1995 (in thousands):
Six Months Ended June 30,
1996 1995
--------- --------
Acquisition of oil and gas reserves $101,784 $ 7,522
Other leasehold costs 71 -
Workovers and recompletions 1,827 870
Exploratory drilling 285 -
Development drilling 1,759 399
Acquisition of gas marketing,
processing and gathering assets 63 109
Other 90 17
--------- --------
Total $ 105,879 $ 8,917
========= ========
Capital Resources and Liquidity
During the six months ended June 30, 1996, the primary sources of funds
for the Company were borrowings under the Company's new bank credit facility of
$172.1 million, cash generated from operations of $13.8 million and proceeds
from sales of properties of $9 million. Primary uses of funds for the six months
ended June 30, 1996 were capital expenditures and acquisitions of $105.9 million
and principal payments on debt including the retirement of the short-term bridge
note and the existing credit facility totalling $83.7 million.
The May 1996 acquisition was financed under a new $176 million bank credit
facility provided by two banks consisting of a $166 million revolving credit
facility and a $10 million bridge loan. The Company financed the $104 million
acquisition and refinanced $58.7 million outstanding under its existing
revolving credit facility and an existing $10 million bridge loan which was to
mature on July 31,
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(continued)
1996 with borrowings under the new bank credit facility. The new revolving
credit facility converts to a two year term loan on May 1, 1999. On May 15,
1996, the Company retired the $10 million bridge note primarily from the
proceeds from the sale of certain oil and gas properties.
At the end of 1996's second quarter, the Company's working capital
improved to $9.1 million as compared to a working capital deficit of $17.9
million at December 31, 1995. The improvement primarily relates to the repayment
of the short term $10 million bridge loan and the new bank credit facility.
The timing of most of the Company's capital expenditures is discretionary
with no material long-term capital expenditure commitments. Consequently, the
Company has a significant degree of flexibility to adjust the level of such
expenditures as circumstances warrant. The Company uses borrowings under its
bank credit facility as well as internally generated cash flow to fund capital
expenditures other than significant acquisitions and anticipates that such
sources will be sufficient to fund its planned $10.4 million in developmental
capital expenditures during the remainder of 1996.
14
<PAGE>
PART II - OTHER INFORMATION
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company's annual meeting of stockholders was held in Dallas,
Texas at 9:00 a.m., local time, on May 15, 1996.
(b) Proxies for the meeting were solicited pursuant to Regulation 14
under the Securities Exchange Act of 1934, as amended. There was
no solicitation in opposition to the nominees for election as
directors as listed in the proxy statement and all nominees were
elected.
(c) Out of a total 19,402,879 shares of the Company's common stock
outstanding and entitled to vote, (including 6,357,143 equivalent
shares of common stock held by preferred stockholders) 14,789,337
shares were present at the meeting in person or by proxy,
representing approximately 76%. Matters voted upon at the meeting
were as follows:
(i) Election of two Class B Directors to serve on the
Company's board of directors until the 1999 annual
meeting of stockholders. The vote tabulation with
respect to each nominee was as follows:
Nominee For Withheld
--------------- ---------- ---------
M. Jay Allison 14,700,619 88,717
David W. Sledge 14,700,644 88,692
Other Directors of the Company whose term of office as a
Director continued after the meeting are as follows:
Class A Directors Class C Directors
------------------- -------------------
Franklin B. Leonard Harold R. Logan
Cecil E. Martin, Jr. Richard S. Hickok
(ii) The appointment of Arthur Andersen LLP as the Company's
certified public accountants for 1996 was approved by a
vote of 14,755,951 shares for, 12,775 shares against,
20,611 shares abstaining and no broker non-votes.
(iii) An amendment to the Company's 1991 Long-term Incentive
Plan was approved by a vote of 9,748,619 shares for,
565,251 shares against, 37,920 shares abstaining and
4,437,547 broker non-votes.
15
<PAGE>
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27. Financial Data Schedule for the Six Months ended
June 30, 1996.
(b) Reports on Form 8-K
Current reports on Form 8-K filed during the second quarter of
1996 and to the date of this filing are as follows:
Report Date Item Subject of Report
------------- ------ -------------------------------------
May 1, 1996 2 Acquisition of oil and gas properties
from Black Stone Oil Company
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
COMSTOCK RESOURCES, INC.
Date August 14, 1996 /s/M. JAY ALLISON
------------------------------
M. Jay Allison, President and
Chief Executive Officer
(Principal Executive Officer)
Date August 14, 1996 /s/ROLAND O. BURNS
------------------------------
Roland O. Burns, Senior Vice President,
Chief Financial Officer, Secretary, and
Treasurer (Principal Financial and Accounting Officer)
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial data extracted from the
Consolidated Financial Statements of Comstock Resources, Inc. for the Six
Months ended June 30, 1996 and is qualified in its entirety by reference to
such financial statments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,693,877
<SECURITIES> 0
<RECEIVABLES> 23,901,428
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33,141,024
<PP&E> 250,776,740
<DEPRECIATION> (57,603,565)
<TOTAL-ASSETS> 226,975,926
<CURRENT-LIABILITIES> 24,042,406
<BONDS> 160,037,501
21,000,000
10,000,000
<COMMON> 6,862,378
<OTHER-SE> (3,663,375)
<TOTAL-LIABILITY-AND-EQUITY> 226,975,926
<SALES> 70,809,625
<TOTAL-REVENUES> 72,569,471
<CGS> 43,695,842
<TOTAL-COSTS> 13,361,772
<OTHER-EXPENSES> 884,366
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,592,267
<INCOME-PRETAX> 10,035,224
<INCOME-TAX> 0
<INCOME-CONTINUING> 10,035,224
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,035,224
<EPS-PRIMARY> .63
<EPS-DILUTED> .49
</TABLE>
