Energy explorer Comstock Resources Inc. (CRK) reported fourth-quarter 2014 adjusted loss of 19 cents per share (excluding one-time items), which was narrower than the Zacks Consensus Estimate of a loss of 21 cents. The bottom line also showed improvement from the year-ago quarter level of a loss of 31 cents. Higher oil production and increased natural gas realizations supported the results. Shares of Comstock Resources gained about 1.5% in the after-hours trading session.
Quarterly revenues increased 6.3% year over year to $112.6 million but lagged the Zacks Consensus Estimate of $128 million. A decline in volumes affected the result.
For 2014, Comstock Resources reported a loss of 5 cents per share, narrower than the Zacks Consensus Estimate of a loss of 10 cents and a loss of $1.43 per share reported in 2013.
Total revenues of $555.2 million were also substantially higher than the 2013 level of $420.3 million.
Volume Analysis
Comstock’s quarterly volume fell 3.3% year over year to 15.9 billion cubic feet equivalent (Bcfe), of which nearly 57% was natural gas. The downtrend reflects output shrinkage from its East Texas/North Louisiana operations that comprised a significant part of the total volume.
Production in the East Texas/North Louisiana operating region decreased 31% year over year to 7 Bcfe (about 98% gas). Output from South Texas and Other properties came in at approximately 8.4 Bcfe and 0.4 Bcfe, respectively.
Price Realizations
Average oil price realization (before hedging) was $70.54 per barrel (compared with $92.64 per barrel in the fourth quarter of 2013) and average natural gas realization was $3.55 per thousand cubic feet/Mcf (compared with $3.36 per Mcf in the year-earlier quarter).
Costs & Expenses
Gathering and transportation costs came in at $2.9 million, representing a decline of over 32% from the year-ago quarter. Meanwhile, lease operating cost of $15.4 million marked a 12.1% year-over-year rise.
Total operating expenses increased over 48% from the fourth quarter of 2013 to $192.9 million.
Cash Flow & EBITDAX
Comstock generated operating cash flow from continuing operations of $85.7 million in the reported quarter against $64.1 million in the year-earlier quarter. Earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other non-cash expenses (EBITDAX) from continuing operations was $100.5 million, up 27.4% year over year.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock spent $427.6 million on development drilling activities. As of Dec 31, 2014, the company had approximately $2.1 million in cash and cash equivalents and $1,070.5 million in long-term debt. The debt-to-capitalization ratio at the end of the said quarter was approximately 55.1%.
Zacks Rank
Comstock currently carries a Zacks Rank #5 (Strong Sell).
Better-ranked players from the industry include LRR Energy, L.P. (LRE), Midstates Petroleum Company, Inc. (MPO) and Sabine Oil & Gas Corporation (SOGC). All these stocks carry a Zacks Rank #2 (Buy).
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