We are a Nevada corporation engaged in the acquisition, development, production and exploration of oil and natural gas. Our common stock is listed and traded on the New York Stock Exchange.
Our oil and gas operations are concentrated in the East Texas/North Louisiana and South Texas regions. Our oil and natural gas properties are estimated to have proved reserves of 725.7 Bcfe with an estimated PV 10 Value of $489.1 million as of December 31, 2009 and a standardized measure of discounted future net cash flows of $426.6 million. Our consolidated proved oil and natural gas reserve base is 94% natural gas and 55% proved developed on a Bcfe basis as of December 31, 2009.
Strengths
High Quality Properties. Our operations are focused in two primary operating areas, the East Texas/North Louisiana and South Texas regions. Our properties have an average reserve life of approximately 11.1 years and have extensive development and exploration potential. We have an extensive acreage position in our East Texas/North Louisiana region in the Haynesville shale resource play where we have identified 85,589 gross (72,638 net to us) acres prospective for Haynesville shale development.
Successful Exploration and Development Program. In 2009 we spent $345.4 million on exploration and development of our oil and natural gas properties. We drilled 54 wells in 2009, 38.6 net to us, at a cost of $307.0 million. We spent $26.0 million to acquire additional leases in the Haynesville shale, $1.9 million on other leasehold costs and $0.9 million to acquire seismic data. We also spent $9.6 million for recompletions, workovers, abandonment and production facilities. Our drilling activities in 2009 added 350 Bcfe to our proved reserves and drove our 9% production growth in 2009.
Efficient Operator. We operate 90% of our proved oil and natural gas reserve base as of December 31, 2009. As operator we are better able to control operating costs, the timing and plans for future development, the level of drilling and lifting costs and the marketing of production. As an operator, we receive reimbursements for overhead from other working interest owners, which reduces our general and administrative expenses.
Successful Acquisitions. We have had significant growth over the years as a result of our acquisition activity. Since 1991, we have added 984.1 Bcfe of proved oil and natural gas reserves from 36 acquisitions at an average cost of $1.14 per Mcfe. Our application of strict economic and reserve risk criteria have enabled us to successfully evaluate and integrate acquisitions. We did not make any acquisitions of producing oil and gas properties in 2008 or 2009.
East Texas/North Louisiana Region
Approximately 70.3% or 510.2 Bcfe of our proved reserves are located in East Texas and North Louisiana where we own interests in 923 producing wells (561.5 net to us) in 28 field areas. We operate 633 of these wells. The largest of our fields in this region are the Logansport, Toledo Bend, Beckville, Waskom, Blocker, Mansfield, Hico-Knowles/Terryville, Darco, Douglass, Cadeville and Longwood fields. Production from this region averaged 107.0 MMcf of natural gas per day and 576 barrels of oil per day during 2009 or 110.4 MMcfe per day. Most of the reserves in this area produce from the upper Jurassic aged Haynesville shale or Cotton Valley formations and the Cretaceous aged Travis Peak/Hosston formation. In 2009, we spent $277.5 million drilling 49 wells (35.3 net to us) and $31.4 million on leasehold costs, workovers and recompletions in this region. Forty-six (32.9 net to us) of the 49 wells we drilled were horizontal wells. Forty-three (30.7 net) of these horizontal wells drilled targeted the Haynesville shale. We plan to spend approximately $368.0 million in 2010 for drilling activities in this region which will focus primarily on the development of our Haynesville shale properties.
Logansport
The Logansport field located in DeSoto and Sabine Parishes, Louisiana primarily produces from the Haynesville shale formation at a depth of 11,100 to 11,500 feet and from multiple sands in the Cotton Valley and Hosston formations at an average depth of 8,000 feet. Our proved reserves of 203.5 Bcfe in the Logansport field represent approximately 28% of our proved reserves. We own interests in 190 wells (119.9 net to us) and operate 133 of these wells in this field. During December 2009, net daily production attributable to our interest from this field averaged 61.1 MMcf of natural gas and 50 barrels of oil. In 2009, we drilled 19 (13.8 net to us) Haynesville shale horizontal wells and three (2.4 net to us) Cotton Valley vertical wells at Logansport. In 2010, we plan to drill 27 (18.6 net to us) horizontal Haynesville shale wells in our Logansport field.
Toledo Bend
The Toledo Bend field in Desoto and Sabine Parishes, Louisiana was discovered in 2008 with our first horizontal Haynesville shale well. In 2009, we drilled 16 (10.1 net to us) Haynesville shale horizontal wells at Toledo Bend. One of these wells successfully tested the Upper Haynesville shale. Production from the Lower Haynesville shale in the Toledo Bend ranges from 11,400 to 11,800 feet and from 10,880 to 11,300 in the Upper Haynesville shale. Our proved reserves of 104.1 Bcfe in the Toledo Bend field represent approximately 14.3% of our reserves. We own interests in 15 producing wells (9.3 net to us) and operate ten of these wells. At December 31, 2009 we had three wells (2.3 net to us) that were in the process of being drilled and two wells (1.8 net to us) in the process of being completed. During December 2009, net daily production attributable to our interest from this field averaged 23.7 MMcf of natural gas. In 2010, we plan to drill 25 (19.2 net to us) horizontal Haynesville shale wells in this field.
Beckville
The Beckville field, located in Panola and Rusk Counties, Texas, has estimated proved reserves of 55.0 Bcfe which represents approximately 7.6% of our proved reserves. We operate 193 wells in this field and own interests in 78 additional wells for a total of 271 wells (162.4 net to us). During December 2009, production attributable to our interest from this field averaged 12.4 MMcf of natural gas per day and 60 barrels of oil per day. The Beckville field produces primarily from the Cotton Valley formation at depths ranging from 9,000 to 10,000 feet. The field is also prospective for future Haynesville shale development.
Waskom
The Waskom field, located in Harrison and Panola Counties in Texas, represents approximately 5.1% (37.0 Bcfe) of our proved reserves as of December 31, 2009. We own interests in 75 wells in this field (48.7 net to us) and operate 57 wells in this field. During December 2009, net daily production attributable to our interest averaged 5.3 MMcf of natural gas and 45 barrels of oil from this field. The Waskom field produces from the Cotton Valley formation at depths ranging from 9,000 to 10,000 feet and from the Haynesville shale formation at depths of 10,800 to 10,900 feet. In 2009, we drilled two successful horizontal Cotton Valley wells and one Haynesville shale well in the Waskom field. In 2010, we plan to drill one (.8 net to us) horizontal Haynesville shale well in the Waskom field.
Blocker
Our proved reserves of 25.6 Bcfe in the Blocker field located in Harrison County, Texas represent approximately 3.5% of our proved reserves. We own interests in 77 wells (71.3 net to us) and operate 72 of these wells. During December 2009, net daily production attributable to our interest from this field averaged 9.8 MMcf of natural gas and 35 barrels of oil. Most of this production is from the Cotton Valley formation between 8,600 and 10,150 feet and the Haynesville shale formation between 11,100 and 11,450 feet. During 2009 we drilled three successful Haynesville shale horizontal wells and one Cotton Valley horizontal well at Blocker. In 2010, we plan to drill one Haynesville shale horizontal and one Cotton Valley vertical well at Blocker.
Mansfield
The Mansfield field is located in DeSoto Parish Louisiana and produces from the Haynesville shale between 12,250 and 12,350 feet. During 2009 we drilled three (1.9 net to us) Haynesville shale horizontal wells. Our proved reserves in this field of 21.3 Bcfe represent approximately 2.9% of our reserves. During 2010 we plan to drill two (1.5 net to us) horizontal Haynesville shale wells at Mansfield. During December 2009, net daily production attributable to our interest for this field averaged 8.0 MMcf of natural gas.
Hico-Knowles/Terryville
We have 15.8 Bcfe of proved reserves in the Hico-Knowles/Terryville field area located in Lincoln County, Louisiana which represent approximately 2.2% of our reserves. We own interests in 71 wells (25.9 net to us) and operate 23 of these wells. This field produces primarily from the Hosston/Cotton Valley formations between 7,200 and 11,000 feet. During December 2009, net daily production attributable to our interest from this field averaged 7.2 MMcf of natural gas and 190 barrels of oil.
Darco
The Darco field is located in Harrison County, Texas and produces from the Cotton Valley formation at depths from approximately 9,800 to 10,200 feet. Our proved reserves of 12.1 Bcfe in the Darco field represent approximately 1.7% of our reserves. We own interests in 24 wells (18.8 net to us) and operate all of these wells. During December 2009, net daily production attributable to our interest from this field averaged 1.4 MMcf of natural gas and 6 barrels of oil.
Douglass
The Douglass field is located in Nacogdoches County, Texas and is productive from stratigraphically trapped reservoirs in the Pettet Lime and Travis Peak formations. These reservoirs are found at depths from 9,200 to 10,300 feet. Our proved reserves of 7.8 Bcfe in the Douglass field represent approximately 1.1% of our reserves. We own interests in 42 wells (26.9 net to us) and operate 34 of these wells. During December 2009, net daily production attributable to our interest from this field averaged 1.7 MMcf of natural gas.
Cadeville
Our proved reserves of 7.1 Bcfe in the Cadeville field located in Ouachita Parrish, Louisiana represent approximately 1.0% of our reserves. We own interests in seven wells (4.0 net to us) and operate five of these wells. During December 2009, net daily production attributable to our interest from this field averaged 0.4 MMcf of natural gas and 1 barrel of oil. This production is primarily from the Cotton Valley formation between 9,800 and 10,700 feet.
Longwood
The Longwood field located in Harrison County, Texas primarily produces from stacked sandstone reservoirs of the Travis Peak and Cotton Valley formations at depths ranging from 6,000 to 10,000 feet and the Haynesville shale formation at depths ranging from 10,450 to 10,750. We own interests in 25 wells in this field, 20.6 net to us, and operate 22 wells in this field. Our proved reserves of 4.5 Bcfe in the Longwood field represent approximately 0.6% of our total reserves. We drilled one (1.0 net to us) successful Haynesville shale horizontal well in this field during 2009. During December 2009, net daily production attributable to our interest from this field averaged 1.3 MMcf of natural gas and 2 barrels of oil.
South Texas Region
Approximately 22.2%, or 161.3 Bcfe, of our proved reserves are located in South Texas, where we own interests in 236 producing wells (125.6 net to us). We own interests in 16 field areas in the region, the largest of which are the Fandango, Double A Wells, Rosita, Las Hermanitas, Javelina and Ball Ranch fields. Net daily production rates from this region averaged 51.8 MMcf of natural gas and 448 barrels of oil during 2009 or 54.5 MMcfe per day. We spent $34.7 million in this region in 2009 to drill five successful wells (3.4 net to us) and for other development activity. We plan to spend approximately $12.0 million in 2010 for development and exploration activity in this region.
Fandango
We own interests in 21 natural gas wells (21.0 net to us) in the Fandango field, located in Zapata County, Texas. We operate all of these wells which produce from the Wilcox formation at depths from approximately 13,000 to 18,000 feet. Our proved reserves of 54.2 Bcfe in this field represent approximately 7.5% of our total reserves. Production from this field averaged 17.2 MMcf of natural gas per day during December 2009. We have drilled one successful exploration well in 2008 and two successful development wells in 2009 since we acquired this field as part of the Shell Wilcox acquisition in December 2007.
Double A Wells
Our properties in the Double A Wells field have proved reserves of 32.4 Bcfe, which represent 4.5% of our reserves. We own interests in and operate 59 producing wells (28.6 net to us) in this field in Polk County, Texas. Net daily production from the Double A Wells area averaged 5.2 MMcf of natural gas and 170 barrels of oil during December 2009. These wells produce from the Woodbine formation at an average depth of 14,300 feet.
Rosita
We own interests in 32 natural gas wells (17.3 net to us) in the Rosita field, located in Duval County, Texas. We operate four of these wells which produce from the Wilcox formation at depths from approximately 9,300 to 17,000 feet. Our proved reserves of 31.4 Bcfe in this field represent approximately 4.3% of our total reserves. Production from this field averaged 4.5 MMcf of natural gas per day during December 2009. We acquired our interest in the field in the Shell Wilcox acquisition in December 2007.
Las Hermanitas
We own interests in and operate 15 natural gas wells (12.2 net to us) in the Las Hermanitas field, located in Duval County, Texas. These wells produce from the Wilcox formation at depths from approximately 11,400 to 11,800 feet. Our proved reserves of 14.4 Bcfe in this field represent approximately 2.0% of our proved reserves. During December 2009, net daily production attributable to our interest from this field averaged 5.1 MMcf of natural gas. We acquired interests in this field in 2006 and have subsequently drilled eleven successful wells in this field since the acquisition.
Javelina
We own interests in 17 natural gas wells and one oil well, 18 net to us, in the Javelina field in Hidalgo County in South Texas. These wells produce primarily from the Vicksburg formation at a depth of approximately 10,900 to 12,500 feet. Proved reserves attributable to our interests in the Javelina field are 13.3 Bcfe, which represents 1.8% of our total proved reserves. During December 2009, production attributable to our interest from this field averaged 5.8 MMcf of natural gas per day and 50 barrels of oil per day.
Ball Ranch
The Ball Ranch field is located in Kenedy County in South Texas and produces from the Vicksburg formation at depths of approximately 11,700 and 14,600 feet. We have interests in 34 producing wells (7.8 net to us) in this field. The proved reserves in this field of 4.0 Bcfe represent 1% of our total proved reserves. During 2009 we drilled three (1.4 net to us) successful wells in this field. During December 2009, net daily production attributable to our interests in this field averaged 5.1 MMcf of natural gas and 40 barrels of oil per day.
Other Regions
Approximately 7.5%, or 54.1 Bcfe, of our proved reserves are in other regions, primarily in Mississippi, New Mexico, Kentucky and the Mid-Continent regions. Within these regions we own interests in 482 producing wells (216.3 net to us) in 19 fields. Fields with the largest proved reserves include the Laurel field in Laurel, Mississippi, our San Juan Basin properties in New Mexico and our Maxie field in Mississippi. Net daily production from our other regions totaled 7.8 MMcf of natural gas and 1,099 barrels of oil or 14.5 MMcfe per day during 2009.
Laurel
The Laurel field is located in Jones County, Mississippi near a structurally complex salt dome. We own interests in and operate 52 producing wells (49.1 net to us) in the Laurel field. This field’s estimated proved reserves of 26.2 Bcfe represent 3.6% of our reserves. The field produces from more than 42 horizons that range in depth from 6,600 feet in the Stanley sand to 13,100 feet in the Middle Hosston formation. Recovery of low viscosity crude oil from this field is being enhanced through waterflood operations. During December 2009, net daily production attributable to our interests in this field averaged 975 barrels of oil per day.
San Juan
Our San Juan Basin properties are located in the west-central portion of the basin in San Juan County, New Mexico. These wells produce from multiple sands of the Cretaceous Dakota formation and the Fruitland Coal seams. The Dakota is generally found at about 6,000 feet with the shallower Fruitland seams encountered at 2,500 to 3,000 feet. Our proved reserves of 4.7 Bcfe in the San Juan field represent approximately 0.6% of our reserves. We own interests in 97 wells (14.6 net to us) in this field. During December 2009, net daily production attributable to our interest from this field averaged 1.1 MMcf of natural gas and 5 barrels of oil.
Maxie
The Maxie field is located along the southern boundary of the Mississippi Salt Basin and northern edge of Wiggins Arch in Forrest and Pearl River Counties in Mississippi. Maxie is primarily a gas field producing from Upper Cretaceous Sands and Lower Eocene Wilcox Sands. Our proved reserves of 3.7 Bcfe in the Maxie field represent approximately 1% of our reserves. We own interests in and operate three wells (2.1 net to us) in this field. During December 2009, net daily production attributable to our interest from this field averaged 0.9 MMcf of natural gas and 25 barrels of oil.
Major Property Acquisitions
As a result of our acquisitions, we have added 984.1 Bcfe of proved oil and natural gas reserves since 1991. Our largest acquisitions include the following:
Shell Wilcox Acquisition. In December 2007, we completed the acquisition of certain oil and natural gas properties and related assets from SWEPI LP, an affiliate of Shell Oil Company (“Shell”) for $160.1 million. The properties acquired had estimated proved reserves of approximately 70.1 Bcfe. Major fields acquired in the acquisition include the Fandango and Rosita fields. The acquisition was funded with borrowings under our bank credit facility.
Javelina Acquisition. In June 2007 we acquired additional working interests in oil and gas properties in the Javelina field in South Texas from Abaco Operating LLC for $31.2 million. The properties acquired had estimated proved reserves of approximately 9.1 Bcfe. The transaction was funded with borrowings under our bank credit facility.
Denali Acquisition. In September 2006 we acquired proved and unproved oil and gas properties in the Las Hermanitas field in South Texas from Denali Oil & Gas Partners LP and other working interest owners for $67.2 million. The properties acquired had estimated proved reserves of approximately 16.5 Bcfe. The transaction was funded with borrowings under our bank credit facility.
Ensight Acquisition. In May 2005, we completed the acquisition of certain oil and natural gas properties and related assets from Ensight Energy Partners, L.P., Laurel Production, LLC, Fairfield Midstream Services, LLC and Ensight Energy Management, LLC (collectively, “Ensight”) for $190.9 million. We also purchased additional interests in those properties from other owners for $10.9 million in July 2005. The properties acquired had estimated proved reserves of approximately 121.5 billion cubic feet of natural gas equivalent and included 312 active wells, of which 119 are operated by us. Major fields acquired include the Darco, Douglass, Cadeville, and Laurel fields. The acquisition was funded with proceeds from a public stock offering completed in April 2005 and borrowings under our bank credit facility.
Ovation Energy Acquisition. In October 2004, we acquired producing oil and gas properties in the East Texas, Arkoma, Anadarko and San Juan basins from Ovation Energy, L.P. for $62.0 million. The properties acquired had estimated proved reserves of approximately 41.0 billion cubic feet of gas equivalent and included 165 active wells, of which 69 were operated by us. The acquisition was funded by borrowings under our bank credit facility.
DevX Energy Acquisition. In December 2001, we completed the acquisition of DevX Energy, Inc. (“DevX”) by acquiring 100% of the common stock of DevX for $92.6 million. The total purchase price including debt and other liabilities assumed in the acquisition was $160.8 million. As a result of the acquisition of DevX, we acquired interests in 600 producing oil and natural gas wells located onshore primarily in East and South Texas, Kentucky, Oklahoma and Kansas. DevX’s properties had 1.2 MMBbls of oil reserves and 156.5 Bcf of natural gas reserves at the time of the acquisition.
Bois d’Arc Acquisition. In December 1997, Comstock acquired working interests in certain producing offshore Louisiana oil and gas properties as well as interests in undeveloped offshore oil and natural gas leases for approximately $200.9 million from Bois d’Arc Resources and certain of its affiliates and working interest partners. We acquired interests in 43 wells (29.6 net to us) and eight separate production complexes located in the Gulf of Mexico offshore of Plaquemines and Terrebonne Parishes, Louisiana. The acquisition included interests in the Louisiana state and federal offshore areas of Main Pass Block 21, Ship Shoal Blocks 66, 67, 68 and 69 and South Pelto Block 1. The net proved reserves acquired in this acquisition were estimated at 14.3 MMBbls of oil and 29.4 Bcf of natural gas. We divested of these offshore properties in 2008.
Black Stone Acquisition. In May 1996, we acquired 100% of the capital stock of Black Stone Oil Company and interests in producing and undeveloped oil and gas properties located in South Texas for $100.4 million. We acquired interests in 19 wells (7.7 net to us) that were located in the Double A Wells field in Polk County, Texas and we became the operator of most of the wells in the field. The net proved reserves acquired in this acquisition were estimated at 5.9 MMBbls of oil and 100.4 Bcf of natural gas.
Sonat Acquisition. In July 1995, we purchased interests in certain producing oil and gas properties located in East Texas and North Louisiana from Sonat Inc. for $48.1 million. We acquired interests in 319 producing wells (188.0 net to us). The acquisition included interests in the Logansport, Beckville, Waskom, Blocker and Hico-Knowles fields. The net proved reserves acquired in this acquisition were estimated at 0.8 MMBbls of oil and 104.7 Bcf of natural gas.