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Outlook for 2014 

We plan to continue to focus on increasing our oil production in 2014 which could double from what we produced in 2013. We will not start drilling natural gas wells until we can have high returns on those projects. Without additional gas drilling, we expect that the strong growth in our oil production will more than offset the natural gas production declines we are facing to allow us to have higher revenues and cash flow and be a much more profitable company in 2014. We expect oil to comprise more than 40% of production in 2014. Currently all of the net wells we plan to drill in 2014 are oil wells and all of our budget will be spent on oil projects. In 2013, we have expanded our inventory of oil drilling locations by completing bolt-on acreage acquisitions around our Eagle Ford properties and by acquiring acreage in the East Texas Eagle Ford and the Tuscaloosa Marine shale. 

A major goal we set for Comstock in 2013 was to improve our balance sheet. We accomplished that goal and now have a very strong balance sheet after the West Texas divestiture. We were able to reduce our debt by $425 million in 2013 while at the same time investing in new acreage that will fuel our future growth. We entered 2014 with over $400 million in liquidity and strong cash flow growth which will fund our drilling program. 

The strong balance sheet and the profitable outlook for 2014 allowed us to declare our first dividend on our common stock in June 2013. Beginning in June we have paid a quarterly dividend of 12.5¢ per share. 

The directors and management of Comstock want to thank the stockholders for their continued support. 

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