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Weanticipatethe stronggrowthinour oilproductiontooffsetthe lownaturalgasprices toallowustohavehigher revenuesandcashflow andtobeamuchmore profitablecompany in 2013. 

We have 12 Bcfe in the San Juan basin, Mid-Continent and in other areas. Our properties in the other regions accounted for 2% of our 2012 daily production at 6 MMcfe per day. We plan to continue to divest of many of these assets on an opportunistic basis. 

Despite the continued low natural gas prices we are experiencing, we are excited about the prospects for Comstock in 2013. We anticipate the strong growth in our oil production to offset the low natural gas prices to allow us to have higher revenues and cash flow and to be a much more profitable company in 2013. We expect oil to comprise more than 25% of our 2013 production as 94% of the wells that we expect to drill will be oil wells and 92% of our budget is expected to be spent on oil projects. Our Eagle Ford shale program will be our largest growth engine this year. We also see tremendous upside in future horizontal development in the emerging Wolfcamp shale based on recent activity in Reeves County, Texas. 

We will strive to continue to have one of the lowest overall cost structures in the industry even as we transition to oil. We believe that we have adequate liquidity for our 2013 drilling plans. We expect operating cash flow to fund most of our planned drilling program and that the availability under our bank credit facility will increase with our oil reserve growth. We will continue utilizing an oil price hedging strategy to protect our oil focused drilling program. 

A major goal for Comstock in 2013 is to improve our balance sheet. We also want to bring in more capital for our oil focused drilling program. We expect to accomplish this at the asset level by entering into a joint venture or selling a portion of our large acreage position in the Permian Basin. 

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

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## O t h e r R e g i o n s 

## Outlook for 2013 

## Oil Production 

Mbbls per day 

2011 

2010 

2.3 

2.0 

## Natural Gas Production 

Mmcf per day 

2011 

248 

2010 

189 

## Capital Expenditures 

$ in millions 

2011 

$1,048 

2010 

$546 

2012 

6.3 

2012 

225 

2012 

$551 

