Good day, ladies and gentlemen and welcome to the thirdquarter 2007 Comstock Resources earnings conference call. (OperatorInstructions) I would now like to turn the presentation over to your host fortoday, Mr. Jay Allison, President and CEO. Please proceed.

Thank you, Stacy.Good morning, everyone. It's a great day to have a conference call. Welcome tothe Comstock Resources 2007 third quarter financial and operating resultsconference call. You can view a slide presentation during or after this call bygoing to our website at www.ComstockResources.com and clicking presentations.There, you will find a presentation entitled third quarter 2007 results. I'm Jay Allison, President of Comstock and with me thismorning is Roland Burns, our Chief Financial Officer and Mack Good, our ChiefOperating Officer. During this call, I will review our 2007 third quarterfinancial and operating results, as well as the results to date of our 2007drilling program. Our discussion today will include forward-looking statementswithin the meaning of securities laws. While we believe the expectations andsuch statements to be reasonable, there can be no assurance that suchexpectations will prove to be correct. Our 2007 third quarter highlights, our production in thethird quarter averaged 251 Mcfe per day, an increase of 35% of our productionin the third quarter of 2006 and a 6% increase over the previous quarter. Our onshoreproduction soared to 132 Mcfe per day, an increase of 38% over last year'sthird quarter and is attributable to our successful East Texas/North Louisianaand South Texas drilling activity. Offshore, production was up 31% which was primarily due tonew production from wells that we had drilled last year. For the quarter, wehad total revenues of $171 million and we generated EBITDAX of $133 million andoperating cash flow of $116 million. We also generated a profit of $16 millionor $0.37 per share. Our drilling program continues to drive our productiongrowth. Onshore, we drilled 123 successful wells out of a total of 128 wellsdrilled. Offshore, we've had six successful wells and eight dry holes. Boisd'Arc announced on June 5 of this year that it is undertaking a process toreview strategic…

Your first question comes from Wayne Andrews - RaymondJames.

You mentioned DD&A rate being up largely because of EastTexas/North Louisiana. Could you review the economics there? I'm estimatingaround 1.7 million per well and 1.3 million a day. What sort of reserves areyou adding? Or is this sort of a net effect from last year's results as well?

The DD&A rate is really a carryover of last year's inthe way we've booked the reserves in the Cotton Valley, which is as you know,typically a 0.8-type Bcf well. As far as the dollars spent, that has notincreased any more. I think it was fairly level in the third quarter versus thesecond quarter. But it really won't be until the end of the year that we reallysee the impact of our new drilling activity improve the economics there.

Great. That's what Ithought. I also noticed that South Texas was up prettysubstantially in the quarter. Can you comment on what areas are contributingthe most there and what you see going forward in South Texas?

Hermanitas has been a real plus for Comstock, reallystarting to build volume into the quarter. As a matter of fact at Hermanitas,we have laid a loop line in order to get our additional product to sales. Wehave about 8 million a day right now that's waiting on that loop line. We'reabout two weeks away from finishing that, and that's a net number. Javelina, as you know, we acquired additional interest inJavelina and as a result, those net volumes are what you're seeing as well. So,at both Javelina and Hermanitas going forward we expect to continue to beactive in both of those fields throughout the year and throughout next year, asa matter of fact.

In East Texas I know you're working on your first horizontalthere and if successful, you plan to do a few more. Are the current rigs thatyou have in the play, are they capable of doing this kind of work or do youneed to get some different rigs in? Could you discuss availability there?

Every rig we have in our inventory is capable of drillinghorizontals in Waskom and elsewhere that we're looking at. The rig that we haveout there now, just to brag a little bit on the crew and the drilling engineeringhere at Comstock, we're ahead of the drilling time curve by about a week andobviously, that goes straight to the bottom line. We're under budget. We'respending less money than we had anticipated, so we're extremely happy aboutthat. We would like to keep that rig or at least bring it back for a secondhorizontal in Waskom if that's what we decide to do because it's an excellentrig, excellent crew. Availability is not a problem. But we have rigs in ourfleet that can do the job.

The Mississippioil play, any progress there? With oil prices where they are today, that'sprobably looking pretty interesting for you.

We're taking a real hard look at both Laureladditional opportunities as well as in our Maxie field area. We think we've gota couple of ideas there that we'll probably be drilling in the fourth quarteror first quarter of next year.

Your next question comes from the line of Ronald Mills - JohnsonRice.

A question on Hico Knowles. I may have missed the verybeginning of it. It sounds like you drilled two wells, one of which is testedand you have a couple of other wells completing. Can you just walk through whatyour prior activity has been at that area?

Prior to drillingthis year, we had been inactive in the Hico Knowles. We made an agreement withan operator to exchange interest. We improved our acreage position where wethought the most potential was and is. We also reestablished some units, so wecould comingle reservoirs that are targeted for production and we're drillingour sixth well right now in that field. One has come online, the other one iscompleting and testing, and we have three waiting on completion right now or arein the process of being completed and we're drilling our sixth.

Any infrastructure issues in that area?

No, sir. Petrohawk isextremely active in that area as we are, of course, and so the infrastructureissues have been addressed all along.

Petrohawk, I know that in both Hosston and Cotton Valley, they've also chased somemore structural play in the gray sands. The first well they tested at 4.6million a day. Is that Hosston/Cotton Valley comingling? Is that a Hosstonformation?

Cotton Valley only.

Cotton Valley only. Is the plan to eventually comingle productionor are you not able to do that from a pressure standpoint?

We want to draw downthat pressure and then comingle at a later date. You're exactly right.

How about on the deeper potential? I know it's moreseismically driven, but do you all have seismic in on the area to the extentthere is some potential gray sand?

Yes, we have someaccess to seismic and we think we have potential as well.

Going back to the Waskom area where you're drilling thehorizontal well right now, any idea, given your acreage position and to theextent it works, how many potential locations you could drill horizontally inthat area?

Preliminarily, we've identified 13 additional locations withmultiple other probable opportunities. Part of the issue when you drill ahorizontal of course is that you're drilling across lease tracks, so you haveto equalize interests and establish an equal playing field between all of theownerships and we're well into that process on multiple horizontal projecttargets. But of the preliminary pile that we've identified right now,we don't think we'd have a major issue going forward. There are some additionalopportunities as well on the western part of our acreage that we're looking at.Bottom line, we have identified enough Waskom horizontal potential to keep arig busy all next year, at a minimum.

Just to follow up on one of Wayne's questions, in EastTexas, especially given the production results you're seeing from the wellsyou've drilled, are you feeling comfortable that the 0.8 Bcfe of reserves thatyou had bookings for on your East Texas, do you think that could move higherbased on production history, on your activity over the past 12 months?

That's a greatquestion. We think we can move it higher. We know we can. We already are. We'reactive in Hico Knowles as well as Logansport.Waskom we're seeing tremendous results. As a consequence of that, we think ourper well recovery average is going to move up. We're also not drilling some ofthe fringe test wells that we did at the first part of this year, and ofcourse, we drilled several of those last year to test acreage that we hadpurchased. The bottom line is, in answer to your question, yes, we feelvery confident that our 0.8 Bcfe will hold in the wells that we've alreadydrilled, and going forward, we're already seeing some significant increases inreserve estimates on the wells that we're drilling in Logansport, Waskom, HicoKnowles, and a couple of other East Texas fields.

When you look at your program, you drilled 95 wells so far.You still plan on 120 to 125. How many of those had been PUDs versus unbookedlocations? If you look to 2008, I'm assuming you'd have a pretty flatprogram at least, if not growing, because of Hico Knowles. How much of it wouldhave already been booked versus unbooked?

We think we havemultiple opportunities to add reserves, not only in setting up PUDs andexisting reservoirs that are productive, but also we have some opportunities ondeeper horizons that are not booked.

Your next question comes from Kim Pacanovsky – Ferris BakerWatts.

I have a couple more questions on Hico Knowles. I looked onPetrohawk's website. I don't follow them, but I see that it's just a littleover 500,000 to deepen into the gray sand. What are the potential reserves inthe gray sand?

Depends on whereyou're drilling. I'll give you a range. Anywhere from 1 to 10 Bcf.

Wow.

It's a tremendousreservoir if you hit the sweet spot.

Roland, you said earlier that those your wells were costingabout $3 million; PetroQuest is about $2.5 million. Does that mean that there'sroom for improvement in your cost structure there or are you just doing somethingdifferent; maybe going a little bit deeper or something like that?

We're testing somedeeper sections and we're also setting casing to protect shallow underpressured zones a little deeper than Petrohawk. In addition, our fractechnology approach is a little different, but there's always room forimprovement. I would never suggest otherwise and we're looking hard at ourcosts in every field.

What's the average working interest for your 50 locations?

I think it's around75%. I know that the most recent well we had at 86% and we have some at 60%. On the operated side, I think our interest is30% to 40%.

Just a generalquestion about gas and oil prices right now. When you look at what prices havedone and where the strip is at, do you guys get tempted to do some hedging?

We're never tempted. Wewalk the straight and narrow. We use hedging very much with our acquisitionprogram, and so to the extent that we're buying a property at a higher gasprice environment or oil price, that's when we put on hedges and have beenconsistent with that. We just haven't made a lot of acquisitions recently, sowe don't have any positions out but that's historically where they come from. We try to direct our drilling activity in the market, and ifit's going to be a high gas prices market that's when we want to drill thosewells. If it's not going to be we're going to deploy our capital probablytoward acquisitions or other activity.

At this time, there are no further questions in the queue. Iwould now like to turn the presentation back over to Mr. Allison for closingremarks.

I would just like to thankeveryone for participating in the call. It's nice to give stockholders solidfinancial results. It's also nice to really see a positive future. We've gotthe potential sale of Bois d'Arc. We've got the Hico Knowles program, thehorizontal program with Devon and other regions. We'vegot Logansport. If you look at the core areas South Texas, our production is up 58% from the third quarter of lastyear. In East Texas, it's up 41%. I think right now it'sa very bright time for Comstock and I like conference calls where the stockgoes up before the call and hopefully stays up and goes up more after the call.So, we are always thankful for good calls like this. Stacy, thank you and thank you for pronouncing KimPacanovsky's last name properly. You're the first one that's ever done that sothank you.