Good day, ladies and gentlemen, and welcome to the Third Quarter 2013 Comstock Resources Earnings Conference Call. My name is Lisa, and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to your host, Mr. Jay Allison, Chief Executive Officer. Please proceed, sir.

Thank you, Lisa. Before we start, I've got about 6 or 7 bullet points that I want to make sure that those that are attending the conference, if they leave early, they get these bullet points pertaining to the quarter. As you all know, this is the first quarter that we've had -- where we've had the Permian divestiture behind us. With the proceeds from the Permian sale, we have retired $735 million of debt, really, in the last 6 months. So the question is, what do we do with that? And the bullet points are, one, because of that, we've now been able to double our Eagle Ford rig count. We went from 3 rings to 6 rigs, as you know. And that allows our Eagle Ford oil production to grow anywhere from 33% to 36% over that production of 2012. The sale of the Permian also allowed us, really, to be 20% oil at the end of 2013 as far as production. And we should be 40% at the end of 2014 as far as oil production. It also allows Comstock to complete, I think, somewhere like 15 additional net wells in the Eagle Ford versus our initial projections at the beginning of this year. Now we've added 3 more even in this quarter. It has allowed us to repurchase some shares. We repurchased 1.3% of our outstanding shares. And I think the other thing that it does, we will spend $120 million to enter into 2 new oil basins. So the question is, are we having some science experiment? And the answer is, quite frankly, no. We're not looking to enter into a science experiment that will dilute to strong return currently being seen in the Eagle Ford but rather, invest in 2 areas, each of which…

Thanks, Jay. Slide 4 shows our oil production related to our continuing operations by region and on a daily basis for the last 3 years by quarter. Oil production this quarter increased to 6,900 barrels per day and was up 900 barrels per day or 14% over the second quarter of this year. The oil production was also up 30% from the third quarter of 2012. Our Eagle Ford properties in South Texas account for most of our oil production at 6,600 barrels per day. We're looking for our oil production to average between 8,300 and 9,000 barrels per day in the fourth quarter. The wide range that we're providing for guidance for this fourth quarter is due to the very large amount of completions that are planned for December, so the exact timing of those will have a big impact of how we finish up the year. Slide 5 shows our natural gas production from continuing operations on a daily basis. Our natural gas production declined by 5% to 148 million cubic feet per day as compared to the 156 million per day we produced in the second quarter. Production from our Haynesville and Bossier wells, which is shown in dark blue on the chart, declined by 5 million per day to 103 million per day this quarter. Production from our Cotton Valley well, shown in green, averaged 20 million per day. And our South Texas gas production, shown in light blue, was also 20 million per day. Other gas production, shown in purple, increased to 5 million per day. We expect our natural gas production to decline further in the fourth quarter to approximately 130 million to 140 million cubic feet per day. Slide 6 shows our realized oil prices related to our continuing operations for the third…

Thanks, Roland. On Slide 22, we cover our South Texas operations where all of our current activity is in our oil-focused Eagle Ford Shale play. At the end of the third quarter, we had 26,500 net acres reflecting the recent acquisition of 2,300 net acres and the exploration of a similar amount of acreage in Atascosa County. We are working on other bolt-on acreage acquisitions in our area. We estimate that we have 300 operated drilling locations with a total resource potential of 70 million barrels of oil equivalent net to our interest. Slide 23 shows the location of the 89 producing wells we have drilled on our acreage. In the first 3 quarters of 2013, we drilled 47 horizontal oil wells, 31.6 net, and had 11 wells or 8.3 net drilling at September 30 of this year. We have also completed 42 or 26.4 net horizontal Eagle Ford Shale wells, including 6 or 3.8 net wells drilled in 2012. The 42 Eagle Ford Shale wells that were completed this year had an average per well initial production rate of 793 barrels of oil equivalent per day. This rate is 22% higher than the average IP from 2012. Slide 24 shows the results of the 89 wells which are currently producing. We completed 17 more Eagle Ford wells since our last update. They are wells 73 through 89 on this list. The 89 Eagle Ford shale wells that were completed had an average per well initial production rate of 745 BOE per day. These wells are being produced under the company's restricted choke program, and the initial tests were obtained with a 14/64 to 16/64 inch choke. The 30-day per well production rate for these wells averaged 588 BOE per day and the 90-day per well rate averaged 492 BOE…

If you continue to stay on Slide 28, the full impact of our 6-rig Eagle Ford drilling program really shows up in the fourth quarter of 2013, particularly in December. We expect to complete more Eagle Ford wells in December of 2013 than all of the third quarter of 2013, again, that's because you start seeing the full impact of our 6-rig Eagle Ford drilling program. If you go to Slide 29, our 2013 outlook. I'll summarize our outlook for the rest of the year. With continued weak natural gas prices, we have been focused on increasing our oil production with our Eagle Ford Shale drilling program, which provides high returns on our investment. We will not start drilling natural gas wells until we can have high returns on those projects. We expect the strong growth in our oil production will more than offset the natural gas production declines we are facing, allowing us to have higher revenues and cash flow and be a much more profitable company in 2014. We expect oil to comprise 20% of 2013's production even after the sale of our Permian Basin properties and will grow to 40% by the end of next year. 96% of the net wells we'll drill in 2013 will be oil wells and 96% of our budget will be spent on oil projects. We're expanding our inventory of oil drilling locations by completing bolt-on acreage acquisitions around our Eagle Ford properties and by acquiring acreage in emerging oil plays. We continue to have one of the lowest overall cost structures in the industry. We now have a very strong balance sheet after the West Texas divestiture. We'll have over $0.5 billion in liquidity after the retirement of our 2017 bonds that we completed on October 15. For the rest of the call, we'll take questions only from research analysts who follow this talk. So Lisa, I'll turn it back to you.

[Operator Instructions] Your first question comes from the line of Ron Mills of Johnson Rice. Donald P. Crist - Johnson Rice & Company, L.L.C., Research Division: Actually, this is Don. Jay, in your new ventures, are you still focused on the 4-state area that you outlined in our conference of Louisiana, Mississippi, Texas and Oklahoma?

Yes. And the reason we gave you those areas are one, we -- Don, I think that the 2 or 3 things we needed to make clear when we sold the Permian is, one, we've got a great wealth creation group. And you say, "Well, where have they created great wealth?" It's Texas, Louisiana, Oklahoma and Mississippi. Those are the states that we've been very good in, and that's where our core people have been very good in. So we're staying within those states. We give you a budget. We're not going to spend $300 million, $400 million, $500 million chasing something. We're going to spend $120 million. And we've found the 2 areas that we really like, we're attempting to lease right now. And if anyone on the call ask if we're in a particular play, we won't comment on it because we've not publicized that we're in any new play other than the Eagle Ford. And then we have inventory at the Haynesville gas for future drilling when gas prices are anywhere from $4.30 to $4.50 or above. But we have located 2 basins that we really like. It's totally unanimous from the reservoir side, the operations side and the G&G side, the tease or kind of look-alike potential of the Eagle Ford in the future. Now maybe they will be, maybe they won't be, but there will -- we categorize as what the Eagle Ford might have looked like in the very first part of 2010. We're spending anywhere from $200 to $1,500 or so per acre. You can -- we've said that the goal is, in each of these plays, you're going to have a minimum of 20,000, 25,000 acres and maybe a maximum of 50,000 acres. And that's kind of your $120 million. We never…

Well, the goal is to have 2 new core oil basins, 80-plus percent oil. It's to have the equivalent of primary leases, so the leases don't dictate that you have to have heavy drilling at all. And you can filter in these 2 plays throughout 2014 and you can do it within a reasonable budget. So our goal is to not materially outspend our free cash flow at all. I mean, we're going to try to stay within that ballpark. I think once we're able to announce what we're doing then, Don, we'll put our budget together and, believe me, we'll be accountable for the dollars that we'll spend and you'll never see us become reckless because we shouldn't become reckless. We fought really hard to reduce our debt the right way by being -- by creating a profit, and we did that in May of this year. So you can see that our borrowing base should materially increase. Our production should grow. We've got a hedging program for oil. So we're going to protect ourselves from the downside. We'd go from spending $103 million in the Haynesville to $19 million this year. Next year, it could be like $10 million. We don't really see any obligation wells in the Haynesville that we have to drill. We might just put a small budget in there just to have it there. But we're going to be a good, solid growth company with a good, strong balance sheet.

Your next question comes from the line of Ray Deacon with Brean Capital.

I had a question for Mack (sic) [Mark]. I was wondering -- I didn't hear you talk about the oil/gas mix on the wells in McMullen, the Swenson and the Forrest Wheeler wells. Was it -- is it gas here as you go south? I'm assuming yes.

Yes. Our -- we're between 80% and 90% oil on all of our wells. Our GOR is not very high even in McMullen County, so we're probably still over 80% on those wells.

Okay, great. And I was wondering, have you -- can you give me a sense of what the EUR is for on the 2 Haynesville wells you drilled this year and kind of what your plans are looking like into '14 there?

As far as '14, we don't have any Haynesville wells planned. We have a small budget that we'll probably include in our 2014 budget just for non-op and anything that comes up that might be an obligation, but we don't have anything planned to drill in 2014. I don't have the specific EUR numbers on those 2 wells. They're probably in the 6 range, something in there.

Okay. Got it, got it. And maybe just one last quick one. In terms of the acquisition, would you be looking to have a partner on that or would you want to stay 100%?

I think what we do on that, Ray, we see what our obligation might be, and then if there's an increased amount of acreage that we could possibly acquire, if we had a partner, I think the goal is to be -- have a financially-sound balance sheet and CapEx budget, at the same time, drill several wells in 2014 in each of these areas to prove up the areas along with other operators that are in the areas. And then if we can add more acreage and it makes sense to bring a partner in, I think we'd look at that. I think we have the potential to bring one in. So in the past, you didn't know if we could bring one in because historically we never have. But I do think our relationship with KKR and/or others and our performance at the drill bit in the areas that we've been in would allow us to do that. So I think that's just a financial decision where we don't plan on getting over-levered at all. If we need a partner to take a little bigger bite out of the apple, then maybe we'd do that. But we're not telling you that we will. We're telling you that if we had to, we would.

Your next question comes from the line of Mike Kelly with Global Hunter Securities.

Jay, your recent strategy in the Eagle Ford, just curious if this has changed now that you have $120 million slated to go outside the Eagle Ford into -- to new basins. I think the original plan was 6,000 or 7,000 a year being added in just kind of core bolt-on deals.

I think the answer is we're continuing -- like we added the 2,300 acres in the Eagle Ford in the last quarter, but we're continuing to add Eagle Ford acreage. I mean, we've got some more acreage in the queue right now. But I think we've got like a $20 million -- we gave you kind of a $20 million budget for that, and that's the 3,000 to 6,000 acres or so. So that is still what we're doing. But you can't always rely upon the fact that you can get that amount of acres annually. Now we think we have a pretty good shot this year and we already have some more acreage that we'll probably report at the end of next quarter. However, you still have to rely upon your big growth engine because -- which is our G&G group, to find new areas like they did in the Permian, like they did in Eagle Ford. But I think, Mike, the difference is, we said that it was a $50 million to $100 million investment, and now we've changed that. We said, "Well, we really know now it's between $100 million and $120 million in these 2 new areas, if what we're attempting to do, we're successful in doing." So we thought it's fair for the shareholders and you as an analyst, et cetera, to know what we were doing with the dollars and to know that we're trying to create wealth in 2 other regions that are similarly looking to what the Eagle Ford looked like at the beginning of 2010. Which goes back to Don's question earlier. If you remember, when we market with you, when we went into Eagle Ford, we put a rig, and in July of 2010, we didn't put a second rig in until January of 2011. So we let our outcome dictate the number of wells that we drilled in the Eagle Ford and along with the success from the other operators. And these 2 new areas that we're attempting to acquire acreage in, that is our same strategy. So we'll make an initial investment of $100 million to $120 million in these 2 areas. We'll filter in these wells throughout 2014. We'll not become reckless. Hopefully, we'll add great inventory of oil locations in each of those 2 areas by the middle to latter part of 2014 by a little bit of our own drilling and maybe a lot of other operators' drilling. So, no. It's basically the exact same footprint. We're going to continue to add Eagle Ford acreage where we can find it. We're not going to bank everything on doing that even though we've been successful this last quarter in acquiring acreage and not a lot of money in the Eagle Ford. Does that answer that, Mike?

Yes, it does. Two quick follow-ups on that front. So if I took the $20 million that you have allocated to the Eagle Ford, leasehold CapEx and just divide it by the midpoint of that 3,000 to 6,000, that implies you're paying about a little over $4,000 in acreage, just wanted to confirm if that's what you're doing this at. And then just the timing on the leasehold pickups in these 2 other basins. You do have it in the 2013 budget. Do you expect to be -- how much do you expect to actually get signed by the end of the year?

Well, the $4,000 is a good number. I think, give or take $400 or $500, that's a good number. And then I think the reason we stick that $120 million in 2013 is because there's a great chance that, that will happen in 2013. And we don't want to surprise everybody at year-end and all of a sudden they see that we spent $100 million to $120 million when we've told the market it's between $50 million and $100 million. We said it'll be between now and the next year and you don't know when those opportunities come around, but they're here. So we're kind of giving you a heads-up that, that is -- there is a chance that, that might happen this year which, Mike, could be good because then we could factor that into our budget in 2014.

Your next question comes from the line of Rehan Rashid with FBR Capital Markets. Rehan Rashid - FBR Capital Markets & Co., Research Division: My favorite question, downspacing in the Eagle Ford, it looks like you're still carrying 80-acre spacing, any updated thoughts on that, please?

It's time to beat Mark up on that, and he won't budge on me, but I'll let him answer.

Rehan, we're always evaluating it, but based on our information, our reserves and recoveries, we don't think that downspacing is really an opportunity that we will pursue in the Eagle Ford at this time. We think we're at the right spacing and we think, as you get much tighter, you really diminish your net present value on the properties by going down. Rehan Rashid - FBR Capital Markets & Co., Research Division: Okay. Any incremental changes to well design from here, more stages, more tighter cost of spacing, anything on that front?

We're testing several right now. We're testing both of those, really tighter cluster spacing and frac-ing less clusters per stage. And we'll do those tests over the next couple of months and kind of see what kind of impact we get and then move forward with a revised design, if we do see enough benefit for that additional cost. Rehan Rashid - FBR Capital Markets & Co., Research Division: Okay. On the Haynesville front, last time, Jay and Roland, we talked -- you guys had mentioned some kind of incremental work on longer lat curls, any kind of update on that front from a permitting to /science work standpoint?

Well, we think in the core of the Permian, if we kind of extend the laterals to 6.5, we could probably have a drilling program in the $4.30 price range. However, Rehan, I think with the success we've had in the Eagle Ford and, hopefully, the potential purchasing of leases in 2 new key core areas within this oil basin, we'll de-risk part of that in 2014. And then we'll see, Rehan, where gas prices go. We're trying to [indiscernible] the company up to say -- look, we've got 60 cfe, we think there's resource potential in the Haynesville. I guess at a $4.30 price, we could probably start some of the infield for 6.5 drilling laterals. But we're really in a period of a $4.50 to $5.00 price, that's when you can have a dedicated program when you can hedge and you can really develop your Haynesville better. So we're -- that's why, kind of in closing, we say we don't think that we have to drill any Haynesville wells because we don't. Now can we introduce it? Absolutely. And the beauty of that is, kind of like 2012, we spent $103 million holding acreage and completing wells in the Haynesville. This year, we spent $19 million. I mean, that's a lot of extra money we can spend on oil right now. And that's what we're doing because that's what we should be doing. Rehan Rashid - FBR Capital Markets & Co., Research Division: And one quick one, the share buyback, with maybe capital allocation priorities changing into '14 with more acreage, is that -- does that share buyback take a backseat from this point on?

No, not at all. I think we -- that's what we try to advertise, "Here is the amount of money we've invested, we will invest or hope to invest in acreage in the future." We do hope to have 2 new oil regions, and we'll filter in whatever budget we'll have in those 2 regions in a 2014 budget, if we can close those by year-end. But at the same time, we're totally committed to a dividend, which is at 3% yield. At the same time, we're committed to share buybacks if the shares, what we call, misbehaved. So we bought 1.3% of the shares back, and we can do that. You can see our borrowing base should go up to that $1 billion, with $625 million available. So I mean, we're getting stronger financially. And the reason is we divested our sales of the Permian properties. It unlocked our great strength and we're using those now. You're just now starting to see it.

Your next question comes from the line of Amir Arif with Stifel. Amir Arif - Stifel, Nicolaus & Co., Inc., Research Division: Just a question, can you give us a sense of how much of the $120 million you've spent so far?

No, we can't comment on that.

None as of the -- into the third quarter.

Yes. Amir Arif - Stifel, Nicolaus & Co., Inc., Research Division: Yes, good. But a good chance that most of it should be done by year-end, is that fair based on your previous comments?

I think we'd like it for it to be spent. Now whether that happens or not, I don't know. Amir Arif - Stifel, Nicolaus & Co., Inc., Research Division: Okay, okay. And then just a quick question on the Eagle Ford production growth. I mean, just given the completions that you showed in that one chart, with most of them coming in December, even at the low end of your 8.3 to 9 range, that's implying 20% sequential growth. Are you -- you guys are comfortable with that based on the completions that were happening in 3Q?

Yes. This is Roland, Amir. Yes, we -- yes, a lot of that was achieved with the activity in third quarter, not really based on the December activities. So achieving the high end of the range with what-have-those contribute some, but with those being pushed toward the very end of the year, that's why we have kind of a larger range that we'd like to have for the fourth quarter because of the timing of -- do we get a month to production out of a lot of those? Do we get a half a month? Do we get a day? So that's -- accounts for the range. But we're very comfortable that we can be in that range, given the levels of production we're at now. Amir Arif - Stifel, Nicolaus & Co., Inc., Research Division: Okay, that sounds good. And just a final question on the Haynesville. I mean, if you didn't do any drilling next year, what kind of decline rates would that field have, 15% to 20% would be a fair number, or would it still be higher than that?

Well, I think -- I know that we're looking at our total gas production to decline by around 15% to 18% next year, so the Haynesville is probably a little -- as a component, would be a little larger than that, probably in the 25% range would be my guess. But company-wide, that 15% to 18% is a good number. That's what we're looking at, with no investment in gas at all next year, so we can take that kind of a floor.

Your next question comes from the line of Marshall Carver with Heikkinen Energy Advisors.

Yes. The downtick in the 3P reserves in the presentation from 78 million BOE to 70 million BOE, what was -- did you condense some locations? Are you assuming smaller wells there? What drove that change from 2Q to 3Q?

Well, Marshall, what we did is with the -- some of the acreage has expired and that's out of our acreage count. And most of that, that we didn't have locations on. And then we added some new acres, and that's really just a more refined calculation of putting -- we do have 300 operated, engineered locations on our acreage that we feel like are -- will all be developed. And then we just kind of put those in their real proper EUR category, so we think it's a very fair number, a much more precise number than before. So I think it's just much more precision. And there is some of our acreage that has a -- that's not been put in an operated unit yet, that probably we have potential for, but we're going to kind of wait and add that when we kind of get those put into a unit. So I think it's really just more precision on the numbers than anything else.

Okay. And in terms of the 2 new areas, is it a bunch of small packages, some sort of organic leasing or is there some -- a few key -- a couple of key packages you're looking for? I'm wondering if we're going to -- you would likely have an announcement or would it just be when your numbers come out, you can reveal those positions?

I think that if we can -- I think we have an obligation. If we spend that amount of money between now and year-end, then we'll put a press release on about it because I think that's a fair thing to do to the markets.

And Marshall, I think if you kind of look at the rest of the year, things could be different. But before the fourth quarter update, which obviously won't come until next year, we see -- of course, we'll finalize our bank facility, so that should be pretty imminent coming out. We'll report in our capital budget after approval by our board in early December. But those 2 are things that are planned on. And then I think that if we are able to complete significant leasings in these 2 areas in the fourth quarter, which we think is probable, we'll probably report on that also. So I think those are the 3 kind of announcements we could say that are probably going to come before the end of the year.

Your next question is a follow-up from the line of Rehan Rashid from FBR Capital Markets. Rehan Rashid - FBR Capital Markets & Co., Research Division: Yes, real quick. On the inventory for Eagle Ford, is that the remaining inventory? Is that the total?

No, Rehan, that would be the total [indiscernible] on that acreage.

I would now like to turn the presentation back over to Mr. Jay Allison for closing remarks.

Again, I think this is the first quarter that we've had that is pretty much a clean quarter after the divestiture. And you can see, hopefully, the direction that we're focused. We're focused on telling you what our bank facility looks like, telling you what the results are from the 6-rig program, of what is -- in the Eagle Ford or what they should look like in October, November, December of this year. And then being accountable to you for the entrance in the 2 new oil regions that we think we'll be successful in entering. And if we are successful, we will put a press release out on that and we'll be accountable to how we would develop those regions in 2014 and beyond. So again, we're always appreciative of your time, and thanks for the conference call.

Ladies and gentlemen, this concludes today's presentation. You may now disconnect. Have a great day.