##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  FORM 10-K
 (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    no. 001-32494
  BOIS dARC ENERGY,
    INC.
 (Exact name of registrant as
    specified in its charter)
  NEVADA

20-1268553(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)   600 Travis Street,
    Suite 5200, Houston, TX 77002
 (Address of principal executive
    offices including zip code)
  (713) 228-0438
 (Registrants telephone
    number and area code)
  Securities registered pursuant to
    Section 12(b) of the Act:
  Common Stock, $.01 Par
    Value

New York Stock
    Exchange(Title of class)

(Name of exchange on which
    registered)   Securities registered pursuant to
    Section 12(g) of the Act: None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o  Rule 12b-2).  Yes o þ
      DOCUMENTS INCORPORATED BY
    REFERENCE
  Portions of the Proxy Statement
    for the 2007 Annual Meeting of Stockholders to be held
 May 22, 2007 are incorporated
    by reference into Part III of this report.




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##### 



BOIS
    dARC ENERGY, INC.
  ANNUAL
    REPORT ON
    FORM 10-K
  For the Fiscal Year Ended December 31, 2006
  CONTENTS
  Item



PagePart ICautionary Note
    Regarding Forwarding Looking Statements


3Definitions


41 and 2.

Business and
    Properties


61A.

Risk Factors


211B.

Unresolved Staff
    Comments


323.

Legal Proceedings


324.

Submission of
    Matters to a Vote of Security Holders


32Part II5.

Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


336.

Selected Financial
    Data


347.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


357A.

Quantitative and
    Qualitative Disclosures About Market Risk


468.

Financial
    Statements and Supplementary Data


479.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


479A.

Controls and
    Procedures


479B.

Other
    Information


50Part III10.

Directors and
    Executive Officers of the Registrant


5011.

Executive
    Compensation


5012.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


5013.

Certain
    Relationships, Related Transactions, and Director
    Independence


5014.

Principal
    Accountant Fees and Services


50Part IV15.

Exhibits and
    Financial Statement Schedules


51List of SubsidiariesConsent of Ernst & Young LLPConsent of Lee Keeling and Associates, Inc.Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906   2




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##### Table of Contents



CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS    
    the potential for future of undiscovered reserves;
    the availability of exploration and development opportunities;
    amount, nature and timing of capital expenditures;
    amount and timing of future production of oil and natural gas;
    the number of anticipated wells to be drilled after the date
    hereof;
    our financial or operating results;
    cash flow and anticipated liquidity;
    operating costs such as finding and development costs, lease
    operating expenses, administrative costs and other expenses;
    our business strategy; and
    other plans and objectives for future operations.    
    the risks described in the Risk Factors and
    elsewhere in this report;
    the timing and success of our drilling activities;
    the volatility of prices and supply of, and demand for, oil and
    natural gas;
    the numerous uncertainties inherent in estimating quantities of
    oil and natural gas reserves and actual future production rates
    and associated costs;
    our ability to successfully identify, execute or effectively
    integrate future acquisitions;
    the usual hazards associated with the oil and natural gas
    industry, including fires, well blowouts, pipe failure, spills,
    explosions and other unforeseen hazards;
    our ability to effectively market our oil and natural gas;
    the availability of rigs, equipment, supplies and personnel;
    our ability to discover or acquire additional reserves;
    our ability to satisfy future capital requirements;
    changes in regulatory requirements;
    general economic and competitive conditions;
    our ability to retain key members of our senior management and
    key employees; and
    continued hostilities in the Middle East and other sustained
    military campaigns and acts of terrorism or sabotage. 3




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DEFINITIONS  The following are abbreviations and definitions of terms
    commonly used in the oil and gas industry and this report.
    Natural gas equivalents and crude oil equivalents are determined
    using the ratio of six Mcf to one barrel. All references to
    us, our, we or Bois
    dArc mean Bois dArc Energy, Inc., including as
    the successor to Bois dArc Energy, LLC and where
    applicable, its consolidated subsidiaries.
  Bbl
  Bcf
  Bcfe
  Completion
  Condensate
  Development well
  Dry hole
  Exploratory well
  Gross
  MBbls
  MBbls/d
  Mcf
  Mcfe
  MMBbls
  MMcf
  MMcf/d
  MMcfe
  Net
  Net production
  Oil
  Operator
  Proved developed reserves
  Proved developed non-producing
 4




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##### Table of Contents



Proved developed producing
  Proved reserves
  Proved undeveloped reserves
  PV 10 Value
  Recompletion
  Reserve life
  Reserve replacement
  Royalty
  3-D
    seismic
  Working interest
  Workover
 5




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PART I  ITEMS 1.
    and 2.
    BUSINESS
    AND PROPERTIES  General
      Strengths
  Experienced Management and Technical Team.
  Substantial Drilling Inventory.
  Operational Capabilities.
  Technical Approach. 3-D
  Strong Balance Sheet.
  Business
    Strategy
    Grow Through Exploration.
 6




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Focus on the Gulf of Mexico Shelf.
  Generate Prospects Internally. 3-D
  Pursue Leasehold Acquisitions.
  Operate Core Properties.
  
    exercise greater control over the cost, timing and scope of our
    activities;
    more effectively utilize our platforms, processing facilities,
    flowlines and pipelines; and
    maintain a lower cost structure.  Exploit Existing Reserves. 3-D
  Maintain Flexible Capital Expenditure
    Budget.
  Primary
    Operating Areas
   7




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##### Table of Contents



Net Oil


Net Gas(MBbls)


(MMcf)


MMcfe


%


PV 10
    Value(1)


%(In thousands)Ship Shoal 111 and the Ship Shoal
    113 Unit


8,261



71,854



121,417



35
%

$
438,315



33
%South Pelto 5 and South
    Timbalier 9, 11 and 16


1,406



25,204



33,643



10
%


145,955



11
%Ship Shoal 66, 67, 68, 69 and
    South Pelto 1


3,603



9,818



31,436



9
%


124,364



9
%Ship Shoal 97, 98, 99, 106, 107,
    109 and 110


500



25,872



28,873



8
%


95,415



7
%South Pelto 22


1,336



13,428



21,445



6
%


91,283



7
%South Timbalier 29, 30 and 38


1,079



8,983



15,457



4
%


65,076



5
%Vermillion 51 and South Marsh
    Island 220


159



14,009



14,962



4
%


56,940



4
%South Timbalier 34 and 50 and
    South Pelto 15


1,063



6,306



12,685



4
%


50,230



4
%Vermillion 87, 122 and 127


624



8,400



12,141



4
%


49,879



4
%Ship Shoal 134, 135 and 146






12,050



12,050



4
%


42,667



3
%Other


2,394



25,539



39,902



12
%


156,996



13
%Total


20,425



221,463



344,011



100
%


1,317,120



100
%Discounted Future Income Taxes


(236,109
)Standardized Measure of Discounted
    Future Net Cash Flows

$
1,081,011    (1)
    
    The PV 10 Value excludes future
    income taxes related to the future net cash flows. The
    standardized measure of future net cash flows represents the
    present value of future cash flows attributable to our proved
    oil and natural gas reserves after income tax discounted at 10%.  Ship
    Shoal 111 and the Ship Shoal 113 Unit
    South
    Pelto 5 and South Timbalier 9, 11, 16
   8




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Ship
    Shoal 66, 67, 68, 69 and South Pelto 1
    Ship
    Shoal 97, 98, 99, 107, 109 and 110
    South
    Pelto 22
    South
    Timbalier 29, 30 and 38
    Vermilion
    51 and South Marsh Island 220
   9




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South
    Timbalier 34 and 50 and South Pelto 14 and 15
    Vermilion
    87, 122 and 127
    Ship
    Shoal 134, 135 and 146
    Oil and
    Natural Gas Reserves
    Oil


Gas


Total(MBbls)


(MMcf)


(MMcfe)


PV 10
    Value(1)(In thousands)Proved Developed Producing


4,701



50,222



78,428


$
322,383Proved Developed Non-producing


10,936



132,781



198,393



772,499Proved Undeveloped


4,788



38,460



67,190



222,238Total Proved


20,425



221,463



344,011



1,317,120Discounted Future Income Taxes


(236,109
)Standardized Measure of Discounted
    FutureNet Cash
    Flows(1)

$
1,081,011    (1)
    
    The PV 10 Value represents the
    discounted future net cash flows attributable to our proved oil
    and gas reserves before income tax, discounted at 10%. Although
    it is a non-GAAP measure, we believe that the presentation of
    the PV 10 Value is relevant and useful to our investors because
    it presents the discounted future net cash flows attributable to
    our proved reserves prior to taking into account corporate
    future income taxes and our current tax structure. We use this
    measure when assessing the potential return on investment
    related to our oil and gas properties. The standardized measure
    of discounted future net cash flows represents the present value
    of future cash flows attributable to our proved oil and natural
    gas reserves after income tax, discounted at 10%. 10




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Drilling
    Activity Summary
    Year Ended December 31,2004


2005


2006Gross


Net


Gross


Net


Gross


NetExploratory Wells:Oil


4



3.2



2



1.5







Gas


5



3.8



8



6.4



8



7.0Dry


5



3.1



1



0.6



3



2.514



10.1



11



8.5



11



9.5Development Wells:Oil


1



1.0



3



3.0







Gas


9



7.1



6



5.2



2



1.7Dry










2



2.0







10



8.1



11



10.2



2



1.7Total Wells


24



18.2



22



18.7



13



11.2    11




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Producing
    Well Summary
    Oil


GasGross


Net


Gross


NetOffshore:Louisiana


10



7.9



9



7.0Federal


34



17.9



58



43.8Total


44



25.8



67



50.8     Acreage
    Developed


Undeveloped


TotalGross


Net


Gross


Net


Gross


NetOffshore:Louisiana


5,484



4,929



1,304



1,304



6,788



6,233Federal


213,771



156,623



171,208



171,208



384,979



327,831Total


219,255



161,552



172,512



172,512



391,767



334,064     Expires in 2007


23
%Expires in 2008


23
%Expires in 2009


24
%Expires in 2010


18
%Expires in 2011


12
%100
%    12




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Markets
    and Customers
      Regulation
  General.
  Regulation and transportation of natural
    gas.
 13




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ultra vires
    Federal leases.
       14




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Oil and Natural Gas Liquids Transportation
    Rates.
  cost-of-service
      Environmental regulations.
 15




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16




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and/or
    and/or
  Right-to-Know
 17




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Regulation of oil and natural gas exploration and
    production.
  State Regulation.
  Competition
    Office
    and Operations Facilities
  (713) 228-0438.
  Employees
   18




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Directors,
    Executive Officers and Other Management
    Name

Position

AgeM. Jay Allison

Chairman of the Board of Directors


51Wayne L. Laufer

Chief Executive Officer and
    Director


61Gary W. Blackie

President and Director


58Roland O. Burns

Senior Vice President, Chief
    Financial Officer, Secretary and Director


46John L. Duvieilh

Director


46D. Michael Harris

Director


60David K. Lockett

Director


52Cecil E. Martin, Jr

Director


65David W. Sledge

Director


50   Executive
    Officers
    M. Jay Allison
  Wayne Laufer
  Gary Blackie
 19




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Roland Burns
  Outside
    Directors
  John Duvieilh
  Michael Harris
  David Lockett
  Cecil Martin
  David Sledge
  Available
    Information
  (713) 228-0438.
 20




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1-800-SEC-0330. Form 10-K, Form 10-Q, Form 8-K
  ITEM 1A.
    RISK
    FACTORS    Risks
    Relating to the Oil and Natural Gas Industry and Our
    Business
  A
    substantial or extended decline in oil and natural gas prices
    may adversely affect our business, financial condition, cash
    flow, liquidity or results of operations and our ability to meet
    our capital expenditure obligations and financial commitments
    and to implement our business strategy.
    
    the domestic and foreign supply of oil and natural gas;
    the price and quantity of imports of crude oil and natural gas;
    political conditions and events in other oil-producing and
    natural gas-producing countries, including embargoes, continued
    hostilities in the Middle East and other sustained military
    campaigns, and acts of terrorism or sabotage;
    the actions of the Organization of Petroleum Exporting
    Countries, or OPEC;
    domestic government regulation, legislation and policies;
    the level of global oil and natural gas inventories;
    weather conditions;
    technological advances affecting energy consumption;
    the price and availability of alternative fuels; and
    overall economic conditions.    
    our revenues, profitability and cash flow from operations;
    the value of our proved oil and natural gas reserves;
    the economic viability of certain of our drilling prospects;
    our borrowing capacity; and
    our ability to obtain additional capital.   21




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Prospects
    that we decide to drill may not yield oil or natural gas in
    commercially viable quantities or quantities sufficient to meet
    our targeted rate of return.
  and/or
  We are
    vulnerable to operational, regulatory and other risks associated
    with the Gulf of Mexico, including the effects of adverse
    weather conditions such as hurricanes, because we currently
    explore and produce exclusively in that area.
    
    adverse weather conditions, including hurricanes and tropical
    storms;
    delays or decreases in production, the availability of
    equipment, facilities or services;
    delays or decreases in the availability of capacity to
    transport, gather or process production; and
    changes in the regulatory environment.     22




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We
    need to replace our reserves at a faster rate than companies
    whose reserves have longer production periods. Our failure to
    replace our reserves would result in decreasing reserves and
    production over time.
    We
    plan to conduct exploration, development and production
    operations on the deep shelf and in the deepwater of the Gulf of
    Mexico, which presents greater operating and financial risks
    than conventional shelf operations.
  state-of-the-art and/or
  We
    plan to pursue acquisitions as part of our growth strategy and
    there are risks in connection with acquisitions.
   23




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
    recoverable reserves;
    exploration potential;
    future oil and natural gas prices;
    operating costs; and
    potential environmental and other liabilities.      Our
    business involves many uncertainties and operating risks that
    can prevent us from realizing profits and can cause substantial
    losses.
      
    unusual or unexpected geological formations;
    fires;
    explosions;
    blow-outs and surface cratering;
    uncontrollable flows of natural gas, oil and formation water;
    natural disasters, such as hurricanes, tropical storms and other
    adverse weather conditions;
    pipe, cement, subsea well or pipeline failures;
    casing collapses;
    mechanical difficulties, such as lost or stuck oil field
    drilling and service tools;
    abnormally pressured formations; and
    environmental hazards, such as natural gas leaks, oil spills,
    pipeline ruptures and discharges of toxic gases. 24




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
    injury or loss of life;
    severe damage to and destruction of property, natural resources
    and equipment;
    pollution and other environmental damage;
    clean-up
    responsibilities;
    regulatory investigation and penalties;
    suspension of our operations; and
    repairs to resume operations.  We
    have limited operating history as a stand-alone entity and might
    not be able to operate our business or implement our operating
    strategy successfully.
    We
    operate in a highly competitive industry, and our failure to
    remain competitive with our competitors, many of which have
    greater resources than we do, could adversely affect our results
    of operations.
    Our
    competitors may use superior technology that we may be unable to
    afford or which would require costly investment by us in order
    to compete.
   25




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Our
    bank credit facility has substantial restrictions and financial
    covenants, which may reduce our operating
    flexibility.
    
    borrow additional money;
    merge, consolidate or dispose of assets;
    make certain types of investments;
    enter into transactions with our affiliates; and
    pay dividends and distributions.    Substantial
    exploration and development activities could require significant
    outside capital, which could dilute the value of our common
    stock and restrict our activities. Also, we may not be able to
    obtain needed capital or financing on satisfactory terms, which
    could lead to a limitation of our future business opportunities
    and a decline in our oil and natural gas reserves.
    If oil
    and natural gas prices decrease, we may be required to
    write-down the carrying values
    and/or the
    estimates of total reserves of our oil and natural gas
    properties, which would constitute a non-cash charge to earnings
    and adversely affect our results of operations.
   26




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Our
    reserve estimates depend on many assumptions that may turn out
    to be inaccurate. Any material inaccuracies in our reserve
    estimates or underlying assumptions will materially affect the
    quantities and present value of our reserves.
      Three
    of our field areas comprise approximately 54% of the PV 10 Value
    of our total proved reserves. If our reserve estimates in these
    areas turn out to be inaccurate, there may be a material adverse
    effect on our financial condition.
    If we
    are unsuccessful at marketing our oil and natural gas at
    commercially acceptable prices, our profitability will
    decline.
    
    the availability and capacity of gathering systems and pipelines;
    federal and state regulation of production and transportation; 27




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
    changes in supply and demand; and
    general economic conditions.    Market
    conditions or operational impediments may hinder our access to
    oil and natural gas markets or delay our
    production.
    We
    depend on our key management personnel and the loss of either of
    these individuals could have a material adverse effect on our
    operations.
    The
    unavailability or high cost of drilling rigs, equipment,
    supplies, personnel and oil field services could adversely
    affect our ability to execute our exploration and development
    plans on a timely basis and within our budget.
    Our
    insurance coverage may not be sufficient or may not be available
    to cover some liabilities or losses that we may
    incur.
   28




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We are
    subject to extensive governmental laws and regulations that may
    adversely affect the cost, manner or feasibility of doing
    business.
    
    lease permit restrictions;
    drilling bonds and other financial responsibility requirements,
    such as plug and abandonment bonds;
    spacing of wells;
    unitization and pooling of properties;
    safety precautions;
    regulatory requirements; and
    taxation.    
    personal injuries;
    property and natural resource damages;
    well reclamation costs; and
    governmental sanctions, such as fines and penalties.    Compliance
    with MMS regulations could significantly delay or curtail our
    operations or require us to make material expenditures, all of
    which could have a material adverse effect on our financial
    condition or results of operations.
   29




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Our
    operations may incur substantial liabilities to comply with
    environmental laws and regulations.
    
    require the acquisition of a permit before drilling commences;
    restrict the types, quantities and concentration of substances
    that can be released into the environment in connection with
    drilling and production activities;
    limit or prohibit drilling activities on certain lands lying
    within wilderness, wetlands and other protected areas; and
    impose substantial liabilities for pollution resulting from our
    operations.    
    the assessment of administrative, civil and criminal penalties;
    the incurrence of investigatory or remedial obligations; and
    the imposition of injunctive relief.    Provisions
    of our articles of incorporation, bylaws and Nevada law will
    make it more difficult to effect a change in control of us,
    which could adversely affect the price of our common
    stock.
    
    allowing for authorized but unissued shares of common and
    preferred stock;
    a classified board of directors;
    requiring special stockholder meetings to be called only by our
    chairman of the board, our chief executive officer, a majority
    of the board or the holders of at least 10% of our outstanding
    stock entitled to vote at a special meeting;
    requiring advance notice procedures with respect to stockholder
    proposals and director nominations;
    requiring removal of directors by a supermajority stockholder
    vote;
    prohibiting cumulative voting in the election of
    directors; and
    Nevada control share laws that may limit voting rights in shares
    representing a controlling interest in us.   30




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Risks
    Related to Our Relationship With Comstock
  As
    long as Comstock owns a substantial amount of our outstanding
    common stock, Comstock will have significant influence over
    matters to be submitted to our stockholders for approval. This
    ownership may adversely affect the value of our common stock and
    inhibit potential changes of control.
    
    the composition of our board of directors and, through it, any
    determination with respect to our business direction and
    policies, including the appointment and removal of officers;
    incentive compensation, which may affect our ability to retain
    key employees;
    mergers or other business combinations;
    our acquisition or disposition of assets;
    a takeover by a third party;
    our financing decisions and capital raising activities;
    payment of dividends on our common stock; and
    amendments to our articles of incorporation or bylaws.    Certain
    of our executive officers and directors face conflicts of
    interest relating to the positions they hold with other
    entities, which could be resolved in a manner adverse to us and
    harm our business.
    
    the allocation of new investments between us and Comstock;
    the allocation of time and resources between us and Comstock;
    financing decisions made by us and Comstock; and
    the terms of the services agreement with Comstock.  case-by-case
 31




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Comstock
    is not prohibited from competing with us, which could adversely
    affect our ability to succeed.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   32




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES    High


Low2005 


First Quarter

$



$
Second
    Quarter(1)


15.61



11.50Third Quarter


17.66



13.40Fourth Quarter


18.00



13.58   High


Low2006 


First Quarter

$
19.94


$
13.75Second Quarter


18.89



13.78Third Quarter


17.13



14.41Fourth Quarter


16.76



14.10    (1)
    
    May 6, 2005 to June 30,
    2005.          Number of securitiesNumber of securities


Weighted average


authorized for futureto be issued upon


exercise price of


issuance under equityexercise of


outstanding


compensation plansoutstanding options


options


(excluding outstanding options)Equity compensation plans approved
    by stockholders


3,350,500


$
7.70



1,892,550
(1)    (1)
    
    Plus 11% of any additional
    issuances of common stock each year beginning on each subsequent
    January 1.   33




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ITEM 6.
    SELECTED
    FINANCIAL DATA    Statement
    of Operations Data:
 Bois dArc EnergyCombined Bois dArc Energy Predecessors


Period fromPeriod from


InceptionJanuary 1,


(July 16,2004 to


2004) to


Year EndedYear Ended December 31,


July 15,


December 31,


December 31,2002


2003


2004


2004


2005


2006(In thousands except per share data)Oil and gas sales

$
76,067


$
133,450


$
70,341


$
72,721


$
184,436


$
254,710Operating expenses:Oil and gas
    operating(1)


14,725



22,290



15,233



16,602



37,089



53,400Exploration


5,458



800



2,676



12,040



16,794



18,708Depreciation, depletion and
    amortization


32,490



44,285



22,831



21,761



42,854



77,591Impairment






500











590



1,632General and administrative, net


2,600



3,481



1,450



2,641



9,331



11,374Total operating expenses


55,273



71,356



42,190



53,044



106,658



162,705Income from operations


20,794



62,094



28,151



19,677



77,778



92,005Other income (expenses):Interest income


81



154



75



74



222



330Interest expense


(10,818
)


(9,580
)


(4,453
)


(2,665
)


(3,775
)


(6,696
)Formation costs














(1,838
)






Loss on disposal of assets


















(89
)


Other income






















597Income before income taxes


10,057



52,668



23,773



15,248



74,136



86,236Provision for income taxes


















(125,808
)


(31,212
)Net income before cumulative effect
    of change in accounting principle


10,057



52,668



23,773



15,248



(51,672
)


55,024Cumulative effect of change in
    accounting principle






(739
)














Net income

$
10,057


$
51,929


$
23,773


$
15,248


$
(51,672
)

$
55,024Income (loss) per share (unit):Basic

$
0.30


$
(0.89
)

$
0.87Diluted

$
0.30


$
(0.89
)

$
0.84Weighted average common and common
    stock equivalent shares (units) outstanding:Basic


50,000



57,909



63,391Diluted


50,485



57,909



65,278Pro forma computation related to
    conversion to a corporation for income tax purposes:Income before income taxes

$
10,057


$
52,668


$
23,773


$
15,248


$
74,136Pro forma provision for income taxes


(3,520
)


(18,434
)


(8,321
)


(5,807
)


(26,914
)Pro forma net income

$
6,537


$
34,234


$
15,452


$
9,441


$
47,222Pro forma income (loss) per share
    (unit):Basic

$
0.19


$
0.82Diluted

$
0.19


$
0.79Weighted average common and common
    stock equivalent shares (units) outstanding:Basic


50,000



57,909Diluted


50,485



59,655    (1)
    
    Includes lease operating costs and
    production and ad valorem taxes. 34




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##### Table of Contents



Balance
    Sheet Data:
  Combined Bois dArc Energy Predecessors


Bois dArc EnergyAs of December 31,


As of December 31,2002


2003


2004


2005


2006(In thousands)Cash and cash equivalents

$
12,311


$
22,019


$
2,416


$
12,043


$
9,487Property and equipment, net


348,004



413,412



511,477



661,931



827,795Total assets


377,170



461,693



530,583



712,902



885,501Bank debt


14,000



10,500







69,000



100,000Payable to Comstock
    Resources(1)


299,864



311,706



148,066







Stockholders equity


19,132



64,949



319,485



419,206



516,610    (1)
    
    Payable to Comstock Resources of
    our predecessors represents advances made to Comstock Offshore
    by Comstock to fund Comstock Offshores acquisition,
    development and exploration activities. Interest expense has
    been included in the combined financial statements on the
    advances made to Comstock Offshore based on Comstocks
    average interest costs under its bank credit facility. Payable
    to Comstock Resources of Bois dArc Energy, LLC represents
    advances made to us by Comstock in connection with our formation.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Overview
  Our Business.
  3-D
 35




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##### Table of Contents



3-D
           36




---



##### Table of Contents



Our Predecessors. 3-D 3-D
  Our Formation.
  Comparability of Results.
 37




---



##### Table of Contents



Results
    of Operations
    Combined Bois dArc


Bois dArcEnergy Predecessors


EnergyPeriod from


Period from


Combined


Bois dArc EnergyJanuary 1, 2004


Inception


Year Ended


Year Ended


Year Endedto July 15,


(July 16, 2004) to


December 31,


December 31,


December 31,2004


December 31, 2004


2004


2005


2006(In thousands, except per unit amounts)Revenues:Oil and gas sales

$
70,341


$
72,721


$
143,062


$
184,436


$
254,710Expenses:Oil and gas
    operating(1)

$
15,233


$
16,602


$
31,835


$
37,089


$
53,400Exploration

$
2,676


$
12,040


$
14,716


$
16,794


$
18,708Depreciation, depletion and
    amortization

$
22,831


$
21,761


$
44,592


$
42,854


$
77,591Net Production Data:Oil (MBbls)


832



779



1,611



1,155



1,383Natural gas (MMcf)


6,267



5,908



12,175



14,896



23,183Natural gas equivalent (MMcfe)


11,260



10,578



21,838



21,825



31,481Average Sales Price:Oil ($/Bbl)

$
36.50


$
44.45


$
40.36


$
52.88


$
64.66Natural gas ($/Mcf)

$
6.38


$
6.45


$
6.41


$
8.28


$
7.13Average equivalent price ($/Mcfe)

$
6.25


$
6.87


$
6.55


$
8.45


$
8.09Expenses ($ per
    Mcfe):Oil and gas
    operating(1)

$
1.35


$
1.57


$
1.46


$
1.70


$
1.70Depreciation, depletion and
    amortization(2)

$
2.02


$
2.04


$
2.04


$
1.95


$
2.45    (1)
    
    Includes lease operating costs and
    production and ad valorem taxes.(2)
    
    Represents depreciation, depletion
    and amortization of oil and gas properties only. 38




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##### Table of Contents



Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Oil and gas sales.
  Oil and gas operating expenses.
  Impairment.
  Exploration expense. 3-D 3-D
  Depreciation, depletion and amortization.
  General and administrative expenses.
  Interest expense.
  Income taxes.
 39




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##### Table of Contents



Net income.
  Year
    Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
  Oil and gas sales.
  Oil and gas operating expenses.
  Impairment.
  Exploration expense. 3-D 3-D
  Depreciation, depletion and amortization.
  General and administrative expenses.
  Interest expense.
 40




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##### Table of Contents



Income taxes.
  Net income.
  Liquidity
    and Capital Resources
       41




---



##### Table of Contents



2005


2006(In thousands)Acquisitions of proved oil and gas
    properties

$



$
18,148Acquisitions of unproved oil and
    gas leasehold


4,968



2,979Exploration
    drilling(1)


63,018



128,983Development drilling


77,601



23,360Offshore facilities


22,000



50,764Other development costs


19,975



20,376Other


2,209



1,611Total

$
189,771


$
246,221    (1)
    
    Excludes geological and geophysical
    expenses which are not capitalized and capitalized costs of
    asset retirement obligations.             42




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##### Table of Contents



one-to-one
    2007


2008


2009


2010


2011


Thereafter


Total(In thousands)Bank credit facility

$



$



$
100,000


$



$



$



$
100,000Interest on debt obligations


6,850



6,850



2,458















16,158Operating leases


383



388



402



412



418



142



2,145Contracted drilling services


28,840























28,840Acquisition of seismic data


5,250



8,250



















13,500$
41,323


$
15,488


$
102,860


$
412


$
418


$
142


$
160,643         Critical
    Accounting Policies
     43




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##### Table of Contents



Successful efforts accounting.
  Oil and natural gas reserve quantities.
  Impairment of oil and gas properties.
 44




---



##### Table of Contents



Asset retirement obligations.
  Federal Taxation.
  Stock-Based Compensation.
     45




---



##### Table of Contents



New accounting standards.
    accrue-in-advance
  Related
    Party Transactions
    ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS  Oil and
    Natural Gas Prices
   46




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##### Table of Contents



Interest
    Rates
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA          ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Evaluation of disclosure controls and
    procedures. Rule 13a-15(b) Rule 13a-15(e)) Form 10-K.
  Changes in internal control over financial
    reporting. Rule 13a-15(f)
 47




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##### Table of Contents



Managements
    Report on Internal Control Over Financial Reporting
      Form 10-K,
 48




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
    on Internal Control over Financial Reporting
                     49




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##### Table of Contents



ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS
    AND EXECUTIVE OFFICERS OF THE REGISTRANT  Form 10-K,
  Code of Ethics.
 ITEM 11.EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT AND RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE   ITEM 14.PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   50




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##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements:
    Report of Independent Registered
    Public Accounting Firm






F-2Consolidated Balance Sheets as of
    December 31, 2005 and 2006






F-3Combined Statements of Operations
    for the period from January 1, 2004 to July 15, 2004
    and Consolidated Statements of Operations for the period from
    Inception (July 16, 2004) to December 31, 2004
    and the Years Ended December 31, 2005 and 2006






F-4Consolidated Statement of Changes
    in Members Equity for the Year Ended December 31,
    2004 and Consolidated Statement of Changes in Members and
    Stockholders Equity for the Years Ended December 31,
    2005 and 2006






F-5Combined Statements of Cash Flows
    for the period from January 1, 2004 to July 15, 2004
    and Consolidated Statements of Cash Flows for the period from
    Inception (July 16, 2004) to December 31, 2004
    and the Years Ended December 31, 2005 and 2006






F-6Notes to Combined and Consolidated
    Financial Statements






F-7     Exhibits:
    Exhibit No.

Description2.1

Contribution Agreement, dated as
    of July 16, 2004, by and among Bois dArc Energy, LLC,
    Bois dArc Properties, LP, Bois dArc Resources, Ltd.,
    Wayne L. Laufer, Gary W. Blackie, Haro Investments LLC, Comstock
    Offshore, LLC, Comstock Resources, Inc. and such other persons
    listed on the signature pages thereto (incorporated by reference
    to Exhibit 10.2 to Comstock Resources, Inc.s
    Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2004 (File
    No. 0-16741)).3.1

Articles of Incorporation
    (incorporated by reference to Exhibit 3.1 to our Quarterly
    Report on
    Form 10-Q
    for the quarter ended March 31, 2005).3.2

Bylaws (incorporated by reference
    to Exhibit 3.5 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).3.3

Articles of Organization of Bois
    dArc Energy, LLC (incorporated by reference to
    Exhibit 3.1 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).3.4

Amended and Restated Operating
    Agreement, dated as of August 23, 2004 to be effective
    July 16, 2004, of Bois dArc Energy, LLC (incorporated
    by reference to Exhibit 3.2 to our Registration Statement
    on
    Form S-1
    (File
    No. 333-119511)).3.5

First Amendment, dated as of
    September 29, 2004, to the Amended and Restated Operating
    Agreement of Bois dArc Energy, LLC (incorporated by
    reference to Exhibit 3.3 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).3.6

Second Amendment, dated as of
    January 26, 2005, to the Amended and Restated Operating
    Agreement of Bois dArc Energy, LLC (incorporated by
    reference to Exhibit 3.6 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)). 51




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##### Table of Contents



Exhibit No.

Description3.7

Third Amendment, effective as of
    July 16, 2004, to the Amended and Restated Operating
    Agreement of Bois dArc Energy, LLC (incorporated by
    reference to Exhibit 3.7 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).3.8

Fourth Amendment, dated as of
    April 13, 2005, to the Amended and Restated Operating
    Agreement of Bois dArc Energy, LLC (incorporated by
    reference to Exhibit 3.8 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).3.9

Fifth Amendment, effective as of
    July 16, 2004, to the Amended and Restated Operating
    Agreement of Bois dArc Energy, LLC (incorporated by
    reference to Exhibit 3.9 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).4.1

Specimen Stock Certificate of
    Common Stock (incorporated by reference to Exhibit 4.3 to
    our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).10.1#

Amended and Restated Long-Term
    Incentive Plan of Bois dArc Energy, Inc. (incorporated by
    reference to Exhibit 10.2 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).10.2#

Form of Option Agreement under the
    Bois dArc Energy, Inc. Long-Term Incentive Plan
    (incorporated by reference to Exhibit 99.1 to our Quarterly
    Report on
    Form 10-Q
    for the quarter ended March 31, 2005).10.3#

Form of Restricted Stock Agreement
    under the Bois dArc Energy, Inc. Long-Term Incentive Plan
    (incorporated by reference to Exhibit 99.2 to our Quarterly
    Report on
    Form 10-Q
    for the quarter ended March 31, 2005).10.4#

Employment Agreement, dated as of
    July 16, 2004, between Bois dArc Energy, LLC and Gary
    W. Blackie (incorporated by reference to Exhibit 10.3 to
    our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).10.5#

Employment Agreement, dated as of
    July 16, 2004, between Bois dArc Energy, LLC and
    Wayne L. Laufer (incorporated by reference to Exhibit 10.4
    to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).10.6

Credit Agreement dated
    May 11, 2005 between Bois dArc Energy, Inc., and the
    Bank of Nova Scotia as Administrative Agent and Issuing Bank,
    Calyon New York Branch, as Syndication Agent, AmSouth Bank as
    Documentation Agent and the other lenders (incorporated by
    reference to Exhibit 10.1 to our Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2005).10.7

First Amendment to Credit
    Agreement dated as of May 8, 2006 among Bois dArc
    Energy, Inc., the Banks and other Financial Institutions party
    thereto (incorporated by reference to Exhibit 10.1 to our
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2006).10.8

Second Amendment to Credit
    Agreement dated as of October 31, 2006 among Bois
    dArc Energy, Inc., the Banks and other Financial
    Institutions party thereto (incorporated by reference to
    Exhibit 10.1 to our Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2006).10.9

Services Agreement dated as of
    July 16, 2004, between Comstock Resources, Inc. and Bois
    dArc Energy, LLC (incorporated by reference to
    Exhibit 10.3 to Comstock Resources, Inc.s Quarterly
    Report on
    Form 10-Q
    for the quarter ended June 30, 2004 (File
    No. 0-16741)).10.10

Lease Agreement dated
    December 1, 2004 between Texas Tower Limited and Bois
    dArc Energy, LLC (incorporated by reference to
    Exhibit 10.8 to our Registration Statement on
    Form S-1
    (File
    No. 333-119511)).10.11

Stock Purchase Agreement dated
    August 25, 2006, between Bois dArc Energy, Inc. and
    Comstock Resources, Inc. (incorporated by reference to
    Exhibit 2.1 to our
    Form 8-K
    dated August 25, 2006).21*

List of Subsidiaries.23.1*

Consent of Ernst & Young
    LLP.23.2*

Consent of Lee Keeling and
    Associates, Inc.31.1*

Chief Executive Officer
    certification under Section 302 of the Sarbanes-Oxley Act
    of 2002.31.2*

Chief Financial Officer
    certification under Section 302 of the Sarbanes-Oxley Act
    of 2002.32.1+

Chief Executive Officer
    certification under Section 906 of the Sarbanes-Oxley Act
    of 2002.32.2+

Chief Financial Officer
    certification under Section 906 of the Sarbanes-Oxley Act
    of 2002.    *
    
    Filed herewith.+
    
    Furnished herewith.#
    
    Management contract or compensatory
    plan document. 52




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##### Table of Contents



SIGNATURES
    BOIS dARC ENERGY, INC.
  By:
    /s/  WAYNE
    L. LAUFER        Date: February 28, 2007
    /s/  M.
    JAY ALLISONM.
    Jay Allison

Chairman of the Board of Directors

February 28, 2007/s/  WAYNE
    L. LAUFERWayne
    L. Laufer

Chief Executive Officer and
    Director (Principal Executive Officer)

February 28, 2007/s/  GARY
    W. BLACKIEGary
    W. Blackie

President and Director

February 28, 2007/s/  ROLAND
    O. BURNSRoland
    O. Burns

Senior Vice President, Chief
    Financial Officer, Secretary, Treasurer and Director (Principal
    Financial and Accounting Officer)

February 28, 2007/s/  JOHN
    L. DUVIEILHJohn
    L. Duvieilh

Director

February 28, 2007/s/  D.
    MICHAEL
    HARRISD.
    Michael Harris

Director

February 28, 2007/s/  DAVID
    K. LOCKETTDavid
    K. Lockett

Director

February 28, 2007/s/  CECIL
    E. MARTIN,
    JR.Cecil
    E. Martin, Jr.

Director

February 28, 2007/s/  DAVID
    W. SLEDGEDavid
    W. Sledge

Director

February 28, 2007  53




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##### Table of Contents



BOIS
    dARC ENERGY, INC.
  FINANCIAL STATEMENTS
  INDEX
  Report of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets as of December 31, 2005 and 2006


F-3Combined Statements
    of Operations of the Bois dArc Predecessors for the period
    from January 1, 2004 to July 15, 2004 and Consolidated
    Statements of Operations of Bois dArc Energy, Inc. for the
    period from Inception (July 16, 2004) to
    December 31, 2004 and the Years Ended December 31,
    2005 and 2006


F-4Consolidated
    Statement of Changes in Members Equity for the Year Ended
    December 31, 2004 and Consolidated Statement of Changes in
    Members and Stockholders Equity for the Years Ended
    December 31, 2005 and 2006


F-5Combined Statements
    of Cash Flows of the Bois dArc Predecessors for the period
    from January 1, 2004 to July 15, 2004 and Consolidated
    Statements of Cash Flows of Bois dArc Energy, Inc. for the
    period from Inception (July 16, 2004) to
    December 31, 2004 and the Years Ended December 31,
    2005 and 2006


F-6Notes to
    Consolidated Financial Statements


F-7  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-2




---



##### Table of Contents



BOIS
    dARC ENERGY, INC
  CONSOLIDATED BALANCE SHEETS
 As of December 31, 2005 and 2006
 December 31,2005


2006(In thousands)ASSETSCash and Cash Equivalents

$
12,043


$
9,487Accounts Receivable:Oil and gas sales


25,520



27,018Joint interest operations


8,364



11,494Prepaid Expenses


4,245



8,795Total current assets


50,172



56,794Oil and Gas Properties:Unevaluated properties


13,533



9,511Proved properties


299,947



331,019Wells and related equipment and
    facilities


620,778



832,718Accumulated depreciation,
    depletion and amortization


(274,434
)


(348,643
)Net oil and gas properties


659,824



824,605Other Property and Equipment, net
    of accumulated depreciation of $875 and $1,311 at
    December 31, 2005 and 2006, respectively


2,107



3,190Other Assets


799



912$
712,902


$
885,501LIABILITIES AND
    STOCKHOLDERS EQUITYShort-term Debt

$



$
3,250Accounts Payable


62,982



60,776Income Taxes Payable


952



3,867Accrued Expenses


2,472



975Total current liabilities


66,406



68,868Long-term Debt


69,000



100,000Deferred Income Taxes Payable


123,256



151,959Reserve for Future Abandonment
    Costs


35,034



48,064Total liabilities


293,696



368,891Commitments and ContingenciesStockholders Equity:Common stock  $0.01
    par, 100,000,000 shares authorized, 64,155,000 and
    66,433,500 shares issued and outstanding at
    December 31, 2005 and 2006, respectively


642



664Additional paid-in capital


454,988



497,346Retained earnings (deficit)


(36,424
)


18,600Total stockholders equity


419,206



516,610$
712,902


$
885,501   The accompanying notes are an
    integral part of these statements.
 F-3




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##### Table of Contents



BOIS
    dARC ENERGY, INC.
 BOIS dARC ENERGY PREDECESSORS
  COMBINED STATEMENT OF OPERATIONS
 For the period from January 1, 2004 to July 15,
    2004
  CONSOLIDATED STATEMENTS OF OPERATIONS
 For the period from Inception (July 16, 2004) to
    December 31, 2004
 and for the Years Ended December 31, 2005 and 2006
  Combined Bois dArc


Bois dArc EnergyEnergy Predecessors


Period fromPeriod from


InceptionJanuary 1, 2004


(July 16, 2004) to


Year Ended December 31,to July 15, 2004


December 31, 2004


2005


2006(In thousands except per share amounts)Oil and gas sales

$
70,341


$
72,721


$
184,436


$
254,710Operating expenses:Oil and gas operating


15,233



16,602



37,089



53,400Exploration


2,676



12,040



16,794



18,708Depreciation, depletion and
    amortization


22,831



21,761



42,854



77,591Impairments










590



1,632General and administrative, net


1,450



2,641



9,331



11,374Total operating expenses


42,190



53,044



106,658



162,705Income from operations


28,151



19,677



77,778



92,005Other income (expenses):Interest income


75



74



222



330Other income














597Interest expense


(4,453
)


(2,665
)


(3,775
)


(6,696
)Formation costs






(1,838
)






Loss on sale of assets










(89
)


Total other income (expenses)


(4,378
)


(4,429
)


(3,642
)


(5,769
)Income before income taxes


23,773



15,248



74,136



86,236Provision for income taxes










(125,808
)


(31,212
)Net income

$
23,773


$
15,248


$
(51,672
)

$
55,024Income (loss) per share (unit):Basic

$
0.30


$
(0.89
)

$
0.87Diluted

$
0.30


$
(0.89
)

$
0.84Weighted average common and common
    stock equivalent shares (units) outstanding:Basic


50,000



57,909



63,391Diluted


50,485



57,909



65,278Pro forma computation related to
    conversion to a corporation for income tax purposes:Income before income taxes

$
23,773


$
15,248


$
74,136Pro forma provision for income
    taxes


(8,321
)


(5,807
)


(26,914
)Pro forma net income

$
15,452


$
9,441


$
47,222Pro forma earnings per share
    (unit):Basic

$
0.19


$
0.82Diluted

$
0.19


$
0.79Weighted average common and common
    stock equivalent shares (units) outstanding:Basic


50,000



57,909Diluted


50,485



59,655   The accompanying notes are an
    integral part of these statements.
 F-4




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
    COMBINED STATEMENT OF CHANGES IN EQUITY
    For the period from January 1, 2004 to July 15,
    2004CONSOLIDATED STATEMENTS OF CHANGES
    IN MEMBERS AND STOCKHOLDERS EQUITYFor the period from Inception (July 16, 2004) to
    December 31, 2004 and
    For the Years Ended December 31, 2005 and 2006
  Combined Bois dArc Energy Predecessors


Bois dArc EnergyCommon


Additional


RetainedComstock


Bois dArc





Common


Class A


Class B


Stock Par


Paid In


EarningsOffshore


Participants


Combined


Shares


Units


Units


Value


Capital


(Deficit)


Total(In thousands)Balance at December 31, 2003

$
(13,201
)

$
78,150


$
64,949






$



$



$



$



$



$
Distributions to owners






(946
)


(946
)


























Contributions of assets, net of
    liabilities assumed


(370
)


(87,406
)


(87,776
)






10



304,227















304,237Net income


13,571



10,202



23,773























15,248



15,248Balance at December 31, 2004


















10



304,227











15,248



319,485Conversion from LLC to a corporation














50,000



(10
)


(304,227
)


500



303,727







(10
)Public offering of common stock














12,000











120



144,960







145,080Stock issuance costs






























(1,818
)






(1,818
)Stock-based compensation














2,155











22



8,119







8,141Net income (loss)


































(51,672
)


(51,672
)Balance at December 31, 2005














64,155











642



454,988



(36,424
)


419,206Issuance of common shares














2,250











22



35,843







35,865Stock issuance costs






























(16
)






(16
)Exercise of stock options














20















125







125Tax benefit of stock option
    exercises






























29







29Stock-based compensation














9















6,377







6,377Net income


































55,024



55,024Balance at December 31, 2006

$



$



$




66,434


$



$



$
664


$
497,346


$
18,600


$
516,610   The accompanying notes are an
    integral part of these statements.
 F-5




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##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
 COMBINED
    STATEMENT OF CASH FLOWS
    For the period from January 1, 2004 to July 15,
    2004  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
    For the period from Inception (July 16, 2004) to
    December 31, 2004 and
    For the Years Ended December 31, 2005 and 2006
  CombinedBois dArcEnergyPredecessors


Bois dArc EnergyPeriod from


Period fromJanuary 1,


Inception2004 to


(July 16, 2004) toJuly 15,


December 31,


Year Ended December 31,2004


2004


2005


2006(In thousands)CASH FLOWS FROM OPERATING
    ACTIVITIES:Net income (loss)

$
23,773


$
15,248


$
(51,672
)

$
55,024Adjustments to reconcile net income
    to net cash provided by operating activities:Deferred income taxes










123,256



26,257Depreciation, depletion and
    amortization


22,831



21,761



42,854



77,591Impairments










590



1,632Dry hole costs and lease impairments


1,527



10,892



2,353



14,070Stock based compensation






2,506



5,634



6,377Excess tax benefit from stock based
    compensation














(29
)Amortization of loan costs










141



243Loss on sale of assets










89



Increase (decrease) in accounts
    receivable


(8,659
)


7,282



(19,186
)


(4,628
)Increase in other current assets


(199
)


(1,464
)


(2,769
)


(1,300
)Increase (decrease) in accounts
    payable and accrued expenses


11,715



(6,776
)


30,360



3,172Net cash provided by operating
    activities


50,988



49,449



131,650



178,409CASH FLOWS FROM INVESTING
    ACTIVITIES:Formation of Bois dArc
    Energy, net of cash distributed






(24,054
)






Capital expenditures and
    acquisitions


(83,273
)


(59,703
)


(185,998
)


(247,705
)Proceeds from sale of assets










160



Net cash used for investing
    activities


(83,273
)


(83,757
)


(185,838
)


(247,705
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Borrowings from Comstock Resources


31,649



64,889



16,000



Repayments to Comstock Resources










(164,066
)


Borrowings under bank credit
    facility










126,000



71,000Repayments under bank credit
    facility


(1,944
)


(28,175
)


(57,000
)


(40,000
)Proceeds from issuance of
    Class A Units






10







Redemption of Class A Units










(10
)


Excess tax benefit from stock based
    compensation














29Proceeds from issuance of common
    stock










145,080



35,990Stock and debt issuance costs










(2,189
)


(279
)Distributions to equity owners


(946
)










Net cash provided by financing
    activities


28,759



36,724



63,815



66,740Net increase (decrease) in cash and
    cash equivalents


(3,526
)


2,416



9,627



(2,556
)Cash and cash equivalents,
    beginning of period


22,019







2,416



12,043Cash and cash equivalents, end of
    period

$
18,493


$
2,416


$
12,043


$
9,487Cash paid for interest payments

$
218


$
2,665


$
3,270


$
6,627Cash paid (refunded) for income
    taxes

$



$



$
1,600


$
(435
)   The accompanying notes are an
    integral part of these statements.
 F-6




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##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED
    FINANCIAL STATEMENTS
  (1)
    Organization
    and Basis of Presentation    3-D 3-D
   F-7




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Contributed toBois dArcEnergy(In thousands)Cash

$
17,030Other current assets


21,992Property and equipment, net


482,697Total assets


521,719Current liabilities and bank loan


(66,788
)Payable to Comstock Resources


(83,177
)Reserve for future abandonment


(26,443
)Total liabilities


(176,408
)Net assets


345,311Cash distributed


(41,084
)Net contribution

$
304,227      F-8




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         (2)  Summary
    of Significant Accounting Policies
    Principles
    of Consolidation
    Reclassifications
   F-9




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Use of
    Estimates in the Preparation of Financial
    Statements
    Concentration
    of Credit Risk and Accounts Receivable
    Fair
    Value of Financial Instruments
    Property
    and Equipment
  unit-of-production unit-of-production
 F-10




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Segment
    Reporting
    Major
    Purchasers
    Revenue
    Recognition and Gas Balancing
   F-11




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   General
    and Administrative Expense
    Period fromInceptionPeriod from


(July 16,January 1,


2004) to2004 to July 15,


December 31,


Year Ended December 31,2004


2004


2005


2006(In thousands)General and administrative expense

$
3,514


$
4,303


$
12,364


$
15,856Operating fee income


(2,064
)


(1,662
)


(3,033
)


(4,482
)General and administrative
    expense, net

$
1,450


$
2,641


$
9,331


$
11,374     Stock-based
    Compensation
     F-12




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##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Income
    Taxes
      Comprehensive
    Income
    Statements
    of Cash Flows
    Earnings
    per Share
   F-13




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Period from Inception


Year Ended December 31,(July 16, 2004) through December 31, 2004


2005


2006Shares





Income


Shares


Per ShareIncome


(Units)(1)


Per Share


(Loss)


(Units)(1)


(Unit)(1)


Income


Shares


Per Share(In thousands except per share data)Basic Earnings Per
    Share:Net Income

$
15,248



50,000


$
0.30


$
(51,672
)


57,909


$
(0.89
)

$
55,024



63,391


$
0.87Diluted Earnings Per
    Share:Net Income

$
15,248



50,000


$
0.30


$
(51,672
)


57,909


$
(0.89
)

$
55,024



63,391


$
0.87Effect of Dilutive Securities:Stock Grants and Stock Options






485












(2)










1,887Net Income

$
15,248



50,485


$
0.30


$
(51,672
)


57,909


$
(0.89
)

$
55,024



65,278


$
0.84    (1)
    
    LLC Units were converted to
    equivalent common shares as if the Companys conversion to
    a corporation had occurred at Inception.(2)
    
    For the year ended
    December 31, 2005 1,746 equivalent shares relating to stock
    grants and options were anti-dilutive to the net loss and
    excluded from the computation.    2004


2005


2006(In thousandsexcept per share data)Weighted average anti-dilutive
    stock options






27



124Weighted average exercise price





$
15.55


$
16.50   Asset
    Retirement Obligations
   F-14




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Period fromInceptionPeriod from


(July 16,January 1,


2004) to2004 to July 15,


December 31,


Year Ended December 31,2004


2004


2005


2006(In thousands)Beginning asset retirement
    obligations

$
24,876


$
26,443


$
28,253


$
35,034New wells placed on production and
    changes in estimates


797



1,566



5,276



12,493Acquisition liabilities assumed














3,315Liabilities settled






(591
)


(422
)


(5,111
)Accretion expense


770



835



1,927



2,333Ending asset retirement obligations

$
26,443


$
28,253


$
35,034


$
48,064   New
    Accounting Standards
      accrue-in-advance
  (3)  Acquisition
   F-15




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##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (4)  Bank
    Credit Facility
    one-to-one
  (5)  Stockholders
    and Members Equity
       F-16




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (6)  Long-term
    Incentive Plan
    Stock Options.
    2004


2005


2006Weighted average grant date fair
    value

$
4.55


$
7.63


$
9.63Weighted average assumptions usedExpected volatility


29.8%



37.0%



39.5%Expected lives


7.5 yrs.



8.5 yrs.



9.8 yrs.Risk-free interest rates


4.0%



4.2%



5.5%Expected dividend yield










    F-17




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Number of




Number ofExercise

Options


Weighted Average

OptionsPrice

Outstanding


Remaining Life

Exercisable(in years)$ 6.00



2,758,000


7.5


1,102,000$12.00



15,000


8.4


3,000$12.80



25,000


3.4


25,000$15.55



200,000


8.6


9,000$15.48



50,000


9.3


$16.47



192,500


9.0


$14.23



40,000


9.5


$15.62



40,000


9.6


$16.75



30,000


9.6


$ 7.70



3,350,500


7.7


1,139,000Exercisable



1,139,000


7.4     2004


2005


2006Weighted





Weighted





WeightedNumber of


Average


Number of


Average


Number of


AverageOptions


Exercise Price


Options


Exercise Price


Options


Exercise PriceOutstanding at January 1










2,800,000


$
6.00



3,105,000


$
6.84Granted


2,800,000


$
6.00



305,000


$
14.60



364,000


$
16.02Exercised


















(19,500
)

$
6.46Forfeited


















(99,000
)

$
11.65Outstanding at December 31


2,800,000


$
6.00



3,105,000


$
6.84



3,350,500


$
7.70Vested and Exercisable at
    December 31










560,000


$
6.00



1,139,000


$
6.24   F-18




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  For the Years Ended December 31,2004

2005

2006(In thousands)Cash received for options exercised

$



$



$
125Actual tax benefit realized

$



$



$
172     Restricted Stock Grants.
    Number of


WeightedRestricted


Average GrantShares (Units)


PriceGranted in 2004


2,145,000


$
6.80Outstanding at January 1, 2005


2,145,000


$
6.80Granted


10,000


$
12.00Vested


(429,000
)

$
6.80Outstanding at January 1, 2006


1,726,000


$
6.83Granted


25,000


$
15.48Vested


(429,000
)

$
6.80Forfeited


(16,000
)

$
10.05Outstanding at December 31,
    2006


1,306,000


$
6.97    F-19




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (7)  Retirement
    Plan
    (8)  Commitments
    and Contingencies
  Contingencies
    Commitments
    (In thousands)2007

$
3832008


3882009


4022010


4122011


418Thereafter


142$
2,145     (9)  Related
    Party Transactions
   F-20




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         (10)  Oil
    and Gas Producing Activities
    Capitalized
    Costs
  As of December 31,2005


2006(In thousands)Proved properties

$
920,725


$
1,163,737Unproved properties


13,533



9,511Accumulated depreciation, deletion
    and amortization


(274,434
)


(348,643
)$
659,824


$
824,605  F-21




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Costs
    Incurred
  Period fromInceptionPeriod from


(July 16,January 1,


2004) to2004 to July 15,


December 31,


Year Ended December 31,2004


2004


2005


2006(In thousands)Property acquisitions:Proved properties

$
726


$



$



$
20,091Unproved properties


2,049



120



5,159



2,979Development costs


51,140



30,865



124,139



103,254Exploration costs


31,298



30,261



77,750



133,620$
85,213


$
61,246


$
207,048


$
259,944   (11)  Exploration
    Venture
  3-D 3-D
   F-22




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (12)  Income
    Taxes
      2005


2006(In thousands)Current

$
2,552


$
4,955Deferred


123,256



26,257$
125,808


$
31,212     2005


2006(In thousands)Income tax provision at the
    federal statutory rate of 35%

$
25,948


$
30,183Benefit for period not taxed as an
    entity


(9,039
)


Deferred taxes recognized upon
    conversion to a taxable entity


108,199



Nondeductible stock-based
    compensation


700



1,019Other






10$
125,808


$
31,212      F-23




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Period fromInceptionPeriod from


(July 16,January 1,


2004) to


Year Ended2004 to July 15,


December 31,


December 31,2004


2004


2005(In thousands)Income before income taxes

$
23,773


$
15,248


$
74,136Effective pro forma income tax rate


35%



38%



36%Pro forma income tax expense

$
8,321


$
5,807


$
26,914     2005


2006(In thousands)Net deferred tax assets
    (liabilities):Property and equipment

$
(125,073
)

$
(154,763
)Stock based compensation


1,355



2,539Other assets


462



265$
(123,256
)

$
(151,959
)   (13)  Supplementary
    Quarterly Financial Data (Unaudited)
  2005 
  First


Second


Third


Fourth


Total(In thousands, except per share (unit) amounts)Total oil and gas sales

$
43,476


$
48,685


$
43,434


$
48,841


$
184,436Income from operations

$
18,785


$
20,713


$
21,087


$
17,193


$
77,778Net income (loss)

$
17,062


$
(92,441
)(2)

$
13,269


$
10,438


$
(51,672
)Pro forma net income as if
    converted to a corporation

$
10,974


$
12,541


$
13,269


$
10,438


$
47,222Net income per share (unit):Basic

$
0.34
(1)

$
(1.62
)

$
0.21


$
0.17


$
(0.89
)Diluted

$
0.33
(1)

$
(1.62
)(3)

$
0.21


$
0.16


$
(0.89
)(3)Pro forma net income per share
    (unit):Basic

$
0.21
(1)

$
0.22


$
0.21


$
0.17


$
0.82Diluted

$
0.21
(1)

$
0.21


$
0.21


$
0.16


$
0.79    (1)
    
    LLC units were converted to
    equivalent common shares as if the Companys conversion to
    a corporation had occurred at inception.(2)
    
    Includes $108.2 million
    deferred tax provision upon conversion to a taxable entity.(3)
    
    Basic and diluted are the same due
    to the net loss. F-24




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2006 
  First


Second


Third


Fourth


Total(In thousands, except per share amounts)Total oil and gas sales

$
61,833


$
59,607


$
66,996


$
66,274


$
254,710Income from operations

$
27,228


$
24,086


$
20,041


$
20,650


$
92,005Net income

$
16,781


$
14,783


$
11,584


$
11,876


$
55,024Net income per share:Basic

$
0.27


$
0.24


$
0.18


$
0.18


$
0.87Diluted

$
0.26


$
0.23


$
0.18


$
0.18


$
0.84   (14)  Oil
    and Gas Reserves Information (Unaudited)
    Period from


Period from InceptionJanuary 1, 2004 to


(July 16, 2004) to


Year Ended


Year EndedJuly 15, 2004


December 31, 2004


December 31, 2005


December 31, 2006Oil


Gas


Oil


Gas


Oil


Gas


Oil


Gas(MBbls)


(MMcf)


(MBbls)


(MMcf)


(MBbls)


(MMcf)


(MBbls)


(MMcf)Proved Reserves:Beginning of Year


19,518



204,744



18,436



183,887



18,732



192,935



19,530



205,986Revisions of Previous Estimates


(845
)


(39,298
)


(623
)


2,880



(969
)


(22,043
)


(221
)


1,875Extensions and Discoveries


595



24,708



1,698



12,076



2,922



49,990



1,934



33,454Purchases of Minerals in Place


























565



3,331Production


(832
)


(6,267
)


(779
)


(5,908
)


(1,155
)


(14,896
)


(1,383
)


(23,183
)End of Year


18,436



183,887



18,732



192,935



19,530



205,986



20,425



221,463Proved Developed
    Reserves:Beginning of Year


14,185



152,915



14,214



161,297



14,278



167,730



15,316



175,838End of Year


14,214



161,297



14,278



167,730



15,316



175,838



15,636



183,003  F-25




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2004


2005


2006(In thousands)Cash Flows Relating to Proved
    Reserves:Future Cash Flows

$
1,949,678


$
3,234,675


$
2,506,965Future Costs:Production


(331,887
)


(313,342
)


(439,122
)Development and Abandonment


(124,121
)


(169,238
)


(236,995
)Income Taxes






(920,987
)


(319,142
)Future Net Cash Flows


1,493,670



1,831,108



1,511,70610% Discount Factor


(496,946
)


(548,683
)


(430,695
)Standardized Measure of
    Discounted FutureNet Cash Flows

$
996,724


$
1,282,425


$
1,081,011       Period fromPeriod from


Inception (July 16,January 1, 2004


2004) to


Year Ended


Year Endedto July 15,


December 31,


December 31,


December 31,2004


2004


2005


2006(In thousands)Standardized Measure, Beginning of
    Period

$
1,064,049


$
993,124


$
996,724


$
1,282,425Net Change in Sales Price, Net of
    Production Costs


15,659



29,256



687,692



(750,583
)Development Costs Incurred During
    the Period Which Were Previously Estimated


50,354



19,523



28,319



43,736Revisions of Quantity Estimates


(134,727
)


(3,119
)


(162,481
)


2,304Accretion of Discount


53,203



49,656



99,672



192,803Changes in Future Development and
    Abandonment Costs


(22,097
)


(11,274
)


(22,674
)


(44,955
)Extensions and Discoveries


90,215



90,093



475,944



206,676Purchases of Reserves in Place














16,527Sales, Net of Production Costs


(55,108
)


(56,119
)


(147,347
)


(201,310
)Changes in Timing of Production


(68,424
)


(114,416
)


(27,815
)


(76,112
)Net Changes in Income Taxes










(645,609
)


409,500Standardized Measure, End of Period

$
993,124


$
996,724


$
1,282,425


$
1,081,011  F-26




---



##### Table of Contents



BOIS
    dARC ENERGY, INC.
    BOIS dARC ENERGY PREDECESSORS
  NOTES TO COMBINED AND CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2004


2005


2006Crude Oil (Per Barrel)

$
42.14


$
57.92


$
59.29Natural Gas (Per Mcf)

$
6.01


$
10.21


$
5.85    F-27