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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark
One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For
The Quarter Ended March 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File No. 001-32494
 BOIS dARC ENERGY, INC.
  NEVADA
    
    20-1268553(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)
 600 Travis Street, Suite 5200, Houston, Texas 77002
 (713) 228-0438
  Yes þ
    
    No o
  o o þ
  Yes o
    
    No þ




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BOIS dARC ENERGY, INC.
 QUARTERLY REPORT
 For The Quarter Ended March 31, 2006
 INDEX
 PagePART I. Financial InformationItem 1. Financial Statements (Unaudited):Consolidated Balance Sheets  March 31, 2006 and December 31, 2005
    
    
    4Consolidated Statements of Operations  Three Months Ended March 31, 2006 and 2005
    
    
    5Consolidated Statement of Change in Stockholders Equity  Three Months ended March 31, 2006
    
    
    6Consolidated Statements of Cash Flows  Three Months Ended March 31, 2006 and 2005
    
    
    7Notes to Consolidated and Combined Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosure About Market Risks
    
    
    19Item 4. Controls and Procedures
    
    
    20PART II. Other InformationItem 6. Exhibits
    
    
    21Section 302 Certification of the CEOSection 302 Certification of the CFOCertification of the CEO Pursuant to Section 906Certification of the CFO Pursuant to Section 906First Amendment to Credit AgreementSection 302 Certification of the Chief Executive OfficerSection 302 Certification of the Chief Financial OfficerCertification for the CEO as required by Section 906Certification for the CFO as required by Section 906
 2




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PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
 INTRODUCTORY NOTE
  3




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BOIS dARC ENERGY, INC.
 
 CONSOLIDATED BALANCE SHEETS
(Unaudited)
 March 31,
    
    
    December 31,2006
    
    
    2005(In thousands)ASSETSCash and cash equivalents
    
    $
    7,593
    
    
    $
    12,043Accounts Receivable:Oil and gas sales
    
    
    20,144
    
    
    
    25,520Joint interest operations
    
    
    9,443
    
    
    
    8,364Prepaid Expenses
    
    
    2,392
    
    
    
    4,245Total current assets
    
    
    39,572
    
    
    
    50,172Property and Equipment:Proved properties
    
    
    301,680
    
    
    
    299,947Unevaluated properties
    
    
    12,579
    
    
    
    13,533Wells and related equipment and facilities
    
    
    663,348
    
    
    
    620,778Accumulated depreciation, depletion and amortization
    
    
    (288,193
    )
    
    
    (274,434
    )Net oil and gas properties
    
    
    689,414
    
    
    
    659,824Other Property and Equipment, net of accumulated
 depreciation of $963 and
$875 as of March 31, 2006 and December 31, 2005, respectively
    
    
    2,022
    
    
    
    2,107Other Assets
    
    
    720
    
    
    
    799$
    731,728
    
    
    $
    712,902LIABILITIES AND STOCKHOLDERS EQUITYAccounts Payable
    
    $
    31,838
    
    
    $
    48,005Accrued Expenses
    
    
    19,154
    
    
    
    18,401Total current liabilities
    
    
    50,992
    
    
    
    66,406Long-Term Debt
    
    
    76,000
    
    
    
    69,000Deferred Income Taxes Payable
    
    
    131,508
    
    
    
    123,256Reserve for Future Abandonment Costs
    
    
    35,778
    
    
    
    35,034Total liabilities
    
    
    294,278
    
    
    
    293,696Commitments and ContingenciesStockholders Equity:Common stock  $0.01 par, 100,000,000 shares authorized, 64,170,000 and
64,155,000 outstanding at March 31, 2006 and December 31, 2005, respectively
    
    
    642
    
    
    
    642Additional paid-in capital
    
    
    456,451
    
    
    
    454,988Retained earnings (deficit)
    
    
    (19,643
    )
    
    
    (36,424
    )Total stockholders equity
    
    
    437,450
    
    
    
    419,206$
    731,728
    
    
    $
    712,902
  4




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BOIS dARC ENERGY, INC.
 
 CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
 Three Months EndedMarch 31,2006
    
    
    2005(In thousands except per share orunit amounts)Oil and gas sales
    
    $
    61,833
    
    
    $
    43,476Operating expenses:Oil and gas operating
    
    
    12,440
    
    
    
    7,707Exploration
    
    
    4,531
    
    
    
    3,136Depreciation, depletion and amortization
    
    
    14,393
    
    
    
    11,821General and administrative
    
    
    3,241
    
    
    
    2,027Total operating expenses
    
    
    34,605
    
    
    
    24,691Income from operations
    
    
    27,228
    
    
    
    18,785Other income (expenses):Interest income
    
    
    69
    
    
    
    45Interest expense
    
    
    (1,077
    )
    
    
    (1,768
    )Total other expenses
    
    
    (1,008
    )
    
    
    (1,723
    )Income before income taxes
    
    
    26,220
    
    
    
    17,062Provision for income taxes
    
    
    (9,439
    )
    
    
    Net income
    
    $
    16,781
    
    
    $
    17,062Income per share (unit):Basic
    
    $
    0.27
    
    
    $
    0.34Diluted
    
    $
    0.26
    
    
    $
    0.33Pro forma computation related to conversion to a corporation for income tax purposes:Income before income taxes
    
    
    
    
    
    $
    17,062Pro forma provision for income taxes
    
    
    
    
    
    
    (6,088
    )Pro forma net income
    
    
    
    
    
    $
    10,974Pro forma earnings per share (unit):Basic
    
    
    
    
    
    
    0.22Diluted
    
    
    
    
    
    
    0.21Weighted average common and common stock equivalent shares (units) outstanding:Basic
    
    
    62,429
    
    
    
    50,000Diluted
    
    
    64,429
    
    
    
    51,627
  5




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BOIS dARC ENERGY, INC.
 
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
For the Three Months Ended March 31, 2006
(Unaudited)
 Additional
    
    
    RetainedCommon
    
    
    Paid in
    
    
    EarningsStock
    
    
    Capital
    
    
    (Deficit)
    
    
    Total(In thousands)Balance at January 1, 2006
    
    $
    642
    
    
    $
    454,988
    
    
    $
    (36,424
    )
    
    $
    419,206Stock-based compensation
    
    
    
    
    
    
    1,463
    
    
    
    
    
    
    
    1,463Net income
    
    
    
    
    
    
    
    
    
    
    16,781
    
    
    
    16,781Balance at March 31, 2006
    
    $
    642
    
    
    $
    456,451
    
    
    $
    (19,643
    )
    
    $
    437,450
  6




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BOIS dARC ENERGY, INC.
 
 CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 Three Months EndedMarch 31,2006
    
    
    2005(In thousands)CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    16,781
    
    
    $
    17,062Adjustments to reconcile net income to net cash provided by
operating activities:Deferred income taxes
    
    
    8,252
    
    
    
    Dry holes and leasehold impairments
    
    
    3,306
    
    
    
    Depreciation, depletion and amortization
    
    
    14,393
    
    
    
    11,821Stock-based compensation
    
    
    1,463
    
    
    
    1,357Amortization of loan costs
    
    
    79
    
    
    
    (Increase) decrease in accounts receivable
    
    
    4,297
    
    
    
    (4,112
    )(Increase) decrease in prepaid expenses
    
    
    1,853
    
    
    
    (90
    )Decrease in accounts payable and accrued expenses
    
    
    (17,673
    )
    
    
    (4,303
    )Net cash provided by operating activities
    
    
    32,751
    
    
    
    21,735CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (44,201
    )
    
    
    (36,232
    )Net cash used for investing activities
    
    
    (44,201
    )
    
    
    (36,232
    )CASH FLOWS FROM FINANCING ACTIVITIES:Borrowings from Comstock Resources
    
    
    
    
    
    
    16,030Borrowings under bank credit facility
    
    
    42,000
    
    
    
    Principal payments on bank credit facility
    
    
    (35,000
    )
    
    
    Net cash provided by financing activities
    
    
    7,000
    
    
    
    16,030Net increase (decrease) in cash and cash equivalents
    
    
    (4,450
    )
    
    
    1,533Cash and cash equivalents, beginning of period
    
    
    12,043
    
    
    
    2,416Cash and cash equivalents at end of period
    
    $
    7,593
    
    
    $
    3,949
  7




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BOIS dARC ENERGY, INC.
 
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
March 31, 2006
(Unaudited)
 (1) ORGANIZATION -
  (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
 Basis of Presentation
    Reclassifications
  General and Administrative Expense
  8




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BOIS dARC ENERGY, INC.
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS  (Continued)
 Stock-Based Compensation
   Stock options.
 WeightedWeighted
    
    AverageAverage
    
    RemainingExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    Value(In thousands)Options Outstanding
    
    
    3,107,000
    
    
    $
    6.89
    
    
    8.3 years
    
    $
    30,310Options Exercisable
    
    
    560,000
    
    
    $
    6.00
    
    
    8.3 years
    
    $
    5,964
 Restricted stock.
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BOIS dARC ENERGY, INC.
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS  (continued)
 Income Taxes
   Three MonthsEndedMarch 31, 2006(In thousands )Current
    
    $
    1,187Deferred
    
    
    8,252Provision for Income Taxes
    
    $
    9,439
 Pro Forma Income Tax Information
   Three MonthsEndedMarch 31, 2005(In thousands)Income before income taxes
    
    $
    17,062Effective pro forma income tax rate
    
    
    36
    %Pro forma income tax expense
    
    $
    6,088
 10




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BOIS dARC ENERGY, INC.
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS  (continued)
 Earnings Per Share (Unit)
  Three Months Ended March 31, 2006PerIncome
    
    
    Shares
    
    
    Share(In thousands, except per share amounts)Basic Earnings Per Share:Net Income
    
    $
    16,781
    
    
    
    62,429
    
    
    $
    0.27Diluted Earnings Per Share:Net Income
    
    $
    16,781
    
    
    
    62,429Effect of Dilutive Securities:Stock Grants and Options
    
    
    
    
    
    
    2,000Net Income Available to Common Stockholders With
Assumed Conversions
    
    $
    16,781
    
    
    
    64,429
    
    
    $
    0.26
 Three Months Ended March 31, 2005PerIncome
    
    
    Units(1)
    
    
    Unit(1)(In thousands, except per share amounts)Basic Earnings Per Unit:Net Income
    
    $
    17,062
    
    
    
    50,000
    
    
    $
    0.34Diluted Earnings Per Unit:Net Income
    
    $
    17,062
    
    
    
    50,000Effect of Dilutive Securities:Unit Grants and Options
    
    
    
    
    
    
    1,627Net Income Available to Unitholders With
Assumed Conversions
    
    $
    17,062
    
    
    
    51,627
    
    
    $
    0.33
 
 (1)
    
    LLC Units were converted to equivalent common shares as if the Companys conversion to a corporation had occurred at the
inception of Bois dArc Energy, LLC. 11




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BOIS dARC ENERGY, INC.
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS  (continued)
 Statements of Cash Flows
  Asset Retirement Obligations
  Three monthsEnded March 31,2006
    
    
    2005($ in thousands)Future abandonment liability  beginning of period
    
    $
    35,034
    
    
    $
    28,253Accretion expense
    
    
    546
    
    
    
    439New wells drilled
    
    
    198
    
    
    
    921Liabilities settled
    
    
    
    
    
    
    (218
    )Future abandonment liability  end of period
    
    $
    35,778
    
    
    $
    29,395
 (3) LONG-TERM DEBT -
   12




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BOIS dARC ENERGY, INC.
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS  (continued)
 (4) PAYABLE TO COMSTOCK RESOURCES -
  (5) STOCKHOLDERS EQUITY -
   (6) COMMITMENTS AND CONTINGENCIES -
 Contingencies
  (7) RELATED PARTY TRANSACTIONS -
  13




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BOIS dARC ENERGY, INC.
 NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS  (continued)
  14




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ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Comparability of Results
  Results of Operations
  Three months ended March 31,2006
    
    2005($ in thousands, except per unit amounts)Revenues:Oil and gas sales
    
    $
    61,833
    
    
    $
    43,476Expenses:Oil and gas operating(1)
    
    $
    12,440
    
    
    $
    7,707Exploration
    
    $
    4,531
    
    
    $
    3,136Depreciation, depletion and amortization
    
    $
    14,393
    
    
    $
    11,821Net Production Data:Oil (Mbbls)
    
    
    317
    
    
    
    351Natural gas (Mmcf)
    
    
    5,065
    
    
    
    4,051Natural gas equivalent (Mmcfe)
    
    
    6,968
    
    
    
    6,154Average Sales Price:Oil ($/Bbl)
    
    $
    60.95
    
    
    $
    47.63Natural gas ($/Mcf)
    
    $
    8.39
    
    
    $
    6.61Average equivalent price ($/Mcfe)
    
    $
    8.87
    
    
    $
    7.06Expenses ($  per Mcfe):Oil and gas operating(1)
    
    $
    1.79
    
    
    $
    1.25Depreciation, depletion and amortization(2)
    
    $
    2.05
    
    
    $
    1.91
 
 (1)
    
    Includes lease operating costs and production and ad valorem taxes.(2)
    
    Represents depreciation, depletion and amortization of oil and gas properties only.  15




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Revenues -
 Oil and gas sales.
 Costs and Expenses -
 Oil and gas operating expenses.
 Exploration expense.
 Depreciation, depletion and amortization. .
 General and administrative expenses.
 Interest expense.
 Income taxes
 16




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Net income.
 Critical Accounting Policies
   Liquidity and Capital Resources
    Three Months EndedMarch 31,2006
    
    
    2005(In thousands)Oil and gas exploration and development:Leasehold costs
    
    $
    978
    
    
    $
    100Development drilling
    
    
    11,823
    
    
    
    15,364Exploratory drilling
    
    
    26,312
    
    
    
    13,848Other development
    
    
    7,344
    
    
    
    8,24046,457
    
    
    
    37,552Other
    
    
    3
    
    
    
    267$
    46,460
    
    
    $
    37,819
  17




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18




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ON MARKET RISKS
 Oil and Natural Gas Prices.
 Interest Rates.
 19




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ITEM 4. CONTROLS AND PROCEDURES
   20




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PART II  OTHER INFORMATION
 
 ITEM 6. EXHIBITS
 Exhibit No.
 10.1*
    
    First Amendment to Credit Agreement dated May 8, 2006 among Bois dArc Energy, the Bank of Nova Scotia as
administrative agent, Calyon New York Branch, as syndication agent, AmSouth Bank, as documentation agent
and the lenders named therein.31.1*
    
    Section 302 Certification of the Chief Executive Officer.31.2*
    
    Section 302 Certification of the Chief Financial Officer.32.1*
    
    Certification for the Chief Executive Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification for the Chief Financial Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 21




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SIGNATURES
  BOIS dARC ENERGY, INC.Date: May 11, 2006
    /s/WAYNE L. LAUFERWayne L. Laufer, Chief Executive Officer(Principal Executive Officer)Date: May 11, 2006
    /s/ROLAND O. BURNSRoland O. Burns, Senior Vice President,Chief Financial Officer, Secretary, and Treasurer
(Principal Financial and Accounting Officer) 22