Comstock Resources is a leading independent natural gas producer with operations focused
on the development of the Haynesville Shale in North Louisiana and East Texas

News Releases Details

COMSTOCK RESOURCES, INC. REPORTS FIRST QUARTER 2024 FINANCIAL AND OPERATING RESULTS

FRISCO, TX, May 01, 2024 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended March 31, 2024.

Highlights of 2024's First Quarter

  • Continued weak natural gas prices weighed heavily on the first quarter results.
  • Natural gas and oil sales, including realized hedging gains, were $336 million.
  • Operating cash flow was $182 million or $0.65 per diluted share.
  • Adjusted EBITDAX for the quarter was $230 million.
  • Adjusted net loss was $8.5 million for the quarter.
  • Added $100.5 million of liquidity with a private placement equity offering to majority stockholder.
  • Solid results from the Haynesville shale drilling program with 14 (13.5 net) operated wells turned to sales since the Company's last update with an average initial production of 25 MMcf per day.
  • Added 198,000 net acres to Western Haynesville, increasing leasehold in the emerging play to over 450,000 net acres.
  • Latest four Western Haynesville wells were successful with initial production rates between 35 to 38 MMcf per day.
     

Financial Results for the Three Months Ended March 31, 2024

Comstock's natural gas and oil sales in the first quarter of 2024 totaled $336.0 million (including realized hedging gains of $48.0 million). Operating cash flow (excluding changes in working capital) generated in the first quarter of 2024 was $182.0 million, and net loss available to common stockholders for the first quarter was $14.5 million or $0.05 per share. Net loss in the quarter included a pre-tax $8.7 million unrealized loss on hedging contracts held for risk management. Excluding this item, adjusted net loss for the first quarter of 2024 was $8.5 million, or $0.03 per share.

Comstock's production cost per Mcfe in the first quarter averaged $0.76 per Mcfe, which was comprised of $0.34 for gathering and transportation costs, $0.25 for lease operating costs, $0.13 for production and other taxes and $0.04 for cash general and administrative expenses. Comstock's unhedged operating margin was 63% in the first quarter of 2024 and 68% after hedging.

Drilling Results

Comstock drilled 16 (14.3 net) operated horizontal Haynesville/Bossier shale wells in the first quarter of 2024 which had an average lateral length of 9,845 feet. Comstock turned 18 (16.3 net) operated wells to sales in the first quarter of 2024.

Since its last operational update in February, Comstock has turned 14 (13.5 net) operated Haynesville/Bossier shale wells to sales. These wells had initial daily production rates that averaged 25 MMcf per day. The completed lateral length of these wells averaged 8,031 feet.

Included in the wells turned to sales were four more successful Western Haynesville wells – the Glass RT #1, the Harrison WA #1, the Farley GD #1 and the Ingram Martin #1. The Glass RT #1 well was drilled to a total vertical depth of 18,346 feet and has a 9,292 foot completed lateral. The well's initial production rate was 36 MMcf per day. The Harrison WA #1 well was drilled to a total vertical depth of 19,361 feet and has an 8,866 foot completed lateral. The well's initial production rate was 35 MMcf per day. The Farley GD #1 well was drilled to a total vertical depth of 18,700 feet and has a 9,837 foot completed lateral. The well's initial production rate was 38 MMcf per day. The Ingram Martin #1 well was drilled to a total vertical depth of 17,748 feet and has a 7,764 foot completed lateral. The well's initial production rate was 38 MMcf per day. All of these wells were completed in the Haynesville Shale formation.

Other

Comstock also announced that its bank group reaffirmed the $2.0 billion borrowing base under its $1.5 billion revolving credit facility on April 30, 2024.

Earnings Call Information

Comstock has planned a conference call for 10:00 a.m. Central Time on May 2, 2024, to discuss the first quarter 2024 operational and financial results. Investors wishing to listen should visit the Company's website at www.comstockresources.com for a live webcast. Investors wishing to participate in the conference call telephonically will need to register at https://register.vevent.com/register/BI8bd2e2b2cbc74630942006 e39bfd6cb5. Upon registering to participate in the conference call, participants will receive the dial-in number and a personal PIN number to access the conference call. On the day of the call, please dial in at least 15 minutes in advance to ensure a timely connection to the call. The conference call will also be broadcast live in listen-only mode and can be accessed via the website URL: https://edge.media-server.com/mmc/p/qf4tpuda.

If you are unable to participate in the original conference call, a web replay will be available for twelve months beginning at 1:00 p.m. CT on May 2, 2024. The replay of the conference can be accessed using the webcast link: https://edge.media-server.com/mmc/p/qf4tpuda.

This press release may contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described herein. Although the Company believes the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct. Information concerning the assumptions, uncertainties and risks that may affect the actual results can be found in the Company's filings with the Securities and Exchange Commission ("SEC") available on the Company's website or the SEC's website at sec.gov.

Comstock Resources, Inc. is a leading independent natural gas producer with operations focused on the development of the Haynesville shale in North Louisiana and East Texas. The Company's stock is traded on the New York Stock Exchange under the symbol CRK.

COMSTOCK RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

    Three Months Ended
March 31,
 
    2024     2023  
Revenues:            
Natural gas sales   $ 287,083     $ 378,032  
Oil sales     876       1,942  
Total natural gas and oil sales     287,959       379,974  
Gas services     47,813       109,604  
Total revenues     335,772       489,578  
Operating expenses:            
Production and ad valorem taxes     17,908       14,906  
Gathering and transportation     47,099       45,574  
Lease operating     35,072       34,830  
Exploration           1,775  
Depreciation, depletion and amortization     190,689       133,983  
Gas services     48,680       101,295  
General and administrative     9,171       12,368  
Gain on sale of assets           (773 )
Total operating expenses     348,619       343,958  
Operating income (loss)     (12,847 )     145,620  
Other income (expenses):            
Gain from derivative financial instruments     39,307       66,409  
Other income     331       460  
Interest expense     (49,557 )     (38,270 )
Total other income (expenses)     (9,919 )     28,599  
Income (loss) before income taxes     (22,766 )     174,219  
(Provision for) benefit from income taxes     8,292       (39,716 )
Net income (loss)     (14,474 )     134,503  
Net loss attributable to noncontrolling interest     (1,847 )      
Net income (loss) available to Comstock   $ (16,321 )   $ 134,503  
             
Net income (loss) per share            
Basic   $ (0.05 )   $ 0.49  
Diluted   $ (0.05 )   $ 0.49  
Weighted average shares outstanding:            
Basic     277,962       276,551  
Diluted     277,962       276,551  
Dividends per share   $     $ 0.125  

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per unit amounts)

    Three Months Ended March 31,  
    2024     2023  
Natural gas production (MMcf)     139,443       127,067  
Oil production (Mbbls)     12       27  
Total production (MMcfe)     139,515       127,226  
             
Natural gas sales   $ 287,083     $ 378,032  
Natural gas hedging settlements (1)     47,995       10,383  
Total natural gas including hedging     335,078       388,415  
Oil sales     876       1,942  
Total natural gas and oil sales including hedging   $ 335,954     $ 390,357  
             
Average natural gas price (per Mcf)   $ 2.06     $ 2.98  
Average natural gas price including hedging (per Mcf)   $ 2.40     $ 3.06  
Average oil price (per barrel)   $ 73.00     $ 71.93  
Average price (per Mcfe)   $ 2.06     $ 2.99  
Average price including hedging (per Mcfe)   $ 2.41     $ 3.07  
             
Production and ad valorem taxes   $ 17,908     $ 14,906  
Gathering and transportation     47,099       45,574  
Lease operating     35,072       34,830  
Cash general and administrative (2)     5,755       10,321  
Total production costs   $ 105,834     $ 105,631  
             
Production and ad valorem taxes (per Mcfe)   $ 0.13     $ 0.12  
Gathering and transportation (per Mcfe)     0.34       0.36  
Lease operating (per Mcfe)     0.25       0.27  
Cash general and administrative (per Mcfe)     0.04       0.08  
Total production costs (per Mcfe)   $ 0.76     $ 0.83  
             
Unhedged operating margin     63 %     72 %
Hedged operating margin     68 %     73 %
             
Gas services revenue   $ 47,813     $ 109,604  
Gas services expenses     48,680       101,295  
Gas services margin   $ (867 )   $ 8,309  
             
Natural Gas and Oil Capital Expenditures:            
Unproved property acquisitions   $ 69,444     $ 40,695  
Total natural gas and oil properties acquisitions   $ 69,444     $ 40,695  
Exploration and Development:            
Development leasehold   $ 3,938     $ 8,743  
Exploratory drilling and completion     106,456       29,690  
Development drilling and completion     145,793       280,176  
Other development costs     37       6,097  
Total exploration and development capital expenditures   $ 256,224     $ 324,706  

(1)   Included in gain (loss) from derivative financial instruments in operating results.

(2)   Excludes stock-based compensation.

COMSTOCK RESOURCES, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)

    Three Months Ended
March 31,
 
    2024     2023  
ADJUSTED NET INCOME:            
Net income (loss)   $ (14,474 )   $ 134,503  
Unrealized (gain) loss from derivative financial instruments     8,688       (56,026 )
Exploration expense           1,775  
Gain on sale of assets           (773 )
Adjustment to income taxes     (2,752 )     12,528  
Adjusted net income (loss)   $ (8,538 )   $ 92,007  
             
Adjusted net income (loss) per share (2)   $ (0.03 )   $ 0.33  
Diluted shares outstanding     277,962       276,551  
             
             
ADJUSTED EBITDAX:            
Net income (loss)   $ (14,474 )   $ 134,503  
Interest expense     49,557       38,270  
Income taxes     (8,292 )     39,716  
Depreciation, depletion, and amortization     190,689       133,983  
Exploration           1,775  
Unrealized (gain) loss from derivative financial instruments     8,688       (56,026 )
Stock-based compensation     3,415       2,046  
Gain on sale of assets           (773 )
Total Adjusted EBITDAX (3)   $ 229,583     $ 293,494  

(1)   Adjusted net income (loss) is presented because of its acceptance by investors and by Comstock management as an indicator of the Company's profitability excluding non-cash unrealized gains and losses on derivative financial instruments, gains and losses on sales of assets and other unusual items.

(2)   Adjusted net income (loss) per share is calculated to include the dilutive effects of unvested restricted stock pursuant to the two-class method and performance stock units and preferred stock pursuant to the treasury stock method.

(3)   Adjusted EBITDAX is presented in the earnings release because management believes that adjusted EBITDAX, which represents Comstock's results from operations before interest, income taxes, and certain non-cash items, including depreciation, depletion and amortization, unrealized gains and losses on derivative financial instruments and exploration expense, is a common alternative measure of operating performance used by certain investors and financial analysts.
 

COMSTOCK RESOURCES, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands)

    Three Months Ended
March 31,
 
    2024     2023  
OPERATING CASH FLOW (1):            
Net income (loss)   $ (14,474 )   $ 134,503  
Reconciling items:            
Unrealized (gain) loss from derivative financial instruments     8,688       (56,026 )
Deferred income taxes     (8,287 )     39,180  
Depreciation, depletion and amortization     190,689       133,983  
Amortization of debt discount and issuance costs     1,984       1,997  
Stock-based compensation     3,415       2,046  
Gain on sale of assets           (773 )
Operating cash flow   $ 182,015     $ 254,910  
Decrease in accounts receivable     99,418       255,992  
(Increase) decrease in other current assets     5,576       (1,514 )
Decrease in accounts payable and accrued expenses     (115,470 )     (123,024 )
Net cash provided by operating activities   $ 171,539     $ 386,364  

 

    Three Months Ended
March 31,
 
    2024     2023  
FREE CASH FLOW (DEFICIT)(2):            
Operating cash flow   $ 182,015     $ 254,910  
Less:            
Exploration and development capital expenditures     (256,224 )     (324,706 )
Midstream capital expenditures     (5,298 )     (4,187 )
Other capital expenditures     (29 )     (356 )
Contributions from midstream partner     6,000        
Free cash deficit from operations   $ (73,536 )   $ (74,339 )
Acquisitions     (69,444 )     (40,695 )
Proceeds from divestitures           130  
Free cash deficit after acquisition and divestiture activity   $ (142,980 )   $ (114,904 )

(1)   Operating cash flow is presented in the earnings release because management believes it to be useful to investors as a common alternative measure of cash flows which excludes changes to other working capital accounts.

(2)   Free cash flow (deficit) from operations and free cash flow (deficit) after acquisition and divestiture activity are presented in the earnings release because management believes them to be useful indicators of the Company's ability to internally fund acquisitions and debt maturities after exploration and development capital expenditures, midstream and other capital expenditures, contributions from its midstream partner, proved and unproved property acquisitions, and proceeds from divestiture of natural gas and oil properties.

COMSTOCK RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

    March 31,
2024
    December 31,
2023
 
ASSETS            
Cash and cash equivalents   $ 6,420     $ 16,669  
Accounts receivable     132,012       231,430  
Derivative financial instruments     141,821       126,775  
Other current assets     77,811       86,619  
Total current assets     358,064       461,493  
Property and equipment, net     5,525,553       5,384,771  
Goodwill     335,897       335,897  
Operating lease right-of-use assets     97,728       71,462  
    $ 6,317,242     $ 6,253,623  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Accounts payable   $ 440,956     $ 523,260  
Accrued costs     80,863       134,466  
Operating leases     34,199       23,765  
Total current liabilities     556,018       681,491  
Long-term debt     2,702,375       2,640,391  
Deferred income taxes     461,748       470,035  
Derivative financial instruments     23,734        
Long-term operating leases     63,536       47,742  
Asset retirement obligation     31,249       30,773  
Total liabilities     3,838,660       3,870,432  
Stockholders' Equity:            
Common stock     146,101       139,214  
Additional paid-in capital     1,357,908       1,260,930  
Accumulated earnings     941,949       958,270  
Total stockholders' equity attributable to Comstock     2,445,958       2,358,414  
Noncontrolling interest     32,624       24,777  
Total stockholders' equity     2,478,582       2,383,191  
    $ 6,317,242     $ 6,253,623  

 


Ron Mills
Vice President of Finance and Investor Relations
Comstock Resources
972-668-8834
rmills@comstockresources.com

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Source: Comstock Resources, Inc.