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 SECOND QUARTER 2024 FINANCIAL AND OPERATING RESULTS

FRISCO, TX, July 30, 2024 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended June 30, 2024.

Highlights of 2024's Second Quarter

  • Very weak natural gas prices weighed heavily on the second quarter financial results.
  • Natural gas and oil sales, including realized hedging gains, were $278 million.
  • Operating cash flow was $118 million or $0.41 per diluted share.
  • Adjusted EBITDAX for the quarter was $167 million.
  • Adjusted net loss was $58.2 million or $0.20 per share for the quarter.
  • Enhanced liquidity with $400 million, 6.75% senior notes issuance.
  • Steady results from the Haynesville shale drilling program with 15 (14.4 net) operated wells turned to sales since the Company's last update with an average initial production of 21 MMcf per day.
     

Financial Results for the Three Months Ended June 30, 2024

Comstock's realized gas price for the second quarter of 2024 averaged $1.65 per Mcf without hedging and $2.12 per Mcf after hedging. As a result, Comstock's natural gas and oil sales in the second quarter of 2024 decreased to $278.2 million (including realized hedging gains of $60.6 million) despite a 4% increase in production as compared to the second quarter of 2023. Operating cash flow (excluding changes in working capital) generated in the second quarter of 2024 was $118.1 million, and net loss for the second quarter was $123.2 million or $0.43 per share. Net loss in the quarter included a pre-tax $85.8 million unrealized loss on hedging contracts held for risk management. Excluding this item, adjusted net loss for the second quarter of 2024 was $58.2 million, or $0.20 per share.

Comstock's production cost per Mcfe in the second quarter averaged $0.84 per Mcfe, which was comprised of $0.38 for gathering and transportation costs, $0.27 for lease operating costs, $0.14 for production and other taxes and $0.05 for cash general and administrative expenses. Comstock's unhedged operating margin was 50% in the second quarter of 2024 and 61% after hedging.

Financial Results for the Six Months Ended June 30, 2024

Natural gas and oil sales for the six months ended June 30, 2024 totaled $614.1 million (including realized hedging gains of $108.5 million). Operating cash flow (excluding changes in working capital) generated during the first six months of 2024 was $300.1 million, and net loss was $137.7 million or $0.49 per share. Net loss during the first six months of 2024 included a pre-tax $94.5 million unrealized loss on hedging contracts held for risk management. Excluding this item, adjusted net loss for the six months ended June 30, 2024 was $66.8 million or $0.24 per share.

Comstock's production cost per Mcfe during the six months ended June 30, 2024 averaged $0.79 per Mcfe, which was comprised of $0.36 for gathering and transportation costs, $0.26 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 57% during the first six months of 2024 and 65% after hedging.

Drilling Results

Comstock drilled 11 (9.2 net) operated horizontal Haynesville/Bossier shale wells in the second quarter of 2024 which had an average lateral length of 11,346 feet. Comstock turned 12 (11.7 net) operated wells to sales in the second quarter of 2024.

Since its last operational update in May, Comstock has turned 15 (14.4 net) operated Haynesville/Bossier shale wells to sales. These wells had initial daily production rates that averaged 21 MMcf per day. The completed lateral length of these wells averaged 9,802 feet.

Earnings Call Information

Comstock has planned a conference call for 10:00 a.m. Central Time on July 31, 2024, to discuss the second 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/BI3dd152694a074bc28172df7314b38 fa6. 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/w3stws2d.

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 July 31, 2024. The replay of the conference can be accessed using the webcast link: https://edge.media-server.com/mmc/p/w3stws2d.

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
June 30,		     Six Months Ended
June 30,		  
    2024     2023     2024     2023  
Revenues:                        
Natural gas sales   $ 216,527     $ 228,892     $ 503,610     $ 606,924  
Oil sales     1,074       860       1,950       2,802  
Total natural gas and oil sales     217,601       229,752       505,560       609,726  
Gas services     29,229       58,459       77,042       168,063  
Total revenues     246,830       288,211       582,602       777,789  
Operating expenses:                        
Production and ad valorem taxes     19,244       19,599       37,152       34,505  
Gathering and transportation     49,361       45,395       96,460       90,969  
Lease operating     34,805       34,031       69,877       68,861  
Exploration     —       —       —       1,775  
Depreciation, depletion and amortization     194,242       140,177       384,931       274,160  
Gas services     31,494       55,390       80,174       156,685  
General and administrative     10,177       10,038       19,348       22,406  
(Gain) loss on sale of assets     —       648       —       (125 )
Total operating expenses     339,323       305,278       687,942       649,236  
Operating income (loss)     (92,493 )     (17,067 )     (105,340 )     128,553  
Other income (expenses):                        
Gain (loss) from derivative financial instruments     (25,252 )     (4,495 )     14,055       61,914  
Other income     322       598       653       1,058  
Interest expense     (51,932 )     (39,188 )     (101,489 )     (77,458 )
Total other expenses     (76,862 )     (43,085 )     (86,781 )     (14,486 )
Income (loss) before income taxes     (169,355 )     (60,152 )     (192,121 )     114,067  
(Provision for) benefit from income taxes     46,106       14,446       54,398       (25,270 )
Net income (loss)     (123,249 )     (45,706 )     (137,723 )     88,797  
Net income attributable to noncontrolling interest     (3,061 )     —       (4,908 )     —  
Net income (loss) available to Comstock   $ (126,310 )   $ (45,706 )   $ (142,631 )   $ 88,797  
                         
Net income (loss) per share                        
Basic   $ (0.43 )   $ (0.17 )   $ (0.49 )   $ 0.32  
Diluted   $ (0.43 )   $ (0.17 )   $ (0.49 )   $ 0.32  
Weighted average shares outstanding:                        
Basic     289,670       276,669       283,816       276,610  
Diluted     289,670       276,669       283,816       276,610  
Dividends per share   $ —     $ 0.125     $ —     $ 0.250  

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

    Three Months Ended June 30,     Six Months Ended June 30,  
    2024     2023     2024     2023  
Natural gas production (MMcf)     130,861       126,307       270,304       253,374  
Oil production (Mbbls)     15       13       27       40  
Total production (MMcfe)     130,949       126,386       270,464       253,612  
                         
Natural gas sales   $ 216,527     $ 228,892     $ 503,610     $ 606,924  
Natural gas hedging settlements (1)     60,552       55,494       108,547       65,877  
Total natural gas including hedging     277,079       284,386       612,157       672,801  
Oil sales     1,074       860       1,950       2,802  
Total natural gas and oil sales including hedging   $ 278,153     $ 285,246     $ 614,107     $ 675,603  
                         
Average natural gas price (per Mcf)   $ 1.65     $ 1.81     $ 1.86     $ 2.40  
Average natural gas price including hedging (per Mcf)   $ 2.12     $ 2.25     $ 2.26     $ 2.66  
Average oil price (per barrel)   $ 71.60     $ 66.15     $ 72.22     $ 70.05  
Average price (per Mcfe)   $ 1.66     $ 1.82     $ 1.87     $ 2.40  
Average price including hedging (per Mcfe)   $ 2.12     $ 2.26     $ 2.27     $ 2.66  
                         
Production and ad valorem taxes   $ 19,244     $ 19,599     $ 37,152     $ 34,505  
Gathering and transportation     49,361       45,395       96,460       90,969  
Lease operating     34,805       34,031       69,877       68,861  
Cash general and administrative (2)     6,095       7,733       11,850       18,054  
Total production costs   $ 109,505     $ 106,758     $ 215,339     $ 212,389  
                         
Production and ad valorem taxes (per Mcfe)   $ 0.14     $ 0.15     $ 0.13     $ 0.14  
Gathering and transportation (per Mcfe)     0.38       0.36       0.36       0.36  
Lease operating (per Mcfe)     0.27       0.27       0.26       0.27  
Cash general and administrative (per Mcfe)     0.05       0.06       0.04       0.07  
Total production costs (per Mcfe)   $ 0.84     $ 0.84     $ 0.79     $ 0.84  
                         
Unhedged operating margin     50 %     54 %     57 %     65 %
Hedged operating margin     61 %     63 %     65 %     69 %
                         
Gas services revenue   $ 29,229     $ 58,459     $ 77,042     $ 168,063  
Gas services expenses     31,494       55,390       80,174       156,685  
Gas services margin   $ (2,265 )   $ 3,069     $ (3,132 )   $ 11,378  
                         
Natural Gas and Oil Capital Expenditures:                        
Unproved property acquisitions   $ 9,694     $ 15,953     $ 79,138     $ 56,648  
Total natural gas and oil properties acquisitions   $ 9,694     $ 15,953     $ 79,138     $ 56,648  
Exploration and Development:                        
Development leasehold   $ 2,592     $ 4,975     $ 6,530     $ 13,718  
Exploratory drilling and completion     52,392       74,622       158,848       104,312  
Development drilling and completion     151,350       231,038       297,143       511,214  
Other development costs     14,685       11,353       14,722       17,450  
Total exploration and development capital expenditures   $ 221,019     $ 321,988     $ 477,243     $ 646,694  

(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
June 30,		     Six Months Ended
June 30,		  
    2024     2023     2024     2023  
ADJUSTED NET INCOME (LOSS):                        
Net income (loss)   $ (123,249 )   $ (45,706 )   $ (137,723 )   $ 88,797  
Unrealized loss from derivative financial instruments     85,804       59,989       94,492       3,963  
Exploration expense     —       —       —       1,775  
(Gain) loss on sale of assets     —       648       —       (125 )
Adjustment to income taxes     (20,769 )     (13,892 )     (23,521 )     (1,364 )
Adjusted net income (loss)   $ (58,214 )   $ 1,039     $ (66,752 )   $ 93,046  
                         
Adjusted net income (loss) per share (2)   $ (0.20 )   $ 0.00     $ (0.24 )   $ 0.33  
Diluted shares outstanding     289,670       276,669       283,816       276,610  
                         
                         
ADJUSTED EBITDAX:                        
Net income (loss)   $ (123,249 )   $ (45,706 )   $ (137,723 )   $ 88,797  
Interest expense     51,932       39,188       101,489       77,458  
Income taxes     (46,106 )     (14,446 )     (54,398 )     25,270  
Depreciation, depletion, and amortization     194,242       140,177       384,931       274,160  
Exploration     —       —       —       1,775  
Unrealized loss from derivative financial instruments     85,804       59,989       94,492       3,963  
Stock-based compensation     4,082       2,305       7,497       4,351  
(Gain) loss on sale of assets     —       648       —       (125 )
Total Adjusted EBITDAX (3)   $ 166,705     $ 182,155     $ 396,288     $ 475,649  

(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
June 30,		     Six Months Ended
June 30,		  
    2024     2023     2024     2023  
OPERATING CASH FLOW (1):                        
Net income (loss)   $ (123,249 )   $ (45,706 )   $ (137,723 )   $ 88,797  
Reconciling items:                        
Unrealized loss from derivative financial instruments     85,804       59,989       94,492       3,963  
Deferred income taxes     (46,144 )     (13,910 )     (54,431 )     25,270  
Depreciation, depletion and amortization     194,242       140,177       384,931       274,160  
Amortization of debt discount and issuance costs     3,399       1,994       5,383       3,991  
Stock-based compensation     4,082       2,305       7,497       4,351  
(Gain) loss on sale of assets     —       648       —       (125 )
Operating cash flow   $ 118,134     $ 145,497     $ 300,149     $ 400,407  
(Increase) decrease in accounts receivable     (23,187 )     60,218       76,231       316,210  
(Increase) decrease in other current assets     (730 )     2,715       4,846       1,201  
Increase (decrease) in accounts payable and accrued expenses     (10,642 )     123,080       (126,112 )     56  
Net cash provided by operating activities   $ 83,575     $ 331,510     $ 255,114     $ 717,874  

 

    Three Months Ended
June 30,		     Six Months Ended
June 30,		  
    2024     2023     2024     2023  
FREE CASH FLOW (DEFICIT)(2):                        
Operating cash flow   $ 118,134     $ 145,497     $ 300,149     $ 400,407  
Less:                        
Exploration and development capital expenditures     (221,019 )     (321,988 )     (477,243 )     (646,694 )
Midstream capital expenditures     (11,190 )     (6,870 )     (16,488 )     (11,057 )
Other capital expenditures     (942 )     (100 )     (971 )     (456 )
Contributions from midstream partner     11,000       —       17,000       —  
Free cash deficit from operations   $ (104,017 )   $ (183,461 )   $ (177,553 )   $ (257,800 )
Acquisitions     (9,694 )     (15,953 )     (79,138 )     (56,648 )
Proceeds from divestitures     —       41,165       —       41,295  
Free cash deficit after acquisition and divestiture activity   $ (113,711 )   $ (158,249 )   $ (256,691 )   $ (273,153 )

(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)

    June 30,
2024		     December 31,
2023		  
ASSETS            
Cash and cash equivalents   $ 19,270     $ 16,669  
Accounts receivable     155,199       231,430  
Derivative financial instruments     79,649       126,775  
Other current assets     69,289       86,619  
Total current assets     323,407       461,493  
Property and equipment, net     5,574,617       5,384,771  
Goodwill     335,897       335,897  
Operating lease right-of-use assets     90,604       71,462  
    $ 6,324,525     $ 6,253,623  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Accounts payable   $ 377,909     $ 523,260  
Accrued costs     139,414       134,466  
Operating leases     34,952       23,765  
Total current liabilities     552,275       681,491  
Long-term debt     2,856,045       2,640,391  
Deferred income taxes     415,604       470,035  
Derivative financial instruments     47,366       —  
Long-term operating leases     55,621       47,742  
Asset retirement obligation     31,709       30,773  
Total liabilities     3,958,620       3,870,432  
Stockholders' Equity:            
Common stock     146,130       139,214  
Additional paid-in capital     1,358,549       1,260,930  
Accumulated earnings     815,639       958,270  
Total stockholders' equity attributable to Comstock     2,320,318       2,358,414  
Noncontrolling interest     45,587       24,777  
Total stockholders' equity     2,365,905       2,383,191  
    $ 6,324,525     $ 6,253,623   

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

Primary Logo

Source: Comstock Resources, Inc.