COMSTOCK RESOURCES, INC. REPORTS THIRD QUARTER 2021 FINANCIAL AND OPERATING RESULTS
Highlights of 2021's Third Quarter
- Free cash flow of
$84 million was generated in the quarter. - Adjusted net income to common stockholders was
$91 million for the quarter or$0.34 per diluted share. - Production increased 25% to 1,424 MMcfe per day (98% natural gas).
- Revenues, including realized hedging losses, were
$394 million , 86% higher than 2020's third quarter. - Adjusted EBITDAX was up 109% to
$309 million . - Operating cash flow (excluding working capital changes) increased 30% to
$255 million or$0.92 per diluted share. - Third quarter capital spending was
$167 million , including$5 million for leasing activities.
Third Quarter 2021 Financial Results
Revenues in the third quarter of 2021 totaled
Comstock's production cost per Mcfe in the third quarter was
Financial Results for the Nine Months Ended
Revenues reported for the first nine months of 2021 totaled
Drilling Results
Comstock drilled 55 (45.2 net) operated horizontal
Since its last operational update in
Other Matters
Comstock today announced a partnership with MiQ to independently certify its natural gas production in
Earnings Call Information
Comstock has planned a conference call for
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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Revenues: | |||||||||||||||||||
Natural gas sales | $ | 488,303 | $ | 168,374 | $ | 1,133,783 | $ | 547,975 | |||||||||||
Oil sales | 22,873 | 9,637 | 61,571 | 35,449 | |||||||||||||||
Total oil and gas sales | 511,176 | 178,011 | 1,195,354 | 583,424 | |||||||||||||||
Operating expenses: | |||||||||||||||||||
Production and ad valorem taxes | 16,675 | 9,798 | 36,468 | 27,768 | |||||||||||||||
Gathering and transportation | 35,402 | 22,422 | 96,596 | 77,423 | |||||||||||||||
Lease operating | 26,576 | 25,412 | 77,150 | 79,110 | |||||||||||||||
Exploration | — | — | — | 27 | |||||||||||||||
Depreciation, depletion and amortization | 128,739 | 99,056 | 359,313 | 312,828 | |||||||||||||||
General and administrative | 8,052 | 8,974 | 23,952 | 25,991 | |||||||||||||||
Gains on asset sales | (14 | ) | (16 | ) | (93 | ) | (16 | ) | |||||||||||
Total operating expenses | 215,430 | 165,646 | 593,386 | 523,131 | |||||||||||||||
Operating income | 295,746 | 12,365 | 601,968 | 60,293 | |||||||||||||||
Other income (expenses): | |||||||||||||||||||
Loss from derivative financial instruments | (510,319 | ) | (121,579 | ) | (756,026 | ) | (71,978 | ) | |||||||||||
Other income | 197 | 489 | 1,008 | 793 | |||||||||||||||
Interest expense | (49,954 | ) | (63,890 | ) | (170,645 | ) | (168,764 | ) | |||||||||||
Loss on early retirement of debt | — | — | (352,599 | ) | (861 | ) | |||||||||||||
Total other expenses | (560,076 | ) | (184,980 | ) | (1,278,262 | ) | (240,810 | ) | |||||||||||
Loss before income taxes | (264,330 | ) | (172,615 | ) | (676,294 | ) | (180,517 | ) | |||||||||||
Benefit from (provision for) income taxes | (23,976 | ) | 46,123 | 74,168 | 46,177 | ||||||||||||||
Net loss | (288,306 | ) | (126,492 | ) | (602,126 | ) | (134,340 | ) | |||||||||||
Preferred stock dividends and accretion | (4,411 | ) | (4,398 | ) | (13,089 | ) | (26,596 | ) | |||||||||||
Net loss available to common stockholders | $ | (292,717 | ) | $ | (130,890 | ) | $ | (615,215 | ) | $ | (160,936 | ) | |||||||
Net loss per share: | |||||||||||||||||||
Basic | $ | (1.26 | ) | $ | (0.57 | ) | $ | (2.66 | ) | $ | (0.77 | ) | |||||||
Diluted | $ | (1.26 | ) | $ | (0.57 | ) | $ | (2.66 | ) | $ | (0.77 | ) | |||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 231,747 | 231,223 | 231,519 | 209,760 | |||||||||||||||
Diluted (1) | 231,747 | 231,223 | 231,519 | 209,760 | |||||||||||||||
(1) Basic and diluted shares outstanding are the same since the effect of unvested restricted stock, performance stock units and preferred stock would be anti-dilutive.
CONSOLIDATED BALANCE SHEETS
(In thousands)
As of | ||||||
ASSETS | ||||||
Cash and cash equivalents | $ | 27,841 | $ | 30,272 | ||
Accounts receivable | 243,165 | 145,786 | ||||
Derivative financial instruments | 26,392 | 8,913 | ||||
Other current assets | 12,194 | 14,839 | ||||
Total current assets | 309,592 | 199,810 | ||||
Property and equipment, net | 4,234,477 | 4,084,550 | ||||
335,897 | 335,897 | |||||
Derivative financial instruments | 342 | 661 | ||||
Operating lease right-of-use assets | 6,792 | 3,025 | ||||
Other assets | 37 | 40 | ||||
$ | 4,887,137 | $ | 4,623,983 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Accounts payable | $ | 324,811 | $ | 259,284 | ||
Accrued costs | 109,122 | 133,019 | ||||
Operating leases | 2,356 | 2,284 | ||||
Derivative financial instruments | 627,166 | 47,005 | ||||
Total current liabilities | 1,063,455 | 441,592 | ||||
Long-term debt | 2,801,312 | 2,517,149 | ||||
Deferred income taxes | 115,585 | 200,583 | ||||
Derivative financial instruments | 50,127 | 2,364 | ||||
Long-term operating leases | 4,486 | 740 | ||||
Reserve for future abandonment costs | 21,867 | 19,290 | ||||
Other non-current liabilities | 24 | 492 | ||||
Total liabilities | 4,056,856 | 3,182,210 | ||||
Mezzanine equity: | ||||||
Preferred stock | 175,000 | 175,000 | ||||
Stockholders' equity: | ||||||
Common stock | 116,462 | 116,206 | ||||
Additional paid-in capital | 1,098,851 | 1,095,384 | ||||
Accumulated earnings (deficit) | (560,032 | ) | 55,183 | |||
Total stockholders' equity | 655,281 | 1,266,773 | ||||
$ | 4,887,137 | $ | 4,623,983 |
OPERATING RESULTS
(In thousands, except per unit amounts)
Three Months Ended |
Nine Months Ended |
||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||
Gas production (MMcf) | 128,896 | 102,560 | 366,272 | 341,823 | |||||||||||||
Oil production (Mbbls) | 346 | 354 | 1,034 | 1,168 | |||||||||||||
Total production (MMcfe) | 130,968 | 104,687 | 372,474 | 348,831 | |||||||||||||
Natural gas sales | $ | 488,303 | $ | 168,374 | $ | 1,133,783 | $ | 547,975 | |||||||||
Natural gas hedging settlements (1) | (114,538 | ) | 32,000 | (138,907 | ) | 121,796 | |||||||||||
Total natural gas including hedging | 373,765 | 200,374 | 994,876 | 669,771 | |||||||||||||
Oil sales | 22,873 | 9,637 | 61,571 | 35,449 | |||||||||||||
Oil hedging settlements (1) | (2,606 | ) | 2,238 | (5,489 | ) | 11,082 | |||||||||||
Total oil including hedging | 20,267 | 11,875 | 56,082 | 46,531 | |||||||||||||
Total oil and gas sales including hedging | $ | 394,032 | $ | 212,249 | $ | 1,050,958 | $ | 716,302 | |||||||||
Average gas price (per Mcf) | $ | 3.79 | $ | 1.64 | $ | 3.10 | $ | 1.60 | |||||||||
Average gas price including hedging (per Mcf) | $ | 2.90 | $ | 1.95 | $ | 2.72 | $ | 1.96 | |||||||||
Average oil price (per barrel) | $ | 66.11 | $ | 27.20 | $ | 59.55 | $ | 30.35 | |||||||||
Average oil price including hedging (per barrel) | $ | 58.58 | $ | 33.52 | $ | 54.24 | $ | 39.84 | |||||||||
Average price (per Mcfe) | $ | 3.90 | $ | 1.70 | $ | 3.21 | $ | 1.67 | |||||||||
Average price including hedging (per Mcfe) | $ | 3.01 | $ | 2.03 | $ | 2.82 | $ | 2.05 | |||||||||
Production and ad valorem taxes | $ | 16,675 | $ | 9,798 | $ | 36,468 | $ | 27,768 | |||||||||
Gathering and transportation | 35,402 | 22,422 | 96,596 | 77,423 | |||||||||||||
Lease operating | 26,576 | 25,412 | 77,150 | 79,110 | |||||||||||||
Cash general and administrative (2) | 6,250 | 7,222 | 18,661 | 21,257 | |||||||||||||
Total production costs | $ | 84,903 | $ | 64,854 | $ | 228,875 | $ | 205,558 | |||||||||
Production and ad valorem taxes (per Mcfe) | $ | 0.13 | $ | 0.09 | $ | 0.09 | $ | 0.08 | |||||||||
Gathering and transportation (per Mcfe) | 0.27 | 0.21 | 0.26 | 0.22 | |||||||||||||
Lease operating (per Mcfe) | 0.20 | 0.25 | 0.21 | 0.23 | |||||||||||||
Cash general and administrative (per Mcfe) | 0.05 | 0.07 | 0.05 | 0.06 | |||||||||||||
Total production costs (per Mcfe) | $ | 0.65 | $ | 0.62 | $ | 0.61 | $ | 0.59 | |||||||||
Unhedged operating margin | 83 | % | 64 | % | 81 | % | 65 | % | |||||||||
Hedged operating margin | 78 | % | 69 | % | 78 | % | 71 | % | |||||||||
Oil and Gas Capital Expenditures: | |||||||||||||||||
Exploratory leasehold | $ | 5,248 | $ | 1,457 | $ | 18,649 | $ | 1,457 | |||||||||
Development leasehold | 733 | 1,027 | 6,794 | 7,363 | |||||||||||||
Development drilling and completion | 141,637 | 96,903 | 454,524 | 280,383 | |||||||||||||
Other development | 19,524 | 11,045 | 28,455 | 26,463 | |||||||||||||
Total | $ | 167,142 | $ | 110,432 | $ | 508,422 | $ | 315,666 |
(1) Included in gain (loss) from derivative financial instruments in operating results.
(2) Excludes stock-based compensation.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
ADJUSTED NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS | ||||||||||||||||||||
Net loss available to common stockholders | $ | (292,717 | ) | $ | (130,890 | ) | $ | (615,215 | ) | $ | (160,936 | ) | ||||||||
Unrealized loss from derivative financial instruments | 392,870 | 155,601 | 610,764 | 204,703 | ||||||||||||||||
Non-cash interest amortization from adjusting debt assumed in acquisition to fair value | 2,565 | 5,621 | 9,962 | 16,301 | ||||||||||||||||
Gains on asset sales | (14 | ) | (16 | ) | (93 | ) | (16 | ) | ||||||||||||
Loss on early retirement of debt | — | — | 352,599 | 861 | ||||||||||||||||
Non-cash accretion from adjusting preferred stock issued in acquisition to fair value |
— | — | — | 5,417 | ||||||||||||||||
Impairment of unevaluated oil and gas properties | — | — | — | 27 | ||||||||||||||||
Adjustment to provision for income taxes | (12,099 | ) | (44,122 | ) | (149,106 | ) | (53,430 | ) | ||||||||||||
Adjusted net income (loss) available to common stockholders (1) | $ | 90,605 | $ | (13,806 | ) | $ | 208,911 | $ | 12,927 | |||||||||||
Adjusted net income (loss) available to common stockholders per share (2) | $ | 0.34 | $ | (0.06 | ) | $ | 0.80 | $ | 0.06 | |||||||||||
Diluted shares outstanding | 276,886 | 231,223 | (3) | 276,368 | 209,760 | (3) |
ADJUSTED EBITDAX: | ||||||||||||||||||||
Net loss | $ | (288,306 | ) | $ | (126,492 | ) | $ | (602,126 | ) | $ | (134,340 | ) | ||||||||
Interest expense (4) | 50,259 | 64,106 | 171,511 | 168,917 | ||||||||||||||||
Income taxes | 23,976 | (46,123 | ) | (74,168 | ) | (46,177 | ) | |||||||||||||
Depreciation, depletion, and amortization | 128,739 | 99,056 | 359,313 | 312,828 | ||||||||||||||||
Exploration | — | — | — | 27 | ||||||||||||||||
Unrealized loss from derivative financial instruments | 392,870 | 155,601 | 610,764 | 204,703 | ||||||||||||||||
Stock-based compensation | 1,802 | 1,752 | 5,291 | 4,734 | ||||||||||||||||
Loss on early retirement of debt | — | — | 352,599 | 861 | ||||||||||||||||
Gains on asset sales | (14 | ) | (16 | ) | (93 | ) | (16 | ) | ||||||||||||
Total Adjusted EBITDAX (5) | $ | 309,326 | $ | 147,884 | $ | 823,091 | $ | 511,537 |
(1) Adjusted net income (loss) available to common stockholders is presented because of its acceptance by investors and by Comstock management as an indicator of the Company's profitability excluding loss on early retirement of debt, non-cash unrealized gains and losses on derivative financial instruments and other unusual items.
(2) Adjusted net income (loss) available to common stockholders 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) Basic and diluted shares outstanding are the same since the effect of unvested restricted stock, performance stock units and preferred stock would be anti-dilutive.
(4) Includes realized gains or losses from interest rate derivative financial instruments.
(5) 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 loss on early retirement of debt, depreciation, depletion and amortization and exploration expense, is a common alternative measure of operating performance used by certain investors and financial analysts.
NON-GAAP FINANCIAL MEASURES
(In thousands)
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
OPERATING CASH FLOW (1): | |||||||||||||||||||
Net loss | $ | (288,306 | ) | $ | (126,492 | ) | $ | (602,126 | ) | $ | (134,340 | ) | |||||||
Reconciling items: | |||||||||||||||||||
Unrealized loss from derivative financial instruments | 392,870 | 155,601 | 610,764 | 204,703 | |||||||||||||||
Deferred income taxes (benefit) | 16,339 | (46,237 | ) | (84,942 | ) | (46,443 | ) | ||||||||||||
Depreciation, depletion and amortization | 128,739 | 99,056 | 359,313 | 312,828 | |||||||||||||||
Loss on early retirement of debt | — | — | 352,599 | 861 | |||||||||||||||
Amortization of debt discount and issuance costs | 4,012 | 9,505 | 17,587 | 24,231 | |||||||||||||||
Stock-based compensation | 1,802 | 1,752 | 5,291 | 4,734 | |||||||||||||||
Exploration | — | — | — | 27 | |||||||||||||||
Gains on asset sales | (14 | ) | (16 | ) | (93 | ) | (16 | ) | |||||||||||
Operating cash flow | 255,442 | 93,169 | 658,393 | 366,585 | |||||||||||||||
Decrease (increase) in accounts receivable | (57,189 | ) | (3,790 | ) | (97,379 | ) | 79,382 | ||||||||||||
Decrease (increase) in other current assets | (4,678 | ) | 11,094 | 850 | 8,291 | ||||||||||||||
Increase (decrease) in accounts payable and accrued expenses | 39,395 | 23,391 | 56,689 | (64,303 | ) | ||||||||||||||
Net cash provided by operating activities | $ | 232,970 | $ | 123,864 | $ | 618,553 | $ | 389,955 | |||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
FREE CASH FLOW (2): | |||||||||||||||||||
Operating cash flow | $ | 255,442 | $ | 93,169 | $ | 658,393 | $ | 366,585 | |||||||||||
Less: | |||||||||||||||||||
Capital expenditures | (167,142 | ) | (110,432 | ) | (508,422 | ) | (315,666 | ) | |||||||||||
Preferred dividends | (4,411 | ) | (4,398 | ) | (13,089 | ) | (21,180 | ) | |||||||||||
Free cash flow | $ | 83,889 | $ | (21,661 | ) | $ | 136,882 | $ | 29,739 | ||||||||||
(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 is presented in the earnings release because management believes it to be a useful indicator of the Company's ability to internally fund acquisitions and debt maturities after capital expenditures and preferred dividend payments.
Ron Mills VP of Finance and Investor RelationsComstock Resources 972-668-8834 rmills@comstockresources.com
Source: Comstock Resources, Inc.