COMSTOCK RESOURCES, INC. REPORTS THIRD QUARTER 2024 FINANCIAL AND OPERATING RESULTS
Highlights of 2024's Third Quarter
Weak natural gas prices continued to weigh heavily on the third quarter financial results.
Natural gas and oil sales, including realized hedging gains, were
$305 million .Operating cash flow was
$152 million or$0.52 per diluted share.Adjusted EBITDAX for the quarter was
$202 million .Adjusted net loss was
$48.5 million or$0.17 per share for the quarter.Lower completion activity was planned for the quarter, resulting in eight (5.4 net) operated wells being turned to sales since the Company's last update with an average initial production of 21 MMcf per day.
First horseshoe
Haynesville well was successful with a 31 MMcf per day initial production rate.Western Haynesville exploratory play continues to progress with acreage position up to 453,881 net acres and most recent well costs down to an estimated$2,814 per completed lateral foot. Comstock's thirteenthWestern Haynesville well is on flowback with another five wells in the play expected to be turned to sales in late 2024 through early 2025.
Financial Results for the Three Months Ended
Comstock's realized natural gas price for the third quarter of 2024 averaged
Comstock's production cost per Mcfe in the third quarter averaged
Financial Results for the Nine Months Ended
Natural gas and oil sales for the nine months ended
Comstock's production cost per Mcfe during the nine months ended
Drilling Results
Comstock drilled eight (6.2 net) operated horizontal
Since its last operational update in July, Comstock has turned eight (5.4 net) operated
Other
On
Earnings Call Information
Comstock has planned a conference call for
If you are unable to participate in the original conference call, a web replay will be available for twelve months beginning at
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
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Revenues: | ||||||||||||||||
Natural gas sales | $ | 252,650 | $ | 304,141 | $ | 756,260 | $ | 911,065 | ||||||||
Oil sales | 975 | 1,309 | 2,925 | 4,111 | ||||||||||||
Total natural gas and oil sales | 253,625 | 305,450 | 759,185 | 915,176 | ||||||||||||
Gas services | 50,847 | 71,287 | 127,889 | 239,350 | ||||||||||||
Total revenues | 304,472 | 376,737 | 887,074 | 1,154,526 | ||||||||||||
Operating expenses: | ||||||||||||||||
Production and ad valorem taxes | 12,578 | 25,386 | 49,730 | 59,891 | ||||||||||||
Gathering and transportation | 53,996 | 47,012 | 150,456 | 137,981 | ||||||||||||
Lease operating | 29,248 | 31,664 | 99,125 | 100,525 | ||||||||||||
Exploration | — | — | — | 1,775 | ||||||||||||
Depreciation, depletion and amortization | 208,350 | 148,190 | 593,281 | 422,350 | ||||||||||||
Gas services | 52,622 | 67,632 | 132,796 | 224,317 | ||||||||||||
General and administrative | 9,923 | 9,586 | 29,271 | 31,992 | ||||||||||||
Gain on sale of assets | (910 | ) | — | (910 | ) | (125 | ) | |||||||||
Total operating expenses | 365,807 | 329,470 | 1,053,749 | 978,706 | ||||||||||||
Operating income (loss) | (61,335 | ) | 47,267 | (166,675 | ) | 175,820 | ||||||||||
Other income (expenses): | ||||||||||||||||
Gain from derivative financial instruments | 75,163 | 14,276 | 89,218 | 76,190 | ||||||||||||
Other income | 274 | 409 | 927 | 1,467 | ||||||||||||
Interest expense | (54,516 | ) | (43,624 | ) | (156,005 | ) | (121,082 | ) | ||||||||
Total other income (expenses) | 20,921 | (28,939 | ) | (65,860 | ) | (43,425 | ) | |||||||||
Income (loss) before income taxes | (40,414 | ) | 18,328 | (232,535 | ) | 132,395 | ||||||||||
(Provision for) benefit from income taxes | 14,696 | (3,608 | ) | 69,094 | (28,878 | ) | ||||||||||
Net income (loss) | (25,718 | ) | 14,720 | (163,441 | ) | 103,517 | ||||||||||
Net income attributable to noncontrolling interest | (3,173 | ) | — | (8,081 | ) | — | ||||||||||
Net income (loss) available to Comstock | $ | (28,891 | ) | $ | 14,720 | $ | (171,522 | ) | $ | 103,517 | ||||||
Net income (loss) per share | ||||||||||||||||
Basic | $ | (0.09 | ) | $ | 0.05 | $ | (0.57 | ) | $ | 0.37 | ||||||
Diluted | $ | (0.09 | ) | $ | 0.05 | $ | (0.57 | ) | $ | 0.37 | ||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 290,170 | 276,999 | 285,949 | 276,741 | ||||||||||||
Diluted | 290,170 | 276,999 | 285,949 | 276,741 | ||||||||||||
Dividends per share | $ | — | $ | 0.125 | $ | — | $ | 0.375 |
OPERATING RESULTS
(In thousands, except per unit amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Natural gas production (MMcf) | 133,116 | 130,528 | 403,420 | 383,902 | ||||||||||||
Oil production (Mbbls) | 13 | 17 | 40 | 57 | ||||||||||||
Total production (MMcfe) | 133,198 | 130,629 | 403,662 | 384,241 | ||||||||||||
Natural gas sales | $ | 252,650 | $ | 304,141 | $ | 756,260 | $ | 911,065 | ||||||||
Natural gas hedging settlements (1) | 51,409 | 10,344 | 159,956 | 76,221 | ||||||||||||
Total natural gas including hedging | 304,059 | 314,485 | 916,216 | 987,286 | ||||||||||||
Oil sales | 975 | 1,309 | 2,925 | 4,111 | ||||||||||||
Total natural gas and oil sales including hedging | $ | 305,034 | $ | 315,794 | $ | 919,141 | $ | 991,397 | ||||||||
Average natural gas price (per Mcf) | $ | 1.90 | $ | 2.33 | $ | 1.87 | $ | 2.37 | ||||||||
Average natural gas price including hedging (per Mcf) | $ | 2.28 | $ | 2.41 | $ | 2.27 | $ | 2.57 | ||||||||
Average oil price (per barrel) | $ | 75.00 | $ | 77.00 | $ | 73.13 | $ | 72.12 | ||||||||
Average price (per Mcfe) | $ | 1.90 | $ | 2.34 | $ | 1.88 | $ | 2.38 | ||||||||
Average price including hedging (per Mcfe) | $ | 2.29 | $ | 2.42 | $ | 2.28 | $ | 2.58 | ||||||||
Production and ad valorem taxes | $ | 12,578 | $ | 25,386 | $ | 49,730 | $ | 59,891 | ||||||||
Gathering and transportation | 53,996 | 47,012 | 150,456 | 137,981 | ||||||||||||
Lease operating | 29,248 | 31,664 | 99,125 | 100,525 | ||||||||||||
Cash general and administrative (2) | 6,042 | 6,930 | 17,892 | 24,984 | ||||||||||||
Total production costs | $ | 101,864 | $ | 110,992 | $ | 317,203 | $ | 323,381 | ||||||||
Production and ad valorem taxes (per Mcfe) | $ | 0.09 | $ | 0.20 | $ | 0.12 | $ | 0.16 | ||||||||
Gathering and transportation (per Mcfe) | 0.41 | 0.36 | 0.37 | 0.36 | ||||||||||||
Lease operating (per Mcfe) | 0.22 | 0.24 | 0.25 | 0.26 | ||||||||||||
Cash general and administrative (per Mcfe) | 0.05 | 0.05 | 0.04 | 0.07 | ||||||||||||
Total production costs (per Mcfe) | $ | 0.77 | $ | 0.85 | $ | 0.78 | $ | 0.85 | ||||||||
Unhedged operating margin | 60 | % | 64 | % | 58 | % | 65 | % | ||||||||
Hedged operating margin | 67 | % | 65 | % | 65 | % | 67 | % | ||||||||
Gas services revenue | $ | 50,847 | $ | 71,287 | $ | 127,889 | $ | 239,350 | ||||||||
Gas services expenses | 52,622 | 67,632 | 132,796 | 224,317 | ||||||||||||
Gas services margin | $ | (1,775 | ) | $ | 3,655 | $ | (4,907 | ) | $ | 15,033 | ||||||
Natural Gas and Oil Capital Expenditures: | ||||||||||||||||
Unproved property acquisitions | $ | 8,800 | $ | 19,998 | $ | 87,938 | $ | 76,646 | ||||||||
Total natural gas and oil properties acquisitions | $ | 8,800 | $ | 19,998 | $ | 87,938 | $ | 76,646 | ||||||||
Exploration and Development: | ||||||||||||||||
Development leasehold | $ | 5,623 | $ | 5,369 | $ | 12,153 | $ | 19,087 | ||||||||
Exploratory drilling and completion | 57,144 | 74,737 | 215,992 | 179,049 | ||||||||||||
Development drilling and completion | 114,172 | 229,594 | 411,315 | 740,808 | ||||||||||||
Other development costs | 7,453 | 1,418 | 22,175 | 18,868 | ||||||||||||
Total exploration and development capital expenditures | $ | 184,392 | $ | 311,118 | $ | 661,635 | $ | 957,812 |
(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 | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
ADJUSTED NET INCOME (LOSS): | ||||||||||||||||
Net income (loss) | $ | (25,718 | ) | $ | 14,720 | $ | (163,441 | ) | $ | 103,517 | ||||||
Unrealized (gain) loss from derivative financial instruments | (23,754 | ) | (3,932 | ) | 70,738 | 31 | ||||||||||
Exploration expense | — | — | — | 1,775 | ||||||||||||
Gain on sale of assets | (910 | ) | — | (910 | ) | (125 | ) | |||||||||
Adjustment to income taxes | 1,873 | 946 | (27,663 | ) | (418 | ) | ||||||||||
Adjusted net income (loss) | $ | (48,509 | ) | $ | 11,734 | $ | (121,276 | ) | $ | 104,780 | ||||||
Adjusted net income (loss) per share (2) | $ | (0.17 | ) | $ | 0.04 | $ | (0.42 | ) | $ | 0.38 | ||||||
Diluted shares outstanding | 290,170 | 276,999 | 285,949 | 276,741 | ||||||||||||
ADJUSTED EBITDAX: | ||||||||||||||||
Net income (loss) | $ | (25,718 | ) | $ | 14,720 | $ | (163,441 | ) | $ | 103,517 | ||||||
Interest expense | 54,516 | 43,624 | 156,005 | 121,082 | ||||||||||||
Income taxes | (14,696 | ) | 3,608 | (69,094 | ) | 28,878 | ||||||||||
Depreciation, depletion, and amortization | 208,350 | 148,190 | 593,281 | 422,350 | ||||||||||||
Exploration | — | — | — | 1,775 | ||||||||||||
Unrealized (gain) loss from derivative financial instruments | (23,754 | ) | (3,932 | ) | 70,738 | 31 | ||||||||||
Stock-based compensation | 3,883 | 2,655 | 11,380 | 7,006 | ||||||||||||
Gain on sale of assets | (910 | ) | — | (910 | ) | (125 | ) | |||||||||
Total Adjusted EBITDAX (3) | $ | 201,671 | $ | 208,865 | $ | 597,959 | $ | 684,514 |
(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 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.
NON-GAAP FINANCIAL MEASURES
(In thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
OPERATING CASH FLOW (1): | ||||||||||||||||
Net income (loss) | $ | (25,718 | ) | $ | 14,720 | $ | (163,441 | ) | $ | 103,517 | ||||||
Reconciling items: | ||||||||||||||||
Unrealized (gain) loss from derivative financial instruments | (23,754 | ) | (3,932 | ) | 70,738 | 31 | ||||||||||
Deferred income taxes | (12,734 | ) | 3,608 | (67,165 | ) | 28,878 | ||||||||||
Depreciation, depletion and amortization | 208,350 | 148,190 | 593,281 | 422,350 | ||||||||||||
Amortization of debt discount and issuance costs | 3,136 | 1,989 | 8,519 | 5,980 | ||||||||||||
Stock-based compensation | 3,883 | 2,655 | 11,380 | 7,006 | ||||||||||||
Gain on sale of assets | (910 | ) | — | (910 | ) | (125 | ) | |||||||||
Operating cash flow | $ | 152,253 | $ | 167,230 | $ | 452,402 | $ | 567,637 | ||||||||
(Increase) decrease in accounts receivable | (658 | ) | (20,887 | ) | 75,573 | 295,323 | ||||||||||
Increase in other current assets | (5,595 | ) | (1,825 | ) | (749 | ) | (624 | ) | ||||||||
Decrease in accounts payable and accrued expenses | (47,830 | ) | (73,753 | ) | (173,942 | ) | (73,697 | ) | ||||||||
Net cash provided by operating activities | $ | 98,170 | $ | 70,765 | $ | 353,284 | $ | 788,639 |
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
FREE CASH FLOW (DEFICIT)(2): | ||||||||||||||||
Operating cash flow | $ | 152,253 | $ | 167,230 | $ | 452,402 | $ | 567,637 | ||||||||
Less: | ||||||||||||||||
Exploration and development capital expenditures | (184,392 | ) | (311,118 | ) | (661,635 | ) | (957,812 | ) | ||||||||
Midstream capital expenditures | (30,251 | ) | — | (46,739 | ) | — | ||||||||||
Other capital expenditures | (735 | ) | (10,563 | ) | (1,706 | ) | (22,076 | ) | ||||||||
Contributions from midstream partner | 19,000 | — | 36,000 | — | ||||||||||||
Free cash deficit from operations | $ | (44,125 | ) | $ | (154,451 | ) | $ | (221,678 | ) | $ | (412,251 | ) | ||||
Acquisitions | (8,800 | ) | (19,998 | ) | (87,938 | ) | (76,646 | ) | ||||||||
Proceeds from divestitures | 1,214 | — | 1,214 | 41,295 | ||||||||||||
Free cash deficit after acquisition and divestiture activity | $ | (51,711 | ) | $ | (174,449 | ) | $ | (308,402 | ) | $ | (447,602 | ) |
(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.
CONSOLIDATED BALANCE SHEETS
(In thousands)
, | , | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 13,772 | $ | 16,669 | ||||
Accounts receivable | 155,857 | 231,430 | ||||||
Derivative financial instruments | 71,704 | 126,775 | ||||||
Other current assets | 58,379 | 86,619 | ||||||
Total current assets | 299,712 | 461,493 | ||||||
Property and equipment, net | 5,590,448 | 5,384,771 | ||||||
| 335,897 | 335,897 | ||||||
Operating lease right-of-use assets | 82,124 | 71,462 | ||||||
Derivative financial instruments | 4,828 | — | ||||||
$ | 6,313,009 | $ | 6,253,623 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Accounts payable | $ | 358,336 | $ | 523,260 | ||||
Accrued costs | 106,057 | 134,466 | ||||||
Operating leases | 35,372 | 23,765 | ||||||
Total current liabilities | 499,765 | 681,491 | ||||||
Long-term debt | 2,949,181 | 2,640,391 | ||||||
Deferred income taxes | 402,870 | 470,035 | ||||||
Derivative financial instruments | 20,495 | — | ||||||
Long-term operating leases | 46,681 | 47,742 | ||||||
Asset retirement obligation | 32,016 | 30,773 | ||||||
Total liabilities | 3,951,008 | 3,870,432 | ||||||
Stockholders' Equity: | ||||||||
Common stock | 146,130 | 139,214 | ||||||
Additional paid-in capital | 1,362,393 | 1,260,930 | ||||||
Accumulated earnings | 786,748 | 958,270 | ||||||
Total stockholders' equity attributable to Comstock | 2,295,271 | 2,358,414 | ||||||
Noncontrolling interest | 66,730 | 24,777 | ||||||
Total stockholders' equity | 2,362,001 | 2,383,191 | ||||||
$ | 6,313,009 | $ | 6,253,623 |
Ron Mills VP - Finance and Investor RelationsComstock Resources 972-668-8834 rmills@comstockresources.com
Source: Comstock Resources, Inc.