COMSTOCK RESOURCES, INC. REPORTS FIRST QUARTER 2023 FINANCIAL AND OPERATING RESULTS
Highlights of 2023's First Quarter
- Generated operating cash flow of
$255 million or$0.92 per diluted share. - Adjusted net income to common stockholders for the quarter was
$92 million or$0.33 per diluted share. - Adjusted EBITDAX was
$293 million . - Oil and gas sales, including realized hedging gains, were
$390 million . - Solid results from
Haynesville shale drilling program with 15 (9.8 net) operated wells turned to sales since our last update with an average initial production of 23 MMcf per day.
Financial Results for the Three Months Ended
Comstock's revenues in the first quarter of 2023 totaled
Comstock's production cost per Mcfe in the first quarter averaged
Drilling Results
Comstock drilled 18 (13.7 net) operated horizontal
Since its last operational update in February, Comstock has turned 15 (9.8 net) operated
Included in the wells turned to sales was the
Declaration of Quarterly Dividend
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 |
|||||||
2023 | 2022 | ||||||
Revenues: | |||||||
Natural gas sales | $ | 378,032 | $ | 522,957 | |||
Oil sales | 1,942 | 1,884 | |||||
Total natural gas and oil sales | 379,974 | 524,841 | |||||
Gas services | 109,604 | — | |||||
Total revenues | 489,578 | 524,841 | |||||
Operating expenses: | |||||||
Production and ad valorem taxes | 14,906 | 13,820 | |||||
Gathering and transportation | 45,574 | 32,093 | |||||
Lease operating | 34,830 | 26,186 | |||||
Exploration | 1,775 | 1,021 | |||||
Depreciation, depletion and amortization | 133,983 | 106,728 | |||||
Gas services | 101,295 | — | |||||
General and administrative | 12,368 | 8,223 | |||||
Gain on sale of assets | (773 | ) | (2 | ) | |||
Total operating expenses | 343,958 | 188,069 | |||||
Operating income | 145,620 | 336,772 | |||||
Other income (expenses): | |||||||
Gain (loss) from derivative financial instruments | 66,409 | (437,493 | ) | ||||
Other income | 460 | 4,166 | |||||
Interest expense | (38,270 | ) | (46,491 | ) | |||
Total other income (expenses) | 28,599 | (479,818 | ) | ||||
Income (loss) before income taxes | 174,219 | (143,046 | ) | ||||
(Provision for) benefit from income taxes | (39,716 | ) | 31,622 | ||||
Net income (loss) | 134,503 | (111,424 | ) | ||||
Preferred stock dividends | — | (4,315 | ) | ||||
Net income (loss) available to common stockholders | $ | 134,503 | $ | (115,739 | ) | ||
Net income (loss) per share: | |||||||
Basic | $ | 0.49 | $ | (0.50 | ) | ||
Diluted | $ | 0.49 | $ | (0.50 | ) | ||
Weighted average shares outstanding: | |||||||
Basic | 276,551 | 231,976 | |||||
Diluted | 276,551 | 231,976 | |||||
Dividends per share | $ | 0.125 | $ | — |
OPERATING RESULTS
(In thousands, except per unit amounts)
Three Months Ended |
|||||||
2023 | 2022 | ||||||
Gas production (MMcf) | 127,067 | 114,906 | |||||
Oil production (Mbbls) | 27 | 21 | |||||
Total production (MMcfe) | 127,226 | 115,035 | |||||
Natural gas sales | $ | 378,032 | $ | 522,957 | |||
Natural gas hedging settlements (1) | 10,383 | (117,186 | ) | ||||
Total natural gas including hedging | 388,415 | 405,771 | |||||
Oil sales | 1,942 | 1,884 | |||||
Total natural gas and oil sales including hedging | $ | 390,357 | $ | 407,655 | |||
Average gas price (per Mcf) | $ | 2.98 | $ | 4.55 | |||
Average gas price including hedging (per Mcf) | $ | 3.06 | $ | 3.53 | |||
Average oil price (per barrel) | $ | 71.93 | $ | 89.71 | |||
Average price (per Mcfe) | $ | 2.99 | $ | 4.56 | |||
Average price including hedging (per Mcfe) | $ | 3.07 | $ | 3.54 | |||
Production and ad valorem taxes | $ | 14,906 | $ | 13,820 | |||
Gathering and transportation | 45,574 | 32,093 | |||||
Lease operating | 34,830 | 26,186 | |||||
Cash general and administrative (2) | 10,321 | 6,728 | |||||
Total production costs | $ | 105,631 | $ | 78,827 | |||
Production and ad valorem taxes (per Mcfe) | $ | 0.12 | $ | 0.12 | |||
Gathering and transportation (per Mcfe) | 0.36 | 0.28 | |||||
Lease operating (per Mcfe) | 0.27 | 0.23 | |||||
Cash general and administrative (per Mcfe) | 0.08 | 0.06 | |||||
Total production costs (per Mcfe) | $ | 0.83 | $ | 0.69 | |||
Unhedged operating margin | 72 | % | 85 | % | |||
Hedged operating margin | 73 | % | 81 | % | |||
Gas services revenue | $ | 109,604 | $ | — | |||
Gas services expenses | 101,295 | — | |||||
Gas services margin | 8,309 | — | |||||
Oil and Gas Capital Expenditures: | |||||||
Proved property acquisitions | $ | — | $ | 274 | |||
Unproved property acquisitions | 40,695 | 3,631 | |||||
Total oil and gas properties acquisitions | $ | 40,695 | $ | 3,905 | |||
Exploration and Development: | |||||||
Development leasehold | $ | 8,743 | $ | 4,632 | |||
Exploratory drilling and completion | 29,690 | 11,557 | |||||
Development drilling and completion | 280,176 | 189,048 | |||||
Other development costs | 6,097 | 18,612 | |||||
Total exploration and development capital expenditures | $ | 324,706 | $ | 223,849 |
(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 |
|||||||
2023 | 2022 | ||||||
ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS: | |||||||
Net income (loss) available to common stockholders | $ | 134,503 | $ | (115,739 | ) | ||
Unrealized (gain) loss from derivative financial instruments | (56,026 | ) | 320,307 | ||||
Non-cash interest amortization from adjusting debt assumed in acquisition to fair value |
— | 2,760 | |||||
Exploration expense | 1,775 | 1,021 | |||||
Gain on sale of assets | (773 | ) | (2 | ) | |||
Adjustment to (provision for) benefit from income taxes | 12,528 | (72,589 | ) | ||||
Adjusted net income available to common stockholders (1) | $ | 92,007 | $ | 135,758 | |||
Adjusted net income available to common stockholders per share (2) | $ | 0.33 | $ | 0.51 | |||
Diluted shares outstanding | 276,551 | 277,058 |
ADJUSTED EBITDAX: | |||||||
Net income (loss) | $ | 134,503 | $ | (111,424 | ) | ||
Interest expense | 38,270 | 46,491 | |||||
Income taxes | 39,716 | (31,622 | ) | ||||
Depreciation, depletion, and amortization | 133,983 | 106,728 | |||||
Exploration | 1,775 | 1,021 | |||||
Unrealized (gain) loss from derivative financial instruments | (56,026 | ) | 320,307 | ||||
Stock-based compensation | 2,046 | 1,495 | |||||
Gain on sale of assets | (773 | ) | (2 | ) | |||
Total Adjusted EBITDAX (3) | $ | 293,494 | $ | 332,994 |
(1) Adjusted net income 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, gains and losses on sales of assets and other unusual items.
(2) Adjusted net income 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) 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 |
|||||||
2023 | 2022 | ||||||
OPERATING CASH FLOW(1): | |||||||
Net income (loss) | $ | 134,503 | $ | (111,424 | ) | ||
Reconciling items: | |||||||
Unrealized (gain) loss from derivative financial instruments | (56,026 | ) | 320,307 | ||||
Deferred income taxes (benefit) | 39,180 | (24,788 | ) | ||||
Depreciation, depletion and amortization | 133,983 | 106,728 | |||||
Amortization of debt discount and issuance costs | 1,997 | 4,225 | |||||
Stock-based compensation | 2,046 | 1,495 | |||||
Gain on sale of assets | (773 | ) | (2 | ) | |||
Operating cash flow | $ | 254,910 | $ | 296,541 | |||
Decrease in accounts receivable | 255,992 | 28,125 | |||||
(Increase) decrease in other current assets | (1,514 | ) | 2,985 | ||||
Decrease in accounts payable and accrued expenses | (123,024 | ) | (42,033 | ) | |||
Net cash provided by operating activities | $ | 386,364 | $ | 285,618 | |||
Three Months Ended |
|||||||
2023 | 2022 | ||||||
FREE CASH FLOW(2): | |||||||
Operating cash flow | $ | 254,910 | $ | 296,541 | |||
Less: | |||||||
Exploration and development capital expenditures | (324,706 | ) | (223,849 | ) | |||
Other capital expenditures | (4,543 | ) | (22 | ) | |||
Preferred stock dividends | — | (4,315 | ) | ||||
Free cash flow from operations | $ | (74,339 | ) | $ | 68,355 | ||
Acquisitions of oil and gas properties | (40,695 | ) | (3,905 | ) | |||
Proceeds from divestitures | 130 | 45 | |||||
Free cash flow (deficit) after acquisition and divestiture activity | $ | (114,904 | ) | $ | 64,495 | ||
(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 from operations and free cash flow 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, preferred dividend payments, proved and unproved property acquisitions, and proceeds from divestiture of oil and gas properties.
CONSOLIDATED BALANCE SHEETS
(In thousands)
2023 |
|||||
ASSETS | |||||
Cash and cash equivalents | $ | 33,677 | $ | 54,652 | |
Accounts receivable | 254,135 | 510,127 | |||
Derivative financial instruments | 75,490 | 23,884 | |||
Other current assets | 59,522 | 56,324 | |||
Total current assets | 422,824 | 644,987 | |||
Property and equipment, net | 4,859,699 | 4,622,655 | |||
335,897 | 335,897 | ||||
Operating lease right-of-use assets | 82,461 | 90,716 | |||
$ | 5,700,881 | $ | 5,694,255 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accounts payable | $ | 443,501 | $ | 530,195 | |
Accrued costs | 145,779 | 183,111 | |||
Operating leases | 39,031 | 38,411 | |||
Derivative financial instruments | — | 4,420 | |||
Total current liabilities | 628,311 | 756,137 | |||
Long-term debt | 2,154,424 | 2,152,571 | |||
Deferred income taxes | 464,914 | 425,734 | |||
Long-term operating leases | 43,504 | 52,385 | |||
Asset retirement obligation | 29,553 | 29,114 | |||
Total liabilities | 3,320,706 | 3,415,941 | |||
Stockholders' Equity: | |||||
Common stock | 138,755 | 138,759 | |||
Additional paid-in capital | 1,255,467 | 1,253,417 | |||
Accumulated earnings | 985,953 | 886,138 | |||
Total stockholders' equity | 2,380,175 | 2,278,314 | |||
$ | 5,700,881 | $ | 5,694,255 |

Ron Mills VP of Finance and Investor RelationsComstock Resources 972-668-8834 rmills@comstockresources.com
Source: Comstock Resources, Inc.