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 2023 FINANCIAL AND OPERATING RESULTS

FRISCO, TX, May 02, 2023 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended March 31, 2023.

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 March 31, 2023

Comstock's revenues in the first quarter of 2023 totaled $390.4 million (including realized hedging gains of $10.4 million). Net cash provided by operating activities (excluding changes in working capital) generated in the first quarter of 2023 was $254.9 million, and net income available to common stockholders for the first quarter was $134.5 million or $0.49 per share. Reported net income in the quarter included a pre-tax $56.0 million unrealized gain on hedging contracts held for risk management. Excluding this item and certain other items, adjusted net income available to common stockholders for the first quarter of 2023 was $92.0 million, or $0.33 per diluted share.

Comstock's production cost per Mcfe in the first quarter averaged $0.83 per Mcfe, which was comprised of $0.36 for gathering and transportation costs, $0.27 for lease operating costs, $0.12 for production and other taxes and $0.08 for cash general and administrative expenses. Comstock's unhedged operating margin was 72% in the first quarter of 2023 and 73% after hedging.

Drilling Results

Comstock drilled 18 (13.7 net) operated horizontal Haynesville/Bossier shale wells in the first quarter of 2023 which had an average lateral length of 12,075 feet. The Company also participated in an additional 26 (2.6 net) non-operated Haynesville shale wells in the first quarter of 2023. Comstock turned 19 (11.6 net) operated wells and ten (1.2 net) non-operated wells to sales in the first quarter of 2023 and currently expects to turn an additional 17 (13.0 net) operated wells to sales in the second quarter of 2023.

Since its last operational update in February, Comstock has turned 15 (9.8 net) operated Haynesville/Bossier shale wells to sales. These wells had initial daily production rates that averaged 23 MMcf per day. The completed lateral length of these wells averaged 11,042 feet.

Included in the wells turned to sales was the Campbell #2H, Comstock's third successful Western Haynesville well. This well was drilled to a total vertical depth of 15,700 feet and has a 12,763 foot completed lateral. The well's initial production rate was 36 MMcf per day.

Declaration of Quarterly Dividend

On May 1, 2023, Comstock's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be payable on June 15, 2023 to stockholders of record at the close of business on June 1, 2023.

Earnings Call Information

Comstock has planned a conference call for 10:00 a.m. Central Time on May 3, 2023, to discuss the first quarter 2023 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/BI7639b1d21a9745e8b20115 83a0365914. 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/fobwbsen.

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 3, 2023. The replay of the conference can be accessed using the webcast link: https://edge.media-server.com/mmc/p/fobwbsen.

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,
    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             $         —          

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

  Three Months Ended March 31,
    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.

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

  Three Months Ended March 31,
    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.
 

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

  Three Months Ended March 31,
    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 March 31,
    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.

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

  March 31,
2023		   December 31, 2022
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        
Goodwill           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 Relations
Comstock Resources
972-668-8834
rmills@comstockresources.com

Primary Logo

Source: Comstock Resources, Inc.