COMSTOCK RESOURCES, INC. REPORTS FOURTH QUARTER 2021 FINANCIAL AND OPERATING RESULTS
Highlights of 2021's Fourth Quarter
- Generated free cash flow from operations of
$105 million in the quarter and$262 million for the year. - Generated free cash flow including acquisition and divestiture activity of
$204 million in the quarter and$343 million for the year. - Paid down
$190 million of debt in the quarter. - Adjusted EBITDAX increased 41% to
$297 million . - Operating cash flow (excluding working capital changes) increased 62% to
$250 million or$0.90 per diluted share. - Fourth quarter capital spending was
$140 million for drilling and completion activities and$39 million for acquisition activities. - Production increased 12% to 1,348 MMcfe per day (99% natural gas).
- Revenues, after realized hedging losses, were
$380 million , 37% higher than 2020's fourth quarter. - Adjusted net income to common stockholders was
$99 million for the quarter or$0.37 per diluted share.
Financial Results for the Three Months Ended
Revenues in the fourth quarter of 2021 totaled
Comstock's production cost per Mcfe in the fourth quarter was
Financial Results for the Year Ended
Revenues for the year ended
Fourth Quarter Drilling Results
Comstock drilled nine (7.0 net) operated horizontal
Since its last operational update in
Included in the wells completed in the fourth quarter were the Company's first 15,000 foot lateral
2022 Drilling Budget
The Company currently plans to spend approximately
The program will be funded entirely through operating cash flow and the Company is expected to generate substantial free cash flow in 2022 which it will use to retire debt and initiate a return of capital program once the Company reaches its leverage target.
Other Matters
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. 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 |
Year Ended |
||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Revenues: | |||||||||||||||
Natural gas sales | $ | 641,985 | $ | 261,424 | $ | 1,775,768 | $ | 809,399 | |||||||
Oil sales | 13,391 | 13,347 | 74,962 | 48,796 | |||||||||||
Total oil and gas sales | 655,376 | 274,771 | 1,850,730 | 858,195 | |||||||||||
Operating expenses: | |||||||||||||||
Production and ad valorem taxes | 12,673 | 9,199 | 49,141 | 36,967 | |||||||||||
Gathering and transportation | 34,344 | 29,159 | 130,940 | 106,582 | |||||||||||
Lease operating | 26,317 | 23,342 | 103,467 | 102,452 | |||||||||||
Depreciation, depletion and amortization | 110,075 | 104,284 | 469,388 | 417,112 | |||||||||||
General and administrative | 10,991 | 6,049 | 34,943 | 32,040 | |||||||||||
Exploration | — | — | — | 27 | |||||||||||
Loss (gain) on sale of assets | 162,170 | (1 | ) | 162,077 | (17 | ) | |||||||||
Total operating expenses | 356,570 | 172,032 | 949,956 | 695,163 | |||||||||||
Operating income | 298,806 | 102,739 | 900,774 | 163,032 | |||||||||||
Other income (expenses): | |||||||||||||||
Gain (loss) from derivative financial instruments | 195,378 | 81,929 | (560,648 | ) | 9,951 | ||||||||||
Other income (expense) | (372 | ) | 287 | 636 | 1,080 | ||||||||||
Interest expense | (47,840 | ) | (66,065 | ) | (218,485 | ) | (234,829 | ) | |||||||
Loss on early retirement of debt | — | — | (352,599 | ) | (861 | ) | |||||||||
Total other income (expenses) | 147,166 | 16,151 | (1,131,096 | ) | (224,659 | ) | |||||||||
Income (loss) before income taxes | 445,972 | 118,890 | (230,322 | ) | (61,627 | ) | |||||||||
Benefit from (provision for) income taxes | (85,571 | ) | (36,967 | ) | (11,403 | ) | 9,210 | ||||||||
Net income (loss) | 360,401 | 81,923 | (241,725 | ) | (52,417 | ) | |||||||||
Preferred stock dividends and accretion | (4,411 | ) | (4,400 | ) | (17,500 | ) | (30,996 | ) | |||||||
Net income (loss) available to common stockholders | $ | 355,990 | $ | 77,523 | $ | (259,225 | ) | $ | (83,413 | ) | |||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 1.53 | $ | 0.34 | $ | (1.12 | ) | $ | (0.39 | ) | |||||
Diluted | $ | 1.30 | $ | 0.30 | $ | (1.12 | ) | $ | (0.39 | ) | |||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 231,972 | 231,377 | 231,633 | 215,194 | |||||||||||
Diluted | 276,713 | 275,127 | 231,633 | 215,194 | |||||||||||
CONSOLIDATED BALANCE SHEETS
(In thousands)
As of |
||||||
2021 | 2020 | |||||
ASSETS | ||||||
Cash and cash equivalents | $ | 30,663 | $ | 30,272 | ||
Accounts receivable | 267,738 | 145,786 | ||||
Derivative financial instruments | 5,258 | 8,913 | ||||
Other current assets | 15,077 | 14,839 | ||||
Total current assets | 318,736 | 199,810 | ||||
Property and equipment, net | 4,007,146 | 4,084,550 | ||||
335,897 | 335,897 | |||||
Derivative financial instruments | — | 661 | ||||
Operating lease right-of-use assets | 6,450 | 3,025 | ||||
Other assets | — | 40 | ||||
$ | 4,668,229 | $ | 4,623,983 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Accounts payable | $ | 314,569 | $ | 259,284 | ||
Accrued costs | 135,026 | 133,019 | ||||
Operating leases | 2,444 | 2,284 | ||||
Derivative financial instruments | 181,945 | 47,005 | ||||
Total current liabilities | 633,984 | 441,592 | ||||
Long-term debt | 2,615,235 | 2,517,149 | ||||
Deferred income taxes | 197,417 | 200,583 | ||||
Derivative financial instruments | 4,042 | 2,364 | ||||
Long-term operating leases | 4,075 | 740 | ||||
Asset retirement obligation | 25,673 | 19,290 | ||||
Other non-current liabilities | 24 | 492 | ||||
Total liabilities | 3,480,450 | 3,182,210 | ||||
Mezzanine Equity: | ||||||
Preferred stock | 175,000 | 175,000 | ||||
Stockholders' Equity: | ||||||
Common stock | 116,462 | 116,206 | ||||
Additional paid-in capital | 1,100,359 | 1,095,384 | ||||
Accumulated earnings (deficit) | (204,042 | ) | 55,183 | |||
Total stockholders' equity | 1,012,779 | 1,266,773 | ||||
$ | 4,668,229 | $ | 4,623,983 |
OPERATING RESULTS
(In thousands, except per unit amounts)
Three Months Ended |
Year Ended |
||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Gas production (MMcf) | 123,002 | 109,013 | 489,274 | 450,836 | |||||||||||
Oil production (Mbbls) | 176 | 340 | 1,210 | 1,508 | |||||||||||
Total production (MMcfe) | 124,060 | 111,052 | 496,534 | 459,883 | |||||||||||
Natural gas sales | $ | 641,985 | $ | 261,424 | $ | 1,775,768 | $ | 809,399 | |||||||
Natural gas hedging settlements (1) | (272,891 | ) | 240 | (411,798 | ) | 122,036 | |||||||||
Total natural gas including hedging | 369,094 | 261,664 | 1,363,970 | 931,435 | |||||||||||
Oil sales | 13,391 | 13,347 | 74,962 | 48,796 | |||||||||||
Oil hedging settlements (1) | (2,588 | ) | 1,767 | (8,077 | ) | 12,849 | |||||||||
Total oil including hedging | 10,803 | 15,114 | 66,885 | 61,645 | |||||||||||
Total oil and gas sales including hedging | $ | 379,897 | $ | 276,778 | $ | 1,430,855 | $ | 993,080 | |||||||
Average gas price (per Mcf) | $ | 5.22 | $ | 2.40 | $ | 3.63 | $ | 1.80 | |||||||
Average gas price including hedging (per Mcf) | $ | 3.00 | $ | 2.40 | $ | 2.79 | $ | 2.07 | |||||||
Average oil price (per barrel) | $ | 76.09 | $ | 39.27 | $ | 61.95 | $ | 32.36 | |||||||
Average oil price including hedging (per barrel) | $ | 61.38 | $ | 44.47 | $ | 55.28 | $ | 40.88 | |||||||
Average price (per Mcfe) | $ | 5.28 | $ | 2.47 | $ | 3.73 | $ | 1.87 | |||||||
Average price including hedging (per Mcfe) | $ | 3.06 | $ | 2.49 | $ | 2.88 | $ | 2.16 | |||||||
Production and ad valorem taxes | $ | 12,673 | $ | 9,199 | $ | 49,141 | $ | 36,967 | |||||||
Gathering and transportation | 34,344 | 29,159 | 130,940 | 106,582 | |||||||||||
Lease operating | 26,317 | 23,342 | 103,467 | 102,452 | |||||||||||
Cash general and administrative (2) | 9,484 | 4,319 | 28,145 | 25,576 | |||||||||||
Total production costs | $ | 82,818 | $ | 66,019 | $ | 311,693 | $ | 271,577 | |||||||
Production and ad valorem taxes (per Mcfe) | $ | 0.10 | $ | 0.09 | $ | 0.10 | $ | 0.08 | |||||||
Gathering and transportation (per Mcfe) | 0.28 | 0.26 | 0.26 | 0.23 | |||||||||||
Lease operating (per Mcfe) | 0.21 | 0.21 | 0.21 | 0.22 | |||||||||||
Cash general and administrative (per Mcfe) | 0.08 | 0.04 | 0.06 | 0.06 | |||||||||||
Total production costs (per Mcfe) | $ | 0.67 | $ | 0.60 | $ | 0.63 | $ | 0.59 | |||||||
Unhedged operating margin | 87 | % | 76 | % | 83 | % | 68 | % | |||||||
Hedged operating margin | 78 | % | 76 | % | 78 | % | 73 | % | |||||||
Oil and Gas Capital Expenditures: | |||||||||||||||
Proved property acquisitions | $ | 21,781 | $ | — | $ | 21,781 | $ | — | |||||||
Unproved property acquisitions | 17,222 | 6,492 | 35,871 | 7,949 | |||||||||||
Total oil and gas properties acquisitions | $ | 39,003 | $ | 6,492 | $ | 57,652 | $ | 7,949 | |||||||
Exploration and Development: | |||||||||||||||
Development leasehold | $ | 6,159 | $ | 5,659 | $ | 12,953 | $ | 13,022 | |||||||
Exploratory drilling and completion | 6,966 | — | 6,966 | — | |||||||||||
Development drilling and completion | 114,617 | 155,691 | 569,141 | 436,074 | |||||||||||
Other development costs | 12,373 | 8,480 | 39,168 | 34,572 | |||||||||||
Total exploration and development capital expenditures | $ | 140,115 | $ | 169,830 | $ | 628,228 | $ | 483,668 |
(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 |
Year Ended |
|||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS: | ||||||||||||||||
Net income (loss) available to common stockholders | $ | 355,990 | $ | 77,523 | $ | (259,225 | ) | $ | (83,413 | ) | ||||||
Unrealized (gain) loss from derivative financial instruments | (469,830 | ) | (80,158 | ) | 140,934 | 124,545 | ||||||||||
Non-cash interest amortization from adjusting debt assumed in acquisition to fair value |
2,659 | 5,811 | 12,621 | 22,112 | ||||||||||||
(Gain) loss on sale of assets | 162,170 | (1 | ) | 162,077 | (17 | ) | ||||||||||
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) benefit from income taxes | 47,777 | 31,408 | (106,000 | ) | (19,930 | ) | ||||||||||
Adjusted net income available to common stockholders (1) | $ | 98,766 | $ | 34,583 | $ | 303,006 | $ | 49,602 | ||||||||
Adjusted net income available to common stockholders per share (2) | $ | 0.37 | $ | 0.14 | $ | 1.16 | $ | 0.23 | ||||||||
Diluted shares outstanding | 276,713 | 275,127 | 275,663 | 278,554 |
ADJUSTED EBITDAX: | ||||||||||||||||
Net income (loss) | $ | 360,401 | $ | 81,923 | $ | (241,725 | ) | $ | (52,417 | ) | ||||||
Interest expense (3) | 46,811 | 66,301 | 218,322 | 235,218 | ||||||||||||
Income taxes | 85,571 | 36,967 | 11,403 | (9,210 | ) | |||||||||||
Depreciation, depletion, and amortization | 110,075 | 104,284 | 469,388 | 417,112 | ||||||||||||
Exploration | — | — | — | 27 | ||||||||||||
Unrealized (gain) loss from derivative financial instruments | (469,830 | ) | (80,158 | ) | 140,934 | 124,545 | ||||||||||
Stock-based compensation | 1,508 | 1,730 | 6,799 | 6,464 | ||||||||||||
Loss on early extinguishment of debt | — | — | 352,599 | 861 | ||||||||||||
(Gain) loss on sale of assets | 162,170 | (1 | ) | 162,077 | (17 | ) | ||||||||||
Total Adjusted EBITDAX (4) | $ | 296,706 | $ | 211,046 | $ | 1,119,797 | $ | 722,583 |
(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) Includes realized gains or losses from interest rate derivative financial instruments.
(4) 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 |
Year Ended |
||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
OPERATING CASH FLOW (1): | |||||||||||||||
Net income (loss) | $ | 360,401 | $ | 81,923 | $ | (241,725 | ) | $ | (52,417 | ) | |||||
Reconciling items: | |||||||||||||||
Unrealized (gain) loss from derivative financial instruments | (469,830 | ) | (80,158 | ) | 140,934 | 124,545 | |||||||||
Deferred income taxes (benefit) | 81,377 | 37,034 | (3,565 | ) | (9,409 | ) | |||||||||
Depreciation, depletion and amortization | 110,075 | 104,284 | 469,388 | 417,112 | |||||||||||
Loss on early retirement of debt | — | — | 352,599 | 861 | |||||||||||
Amortization of debt discount and issuance costs | 4,116 | 9,807 | 21,703 | 34,038 | |||||||||||
Stock-based compensation | 1,508 | 1,730 | 6,799 | 6,464 | |||||||||||
Exploration | — | — | — | 27 | |||||||||||
(Gain) loss on sale of assets | 162,170 | (1 | ) | 162,077 | (17 | ) | |||||||||
Operating cash flow | $ | 249,817 | $ | 154,619 | $ | 908,210 | $ | 521,204 | |||||||
(Increase) decrease in accounts receivable | (24,573 | ) | (44,827 | ) | (121,952 | ) | 34,555 | ||||||||
(Increase) decrease in other current assets | (2,883 | ) | (1,272 | ) | (2,033 | ) | 7,019 | ||||||||
Increase in accounts payable and accrued expenses | 18,091 | 77,226 | 74,780 | 12,923 | |||||||||||
Net cash provided by operating activities | $ | 240,452 | $ | 185,746 | $ | 859,005 | $ | 575,701 | |||||||
Three Months Ended |
Year Ended |
||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
FREE CASH FLOW (2): | |||||||||||||||
Operating cash flow | $ | 249,817 | $ | 154,619 | $ | 908,210 | $ | 521,204 | |||||||
Less: | |||||||||||||||
Exploration and development capital expenditures | (140,115 | ) | (169,830 | ) | (628,228 | ) | (483,668 | ) | |||||||
Preferred dividends | (4,411 | ) | (4,400 | ) | (17,500 | ) | (25,580 | ) | |||||||
Free cash flow from operations | $ | 105,291 | $ | (19,611 | ) | $ | 262,482 | $ | 11,956 | ||||||
Acquisition of oil and gas properties | (39,003 | ) | (6,492 | ) | (57,652 | ) | (7,949 | ) | |||||||
Proceeds from divestiture of oil and gas properties | 138,099 | — | 138,099 | — | |||||||||||
Free cash flow after acquisition and divestiture activity | $ | 204,387 | $ | (26,103 | ) | $ | 342,929 | $ | 4,007 | ||||||
(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.
Ron Mills VP - Finance & Investor RelationsComstock Resources 972-668-8834 rmills@comstockresources.com
Source: Comstock Resources, Inc.