COMSTOCK RESOURCES, INC. REPORTS THIRD QUARTER 2020 FINANCIAL AND OPERATING RESULTS
Financial Results for the Three Months Ended
For the third quarter of 2020, Comstock reported a net loss available to common stockholders of
Comstock produced 102.6 billion cubic feet ("Bcf") of natural gas and 0.4 million barrels of oil or 104.7 billion cubic feet of natural gas equivalent ("Bcfe") in the third quarter of 2020. Natural gas production averaged 1,115 million cubic feet ("MMcf") per day, an increase of 5% over natural gas production in the third quarter of 2019. Oil production in the third quarter of 2020 decreased to 3,851 barrels of oil per day from 6,563 barrels per day produced in the third quarter of 2019. 12% of the Company's net oil production was shut in or curtailed during the third quarter of 2020 and 7% of the natural gas production was shut-in due to offset completion activity or due to curtailments related to storm activity or pipeline constraints.
Comstock's average realized natural gas price in the third quarter of 2020, including realized hedging gains, decreased to
Financial Results for the Nine Months Ended
For the first nine months of 2020, Comstock reported a net loss available to common stockholders of
Comstock produced 341.8 Bcf of natural gas and 1.2 million barrels of oil or 348.8 Bcfe in the first nine months of 2020. Natural gas production averaged 1,248 MMcf per day, an increase of 99% over natural gas production in the first nine months of 2019 due to the acquisition of
Comstock's average realized natural gas price in the first nine months of 2020, including realized hedging gains, decreased to
Drilling Results
Comstock spent
Since its last operational update, Comstock turned 15 (11.7 net) Haynesville shale wells into sales. The average initial production rate of these wells was 26 MMcf per day and had an average completed lateral length of 9,088 feet.
2021 Drilling Budget
The Company currently plans to spend approximately
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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Revenues: | |||||||||||||||||||
Natural gas sales | $ | 168,374 | $ | 193,506 | $ | 547,975 | $ | 375,589 | |||||||||||
Oil sales | 9,637 | 30,938 | 35,449 | 103,852 | |||||||||||||||
Total oil and gas sales | 178,011 | 224,444 | 583,424 | 479,441 | |||||||||||||||
Operating expenses: | |||||||||||||||||||
Production and ad valorem taxes | 9,798 | 9,381 | 27,768 | 22,703 | |||||||||||||||
Gathering and transportation | 22,422 | 23,414 | 77,423 | 41,346 | |||||||||||||||
Lease operating | 25,412 | 26,696 | 79,110 | 54,477 | |||||||||||||||
Exploration | — | 241 | 27 | 241 | |||||||||||||||
Depreciation, depletion and amortization | 99,056 | 80,247 | 312,828 | 164,684 | |||||||||||||||
General and administrative | 8,974 | 8,105 | 25,991 | 22,760 | |||||||||||||||
(Gain) loss on sale of assets | (16 | ) | — | (16 | ) | 25 | |||||||||||||
Total operating expenses | 165,646 | 148,084 | 523,131 | 306,236 | |||||||||||||||
Operating income | 12,365 | 76,360 | 60,293 | 173,205 | |||||||||||||||
Other income (expenses): | |||||||||||||||||||
Gain (loss) from derivative financial instruments | (121,579 | ) | 24,858 | (71,978 | ) | 31,945 | |||||||||||||
Other income | 489 | 92 | 793 | 340 | |||||||||||||||
Transaction costs | — | (39,657 | ) | — | (41,100 | ) | |||||||||||||
Interest expense | (63,890 | ) | (51,015 | ) | (168,764 | ) | (107,434 | ) | |||||||||||
Loss on early extinguishment of debt | — | — | (861 | ) | — | ||||||||||||||
Total other income (expenses) | (184,980 | ) | (65,722 | ) | (240,810 | ) | (116,249 | ) | |||||||||||
Income (loss) before income taxes | (172,615 | ) | 10,638 | (180,517 | ) | 56,956 | |||||||||||||
Benefit from (provision for) income taxes | 46,123 | (3,847 | ) | 46,177 | (15,183 | ) | |||||||||||||
Net income (loss) | (126,492 | ) | 6,791 | (134,340 | ) | 41,773 | |||||||||||||
Preferred stock dividends and accretion | (4,398 | ) | (8,128 | ) | (26,596 | ) | (8,128 | ) | |||||||||||
Net income (loss) available to common stockholders | $ | (130,890 | ) | $ | (1,337 | ) | $ | (160,936 | ) | $ | 33,645 | ||||||||
Net income (loss) per share: | |||||||||||||||||||
Basic | $ | (0.57 | ) | $ | (0.01 | ) | $ | (0.77 | ) | $ | 0.26 | ||||||||
Diluted | $ | (0.57 | ) | $ | (0.01 | ) | $ | (0.77 | ) | $ | 0.26 | ||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 231,223 | 171,487 | 209,760 | 127,709 | |||||||||||||||
Diluted | 231,223 | 171,487 | 209,760 | 127,709 | |||||||||||||||
CONSOLIDATED BALANCE SHEETS
(In thousands)
As of | ||||||
ASSETS | ||||||
Cash and cash equivalents | $ | 28,268 | $ | 18,532 | ||
Accounts receivable | 100,959 | 180,341 | ||||
Derivative financial instruments | 8,830 | 75,304 | ||||
Income taxes receivable | — | 5,109 | ||||
Other current assets | 11,773 | 10,399 | ||||
Total current assets | 149,830 | 289,685 | ||||
Property and equipment, net | 4,012,348 | 4,008,803 | ||||
335,897 | 335,897 | |||||
Income taxes receivable | — | 5,109 | ||||
Derivative financial instruments | 1,185 | 13,888 | ||||
Operating lease right-of-use assets | 3,554 | 3,509 | ||||
Other assets | 40 | 231 | ||||
$ | 4,502,854 | $ | 4,657,122 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Accounts payable | $ | 202,174 | $ | 252,994 | ||
Accrued costs | 112,695 | 137,166 | ||||
Operating leases | 2,318 | 1,994 | ||||
Derivative financial instruments | 63,595 | 222 | ||||
Total current liabilities | 380,782 | 392,376 | ||||
Long-term debt | 2,507,669 | 2,500,132 | ||||
Deferred income taxes | 163,550 | 211,772 | ||||
Derivative financial instruments | 66,373 | 4,220 | ||||
Long-term operating leases | 1,236 | 1,515 | ||||
Asset retirement obligation | 19,402 | 18,151 | ||||
Other non-current liabilities | 1,162 | 6,351 | ||||
Total liabilities | 3,140,174 | 3,134,517 | ||||
Mezzanine Equity: | ||||||
Preferred stock | 175,000 | 379,583 | ||||
Stockholders' Equity: | ||||||
Common stock | 116,210 | 95,003 | ||||
Additional paid-in capital | 1,093,811 | 909,423 | ||||
Accumulated earnings (deficit) | (22,341 | ) | 138,596 | |||
Total stockholders' equity | 1,187,680 | 1,143,022 | ||||
$ | 4,502,854 | $ | 4,657,122 |
OPERATING RESULTS
(In thousands, except per unit amounts)
Three Months Ended |
Nine Months Ended |
||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Gas production (MMcf) | 102,560 | 97,236 | 341,823 | 171,313 | |||||||||||
Oil production (Mbbls) | 354 | 603 | 1,168 | 2,108 | |||||||||||
Total production (MMcfe) | 104,687 | 100,859 | 348,831 | 183,964 | |||||||||||
Natural gas sales | $ | 168,374 | $ | 193,506 | $ | 547,975 | $ | 375,589 | |||||||
Natural gas hedging settlements (1) | 32,000 | 26,030 | 121,796 | 32,995 | |||||||||||
Total natural gas including hedging | 200,374 | 219,536 | 669,771 | 408,584 | |||||||||||
Oil sales | 9,637 | 30,938 | 35,449 | 103,852 | |||||||||||
Oil hedging settlements (1) | 2,238 | 17 | 11,082 | 387 | |||||||||||
Total oil including hedging | 11,875 | 30,955 | 46,531 | 104,239 | |||||||||||
Total oil and gas sales including hedging | $ | 212,249 | $ | 250,491 | $ | 716,302 | $ | 512,823 | |||||||
Average gas price (per Mcf) | $ | 1.64 | $ | 1.99 | $ | 1.60 | $ | 2.19 | |||||||
Average gas price including hedging (per Mcf) | $ | 1.95 | $ | 2.26 | $ | 1.96 | $ | 2.39 | |||||||
Average oil price (per barrel) | $ | 27.20 | $ | 51.24 | $ | 30.35 | $ | 49.26 | |||||||
Average oil price including hedging (per barrel) | $ | 33.52 | $ | 51.27 | $ | 39.84 | $ | 49.44 | |||||||
Average price (per Mcfe) | $ | 1.70 | $ | 2.23 | $ | 1.67 | $ | 2.61 | |||||||
Average price including hedging (per Mcfe) | $ | 2.03 | $ | 2.48 | $ | 2.05 | $ | 2.79 | |||||||
Production and ad valorem taxes | $ | 9,798 | $ | 9,381 | $ | 27,768 | $ | 22,703 | |||||||
Gathering and transportation | $ | 22,422 | $ | 23,414 | $ | 77,423 | $ | 41,346 | |||||||
Lease operating | $ | 25,412 | $ | 26,696 | $ | 79,110 | $ | 54,477 | |||||||
Production and ad valorem taxes (per Mcfe) | $ | 0.09 | $ | 0.09 | $ | 0.08 | $ | 0.12 | |||||||
Gathering and transportation (per Mcfe) | $ | 0.21 | $ | 0.23 | $ | 0.22 | $ | 0.22 | |||||||
Lease operating (per Mcfe) | $ | 0.25 | $ | 0.27 | $ | 0.23 | $ | 0.30 | |||||||
Oil and Gas Capital Expenditures: | |||||||||||||||
Acquisitions | $ | — | $ | 2,055,623 | $ | — | $ | 2,055,623 | |||||||
Exploratory leasehold | 1,457 | — | 1,457 | — | |||||||||||
Development leasehold | 1,027 | 2,407 | 7,363 | 6,713 | |||||||||||
Development drilling and completion | 96,903 | 169,747 | 280,383 | 342,665 | |||||||||||
Other development | 11,045 | 1,502 | 26,463 | 6,218 | |||||||||||
Total | $ | 110,432 | $ | 2,229,279 | $ | 315,666 | $ | 2,411,219 |
(1) Included in gain (loss) from derivative financial instruments in operating results.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
ADJUSTED NET INCOME (LOSS) TO COMMON STOCKHOLDERS: | |||||||||||||||||||
Net income (loss) available to common stockholders | $ | (130,890 | ) | $ | (1,337 | ) | $ | (160,936 | ) | $ | 33,645 | ||||||||
(Gain) loss on sale of oil and gas properties | (16 | ) | — | (16 | ) | 25 | |||||||||||||
Unrealized loss on derivative financial instruments | 155,601 | 1,189 | 204,703 | 1,437 | |||||||||||||||
Loss on early extinguishment of debt | — | — | 861 | — | |||||||||||||||
Non-cash interest amortization from adjusting debt assumed in acquisition to fair value |
5,621 | 4,078 | 16,301 | 4,078 | |||||||||||||||
Non-cash accretion from adjusting preferred stock issued in acquisition to fair value |
— | — | 5,417 | — | |||||||||||||||
Impairment of unevaluated oil and gas properties | — | — | 27 | — | |||||||||||||||
Transaction costs | — | 39,657 | — | 41,100 | |||||||||||||||
Covey Park |
— | 4,574 | — | 4,574 | |||||||||||||||
Adjusted provision for income taxes | (44,122 | ) | (13,833 | ) | (53,430 | ) | (13,652 | ) | |||||||||||
Adjusted net income (loss) available to common stockholders (1) | $ | (13,806 | ) | $ | 34,328 | $ | 12,927 | $ | 71,207 | ||||||||||
Diluted shares outstanding | 231,223 | 252,177 | 209,760 | 154,856 | |||||||||||||||
Adjusted net income (loss) available to common stockholders per share | $ | (0.06 | ) | $ | 0.17 | $ | 0.06 | $ | 0.51 |
ADJUSTED EBITDAX: | |||||||||||||||||
Net income (loss) | $ | (126,492 | ) | $ | 6,791 | $ | (134,340 | ) | $ | 41,773 | |||||||
Interest expense | 63,890 | 51,015 | 168,764 | 107,434 | |||||||||||||
Income taxes | (46,123 | ) | 3,847 | (46,177 | ) | 15,183 | |||||||||||
Depreciation, depletion, and amortization | 99,056 | 80,247 | 312,828 | 164,684 | |||||||||||||
Unrealized loss from derivative financial instruments | 155,601 | 1,189 | 204,703 | 1,437 | |||||||||||||
Exploration | — | 241 | 27 | 241 | |||||||||||||
Stock-based compensation | 1,752 | 1,088 | 4,734 | 2,359 | |||||||||||||
Loss on early extinguishment of debt | — | — | 861 | — | |||||||||||||
Transaction costs | — | 39,657 | — | 41,100 | |||||||||||||
Covey Park |
— | 4,574 | — | 4,574 | |||||||||||||
(Gain) loss on sale of assets | (16 | ) | — | (16 | ) | 25 | |||||||||||
Total Adjusted EBITDAX (2) | $ | 147,668 | $ | 188,649 | $ | 511,384 | $ | 378,810 |
(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 non-cash unrealized gains and losses on derivative financial instruments and other unusual items.
(2) 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 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 |
||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
OPERATING CASH FLOW: | |||||||||||||||||||
Net income (loss) | $ | (126,492 | ) | $ | 6,791 | $ | (134,340 | ) | $ | 41,773 | |||||||||
Reconciling items: | |||||||||||||||||||
Deferred income taxes | (46,237 | ) | 3,775 | (46,443 | ) | 15,205 | |||||||||||||
Depreciation, depletion and amortization | 99,056 | 80,247 | 312,828 | 164,684 | |||||||||||||||
Unrealized loss from derivative financial instruments | 155,601 | 1,189 | 204,703 | 1,437 | |||||||||||||||
Amortization of debt discount and issuance costs | 9,505 | 6,009 | 24,231 | 9,206 | |||||||||||||||
Stock-based compensation | 1,752 | 1,088 | 4,734 | 2,359 | |||||||||||||||
Loss on early extinguishment of debt | — | — | 861 | — | |||||||||||||||
Transaction costs | — | 39,657 | — | 41,100 | |||||||||||||||
Covey Park |
— | 4,574 | — | 4,574 | |||||||||||||||
Exploration | — | — | 27 | — | |||||||||||||||
(Gain) loss on sale of assets | (16 | ) | — | (16 | ) | 25 | |||||||||||||
Operating cash flow (1) | 93,169 | 143,330 | 366,585 | 280,363 | |||||||||||||||
Transaction costs | — | (39,657 | ) | — | (41,100 | ) | |||||||||||||
Covey Park |
— | (4,574 | ) | — | (4,574 | ) | |||||||||||||
Decrease (increase) in accounts receivable | (3,790 | ) | 27,670 | 79,382 | 48,404 | ||||||||||||||
Decrease in other current assets | 11,093 | 5,545 | 8,291 | 7,137 | |||||||||||||||
Increase (decrease) in accounts payable and accrued expenses | 23,392 | (22,534 | ) | (64,303 | ) | (7,424 | ) | ||||||||||||
Net cash provided by operating activities | $ | 123,864 | $ | 109,780 | $ | 389,955 | $ | 282,806 | |||||||||||
(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.
Ronald Mills VP - Finance & Investor Relations 972-668-8834 rmills@comstockresources.com
Source: Comstock Resources, Inc.