UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 4, 2020
COMSTOCK RESOURCES, INC.
(Exact Name of Registrant as Specified in Charter)
| Nevada | 001-03262 | 94-1667468 | ||||||
| (State or other jurisdiction incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||
5300 Town and Country Boulevard
Suite 500
Frisco, Texas 75034
(Address of principal executive offices)
(972) 668-8800
(Registrant's Telephone No.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, par value $0.50 (per share) | CRK | New York Stock Exchange | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On November 4, 2020, Comstock Resources, Inc. ("Comstock" or the "Company") announced financial results for the three months and nine months ended September 30, 2020. A copy of the press release announcing Comstock's earnings and operating results for these periods and other matters is attached hereto as Exhibit 99.1.
The earnings press release contains financial measures that are not in accordance with generally accepted accounting principles in the United States ("GAAP"). Comstock has provided reconciliations within the earnings release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, measures of financial performance prepared in accordance with GAAP that are presented in the earnings release.
The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liability of that section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits
| Exhibit 99.1 | |||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| COMSTOCK RESOURCES, INC. | ||||||||
| Dated: November 4, 2020 | By: | /s/ ROLAND O. BURNS | ||||||
| Roland O. Burns | ||||||||
| President and Chief Financial Officer | ||||||||
Exhibit 99.1
 | 5300 Town and Country Blvd., Suite 500 | ||||
| Frisco, Texas 75034 | |||||
| Telephone: (972) 668-8834 | |||||
| Contact: Ron Mills | |||||
| VP of Finance and Investor Relations | |||||
| Web Site: www.comstockresources.com | |||||
| NEWS RELEASE | |||||
For Immediate Release
COMSTOCK RESOURCES, INC. REPORTS
THIRD QUARTER 2020 FINANCIAL AND OPERATING RESULTS
FRISCO, TEXAS, November 4, 2020 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended September 30, 2020.
Financial Results for the Three Months Ended September 30, 2020
For the third quarter of 2020, Comstock reported a net loss available to common stockholders of $130.9 million or $0.57 per share. The loss was primarily related to a $155.6 million unrealized loss on the mark-to-market value of the Company's derivative financial instruments that are held to hedge oil and natural gas prices as future natural gas prices have improved substantially since the end of the second quarter of 2020. The adjusted net loss available to common stockholders excluding the unrealized loss on the hedge contracts and other non-recurring items for the third quarter of 2020 was $13.8 million or $0.06 per diluted share.
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 $1.95 per Mcf as compared to $2.26 per Mcf realized in the third quarter of 2019. The Company's average realized oil price in the third quarter of 2020, including realized hedging gains, decreased to $33.52 per barrel as compared to $51.27 per barrel in the third quarter of 2019. Oil and gas sales were $212.2 million (including realized hedging gains) in the third quarter of 2020 as compared to $250.5 million in the third quarter of 2019. The lower oil and gas prices realized caused adjusted EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, of $147.7 million in the third quarter of 2020 to decrease by 22% over adjusted EBITDAX of $188.6 million for the third quarter of 2019. The Company's operating cash flow generated in the third quarter of 2020 of $93.2 million decreased 35% over operating cash flow of $143.3 million in the third quarter of 2019.
Financial Results for the Nine Months Ended September 30, 2020
For the first nine months of 2020, Comstock reported a net loss available to common stockholders of $160.9 million or $0.77 per share. Adjusted net income available to common stockholders excluding the $204.7 million unrealized loss on derivative financial instruments and other non-recurring items for the first nine months of 2020 was $12.9 million or $0.06 per diluted share.
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 Covey Park Energy LLC, which was completed in July 2019. Oil production in the first nine months of 2020 decreased to 4,263 barrels of oil per day from 7,723 barrels per day produced in first nine months of 2019.
Comstock's average realized natural gas price in the first nine months of 2020, including realized hedging gains, decreased to $1.96 per Mcf as compared to $2.39 per Mcf realized in the first nine months of 2019. The Company's average realized oil price in the first nine months of 2020, including realized hedging gains, decreased to $39.84 per barrel as compared to $49.44 per barrel in the first nine months of 2019. Oil and gas sales were $716.3 million, including realized hedging gains, in the first nine months of 2020 as compared to sales of $512.8 million in the first nine months of 2019. Adjusted EBITDAX of $511.4 million in the first nine months of 2020 increased by 35% over adjusted EBITDAX of $378.8 million for the first nine months of 2019. The Company's operating cash flow generated in the first nine months of 2020 of $366.6 million increased 31% over operating cash flow of $280.4 million in the first nine months of 2019.
Drilling Results
Comstock spent $315.7 million during the first nine months of 2020 for drilling and development activities. $308.6 million was spent to develop its Haynesville and Bossier shale properties, comprised of $280.4 million on drilling and completing wells and an additional $28.2 million on other development activity. In response to the higher anticipated natural gas prices, Comstock restarted completion activity and added two operating drilling rigs in the third quarter and currently has three completion crews working through the backlog of drilled but uncompleted wells. The ramp-up of activity will allow new wells to come on line late in the fourth quarter of 2020 and early in 2021 to coincide with the expected continued improvement of future natural gas prices. Comstock drilled 36 (28.6) horizontal operated Haynesville shale wells during the first nine months of 2020, which had an average lateral length of 9,143 feet. Comstock also participated in 18 (1.3 net) non-operated Haynesville shale wells in the first nine months of 2020. During the first nine months of 2020, Comstock turned 33 (24.6 net) Haynesville shale wells to sales and currently expects to turn an additional 22 (17.6 net) wells to sales in the fourth quarter of 2020.
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 $525.0 to $575.0 million in 2021 on drilling and completion activities primarily focused in the Haynesville/Bossier shale. Comstock is currently planning to operate six rigs for the first half of 2021 and seven rigs for the remainder of the year and expects to drill 70 (56.5 net) and complete 65 (56.6 net) operated horizontal wells.
Other Matters
Comstock has planned a conference call for 10:00 a.m. Central Time on November 5, 2020, to discuss the third quarter of 2020 operational and financial results. Investors wishing to participate should visit the Company's website at www.comstockresources.com for a live webcast or dial 844-776-7840 (international dial-in use 661-378-9538) and provide access code 1275655 when prompted. If you are unable to participate in the original conference call, a web replay will be available approximately 24 hours following the completion of the call on Comstock's website at www.comstockresources.com. The web replay will be available for approximately one week. A replay of the conference call will be available beginning at 1:00 p.m. CT November 5, 2020 and will continue until 1:00 p.m. November 12, 2020. To hear the replay, call 855-859-2056 (404-537-3406) if calling from outside the US). The conference call access code is 1275655.
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.
Comstock Resources, Inc. is an independent energy company based in Frisco, Texas engaged in oil and gas acquisitions, exploration and development, and its assets are primarily located in Texas, Louisiana and North Dakota. 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 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 | |||||||||||||||||||
COMSTOCK RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| As of | |||||||||||
| September 30, 2020 | December 31, 2019 | ||||||||||
| 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 | |||||||||
| Goodwill | 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 | ||||||||
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per unit amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 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.
COMSTOCK RESOURCES, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 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 July 2019 hedging settlements | — | 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 July 2019 hedging settlements | — | 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.
COMSTOCK RESOURCES, INC.
NON-GAAP FINANCIAL MEASURES
(In thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 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 July 2019 hedging settlements | — | 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 July 2019 hedging settlements | — | (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.