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 2, 2021
(Exact Name of Registrant as Specified in Charter)
| (State or other jurisdiction incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||
(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 | ||||||
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 2, 2021 , Comstock Resources, Inc. ("Comstock" or the "Company") announced financial results for the three months and nine months ended September 30, 2021. 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 No. | Description | ||||
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 2, 2021 | 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 2021 FINANCIAL AND OPERATING RESULTS
FRISCO, TEXAS, November 2, 2021 – Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended September 30, 2021.
Highlights of 2021's Third Quarter
•Free cash flow of $84 million was generated in the quarter.
•Adjusted net income to common stockholders was $91 million for the quarter or $0.34 per diluted share.
•Production increased 25% to 1,424 MMcfe per day (98% natural gas).
•Revenues, including realized hedging losses, were $394 million, 86% higher than 2020's third quarter.
•Adjusted EBITDAX was up 109% to $309 million.
•Operating cash flow (excluding working capital changes) increased 30% to $255 million or $0.92 per diluted share.
•Third quarter capital spending was $167 million, including $5 million for leasing activities.
Third Quarter 2021 Financial Results
Revenues in the third quarter of 2021 totaled $394.0 million (after deducting realized losses on hedging of $117.1 million). Net cash provided by operating activities (excluding changes in working capital) generated in the third quarter was $255.4 million, and the Company reported a net loss available to common stockholders for the third quarter of $292.7 million ($1.26 per share). The net loss in the quarter was driven by a $392.9 million unrealized loss on hedging contracts held for risk management. The significant improvement in the outlook for natural gas prices generated the unrealized loss on the hedging contracts. Excluding this item and certain other unusual items, adjusted net income available to common stockholders for the third quarter of 2021 was $90.6 million, or $0.34 per diluted share.
Comstock's production cost per Mcfe in the third quarter was $0.65 per Mcfe, which was comprised of $0.27 for gathering and transportation costs, $0.20 for lease operating costs, $0.13 for production and other taxes and $0.05 for cash general and administrative expenses. Production cost was $0.59 per Mcfe in the second quarter of 2021 and $0.62 in the third quarter of 2020. Comstock's unhedged operating margin was 83% in the third quarter of 2021.
Financial Results for the Nine Months Ended September 30, 2021
Revenues reported for the first nine months of 2021 totaled $1.1 billion (after deducting realized losses on hedging of $144.4 million). Net cash provided by operating activities (excluding changes in working capital) was $658.4 million, and the Company reported a net loss available to common stockholders for the first nine months of 2021 of $615.2 million ($2.66 per share). The net loss in the first nine months of 2021 included a $610.8 million unrealized loss on the change in fair market value of the Company's hedging contracts and $352.6 million in pre-tax losses on the early retirement of the Company's 9.75% and 7.50% senior notes. Excluding these items and certain other unusual items, adjusted net income available to common stockholders was $208.9 million, or $0.80 per diluted share.
Drilling Results
Comstock drilled 55 (45.2 net) operated horizontal Haynesville/Bossier shale wells in the first nine months of 2021 which had an average lateral length of 8,504 feet. Comstock also participated in an additional 26 (1.7 net) non-operated Haynesville shale wells in the first nine months of 2021. Comstock turned 68 (47.2 net) wells to sales in the first nine months of 2021 and currently expects to turn an additional 10 wells (8.8 net) to sales in the fourth quarter of 2021.
Since its last operational update in August 2021, Comstock has turned 15 (12.3 net) new operated Haynesville/Bossier shale wells to sales. These wells had initial daily production rates that averaged 22 MMcf per day. The completed lateral length of these wells averaged 7,925 feet.
Other Matters
Comstock today announced a partnership with MiQ to independently certify its natural gas production in North Louisiana and East Texas and has engaged Responsible Energy Solutions, LLC as the third-party auditor for the certification process. Comstock will use the MiQ Standard, a framework that assesses and grades methane emissions intensity, enhanced monitoring technology deployment and operating practices that promote a culture of emissions management and continuous improvement, for its facilities in North Louisiana and East Texas, which currently produce approximately 2.0 billion cubic feet per day of natural gas (gross). The partnership highlights Comstock's ongoing commitment to produce natural gas under strict environmental standards and deliver differentiated, responsibly sourced gas based on methane intensity to both domestic and international markets. Comstock's goal is to achieve the MiQ certified natural gas status in the first half of 2022.
Earnings Call Information
Comstock has planned a conference call for 10:00 a.m. Central Time on November 3, 2021, to discuss the third quarter of 2021 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 9128805 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 on November 3, 2021 and will continue until 12:00 p.m. CT on November 10, 2021. To hear the replay, call 855-859-2056 (404-537-3406 if calling from outside the US). The conference call access code is 9128805.
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 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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Natural gas sales | $ | 488,303 | $ | 168,374 | $ | 1,133,783 | $ | 547,975 | |||||||||||||||
| Oil sales | 22,873 | 9,637 | 61,571 | 35,449 | |||||||||||||||||||
| Total oil and gas sales | 511,176 | 178,011 | 1,195,354 | 583,424 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Production and ad valorem taxes | 16,675 | 9,798 | 36,468 | 27,768 | |||||||||||||||||||
| Gathering and transportation | 35,402 | 22,422 | 96,596 | 77,423 | |||||||||||||||||||
| Lease operating | 26,576 | 25,412 | 77,150 | 79,110 | |||||||||||||||||||
| Exploration | — | — | — | 27 | |||||||||||||||||||
| Depreciation, depletion and amortization | 128,739 | 99,056 | 359,313 | 312,828 | |||||||||||||||||||
| General and administrative | 8,052 | 8,974 | 23,952 | 25,991 | |||||||||||||||||||
| Gains on asset sales | (14) | (16) | (93) | (16) | |||||||||||||||||||
| Total operating expenses | 215,430 | 165,646 | 593,386 | 523,131 | |||||||||||||||||||
| Operating income | 295,746 | 12,365 | 601,968 | 60,293 | |||||||||||||||||||
| Other income (expenses): | |||||||||||||||||||||||
| Loss from derivative financial instruments | (510,319) | (121,579) | (756,026) | (71,978) | |||||||||||||||||||
| Other income | 197 | 489 | 1,008 | 793 | |||||||||||||||||||
| Interest expense | (49,954) | (63,890) | (170,645) | (168,764) | |||||||||||||||||||
| Loss on early retirement of debt | — | — | (352,599) | (861) | |||||||||||||||||||
| Total other expenses | (560,076) | (184,980) | (1,278,262) | (240,810) | |||||||||||||||||||
| Loss before income taxes | (264,330) | (172,615) | (676,294) | (180,517) | |||||||||||||||||||
| Benefit from (provision for) income taxes | (23,976) | 46,123 | 74,168 | 46,177 | |||||||||||||||||||
| Net loss | (288,306) | (126,492) | (602,126) | (134,340) | |||||||||||||||||||
| Preferred stock dividends and accretion | (4,411) | (4,398) | (13,089) | (26,596) | |||||||||||||||||||
| Net loss available to common stockholders | $ | (292,717) | $ | (130,890) | $ | (615,215) | $ | (160,936) | |||||||||||||||
| Net loss per share: | |||||||||||||||||||||||
| Basic | $ | (1.26) | $ | (0.57) | $ | (2.66) | $ | (0.77) | |||||||||||||||
| Diluted | $ | (1.26) | $ | (0.57) | $ | (2.66) | $ | (0.77) | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 231,747 | 231,223 | 231,519 | 209,760 | |||||||||||||||||||
Diluted (1) | 231,747 | 231,223 | 231,519 | 209,760 | |||||||||||||||||||
(1)Basic and diluted shares outstanding are the same since the effect of unvested restricted stock, performance stock units and preferred stock would be anti-dilutive.
COMSTOCK RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| As of | |||||||||||
| September 30, 2021 | December 31, 2020 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 27,841 | $ | 30,272 | |||||||
| Accounts receivable | 243,165 | 145,786 | |||||||||
| Derivative financial instruments | 26,392 | 8,913 | |||||||||
| Other current assets | 12,194 | 14,839 | |||||||||
| Total current assets | 309,592 | 199,810 | |||||||||
| Property and equipment, net | 4,234,477 | 4,084,550 | |||||||||
| Goodwill | 335,897 | 335,897 | |||||||||
| Derivative financial instruments | 342 | 661 | |||||||||
| Operating lease right-of-use assets | 6,792 | 3,025 | |||||||||
| Other assets | 37 | 40 | |||||||||
| $ | 4,887,137 | $ | 4,623,983 | ||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Accounts payable | $ | 324,811 | $ | 259,284 | |||||||
| Accrued costs | 109,122 | 133,019 | |||||||||
| Operating leases | 2,356 | 2,284 | |||||||||
| Derivative financial instruments | 627,166 | 47,005 | |||||||||
| Total current liabilities | 1,063,455 | 441,592 | |||||||||
| Long-term debt | 2,801,312 | 2,517,149 | |||||||||
| Deferred income taxes | 115,585 | 200,583 | |||||||||
| Derivative financial instruments | 50,127 | 2,364 | |||||||||
| Long-term operating leases | 4,486 | 740 | |||||||||
| Reserve for future abandonment costs | 21,867 | 19,290 | |||||||||
| Other non-current liabilities | 24 | 492 | |||||||||
| Total liabilities | 4,056,856 | 3,182,210 | |||||||||
| Mezzanine equity: | |||||||||||
| Preferred stock | 175,000 | 175,000 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock | 116,462 | 116,206 | |||||||||
| Additional paid-in capital | 1,098,851 | 1,095,384 | |||||||||
| Accumulated earnings (deficit) | (560,032) | 55,183 | |||||||||
| Total stockholders' equity | 655,281 | 1,266,773 | |||||||||
| $ | 4,887,137 | $ | 4,623,983 | ||||||||
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per unit amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Gas production (MMcf) | 128,896 | 102,560 | 366,272 | 341,823 | |||||||||||||||||||
| Oil production (Mbbls) | 346 | 354 | 1,034 | 1,168 | |||||||||||||||||||
| Total production (MMcfe) | 130,968 | 104,687 | 372,474 | 348,831 | |||||||||||||||||||
| Natural gas sales | $ | 488,303 | $ | 168,374 | $ | 1,133,783 | $ | 547,975 | |||||||||||||||
Natural gas hedging settlements (1) | (114,538) | 32,000 | (138,907) | 121,796 | |||||||||||||||||||
| Total natural gas including hedging | 373,765 | 200,374 | 994,876 | 669,771 | |||||||||||||||||||
| Oil sales | 22,873 | 9,637 | 61,571 | 35,449 | |||||||||||||||||||
Oil hedging settlements (1) | (2,606) | 2,238 | (5,489) | 11,082 | |||||||||||||||||||
| Total oil including hedging | 20,267 | 11,875 | 56,082 | 46,531 | |||||||||||||||||||
| Total oil and gas sales including hedging | $ | 394,032 | $ | 212,249 | $ | 1,050,958 | $ | 716,302 | |||||||||||||||
| Average gas price (per Mcf) | $ | 3.79 | $ | 1.64 | $ | 3.10 | $ | 1.60 | |||||||||||||||
| Average gas price including hedging (per Mcf) | $ | 2.90 | $ | 1.95 | $ | 2.72 | $ | 1.96 | |||||||||||||||
| Average oil price (per barrel) | $ | 66.11 | $ | 27.20 | $ | 59.55 | $ | 30.35 | |||||||||||||||
| Average oil price including hedging (per barrel) | $ | 58.58 | $ | 33.52 | $ | 54.24 | $ | 39.84 | |||||||||||||||
| Average price (per Mcfe) | $ | 3.90 | $ | 1.70 | $ | 3.21 | $ | 1.67 | |||||||||||||||
| Average price including hedging (per Mcfe) | $ | 3.01 | $ | 2.03 | $ | 2.82 | $ | 2.05 | |||||||||||||||
| Production and ad valorem taxes | $ | 16,675 | $ | 9,798 | $ | 36,468 | $ | 27,768 | |||||||||||||||
| Gathering and transportation | 35,402 | 22,422 | 96,596 | 77,423 | |||||||||||||||||||
| Lease operating | 26,576 | 25,412 | 77,150 | 79,110 | |||||||||||||||||||
Cash general and administrative (2) | 6,250 | 7,222 | 18,661 | 21,257 | |||||||||||||||||||
| Total production costs | $ | 84,903 | $ | 64,854 | $ | 228,875 | $ | 205,558 | |||||||||||||||
| Production and ad valorem taxes (per Mcfe) | $ | 0.13 | $ | 0.09 | $ | 0.09 | $ | 0.08 | |||||||||||||||
| Gathering and transportation (per Mcfe) | 0.27 | 0.21 | 0.26 | 0.22 | |||||||||||||||||||
| Lease operating (per Mcfe) | 0.20 | 0.25 | 0.21 | 0.23 | |||||||||||||||||||
| Cash general and administrative (per Mcfe) | 0.05 | 0.07 | 0.05 | 0.06 | |||||||||||||||||||
| Total production costs (per Mcfe) | $ | 0.65 | $ | 0.62 | $ | 0.61 | $ | 0.59 | |||||||||||||||
| Unhedged operating margin | 83 | % | 64 | % | 81 | % | 65 | % | |||||||||||||||
| Hedged operating margin | 78 | % | 69 | % | 78 | % | 71 | % | |||||||||||||||
| Oil and Gas Capital Expenditures: | |||||||||||||||||||||||
| Exploratory leasehold | $ | 5,248 | $ | 1,457 | $ | 18,649 | $ | 1,457 | |||||||||||||||
| Development leasehold | 733 | 1,027 | 6,794 | 7,363 | |||||||||||||||||||
| Development drilling and completion | 141,637 | 96,903 | 454,524 | 280,383 | |||||||||||||||||||
| Other development | 19,524 | 11,045 | 28,455 | 26,463 | |||||||||||||||||||
| Total | $ | 167,142 | $ | 110,432 | $ | 508,422 | $ | 315,666 | |||||||||||||||
(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 September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
| ADJUSTED NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS | ||||||||||||||||||||||||||
| Net loss available to common stockholders | $ | (292,717) | $ | (130,890) | $ | (615,215) | $ | (160,936) | ||||||||||||||||||
| Unrealized loss from derivative financial instruments | 392,870 | 155,601 | 610,764 | 204,703 | ||||||||||||||||||||||
| Non-cash interest amortization from adjusting debt assumed in acquisition to fair value | 2,565 | 5,621 | 9,962 | 16,301 | ||||||||||||||||||||||
| Gains on asset sales | (14) | (16) | (93) | (16) | ||||||||||||||||||||||
| 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 income taxes | (12,099) | (44,122) | (149,106) | (53,430) | ||||||||||||||||||||||
Adjusted net income (loss) available to common stockholders (1) | $ | 90,605 | $ | (13,806) | $ | 208,911 | $ | 12,927 | ||||||||||||||||||
Adjusted net income (loss) available to common stockholders per share (2) | $ | 0.34 | $ | (0.06) | $ | 0.80 | $ | 0.06 | ||||||||||||||||||
| Diluted shares outstanding | 276,886 | 231,223 | (3) | 276,368 | 209,760 | (3) | ||||||||||||||||||||
| ADJUSTED EBITDAX: | ||||||||||||||||||||||||||
| Net loss | $ | (288,306) | $ | (126,492) | $ | (602,126) | $ | (134,340) | ||||||||||||||||||
Interest expense (4) | 50,259 | 64,106 | 171,511 | 168,917 | ||||||||||||||||||||||
| Income taxes | 23,976 | (46,123) | (74,168) | (46,177) | ||||||||||||||||||||||
| Depreciation, depletion, and amortization | 128,739 | 99,056 | 359,313 | 312,828 | ||||||||||||||||||||||
| Exploration | — | — | — | 27 | ||||||||||||||||||||||
| Unrealized loss from derivative financial instruments | 392,870 | 155,601 | 610,764 | 204,703 | ||||||||||||||||||||||
| Stock-based compensation | 1,802 | 1,752 | 5,291 | 4,734 | ||||||||||||||||||||||
| Loss on early retirement of debt | — | — | 352,599 | 861 | ||||||||||||||||||||||
| Gains on asset sales | (14) | (16) | (93) | (16) | ||||||||||||||||||||||
Total Adjusted EBITDAX (5) | $ | 309,326 | $ | 147,884 | $ | 823,091 | $ | 511,537 | ||||||||||||||||||
(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 loss on early retirement of debt, non-cash unrealized gains and losses on derivative financial instruments and other unusual items.
(2)Adjusted net income (loss) 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)Basic and diluted shares outstanding are the same since the effect of unvested restricted stock, performance stock units and preferred stock would be anti-dilutive.
(4)Includes realized gains or losses from interest rate derivative financial instruments.
(5)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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
OPERATING CASH FLOW (1): | |||||||||||||||||||||||
| Net loss | $ | (288,306) | $ | (126,492) | $ | (602,126) | $ | (134,340) | |||||||||||||||
| Reconciling items: | |||||||||||||||||||||||
| Unrealized loss from derivative financial instruments | 392,870 | 155,601 | 610,764 | 204,703 | |||||||||||||||||||
| Deferred income taxes (benefit) | 16,339 | (46,237) | (84,942) | (46,443) | |||||||||||||||||||
| Depreciation, depletion and amortization | 128,739 | 99,056 | 359,313 | 312,828 | |||||||||||||||||||
| Loss on early retirement of debt | — | — | 352,599 | 861 | |||||||||||||||||||
| Amortization of debt discount and issuance costs | 4,012 | 9,505 | 17,587 | 24,231 | |||||||||||||||||||
| Stock-based compensation | 1,802 | 1,752 | 5,291 | 4,734 | |||||||||||||||||||
| Exploration | — | — | — | 27 | |||||||||||||||||||
| Gains on asset sales | (14) | (16) | (93) | (16) | |||||||||||||||||||
| Operating cash flow | 255,442 | 93,169 | 658,393 | 366,585 | |||||||||||||||||||
| Decrease (increase) in accounts receivable | (57,189) | (3,790) | (97,379) | 79,382 | |||||||||||||||||||
| Decrease (increase) in other current assets | (4,678) | 11,094 | 850 | 8,291 | |||||||||||||||||||
| Increase (decrease) in accounts payable and accrued expenses | 39,395 | 23,391 | 56,689 | (64,303) | |||||||||||||||||||
| Net cash provided by operating activities | $ | 232,970 | $ | 123,864 | $ | 618,553 | $ | 389,955 | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
FREE CASH FLOW (2): | |||||||||||||||||||||||
| Operating cash flow | $ | 255,442 | $ | 93,169 | $ | 658,393 | $ | 366,585 | |||||||||||||||
| Less: | |||||||||||||||||||||||
| Capital expenditures | (167,142) | (110,432) | (508,422) | (315,666) | |||||||||||||||||||
| Preferred dividends | (4,411) | (4,398) | (13,089) | (21,180) | |||||||||||||||||||
| Free cash flow | $ | 83,889 | $ | (21,661) | $ | 136,882 | $ | 29,739 | |||||||||||||||
(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 is presented in the earnings release because management believes it to be a useful indicator of the Company's ability to internally fund acquisitions and debt maturities after capital expenditures and preferred dividend payments.