false
0000023194
COMSTOCK RESOURCES INC
0000023194
2024-05-01
2024-05-01
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):
May 01, 2024
COMSTOCK RESOURCES, INC.
(Exact name of Registrant as Specified in Its Charter)
Nevada 001-03262 94-1667468
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
5300 Town and Country Blvd.
Suite 500
Frisco 75034
,
Texas
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(972)
668-8800
(Former Name or Former Address, if Changed Since Last Report)
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 Name of each exchange on which registered
Symbol(s)
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 ((s)/230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)/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 May 1, 2024, Comstock Resources, Inc. ("Comstock" or the "Company")
announced financial results for the quarter ended March 31, 2024. 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 Description
No.
99.1 Press Release dated May 1, 2024
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
-------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMSTOCK RESOURCES, INC.
Date: May 1, 2024 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
FIRST QUARTER 2024 FINANCIAL AND OPERATING RESULTS
FRISCO, TEXAS, May 1, 2024
Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today
reported financial and operating results for the quarter ended March 31, 2024.
Highlights of 2024
's
First Quarter
"
Continued weak natural gas prices weighed heavily on the first quarter results.
"
Natural gas and oil sales, including realized hedging gains, were $336 million.
"
Operating cash flow was $182 million or $0.65 per diluted share.
"
Adjusted EBITDAX for the quarter was $230 million.
"
Adjusted net loss was $8.5 million for the quarter.
"
Added $100.5 million of liquidity with a private placement equity offering to
majority stockholder.
"
Solid results from the Haynesville shale drilling program with 14 (13.5 net)
operated wells turned to sales since the Company's last update with an average
initial production of 25 MMcf per day.
"
Added 198,000 net acres to Western Haynesville, increasing leasehold in the
emerging play to over 450,000 net acres.
"
Latest four Western Haynesville wells were successful with initial production
rates between 35 to 38 MMcf per day.
Financial Results for the Three Months Ended March 31, 2024
Comstock's natural gas and oil sales in the first quarter of 2024 totaled
$336.0 million (including realized hedging gains of $48.0 million). Operating
cash flow (excluding changes in working capital) generated in the first
quarter of 2024 was $182.0 million, and net loss available to common
stockholders for the first quarter was $14.5 million or $0.05 per share. Net
loss in the quarter included a pre-tax $8.7 million unrealized loss on hedging
contracts held for risk management. Excluding this item, adjusted net loss for
the first quarter of 2024 was $8.5 million, or $0.03 per share.
-------------------------------------------------------------------------------
Comstock's production cost per Mcfe in the first quarter averaged $0.76 per
Mcfe, which was comprised of $0.34 for gathering and transportation costs,
$0.25 for lease operating costs, $0.13 for production and other taxes and
$0.04 for cash general and administrative expenses. Comstock's unhedged
operating margin was 63% in the first quarter of 2024 and 68% after hedging.
Drilling Results
Comstock drilled 16 (14.3 net) operated horizontal Haynesville/Bossier shale
wells in the first quarter of 2024 which had an average lateral length of
9,845 feet. Comstock turned 18 (16.3 net) operated wells to sales in the first
quarter of 2024.
Since its last operational update in February, Comstock has turned 14 (13.5
net) operated Haynesville/Bossier shale wells to sales. These wells had
initial daily production rates that averaged 25 MMcf per day. The completed
lateral length of these wells averaged 8,031 feet.
Included in the wells turned to sales were four more successful Western
Haynesville wells the Glass RT #1, the Harrison WA #1, the Farley GD #1 and
the Ingram Martin #1. The Glass RT #1 well was drilled to a total vertical
depth of 18,346 feet and has a 9,292 foot completed lateral. The well's
initial production rate was 36 MMcf per day. The Harrison WA #1 well was
drilled to a total vertical depth of 19,361 feet and has an 8,866 foot
completed lateral. The well's initial production rate was 35 MMcf per day. The
Farley GD #1 well was drilled to a total vertical depth of 18,700 feet and has
a 9,837 foot completed lateral. The well's initial production rate was 38 MMcf
per day. The Ingram Martin #1 well was drilled to a total vertical depth of
17,748 feet and has a 7,764 foot completed lateral. The well's initial
production rate was 38 MMcf per day. All of these wells were completed in the
Haynesville Shale formation.
Other
Comstock also announced that its bank group reaffirmed the $2.0 billion
borrowing base under its $1.5 billion revolving credit facility on April 30,
2024.
Earnings Call Information
Comstock has planned a conference call for 10:00 a.m. Central Time on May 2,
2024, to discuss the first quarter 2024 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/BI8bd2e2b2cbc
74630942006
e39bfd6cb5
. 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/qf4tpuda
.
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 2, 2024.
The replay of the conference can be accessed using the webcast link:
https://edge.media-server.com/mmc/p/qf4tpuda
.
-------------------------------------------------------------------------------
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,
2024 2023
Revenues:
Natural gas sales $ 287,083 $ 378,032
Oil sales 876 1,942
Total natural gas and oil sales 287,959 379,974
Gas services 47,813 109,604
Total revenues 335,772 489,578
Operating expenses:
Production and ad valorem taxes 17,908 14,906
Gathering and transportation 47,099 45,574
Lease operating 35,072 34,830
Exploration 1,775
Depreciation, depletion and amortization 190,689 133,983
Gas services 48,680 101,295
General and administrative 9,171 12,368
Gain on sale of assets (773 )
Total operating expenses 348,619 343,958
Operating income (loss) (12,847 ) 145,620
Other income (expenses):
Gain from derivative financial instruments 39,307 66,409
Other income 331 460
Interest expense (49,557 ) (38,270 )
Total other income (expenses) (9,919 ) 28,599
Income (loss) before income taxes (22,766 ) 174,219
(Provision for) benefit from income taxes 8,292 (39,716 )
Net income (loss) (14,474 ) 134,503
Net loss attributable to noncontrolling interest (1,847 )
Net income (loss) available to Comstock $ (16,321 ) $ 134,503
Net income (loss) per share
Basic $ (0.05 ) $ 0.49
Diluted $ (0.05 ) $ 0.49
Weighted average shares outstanding:
Basic 277,962 276,551
Diluted 277,962 276,551
Dividends per share $ $ 0.125
-------------------------------------------------------------------------------
COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per unit amounts)
Three Months Ended March 31,
2024 2023
Natural gas production (MMcf) 139,443 127,067
Oil production (Mbbls) 12 27
Total production (MMcfe) 139,515 127,226
Natural gas sales $ 287,083 $ 378,032
Natural gas hedging settlements 47,995 10,383
(1)
Total natural gas including hedging 335,078 388,415
Oil sales 876 1,942
Total natural gas and oil sales including hedging $ 335,954 $ 390,357
Average natural gas price (per Mcf) $ 2.06 $ 2.98
Average natural gas price including hedging (per Mcf) $ 2.40 $ 3.06
Average oil price (per barrel) $ 73.00 $ 71.93
Average price (per Mcfe) $ 2.06 $ 2.99
Average price including hedging (per Mcfe) $ 2.41 $ 3.07
Production and ad valorem taxes $ 17,908 $ 14,906
Gathering and transportation 47,099 45,574
Lease operating 35,072 34,830
Cash general and administrative 5,755 10,321
(2)
Total production costs $ 105,834 $ 105,631
Production and ad valorem taxes (per Mcfe) $ 0.13 $ 0.12
Gathering and transportation (per Mcfe) 0.34 0.36
Lease operating (per Mcfe) 0.25 0.27
Cash general and administrative (per Mcfe) 0.04 0.08
Total production costs (per Mcfe) $ 0.76 $ 0.83
Unhedged operating margin 63 % 72 %
Hedged operating margin 68 % 73 %
Gas services revenue $ 47,813 $ 109,604
Gas services expenses 48,680 101,295
Gas services margin $ (867 ) $ 8,309
Natural Gas and Oil Capital Expenditures:
Unproved property acquisitions $ 69,444 $ 40,695
Total natural gas and oil properties acquisitions $ 69,444 $ 40,695
Exploration and Development:
Development leasehold $ 3,938 $ 8,743
Exploratory drilling and completion 106,456 29,690
Development drilling and completion 145,793 280,176
Other development costs 37 6,097
Total exploration and development capital expenditures $ 256,224 $ 324,706
(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,
2024 2023
ADJUSTED NET INCOME:
Net income (loss) $ (14,474 ) $ 134,503
Unrealized (gain) loss from derivative financial instruments 8,688 (56,026 )
Exploration expense 1,775
Gain on sale of assets (773 )
Adjustment to income taxes (2,752 ) 12,528
Adjusted net income (loss) $ (8,538 ) $ 92,007
Adjusted net income (loss) per share $ (0.03 ) $ 0.33
(2)
Diluted shares outstanding 277,962 276,551
ADJUSTED EBITDAX:
Net income (loss) $ (14,474 ) $ 134,503
Interest expense 49,557 38,270
Income taxes (8,292 ) 39,716
Depreciation, depletion, and amortization 190,689 133,983
Exploration 1,775
Unrealized (gain) loss from derivative financial instruments 8,688 (56,026 )
Stock-based compensation 3,415 2,046
Gain on sale of assets (773 )
Total Adjusted EBITDAX $ 229,583 $ 293,494
(3)
(1)
Adjusted net income (loss) 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, gains and losses on sales of assets and other unusual items.
(2)
Adjusted net income (loss) 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 depreciation, depletion and amortization, unrealized gains and
losses on derivative financial instruments 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,
2024 2023
OPERATING CASH FLOW
(1)
:
Net income (loss) $ (14,474 ) $ 134,503
Reconciling items:
Unrealized (gain) loss from derivative financial instruments 8,688 (56,026 )
Deferred income taxes (8,287 ) 39,180
Depreciation, depletion and amortization 190,689 133,983
Amortization of debt discount and issuance costs 1,984 1,997
Stock-based compensation 3,415 2,046
Gain on sale of assets (773 )
Operating cash flow $ 182,015 $ 254,910
Decrease in accounts receivable 99,418 255,992
(Increase) decrease in other current assets 5,576 (1,514 )
Decrease in accounts payable and accrued expenses (115,470 ) (123,024 )
Net cash provided by operating activities $ 171,539 $ 386,364
Three Months Ended
March 31,
2024 2023
FREE CASH FLOW (DEFICIT)
(2)
:
Operating cash flow $ 182,015 $ 254,910
Less:
Exploration and development capital expenditures (256,224 ) (324,706 )
Midstream capital expenditures (5,298 ) (4,187 )
Other capital expenditures (29 ) (356 )
Contributions from midstream partner 6,000
Free cash deficit from operations $ (73,536 ) $ (74,339 )
Acquisitions (69,444 ) (40,695 )
Proceeds from divestitures 130
Free cash deficit after acquisition and divestiture activity $ (142,980 ) $ (114,904 )
(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 (deficit) from operations and free cash flow (deficit) 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, midstream and other capital
expenditures, contributions from its midstream partner, proved and unproved
property acquisitions, and proceeds from divestiture of natural gas and oil
properties.
-------------------------------------------------------------------------------
COMSTOCK RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
2024 2023
ASSETS
Cash and cash equivalents $ 6,420 $ 16,669
Accounts receivable 132,012 231,430
Derivative financial instruments 141,821 126,775
Other current assets 77,811 86,619
Total current assets 358,064 461,493
Property and equipment, net 5,525,553 5,384,771
Goodwill 335,897 335,897
Operating lease right-of-use assets 97,728 71,462
$ 6,317,242 $ 6,253,623
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 440,956 $ 523,260
Accrued costs 80,863 134,466
Operating leases 34,199 23,765
Total current liabilities 556,018 681,491
Long-term debt 2,702,375 2,640,391
Deferred income taxes 461,748 470,035
Derivative financial instruments 23,734
Long-term operating leases 63,536 47,742
Asset retirement obligation 31,249 30,773
Total liabilities 3,838,660 3,870,432
Stockholders' Equity:
Common stock 146,101 139,214
Additional paid-in capital 1,357,908 1,260,930
Accumulated earnings 941,949 958,270
Total stockholders' equity attributable to Comstock 2,445,958 2,358,414
Noncontrolling interest 32,624 24,777
Total stockholders' equity 2,478,582 2,383,191
$ 6,317,242 $ 6,253,623
-------------------------------------------------------------------------------
{graphic omitted}
{graphic omitted}
{graphic omitted}