Comstock Resources 3rd Quarter 2023 Results

Link to full report: https://investors.comstockresources.com/static-files/e0c70959-6061-...

Excerpt: 

FRISCO, TX, Oct. 30, 2023 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended September 30, 2023.

Highlights of 2023's Third Quarter

• Continued weak natural gas prices weighed heavily on the third quarter results.
• Natural gas and oil sales, including realized hedging gains, were $316 million.
• Operating cash flow was $167 million or $0.60 per diluted share.
• Adjusted EBITDAX for the quarter was $209 million.
• Adjusted net income was $11.7 million for the quarter.
• Solid results from the Haynesville shale drilling program with 21 (18.1 net) operated wells turned to sales since the Company's last update with an average initial production of 29 MMcf per day.
• Latest two Western Haynesville wells were successful with average initial production rates of 34 and 35 Mmcf per day.
• Entering into new venture to fund the midstream build-out to support Western Haynesville development.

Financial Results for the Three Months Ended September 30, 2023

Comstock's natural gas and oil sales in the third quarter of 2023 totaled $315.8 million (including realized hedging gains of $10.3 million). Operating cash flow (excluding changes in working capital) generated in the third quarter of 2023 was $167.2 million, and net income available to common stockholders for the third quarter was $14.7 million or $0.05 per share. Net income in the quarter included a pre-tax $3.9 million unrealized gain on hedging contracts held for risk management. Excluding this item and certain other items, adjusted net income available to common stockholders for the third quarter of 2023 was $11.7 million, or $0.04 per diluted share.

Comstock's production cost per Mcfe in the third quarter averaged $0.85 per Mcfe, which was comprised of $0.36 for gathering and transportation costs, $0.24 for lease operating costs, $0.20 for production and other taxes and $0.05 for cash general and administrative expenses. Comstock's unhedged operating margin was 64% in the third quarter of 2023 and 65% after hedging.

Financial Results for the Nine Months Ended September 30, 2023

Natural gas and oil sales for the nine months ended September 30, 2023 totaled $991.4 million (including realized hedging gains of $76.2 million). Operating cash flow (excluding changes in working capital) generated during the first nine months of 2023 was $567.6 million, and net income available to common stockholders was $103.5 million or $0.37 per share. Adjusted net income available to common stockholders for the nine months ended September 30, 2023 was $104.8 million or $0.38 per diluted share.

Comstock's production cost per Mcfe during the nine months ended September 30, 2023 averaged $0.85 per Mcfe, which was comprised of $0.36 for gathering and transportation costs, $0.26 for lease operating costs, $0.16 for production and other taxes and $0.07 for cash general and administrative expenses. Comstock's unhedged operating margin was 65% during the first nine months of 2023 and 67% after hedging.

Drilling Results

Comstock drilled thirteen (10.2 net) operated horizontal Haynesville/Bossier shale wells in the third quarter of 2023 which had an average lateral length of 11,644 feet. Comstock turned 21 (18.1 net) operated wells to sales in the third quarter of 2023.

Since its last operational update in August, Comstock has turned 21 (18.1 net) operated Haynesville/Bossier shale wells to sales. These wells had initial daily production rates that averaged 29 MMcf per day. The completed lateral length of these wells averaged 10,460 feet.

Included in the wells turned to sales were the sixth and seventh successful Western Haynesville wells – the Cazey MS #1 and the Lanier CW #1. The Cazey MS #1 well was drilled to a total vertical depth of 15,986 feet and has a 10,028 foot completed lateral. The well's initial production rate was 34 MMcf per day. The Lanier CW #1 well was drilled to a total vertical depth of 17,309 feet and has a 9,577 foot completed lateral. The well's initial production rate was 35 MMcf per day.

Declaration of Quarterly Dividend

On October 30, 2023, Comstock's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be payable on December 15, 2023 to stockholders of record at the close of business on December 1, 2023.

Midstream Partnership

Comstock is forming a midstream partnership for its Western Haynesville acreage with Quantum Capital Solutions ("QCS"), an affiliate of Quantum Capital Group.  As part of this transaction, Comstock will contribute its Pinnacle gathering and treating system, which is comprised of 145-mile high pressure pipeline and the Bethel natural gas processing plant to the partnership in exchange for a total capital commitment by QCS of $300 million to fund the future build-out of the Western Haynesville midstream system over the next several years. Comstock will control and operate the midstream system. "The new partnership with QCS is expected to fund the needed expansion for our Western Haynesville midstream development program over the next five years," stated M. Jay Allison, Chief Executive Officer of Comstock.