Comstock Resources (CRK) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 results were heavily impacted by weak natural gas prices, with an average realized price of $1.90 per Mcf before hedging and $305 million in oil and gas sales, including hedging.

• Adjusted net loss for Q3 2024 was $48.5 million or $0.17 per share, primarily due to higher DD&A from lower proved undeveloped reserves under SEC rules.

• Production increased 2% year-over-year, averaging 1.4 Bcfe per day, with 8 operated wells turned to sales averaging 21 MMcf/d initial production.

• Significant progress in the Western Haynesville play, with acreage expanded to 453,881 net acres, 13 wells drilled, and well costs reduced to $2,814 per lateral foot.

• First horseshoe Haynesville well delivered 31 MMcf/d initial production, with the horseshoe lateral concept tripling IRR compared to short laterals.

Financial highlights

• Q3 2024 oil and gas sales were $305 million, down from $316 million in Q3 2023; adjusted EBITDAX was $202 million.

• Q3 2024 net loss was $25.7 million ($0.09/share); adjusted net loss was $48.5 million ($0.17/share).

• Year-to-date 2024 net loss was $163.4 million ($0.57/share); adjusted net loss was $121 million ($0.42/share).

• Operating cost per Mcfe improved to $0.77, with EBITDA/EBITDAX margin at 67% in Q3 2024.

• Operating cash flow for Q3 2024 was $152 million; liquidity at quarter-end was $1.1 billion.

Outlook and guidance

• 2024 CapEx expected to be down 25%-35% from 2023; Q4 D&C CapEx guided at $225-$275 million.

• Fourth quarter 2024 production guidance: 1,325-1,375 MMcf/d, down ~10% year-over-year.

• Targeting 50% hedge level for Q4 2024 and 2025; activity level to be adjusted based on gas price outlook.

• Dividend suspended, saving $140 million; no remaining long-term commitments for pressure pumping.

• Expects to fund future development with operating cash flow and borrowings; liquidity sufficient for at least the next twelve months.