Comstock Resources (CRK) Q4 2024 earnings summary

Executive summary

• Navigated 2024's historically low natural gas prices by reducing capital spending, suspending dividends, and expanding hedging, resulting in improved realized prices and industry-leading total shareholder return.

• Achieved significant expansion in Western Haynesville, doubling acreage to 518,000 net acres and turning 18 wells to sales with strong initial production rates and cost improvements.

• Drilled 50 successful operated Haynesville/Bossier wells, replacing up to 170% of 2024 production and achieving 6% reserve growth.

• Focused on organic growth, operational efficiency, and disciplined capital management, with a strong emphasis on midstream infrastructure buildout.

• Q4 2024 natural gas and oil sales, including hedging, reached $336 million; annual sales totaled $1.3 billion.

Financial highlights

• Q4 2024 production averaged 1.35 Bcfe/day, down 12% year-over-year; annual production was flat at 1.4 Bcfe/day.

• Q4 oil and gas sales were $336 million; adjusted net income was $46 million ($0.16/share); annual adjusted net loss was $69 million ($0.24/share).

• Q4 adjusted EBITDAX was $252 million; annual adjusted EBITDAX was $850 million.

• Free cash flow deficit after acquisition/divestiture activity was $(51) million in Q4 and $(359) million for 2024.

• Proved reserves at year-end 2024 were 3.8 Tcfe (SEC pricing), but would have been 7.0 Tcfe at NYMEX prices.

Outlook and guidance

• 2025 focus remains on Western Haynesville development, with plans to drill 20 net wells and turn 17 net wells to sales; 26 wells planned in Legacy Haynesville.

• 2025 capital budget set at $1.0–$1.1 billion for development/exploration, targeting 46 operated horizontal wells.

• Midstream expenditures of $130–$150 million will be funded by the midstream partner; drilling program to be funded from operating cash flow, with excess used to pay down debt.

• Anticipates maintaining industry-leading low cost structure and further D&C cost reductions in 2025.

• Targeting leverage ratio below 1.5x by year-end 2026, with significant debt reduction expected as gas prices recover.