COMSTOCK RESOURCES, INC. REPORTS FIRST QUARTER 2025 FINANCIAL AND OPERATING RESULTS

Rhea-AI Summary

Comstock Resources reported its Q1 2025 financial results, showing improved performance driven by higher natural gas prices. The company achieved natural gas and oil sales of $405 million, with operating cash flow of $239 million ($0.81 per diluted share) and adjusted EBITDAX of $293 million.

Key highlights include:

• Natural gas production of 115 Bcf with realized prices of $3.58 per Mcf before hedging
• Fourteen operated wells turned to sales with average initial production of 25 MMcf per day
• Notable success with Western Haynesville well in Freestone County, producing 41 MMcf per day
• Production costs averaged $0.83 per Mcfe
• Unhedged operating margin of 77%

The company reported a net loss of $115.4 million ($0.40 per share), primarily due to a $322.4 million unrealized loss on hedging contracts. Excluding this and exploration expense, adjusted net income was $53.8 million ($0.18 per diluted share).

Positive

• Natural gas sales increased to $412.3M in Q1 2025 vs $287.1M in Q1 2024
• Operating cash flow strong at $239M ($0.81 per share)
• High operating margin maintained at 76% after hedging
• 14 new wells turned to sales with impressive 25 MMcf per day average initial production
• Successful Western Haynesville expansion with Olajuwon Pickens #1 well producing 41 MMcf per day
• $2.0B borrowing base reaffirmed by bank group

Negative

• Net loss of $115.4M ($0.40 per share) in Q1 2025
• Production declined to 115 Bcf from 139.4 Bcf year-over-year
• $322.4M unrealized loss on hedging contracts
• Production costs increased to $0.83 per Mcfe from $0.76 year-over-year
• Gas services segment reported $16.9M loss
• Free cash deficit after acquisitions of $9.7M

Insights

Financial Analyst

Comstock's Q1 shows improved financials driven by higher gas prices despite production declines, with solid margins and strategic growth investments.

Comstock Resources delivered mixed but generally positive Q1 2025 results with significant improvement in financial metrics despite lower production volumes. The company reported $405 million in natural gas and oil sales (including hedging), generating $239 million ($0.81 per diluted share) in operating cash flow and $293 million in adjusted EBITDAX.

While Comstock posted a GAAP net loss of $115.4 million ($0.40 per share), this primarily resulted from a $322.4 million unrealized loss on hedging contracts due to rising future natural gas prices. The adjusted net income of $53.8 million ($0.18 per diluted share) represents a meaningful improvement from the $8.5 million adjusted net loss in Q1 2024.

Production costs remained well-controlled at $0.83 per Mcfe, allowing Comstock to maintain impressive operating margins of 77% (unhedged) and 76% (hedged). These margins reflect operational efficiency despite industry inflation pressures.

Natural gas production totaled 115 Bcf, down from 139.4 Bcf in Q1 2024, representing a 17.5% year-over-year decline. However, realized natural gas prices increased substantially to $3.58 per Mcf before hedging ($3.52 after hedging), driving the financial improvements.

The company's capital allocation shows a focus on growth, with exploration and development expenditures of $249.8 million essentially matching operating cash flow, resulting in a minimal free cash deficit of $22,000 before acquisitions.

Energy Sector Analyst

Comstock's Western Haynesville extension success and strong well performance offset production declines, positioning company to capitalize on higher gas prices.

Comstock's operational results reveal a strategic focus on high-return projects amid strengthening natural gas prices. The company has successfully resumed completion activity with 14 wells (11.3 net) turned to sales, achieving impressive average initial production rates of 25 MMcf per day per well.

The most significant operational development is the successful Western Haynesville extension well in Freestone County, Texas. The Olajuwon Pickens #1 well, located 24.4 miles from the nearest producing Western Haynesville well, delivered an exceptional initial production rate of 41 MMcf per day. This step-out well represents a major milestone in delineating Comstock's Western Haynesville acreage position and potentially expands their developable inventory significantly.

Despite the 17.5% year-over-year production decline, Comstock's drilling program demonstrates strong per-well performance. The average completed lateral length of 12,220 feet for recently completed wells shows the company is optimizing well design to maximize production efficiency and economic returns.

The reaffirmation of Comstock's $2.0 billion borrowing base under their $1.5 billion revolving credit facility provides ample liquidity for continued development activities. This financial flexibility, combined with improved natural gas prices and efficient operations, positions the company to potentially accelerate development if market conditions remain favorable.

The balance between capital investment and cash generation will be a key factor to monitor, as the company continues to prioritize resource development and production capacity expansion over immediate free cash flow generation.

FRISCO, TX, April 30, 2025 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended March 31, 2025.

Highlights of 2025's First Quarter

• Higher natural gas prices in the first quarter drove improved financial results in the quarter.
  • Natural gas and oil sales, including realized hedging gains, were $405 million for the quarter.
  • Operating cash flow was $239 million or $0.81 per diluted share.
  • Adjusted EBITDAX for the quarter was $293 million.
  • Adjusted net income was $53.8 million or $0.18 per diluted share for the quarter.
• Comstock resumed completion activity in late 2024 allowing it to turn fourteen (11.3 net) operated wells to sales since the last update with an average per well initial production rate of 25 MMcf per day.
• The successful results of Comstock’s step out Western Haynesville well drilled in Freestone County, Texas substantially extended the success the Company has had in proving up its Western Haynesville acreage.
  
  

Financial Results for the Three Months Ended March 31, 2025

Natural gas prices improved substantially in the first quarter of 2025 and Comstock realized $3.58 per Mcf before hedging and $3.52 per Mcf after hedging for its natural gas production of 115 Bcf in the quarter. Comstock's natural gas and oil sales in the first quarter of 2025 increased to $405.0 million (including realized hedging losses of $8.0 million). Operating cash flow (excluding changes in working capital) generated in the first quarter of 2025 was $239.0 million, and net loss for the first quarter was $115.4 million or $0.40 per share. The net loss in the quarter included a pre-tax $322.4 million unrealized loss on hedging contracts held for price risk management resulting from the rise in future natural gas prices since the end of 2024. Excluding this item and exploration expense, adjusted net income for the first quarter of 2025 was $53.8 million, or $0.18 per diluted share.

Comstock's production cost per Mcfe in the first quarter averaged $0.83 per Mcfe, which was comprised of $0.37 for gathering and transportation costs, $0.30 for lease operating costs, $0.10 for production and other taxes and $0.06 for cash general and administrative expenses. Comstock's unhedged operating margin was 77% in the first quarter of 2025 and 76% after hedging.

Drilling Results

Comstock drilled seven (6.9 net) operated horizontal Haynesville/Bossier shale wells in the first quarter of 2025, which had an average lateral length of 11,660 feet. Comstock turned eleven (8.3 net) operated wells to sales in the first quarter of 2025.

Since its last operational update in February, Comstock has turned fourteen (11.3 net) operated Haynesville/Bossier shale wells to sales. These wells had initial production rates that averaged 25 MMcf per day. The completed lateral length of these wells averaged 12,220 feet. Included in the wells turned to sales was our first Western Haynesville well drilled in Freestone county, the Olajuwon Pickens #1, which had a 10,306 foot completed lateral. This well is 24.4 miles away from the closest producing Western Haynesville well and represents a major milestone in Comstock's progress in delineating its Western Haynesville acreage. The Olajuwon Pickens #1 was turned to sales at an initial production rate of 41 MMcf per day.

Other

On April 29, 2025, Comstock also announced that its bank group reaffirmed the $2.0 billion borrowing base under its $1.5 billion revolving credit facility.

Earnings Call Information

Comstock has planned a conference call for 10:00 a.m. Central Time on May 1, 2025, to discuss the first quarter 2025 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-conf.media-server.com/register/BIe794f2ba5583499f970858176fd39094.
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/99m3j47q.

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 1, 2025. The replay of the conference can be accessed using the webcast link: https://edge.media-server.com/mmc/p/99m3j47q.

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,
		2025				2024
Revenues:
Natural gas sales		$	412,286			$	287,083
Oil sales			702				876
Total natural gas and oil sales			412,988				287,959
Gas services			99,866				47,813
Total revenues			512,854				335,772
Operating expenses:
Production and ad valorem taxes			11,179				17,908
Gathering and transportation			42,617				47,099
Lease operating			35,000				35,072
Exploration			2,150				—
Depreciation, depletion and amortization			167,891				190,689
Gas services			116,769				48,680
General and administrative			11,080				9,171
Total operating expenses			386,686				348,619
Operating income (loss)			126,168				(12,847	)
Other income (expenses):
Gain (loss) from derivative financial instruments			(330,339	)			39,307
Other income			339				331
Interest expense			(54,837	)			(49,557	)
Total other expenses			(384,837	)			(9,919	)
Loss before income taxes			(258,669	)			(22,766	)
Benefit from income taxes			143,276				8,292
Net loss			(115,393	)			(14,474	)
Net income attributable to noncontrolling interest			(5,885	)			(1,847	)
Net loss available to the Company		$	(121,278	)		$	(16,321	)
Net loss per share
Basic		$	(0.40	)		$	(0.05	)
Diluted		$	(0.40	)		$	(0.05	)
Weighted average shares outstanding:
Basic			290,303				277,962
Diluted			290,303				277,962

COMSTOCK RESOURCES, INC.
OPERATING RESULTS
(In thousands, except per unit amounts)

		Three Months Ended March 31,
		2025				2024
Natural gas production (MMcf)			115,029				139,443
Oil production (Mbbls)			10				12
Total production (MMcfe)			115,091				139,515
Natural gas sales		$	412,286			$	287,083
Natural gas hedging settlements (1)			(7,959	)			47,995
Total natural gas including hedging			404,327				335,078
Oil sales			702				876
Total natural gas and oil sales including hedging		$	405,029			$	335,954
Average natural gas price (per Mcf)		$	3.58			$	2.06
Average natural gas price including hedging (per Mcf)		$	3.52			$	2.40
Average oil price (per barrel)		$	70.20			$	73.00
Average price (per Mcfe)		$	3.59			$	2.06
Average price including hedging (per Mcfe)		$	3.52			$	2.41
Production and ad valorem taxes		$	11,179			$	17,908
Gathering and transportation			42,617				47,099
Lease operating			35,000				35,072
Cash general and administrative (2)			6,640				5,755
Total production costs		$	95,436			$	105,834
Production and ad valorem taxes (per Mcfe)		$	0.10			$	0.13
Gathering and transportation (per Mcfe)			0.37				0.34
Lease operating (per Mcfe)			0.30				0.25
Cash general and administrative (per Mcfe)			0.06				0.04
Total production costs (per Mcfe)		$	0.83			$	0.76
Unhedged operating margin			77	%			63	%
Hedged operating margin			76	%			68	%
Gas services revenue		$	99,866			$	47,813
Gas services expenses			116,769				48,680
Gas services margin		$	(16,903	)		$	(867	)
Natural Gas and Oil Capital Expenditures:
Unproved property acquisitions		$	9,684			$	69,444
Total natural gas and oil properties acquisitions		$	9,684			$	69,444
Exploration and Development:
Development leasehold		$	3,556			$	3,938
Exploratory drilling and completion			100,107				106,456
Development drilling and completion			145,578				145,793
Other development costs			515				37
Total exploration and development capital expenditures		$	249,756			$	256,224

(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,
		2025				2024
ADJUSTED NET INCOME (LOSS):
Net loss		$	(115,393	)		$	(14,474	)
Unrealized loss from derivative financial instruments			322,380				8,688
Exploration expense			2,150				—
Adjustment to income taxes			(155,292	)			(2,752	)
Adjusted net income (loss)		$	53,845			$	(8,538	)
Adjusted net income (loss) per share (2)		$	0.18			$	(0.03	)
Diluted shares outstanding			293,633				277,962
ADJUSTED EBITDAX:
Net loss		$	(115,393	)		$	(14,474	)
Interest expense			54,837				49,557
Income taxes			(143,276	)			(8,292	)
Depreciation, depletion, and amortization			167,891				190,689
Exploration			2,150				—
Unrealized loss from derivative financial instruments			322,380				8,688
Stock-based compensation			4,442				3,415
Total Adjusted EBITDAX (3)		$	293,031			$	229,583

(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, exploration expense 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 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,
		2025				2024
OPERATING CASH FLOW (1):
Net loss		$	(115,393	)		$	(14,474	)
Reconciling items:
Unrealized loss from derivative financial instruments			322,380				8,688
Deferred income taxes			(143,276	)			(8,287	)
Depreciation, depletion and amortization			167,891				190,689
Amortization of debt discount and issuance costs			2,944				1,984
Stock-based compensation			4,442				3,415
Operating cash flow		$	238,988			$	182,015
(Increase) decrease in accounts receivable			(33,660	)			99,418
Decrease in other current assets			559				5,576
Decrease in accounts payable and accrued expenses			(31,141	)			(115,470	)
Net cash provided by operating activities		$	174,746			$	171,539

		Three Months Ended March 31,
		2025				2024
FREE CASH FLOW (DEFICIT)(2):
Operating cash flow		$	238,988			$	182,015
Less:
Exploration and development capital expenditures			(249,756	)			(256,224	)
Midstream capital expenditures			(48,668	)			(5,298	)
Other capital expenditures			(86	)			(29	)
Contributions from midstream partner			59,500				6,000
Free cash deficit from operations		$	(22	)		$	(73,536	)
Acquisitions			(9,684	)			(69,444	)
Free cash deficit after acquisitions		$	(9,706	)		$	(142,980	)

(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 deficit from operations and free cash deficit after acquisitions 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, 2025				December 31, 2024
ASSETS
Cash and cash equivalents		$	32,875			$	6,799
Accounts receivable			208,506				174,846
Derivative financial instruments			—				4,865
Other current assets			97,595				97,524
Total current assets			338,976				284,034
Property and equipment, net			5,828,842				5,688,389
Goodwill			335,897				335,897
Operating lease right-of-use assets			97,832				73,777
		$	6,601,547			$	6,382,097
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable		$	433,797			$	421,814
Accrued costs			113,231				146,173
Operating leases			47,256				35,927
Derivative financial instruments			263,796				8,940
Total current liabilities			858,080				612,854
Long-term debt			3,050,034				2,952,090
Deferred income taxes			201,841				345,116
Derivative financial instruments			129,416				66,757
Long-term operating leases			50,485				37,740
Asset retirement obligation			34,507				33,996
Total liabilities			4,324,363				4,048,553
Stockholders' Equity:
Common stock			146,460				146,130
Additional paid-in capital			1,367,696				1,366,274
Accumulated earnings			607,341				728,619
Total stockholders' equity attributable to Comstock			2,121,497				2,241,023
Noncontrolling interest			155,687				92,521
Total stockholders' equity			2,277,184				2,333,544
		$	6,601,547			$	6,382,097

Ron Mills
VP - Finance and Investor Relations
Comstock Resources
972-668-8834
rmills@comstockresources.com

FAQ

What was Comstock Resources (CRK) Q1 2025 earnings per share?

Comstock Resources reported an adjusted net income of $0.18 per diluted share for Q1 2025, with a GAAP net loss of $0.40 per share due to unrealized hedging losses.

How much natural gas did CRK produce in Q1 2025?

Comstock Resources produced 115 Bcf of natural gas in Q1 2025, with an average realized price of $3.52 per Mcf after hedging.

What was CRK's operating margin in first quarter 2025?

Comstock Resources achieved a 77% unhedged operating margin and 76% hedged operating margin in Q1 2025, with production costs averaging $0.83 per Mcfe.

How many new wells did Comstock Resources complete in Q1 2025?

Comstock turned eleven operated wells to sales in Q1 2025, with fourteen total wells since their last operational update averaging 25 MMcf per day initial production rates.

What was the performance of CRK's Olajuwon Pickens #1 well in Freestone County?

The Olajuwon Pickens #1 well, CRK's first Western Haynesville well in Freestone County, achieved an initial production rate of 41 MMcf per day with a 10,306 foot completed lateral.