Comstock Resources financial results reflect the impact of very weak natural gas prices, which led to significant losses despite hedging gains and increased production. The company’s efforts to manage costs and maintain liquidity were evident through their operational efficiencies and strategic financial actions. Despite the hedging gains, the very weak natural gas prices significantly impacted Comstock Resources’ financial results for the quarter. The hedging gains managed to partially offset the low market prices, allowing for a slightly higher realized price after hedging.
Comstock Resources Q2 2024 Financial and Operational Summary
Financial Highlights:
- Natural Gas and Oil Sales: $278 million, including realized hedging gains.
- Operating Cash Flow: $118 million, or $0.41 per diluted share.
- Adjusted EBITDAX: $167 million.
- Adjusted Net Loss: $58.2 million, or $0.20 per share.
- Net Loss: $123.2 million, or $0.43 per share, impacted by an $85.8 million pre-tax unrealized loss on hedging contracts.
- Liquidity: Enhanced by issuing $400 million in 6.75% senior notes.
- Realized Gas Prices: $1.65 per Mcf without hedging and $2.12 per Mcf after hedging.
- Production Costs: Averaged $0.84 per Mcfe, with the following breakdown:
- Gathering and Transportation: $0.38 per Mcfe
- Lease Operating Costs: $0.27 per Mcfe
- Production and Other Taxes: $0.14 per Mcfe
- Cash General and Administrative Expenses: $0.05 per Mcfe
- Operating Margins: 50% unhedged, 61% after hedging.
First Half 2024 Financial Highlights:
- Natural Gas and Oil Sales: $614.1 million, including realized hedging gains.
- Operating Cash Flow: $300.1 million.
- Net Loss: $137.7 million, or $0.49 per share, including a $94.5 million pre-tax unrealized loss on hedging contracts.
- Adjusted Net Loss: $66.8 million, or $0.24 per share.
- Production Costs: Averaged $0.79 per Mcfe, with the following breakdown:
- Gathering and Transportation: $0.36 per Mcfe
- Lease Operating Costs: $0.26 per Mcfe
- Production and Other Taxes: $0.13 per Mcfe
- Cash General and Administrative Expenses: $0.04 per Mcfe
- Operating Margins: 57% unhedged, 65% after hedging.
Operational Highlights:
- Drilling Activity: 11 (9.2 net) horizontal Haynesville/Bossier shale wells with an average lateral length of 11,346 feet.
- Wells Turned to Sales: 15 (14.4 net) operated wells with an average initial production of 21 MMcf per day.
- Completed Lateral Length: Averaged 9,802 feet for these wells.
Comstock Resources faced significant pressure from weak natural gas prices but maintained steady operational performance in the Haynesville shale, enhancing liquidity through strategic financial maneuvers and continuing to drill and turn wells to sales effectively.
