Group 1 - Comstock Resources (NYSE: CRK) has lowered its production guidance for 2025 by approximately 6% while maintaining its capital expenditure budget unchanged [2] - This adjustment in production guidance could lead to a projected cash burn of close to $150 million for the full year [2] Group 2 - The article mentions the expertise of Aaron Chow, who has over 15 years of analytical experience and is recognized as a top-rated analyst on TipRanks [3] - Aaron Chow co-founded a mobile gaming company that was acquired by PENN Entertainment and has designed in-game economic models for mobile apps with over 30 million combined installs [3]

Group 1 - Comstock Resources (CRK) has recently provided positive news for investors, although there are concerns that may have impacted its stock price performance [2] - The company is influenced by a controlling shareholder, Jerry Jones, which may affect its strategic decisions and market perception [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] Group 2 - The analysis of oil and gas companies focuses on identifying undervalued entities within the sector, examining balance sheets, competitive positions, and development prospects [1]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-03262 COMSTOCK RESOURCES, INC. (Exact name of registrant as specified in its charter) 5300 Town and Country Blvd., Suite 500, Frisco, Texas 75034 (Address of principa ...

Financial Data and Key Metrics Changes - In Q2 2025, the company reported oil and gas sales of $344 million, a 24% increase compared to the previous year despite a 14% decrease in production, averaging 1.23 Bcfe per day [9][10] - Adjusted net income for the quarter was $40 million, or $0.13 per diluted share, compared to a loss in Q2 2024 [10][11] - EBITDAX for the quarter was $260 million, with operating cash flow of $210 million [9][10] Business Line Data and Key Metrics Changes - The company turned 21 wells to sales in the first half of 2025, with an average initial production rate of 25 million cubic feet per day [7][10] - The average lateral length for wells turned to sales in the legacy Haynesville area was 11,803 feet, while the Western Haynesville wells had an average lateral length of 7,933 feet [24][22] - The company drilled 16 wells in the first half of 2025, with a total of 19 wells drilled so far this year [13][10] Market Data and Key Metrics Changes - The average NYMEX settlement price for Q2 2025 was $3.44, while the average Henry Hub spot price was $3.16 [11] - The realized gas price for the second quarter was $3.20, reflecting a $0.42 basis differential compared to the NYMEX settlement price [11] Company Strategy and Development Direction - The company is focused on building its asset base in the Western Haynesville, with plans to drill 19 net wells and turn 13 net wells to sales in 2025 [38] - A new gas treating plant has been put into operation, increasing treating capacity by 400 million cubic feet per day [5][39] - The company plans to divest certain non-core properties to accelerate deleveraging of its balance sheet [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth in natural gas demand and the potential for LNG and industrial demand [8][40] - The company is adjusting its production strategy to optimize long-term value, focusing on disciplined drawdown of wells [74][76] - Management indicated that they are not considering issuing equity to fund growth, instead focusing on divesting non-core assets to improve the balance sheet [68][70] Other Important Information - The company has a total of 1,105,000 gross and 826,741 net acres prospective for commercial development in the Haynesville and Bossier Shales [16] - The average lateral length in the drilling inventory has increased to 9,686 feet, providing over 30 years of future drilling locations based on current activity levels [20][21] Q&A Session Summary Question: Insights on Western Haynesville step-out wells - Management discussed the positive confirmation of initial reservoir pressure and productivity from the Jennings well, which was drilled faster and cheaper than previous wells [44][47] Question: Implications of reduced well guidance for 2027 targets - Management clarified that the reduction in well guidance does not significantly impact the 2027 targets, as drilling speeds are improving [56][58] Question: Non-core asset sales strategy - Management emphasized that the focus is on selling non-core drilling inventory rather than production reserves, aiming to create value for the company [83][85] Question: Coring program objectives - The coring program aims to gather data for better understanding of the geology and to optimize completions, aligning with the company's long-term development strategy [87][88]

Financial Performance - Natural gas and oil sales were $344 million[6] - Operating cash flow was $210 million, or $0.71 per diluted share[6] - Adjusted EBITDAX for the quarter was $260 million[6] - Adjusted net income was $40 million, or $0.13 per diluted share[6] Operational Highlights - Five Western Haynesville wells were turned to sales in the second quarter with an average lateral length of 10,897 feet and an average per well initial production rate of 36 MMcf per day[6] - 21 wells were turned to sales to date in 2025 in the Legacy Haynesville area with an average lateral length of 11,803 feet and a per well initial production rate of 25 MMcf per day[6] - The company drilled and completed wells at an average cost of $2,647 per completed lateral foot in the Western Haynesville[6,57] Drilling Program - For the six months of 2025, the company drilled 19 gross wells (17.5 net) and turned 24 gross wells (20.3 net) to sales[16] - The average lateral length for operated wells turned to sales was 11,137 feet in the Haynesville and 11,684 feet in the Bossier[16] - The average initial production rate for operated wells turned to sales was 27 MMcf per day in the Haynesville and 26 MMcf per day in the Bossier[16] Capitalization and Liquidity - As of June 30, 2025, the company had $26 million in cash and cash equivalents[21] - The company's total debt was $3064 million, including $475 million outstanding on the revolving credit facility[21] - The company has strong financial liquidity of $10 billion[59]

Core Insights - Comstock Resources reported a revenue of $470.26 million for the quarter ended June 2025, marking a 90.5% increase year-over-year [1] - The company's EPS was $0.13, a significant improvement from -$0.20 in the same quarter last year, with an EPS surprise of +44.44% compared to the consensus estimate of $0.09 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $415.32 million, resulting in a surprise of +13.23% [1] Financial Performance Metrics - Average natural gas price was $3.02, lower than the estimated $3.26, while the average price including hedging was $3.06 compared to an estimate of $3.23 [4] - Total production was 112,238.00 MMcfe, below the average estimate of 115,997.70 MMcfe [4] - Oil production totaled 13.00 MBBL, exceeding the average estimate of 9.06 MBBL [4] - Average oil price was $57.00, compared to the estimated $62.07 [4] - Revenues from oil sales were $0.74 million, below the estimated $0.87 million, representing a -31% change year-over-year [4] - Revenues from natural gas sales were $339.23 million, lower than the average estimate of $396.16 million [4] Stock Performance - Comstock shares have returned -16.8% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Comstock Resources reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, and showing a significant improvement from a loss of $0.20 per share a year ago, indicating a positive earnings surprise of +44.44% [1] Financial Performance - The company achieved revenues of $470.26 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 13.23%, and showing a substantial increase from $246.83 million in the same quarter last year [2] - Over the last four quarters, Comstock has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Comstock shares have increased approximately 15.4% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.16 for the coming quarter and $0.56 for the current fiscal year, alongside revenues of $449.36 million and $1.81 billion respectively [7] - The estimate revisions trend for Comstock was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting that the overall industry outlook may impact Comstock's stock performance [8]

[Financial Performance](index=1&type=section&id=Financial%20Performance) Comstock's financial results improved significantly in the second quarter and first half of 2025, driven by higher natural gas prices. For Q2 2025, the company reported total sales of $344.3 million and adjusted net income of $40.0 million. For the first six months, sales reached $749.3 million with an adjusted net income of $93.9 million. Operating margins remained strong, at 74% (hedged) for the quarter and 75% for the half-year [Second Quarter 2025 Financial Results](index=1&type=section&id=Financial%20Results%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025) In Q2 2025, driven by higher natural gas prices, Comstock generated $344.3 million in natural gas and oil sales (including hedging gains) and $209.6 million in operating cash flow. The company reported a net income of $130.7 million, which included a significant $231.6 million pre-tax unrealized gain on hedging contracts. Excluding this, adjusted net income was $40.0 million, or $0.13 per diluted share Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Natural Gas & Oil Sales (incl. hedging) | $344.3 million | | Operating Cash Flow | $209.6 million | | Adjusted EBITDAX | $260 million | | Net Income | $130.7 million ($0.44/share) | | Adjusted Net Income | $40.0 million ($0.13/share) | - Net income for the quarter included a pre-tax unrealized gain of **$231.6 million** on hedging contracts due to changes in future natural gas prices[5](index=5&type=chunk) Q2 2025 Production Costs (per Mcfe) | Cost Component | Value (per Mcfe) | | :--- | :--- | | Gathering & Transportation | $0.37 | | Lease Operating Costs | $0.28 | | Production & Other Taxes | $0.09 | | Cash General & Administrative | $0.06 | | **Total Production Cost** | **$0.80** | - The company's hedged operating margin for Q2 2025 was **74%**[7](index=7&type=chunk) [Six Months 2025 Financial Results](index=2&type=section&id=Financial%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) For the first six months of 2025, Comstock reported natural gas and oil sales of $749.3 million (including minor hedging losses) and operating cash flow of $448.6 million. Net income was $15.3 million, impacted by a $90.8 million pre-tax unrealized loss on hedging contracts. Adjusted net income for the period was $93.9 million, or $0.32 per diluted share Six Months Ended June 30, 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Natural Gas & Oil Sales (incl. hedging) | $749.3 million | | Operating Cash Flow | $448.6 million | | Net Income | $15.3 million ($0.05/share) | | Adjusted Net Income | $93.9 million ($0.32/share) | - The average production cost for the first six months was **$0.82 per Mcfe**, with a **75% operating margin** on both a hedged and unhedged basis[10](index=10&type=chunk) [Operational Highlights and Strategic Initiatives](index=2&type=section&id=Operational%20Highlights%20and%20Strategic%20Initiatives) Operationally, Comstock continued its successful drilling program in the Haynesville/Bossier shale, turning 13 operated wells to sales in Q2 2025. The Western Haynesville wells showed particularly strong results with high initial production rates. Strategically, the company announced a collaboration with NextEra Energy Resources to explore developing power generation assets to serve potential data center customers in the Western Haynesville area [Drilling Results](index=2&type=section&id=Drilling%20Results) In Q2 2025, Comstock drilled 12 (10.6 net) operated horizontal wells and turned 13 (12.0 net) wells to sales. The five new Western Haynesville wells turned to sales in the quarter were highly productive, with an average initial production rate of 36 MMcf per day and an average lateral length of 10,897 feet - Five Western Haynesville wells turned to sales in Q2 2025 had an average initial production rate of **36 MMcf per day**[6](index=6&type=chunk) - To date in 2025, **21 wells** in the Legacy Haynesville area have been turned to sales, with an average initial production rate of **25 MMcf per day**[6](index=6&type=chunk) Recent Western Haynesville Well Results | Well | Completed Lateral (feet) | Initial Production Rate (MMcf per day) | | :--- | :--- | :--- | | Menn PB 1 | 10,926 | 38 | | Jennings Loehr 1 | 12,106 | 34 | | Jennings FSRA 1 | 12,045 | 28 | | Bell Meyer 1 | 9,100 | 41 | [Strategic Initiatives](index=2&type=section&id=Other) Comstock is collaborating with NextEra Energy Resources to explore the development of power generation assets near its Western Haynesville operations. The project aims to leverage Comstock's natural gas supply and infrastructure to provide reliable energy for potential data center customers - Comstock and a unit of NextEra Energy, Inc. are collaborating to explore developing power generation assets in the Western Haynesville area[15](index=15&type=chunk) - The joint project aims to integrate Comstock's natural gas supply and infrastructure to support energy solutions for potential data center customers[15](index=15&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) The consolidated financial statements detail the company's performance. The Statement of Operations shows a significant turnaround from a net loss in the prior year period. The Operating Results table breaks down production volumes, pricing, and per-unit costs. The Balance Sheet indicates an increase in total assets to $6.7 billion and total liabilities to $4.3 billion as of June 30, 2025 [Consolidated Statements of Operations](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended June 30, 2025, Comstock reported total revenues of $470.3 million and a net income of $130.7 million, a substantial improvement from a net loss of $123.2 million in the same period of 2024. For the six-month period, revenues were $983.1 million with a net income of $15.3 million, compared to a net loss of $137.7 million in the prior year Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $470,262 | $246,830 | $983,116 | $582,602 | | Operating Income (Loss) | $89,446 | $(92,493) | $215,614 | $(105,340) | | Net Income (Loss) | $130,728 | $(123,249) | $15,335 | $(137,723) | | Diluted EPS | $0.44 | $(0.43) | $0.05 | $(0.49) | [Operating Results](index=5&type=section&id=OPERATING%20RESULTS) In Q2 2025, total production was 112.2 Bcf-equivalent, down from 130.9 Bcf-equivalent in Q2 2024. The average realized natural gas price, including hedging, was $3.06 per Mcf, up from $2.12 per Mcf in the prior-year quarter. Total production costs were $0.80 per Mcfe. Capital expenditures on exploration and development totaled $268.2 million for the quarter Production and Pricing Comparison | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Production (MMcfe) | 112,238 | 130,949 | | Avg. Gas Price incl. Hedging (per Mcf) | $3.06 | $2.12 | | Total Production Costs (per Mcfe) | $0.80 | $0.84 | Capital Expenditures (in thousands) | Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Exploration and Development | $268,202 | $221,019 | [Consolidated Balance Sheets](index=8&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, Comstock's balance sheet showed total assets of $6.69 billion, up from $6.38 billion at year-end 2024. Total liabilities increased to $4.26 billion from $4.05 billion over the same period, primarily due to an increase in long-term debt. Total stockholders' equity stood at $2.43 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $268,979 | $284,034 | | Property and Equipment, net | $6,002,010 | $5,688,389 | | **Total Assets** | **$6,694,863** | **$6,382,097** | | Total Current Liabilities | $748,147 | $612,854 | | Long-term Debt | $3,018,009 | $2,952,090 | | **Total Liabilities** | **$4,259,996** | **$4,048,553** | | **Total Stockholders' Equity** | **$2,434,867** | **$2,333,544** | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) The company provides non-GAAP measures to offer additional insight into its profitability and cash flow. For Q2 2025, Adjusted Net Income was $40.0 million, and Adjusted EBITDAX was $259.7 million. Operating Cash Flow was $209.6 million, while the company reported a free cash flow deficit of $79.0 million for the quarter, reflecting significant capital investment [Adjusted Net Income and Adjusted EBITDAX](index=6&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20EBITDAX) After excluding a $231.6 million unrealized gain on derivatives, Q2 2025 Adjusted Net Income was $40.0 million, compared to an adjusted net loss of $58.2 million in Q2 2024. Adjusted EBITDAX for Q2 2025 increased to $259.7 million from $166.7 million in the prior-year quarter, reflecting improved operational performance before interest, taxes, and non-cash items Reconciliation of Adjusted Net Income (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (Loss) | $130,728 | $(123,249) | | Unrealized (Gain) Loss on Derivatives | $(231,561) | $85,804 | | **Adjusted Net Income (Loss)** | **$40,040** | **$(58,214)** | Adjusted EBITDAX (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total Adjusted EBITDAX** | **$259,740** | **$166,705** | [Operating Cash Flow and Free Cash Flow](index=7&type=section&id=Operating%20Cash%20Flow%20and%20Free%20Cash%20Flow) Operating cash flow for Q2 2025 was $209.6 million, a significant increase from $118.1 million in Q2 2024. After accounting for $268.2 million in exploration and development capital expenditures and other items, the company had a free cash flow deficit from operations of $79.0 million for the quarter Cash Flow Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Cash Flow | $209,636 | $118,134 | | Free Cash Deficit from Operations | $(78,990) | $(104,017) | [Earnings Call Information](index=3&type=section&id=Earnings%20Call%20Information) Comstock will host a conference call on July 31, 2025, at 10:00 a.m. Central Time to discuss the second quarter 2025 results. A live webcast and a subsequent replay will be available on the company's website - A conference call is scheduled for 10:00 a.m. Central Time on July 31, 2025[17](index=17&type=chunk) - Investors can access a live webcast and a replay via the company's website[17](index=17&type=chunk)[19](index=19&type=chunk)

Financial Performance - Comstock Resources reported natural gas production of 112 Bcf in Q2 2025, with sales totaling $344.3 million, including hedging gains of $4.3 million [4][10] - The company achieved an operating cash flow of $209.6 million and a net income of $130.7 million, translating to $0.44 per diluted share for the quarter [4][10] - For the first half of 2025, Comstock realized $3.31 per Mcf before hedging and $3.29 per Mcf after hedging, with total sales of $749.3 million [7][8] Cost and Margin Analysis - The average production cost per Mcfe in Q2 2025 was $0.80, with an unhedged operating margin of 73% and a hedged operating margin of 74% [5][8] - For the first six months of 2025, the average production cost per Mcfe was $0.82, maintaining a 75% operating margin [8] Drilling and Production Results - Comstock drilled twelve operated horizontal Haynesville/Bossier shale wells in Q2 2025, achieving an average lateral length of 10,388 feet and initial production rates averaging 36 MMcf per day [10][11] - The company has turned 21 wells to sales in 2025 in its Legacy Haynesville area, with an average lateral length of 11,803 feet and initial production rates of 25 MMcf per day [10] Strategic Initiatives - Comstock is collaborating with NextEra Energy Resources to explore the development of power generation assets near its Western Haynesville area, aiming to integrate its natural gas supply with energy solutions for data center customers [12]

Core Viewpoint - Comstock Resources (CRK) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with a consensus outlook suggesting a significant earnings picture that could influence its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to reveal quarterly earnings of $0.09 per share, reflecting a year-over-year increase of +145% [3]. - Revenues are projected to reach $415.32 million, marking a 68.3% increase compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 15.96% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, suggesting no recent differing analyst views [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the deviation of actual earnings from consensus estimates, with positive readings being more reliable [9][10]. - Comstock currently holds a Zacks Rank of 3, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Comstock exceeded the expected earnings of $0.16 per share by delivering $0.18, resulting in a surprise of +12.50% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [14]. Conclusion - While Comstock does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [17].