Group 1 - The article emphasizes the importance of considering stocks like Comstock Resources when they are out of favor, as the downside risk is likely fully priced in [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] - The investing group Oil & Gas Value Research focuses on under-followed oil companies and midstream companies that present compelling investment opportunities [2] Group 2 - The analysis includes a comprehensive breakdown of companies' balance sheets, competitive positions, and development prospects [1] - Members of Oil & Gas Value Research receive early access to analyses and insights that are not available on the free site [1]

Revenue and Sales Performance - Natural gas and oil sales for Q3 2025 were $308.6 million, an increase of $55.0 million (22%) compared to Q3 2024's $253.6 million, primarily due to higher natural gas prices [96]. - Average realized natural gas price increased by 45% to $2.75 per Mcf in Q3 2025 from $1.90 per Mcf in Q3 2024 [96]. - For the nine months ended September 30, 2025, natural gas and oil sales reached $1.06 billion, up $302.4 million (40%) from $759.2 million in the same period of 2024 [98]. - Gas services revenue increased by $90.4 million (178%) to $141.3 million in Q3 2025 from $50.8 million in Q3 2024 [99]. Production and Operational Metrics - Natural gas production for Q3 2025 decreased by 16% to 111.8 Bcf compared to 133.1 Bcf in Q3 2024 [96]. - Production and ad valorem taxes decreased by $1.4 million (11%) to $11.2 million in Q3 2025 due to lower production levels [100]. - Gathering and transportation costs fell by $14.0 million (26%) to $40.0 million in Q3 2025 compared to $54.0 million in Q3 2024 [101]. Expenses and Financial Performance - General and administrative expenses rose to $11.5 million in Q3 2025, up from $9.9 million in Q3 2024, driven by higher employee compensation [106]. - Interest expense increased to $56.7 million in Q3 2025 from $54.5 million in Q3 2024, primarily due to increased borrowings [108]. - For the quarter ended September 30, 2025, the company reported net income of $118.1 million, or $0.40 per diluted share, compared to a net loss of $25.7 million, or $0.09 per share, for the same quarter in 2024 [112]. - Income from operations for the first nine months of 2025 was $265.8 million, a significant increase from a loss of $61.3 million in the same period of 2024 [112]. - Cash provided by operating activities increased by $322.1 million (91%) to $675.4 million in the first nine months of 2025, driven primarily by higher natural gas prices [115]. Capital and Liquidity - The company had $939.2 million in liquidity as of September 30, 2025, consisting of $920 million in unused borrowing capacity and $19.2 million in cash [123]. - Capital expenditures for the first nine months of 2025 totaled $978.4 million, compared to $788.5 million in the same period of 2024 [122]. - The company plans to spend an additional $250 million to $350 million in the remaining three months of 2025 on drilling, completion, and infrastructure activities [122]. - As of September 30, 2025, the company had $580.0 million outstanding under its bank credit facility, with total commitments of $1.5 billion [126]. Debt and Financial Instruments - As of September 30, 2025, the company had approximately $3.2 billion in long-term debt, with $965.0 million at a fixed rate of 5.875% and $1.62 billion at a fixed rate of 6.75% [137]. - The company has natural gas price swaps hedging approximately 50.1 Bcf of 2025 production at an average price of $3.48 per MMBtu [134]. - The company entered into an agreement to sell certain producing wells and undeveloped leasehold acreage in East Texas for $430 million, expected to close in Q4 2025 [129].

Financial Data and Key Metrics Changes - Natural gas and oil sales increased to $335 million, a 10% rise from Q3 2024 [6][11] - Adjusted EBITDA for the quarter was $249 million, with adjusted net income reported at $28 million or $0.09 per diluted share, compared to a loss in the same period in 2024 [7][11] - Operating cash flow generated was $190 million, equating to $0.65 per diluted share [7][11] Business Line Data and Key Metrics Changes - Production averaged 1.22 BCFE per day in Q3 2025, with a total of 36 wells turned to sales in the first nine months of the year [11][14] - Three new Western Haynesville wells were brought online, increasing the total to eight wells for 2025, with an average initial production rate of 32 million cubic feet per day [7][25] - In the legacy Haynesville, 28 wells were turned to sales with an average initial production rate of 25 million cubic feet per day [7][24] Market Data and Key Metrics Changes - The quarterly NYMEX settlement gas price averaged $3.07, while the average Henry Hub spot price was $3.03 [12] - Realized gas price during Q3 averaged $2.75, reflecting a $0.32 basis differential compared to the NYMEX settlement price [12] Company Strategy and Development Direction - The company is focusing on expanding its operations in the Western Haynesville to meet growing natural gas demand driven by LNG exports and AI data center power needs [4][32] - A divestiture of non-strategic assets is underway to improve the balance sheet, with proceeds aimed at retiring long-term debt [6][10] - The company plans to drill 19 wells and turn 13 wells to sales in the Western Haynesville in 2025, while also maintaining production in the legacy Haynesville [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of natural gas, citing record LNG exports and the increasing demand for power generation [4][5] - The company anticipates continued improvements in drilling efficiencies and cost reductions in both the Western and legacy Haynesville areas [32] - Liquidity is strong, totaling over $900 million, which will be enhanced by the upcoming Shelby Trough divestiture [32] Other Important Information - The company has a total of 1,055,386 gross and 797,440 net acres in the Haynesville Bossier Shale, with significant resource potential identified [16] - The average lateral length of drilled wells has increased, with a focus on longer laterals to enhance production efficiency [20][23] Q&A Session Summary Question: Broader question around 2026 capital efficiency - Management indicated that efficiency gains in the legacy Haynesville are nearing their peak, while improvements in the Western Haynesville are still being realized [34][35] Question: Perspective on gas competition along the Gulf Coast - Management highlighted the advantage of owning midstream assets in the Western Haynesville, allowing for direct sales to end users and establishing reliable supply relationships [37][38] Question: Characterization of the Shelby Trough sale - Management described the sale as a win-win, allowing for debt reduction while maintaining a strong inventory position in the Western Haynesville [40][42] Question: Assumptions regarding Western Haynesville inventory - Management acknowledged conservative assumptions in inventory estimates, with ongoing efforts to optimize well spacing and unitization [44][45] Question: Optimization of acreage around 10,000-foot laterals - Management noted that geological structures and ownership issues currently limit the ability to optimize the entire position for longer laterals [46][48] Question: Update on Marquette Gas Treating Plant expansion - Management confirmed that the expansion to 1.3 Bcf/d was part of the original plan, with long lead times for equipment manufacturing [50][51] Question: Potential collaboration with Aethon - Management mentioned ongoing acreage swaps with Aethon to facilitate longer laterals, indicating a collaborative approach to enhance production [58][59]

3rd Quarter 2025 Results Important factors that could cause actual results to differ materially from those in the forward-looking statements herein include the timing and extent of changes in market prices for oil and gas, operating risks, liquidity risks, including risks relating to our debt, political and regulatory developments and legislation, and other risk factors and known trends and uncertainties as described in our Annual Report on Form 10-K for fiscal year 2024 and as updated and supplemented in o ...

Financial Performance - Comstock reported natural gas and oil sales of $335.0 million for Q3 2025, including realized hedging gains of $26.4 million[5]. - Operating cash flow for Q3 2025 was $190.4 million, translating to $0.65 per diluted share[6]. - Adjusted net income for Q3 2025 was $27.9 million, or $0.09 per diluted share, excluding a pre-tax unrealized gain on hedging contracts[5]. - Adjusted EBITDAX for Q3 2025 was $249 million[6]. - For the nine months ended September 30, 2025, total natural gas and oil sales reached $1.08 billion, including realized hedging losses of $22.7 million[9]. - Comstock's net income for the nine months ended September 30, 2025, was $133.4 million, or $0.45 per diluted share[9]. - Adjusted net income for the three months ended September 30, 2025, was $27,904,000, a significant recovery from a loss of $48,509,000 in the same period of 2024[30]. Production and Operations - The company turned 28 wells to sales in 2025 in its Legacy Haynesville area, with an average initial production rate of 25 MMcf per day[6]. - The company drilled 17 operated horizontal Haynesville/Bossier shale wells in Q3 2025, with an average lateral length of 11,692 feet[12]. - Natural gas production decreased by 16% year-over-year to 111,770 MMcf for the three months ended September 30, 2025, compared to 133,116 MMcf in 2024[27]. - Total natural gas and oil sales including hedging increased by 9.8% to $334,968,000 for the three months ended September 30, 2025, compared to $305,034,000 in 2024[27]. - Average natural gas price per Mcf rose to $2.75 for the three months ended September 30, 2025, up from $1.90 in 2024, reflecting a 44.7% increase[27]. - Gas services revenue surged to $141,265,000 for the three months ended September 30, 2025, compared to $50,847,000 in 2024, indicating a substantial growth[27]. Costs and Expenditures - Comstock's production cost per Mcfe in Q3 2025 averaged $0.77, with an unhedged operating margin of 72%[7]. - Free cash deficit from operations for the three months ended September 30, 2025, was $73,672,000, compared to a deficit of $44,125,000 in 2024[34]. - Total exploration and development capital expenditures increased to $267,110,000 for the three months ended September 30, 2025, from $184,392,000 in 2024, representing a 45% increase[34]. - Total production costs decreased to $85,843,000 for the three months ended September 30, 2025, down from $101,864,000 in 2024, reflecting a 15.7% reduction[27]. - Unhedged operating margin improved to 72% for the three months ended September 30, 2025, compared to 60% in 2024[27]. Balance Sheet and Assets - Total current assets increased to $268,853 million in September 2025 from $284,034 million in December 2024, reflecting a decrease of approximately 5.4%[37]. - Long-term debt rose to $3,126,015 million in September 2025, up from $2,952,090 million in December 2024, indicating an increase of about 5.9%[37]. - Total liabilities increased to $4,223,183 million in September 2025 compared to $4,048,553 million in December 2024, representing a growth of approximately 4.3%[37]. - Stockholders' equity attributable to Comstock grew to $2,360,264 million in September 2025, up from $2,241,023 million in December 2024, marking an increase of about 5.3%[37]. - Cash and cash equivalents significantly increased to $19,215 million in September 2025 from $6,799 million in December 2024, showing a growth of approximately 183.5%[37]. - Accounts payable rose to $455,282 million in September 2025, compared to $421,814 million in December 2024, reflecting an increase of about 7.9%[37]. - Accumulated earnings increased to $843,311 million in September 2025 from $728,619 million in December 2024, indicating a growth of approximately 15.7%[37]. - Total stockholders' equity reached $2,617,810 million in September 2025, up from $2,333,544 million in December 2024, representing an increase of about 12.2%[37]. - Other current assets decreased to $68,552 million in September 2025 from $97,524 million in December 2024, reflecting a decline of approximately 29.7%[37]. - Derivative financial instruments increased to $8,140 million in September 2025 from $4,865 million in December 2024, indicating a growth of about 67.5%[37].

Core Insights - Comstock Resources reported strong financial results for Q3 2025, driven by higher natural gas prices, with total natural gas and oil sales reaching $335 million, including realized hedging gains of $26.4 million [3][9] - The company achieved an operating cash flow of $190.4 million and a net income of $118.1 million, translating to $0.40 per diluted share [3][9] - Adjusted net income for the quarter was $27.9 million, or $0.09 per diluted share, after excluding certain items [3][9] Financial Performance - For Q3 2025, Comstock realized an average price of $2.99 per Mcf after hedging for its natural gas production of 112 Bcf [3][4] - The production cost per Mcfe averaged $0.77, with an unhedged operating margin of 72% and a hedged operating margin of 74% [4][7] - For the nine months ended September 30, 2025, total natural gas and oil sales amounted to $1.08 billion, with an operating cash flow of $639 million and a net income of $133.4 million [6][7] Production and Drilling Activities - Comstock turned 28 wells to sales in 2025, with an average lateral length of 11,919 feet and an initial production rate of 25 MMcf per day [9][10] - In Q3 2025, the company drilled 17 operated horizontal Haynesville/Bossier shale wells, achieving an average lateral length of 11,692 feet [10] - The company divested non-strategic Cotton Valley wells for net proceeds of $15 million and entered into an agreement to sell Shelby Trough assets for $430 million [9][14] Divestitures - On September 2, 2025, Comstock sold its legacy Cotton Valley wells for net proceeds of $15.2 million, which included interests in 883 wells [13] - The agreement to divest Shelby Trough properties includes interests in 155 producing wells and approximately 36,000 net acres, with expected proceeds to reduce long-term debt [14] Operational Metrics - The average natural gas price for Q3 2025 was $2.75 per Mcf, compared to $1.90 in Q3 2024, reflecting a significant year-over-year increase [24] - Total production for Q3 2025 was 111,837 MMcfe, down from 133,198 MMcfe in Q3 2024 [24] - The company reported a total of 111,770 MMcf of natural gas production for Q3 2025, compared to 133,116 MMcf in the same period last year [24]

Core Insights - The third-quarter earnings season is underway, with energy companies like Comstock Resources Inc., Williams, and Marathon Petroleum Corp. expected to report better-than-expected earnings due to a favorable energy business environment in the September quarter [1] Oil & Gas Pricing Analysis - Average WTI spot prices for July, August, and September were $68.39, $64.86, and $63.96 per barrel, respectively, indicating a healthier pricing environment compared to the previous quarter [2] - Year-over-year, the pricing environment was less favorable, with average prices in July, August, and September 2024 at $81.80, $76.68, and $70.24 per barrel, respectively [3] - Natural gas prices in the September quarter of 2025 were higher than in the same period of 2024, with Henry Hub average prices at $3.20, $2.91, and $2.97 per million Btu [4] Stock Selection Strategy - Identifying stocks with potential for better-than-expected earnings is challenging, but a combination of positive Earnings ESP and Zacks Rank can help [5] - Stocks with this combination have a 70% chance of delivering an earnings surprise [6] Company-Specific Insights - Comstock Resources, a leading natural gas producer, is expected to benefit from favorable commodity pricing, with an Earnings ESP of +2.86% and a Zacks Rank of 3, scheduled to report on Nov. 3 [8] - Williams, known for its midstream operations, is anticipated to benefit from stable cash flows and higher natural gas prices, with an Earnings ESP of +0.56% and a Zacks Rank of 3, also reporting on Nov. 3 [9] - Marathon Petroleum, a leading refiner, is likely to gain from lower year-over-year oil prices, with an Earnings ESP of +8.68% and a Zacks Rank of 3, set to report on Nov. 4 [10]

Core Viewpoint - Comstock Resources (CRK) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a strong history of exceeding expectations [1]. Earnings Performance - Comstock has a solid track record of surpassing earnings estimates, with an average surprise of 28.47% over the last two quarters [2]. - In the last reported quarter, Comstock achieved earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, resulting in a surprise of 44.44% [3]. - For the previous quarter, the company was expected to report earnings of $0.16 per share but delivered $0.18 per share, yielding a surprise of 12.50% [3]. Earnings Estimates and Predictions - Recent estimates for Comstock have been trending upward, indicating positive sentiment among analysts [6]. - The Zacks Earnings ESP (Expected Surprise Prediction) for Comstock is currently positive, suggesting a strong likelihood of an earnings beat [6][9]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [7]. Earnings ESP Details - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [8]. - Comstock's current Earnings ESP stands at +3.17%, indicating increased analyst optimism regarding its near-term earnings potential [9]. - The next earnings report for Comstock is anticipated to be released on November 3, 2025 [9].

Core Insights - Comstock Resources, Inc. (NYSE:CRK) experienced a significant decline in share price, falling by 12.95% from October 3 to October 10, 2025, making it one of the worst-performing energy stocks during that week [1] - The company is a prominent independent natural gas producer, primarily focused on the Haynesville shale development in North Louisiana and East Texas [2] - A recent surge in natural gas prices, driven by seasonal demand for heating, was followed by a decline of over 6% in prices this week, indicating potential profit-taking by investors [3] - The overall market decline, influenced by escalating trade tensions between China and the US, also negatively affected Comstock Resources, with China imposing stricter export controls on rare-earths and the US threatening additional tariffs [4]

Core Insights - Comstock Resources, Inc. (NYSE:CRK) experienced a share price increase of 9.24% from September 25 to October 2, 2025, making it one of the top-performing energy stocks during that week [1] - The company is a prominent independent natural gas producer, primarily focused on the Haynesville shale development in North Louisiana and East Texas [2] - The surge in Comstock's share price is attributed to a significant rise in natural gas prices, with US natural gas futures increasing by over 30% during the week [3] - The increase in natural gas prices is expected as colder months approach, leading to higher demand for heating [3] - Recent EIA storage data indicated a bullish trend, with natural gas inventories rising by only 53 billion cubic feet (bcf) for the week ending September 26, which was below the expected 67 bcf and the five-year average build of 85 bcf [3] - Over the past year, Comstock's share price has appreciated by 77% [4]