Financial Data and Key Metrics Changes - In Q1 2025, natural gas and oil sales increased to $405 million, a 21% increase compared to the previous year [8][11] - Operating cash flow was $239 million, or $0.81 per diluted share [8] - Adjusted EBITDAX for the quarter was $293 million, with adjusted net income reported at $53.8 million, or $0.18 per diluted share [9][11] - Production averaged 1.28 Bcfe per day, reflecting a 17% decrease from Q1 2024 due to reduced rig activity [10] Business Line Data and Key Metrics Changes - The company turned 14 wells to sales since the last update, with an average initial production rate of 25 million cubic feet per day [9] - The Elijah One well, turned to sales with an initial production rate of 41 million cubic feet per day, represents a significant step in delineating the Western Haynesville [7][25] Market Data and Key Metrics Changes - The average NYMEX settlement price for natural gas was $3.65, while the average Henry Hub spot price was $4.27 [11] - Realized gas price in Q1 was $3.58, reflecting a $0.07 differential from the NYMEX price [12] Company Strategy and Development Direction - The company is focused on building assets in the Western Haynesville to capitalize on growing natural gas demand [40] - Plans to drill 20 wells and turn 15 wells to sales in the Western Haynesville in 2025, while also maintaining production in the legacy Haynesville [41] - The partnership with BKV Corporation aims to develop carbon capture projects, enhancing the company's low-carbon footprint strategy [39][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth in natural gas demand, particularly for power generation and AI applications [6][40] - The company anticipates improved leverage ratios and financial performance due to higher natural gas prices and a strong hedge position [15] Other Important Information - The company has invested over $1 billion in developing the 520,000 net acres in the Western Haynesville [6] - The company reported a greenhouse gas intensity improvement of 28% compared to 2023, with significant reductions in CO2 and methane emissions [36][38] Q&A Session Summary Question: Can you discuss the reservoir quality of the Elajawan well compared to previous wells? - Management indicated that the reservoir quality of the Elajawan well appears as good as those drilled in the core area, with good thickness and geological support [48][51] Question: What is the structure and value of the BKV partnership? - The partnership aims to develop carbon capture projects, enhancing the attractiveness of the company's gas resources for potential power generation facilities [56][60] Question: When can we expect more results from the Western Haynesville area? - The next well is planned to be spud in Q4 2025, with additional wells planned for 2026 [63][65] Question: How many rigs can the Western Haynesville support in the future? - Management indicated that they will prudently develop the area, ensuring they do not oversupply the market while meeting increasing demand [90][92] Question: What is the capital allocation strategy for 2026? - The focus will remain on drilling wells to hold acreage while balancing the need for delineation and appraisal wells [102]

1st Quarter 2025 Results April 30, 2025 Disclaimer This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our current expectations or forecasts of future events. These statements include estimates of future natural gas and oil reserves, expected natural gas and oil production and future expenses, assumptions regarding future natural gas and oil prices, budg ...

Core Insights - Comstock Resources (CRK) reported quarterly earnings of $0.18 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, and showing a significant improvement from a loss of $0.03 per share a year ago [1] - The company achieved revenues of $512.85 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 18.98% and increasing from $335.77 million year-over-year [2] - Comstock shares have increased approximately 3.8% since the beginning of the year, contrasting with a -5.5% decline in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.13 on revenues of $402.66 million, while for the current fiscal year, the estimate is $0.73 on revenues of $1.75 billion [7] - The estimate revisions trend for Comstock is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the bottom 25% of over 250 Zacks industries, suggesting potential challenges for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Comstock reported natural gas and oil sales of $405.0 million in Q1 2025, a significant increase from $335.9 million in Q1 2024[5] - Adjusted net income for Q1 2025 was $53.8 million, or $0.18 per diluted share, compared to a loss of $8.5 million in Q1 2024[25] - The net loss for Q1 2025 was $115.4 million, or $0.40 per share, primarily due to a pre-tax unrealized loss on hedging contracts of $322.4 million[5] - The net loss for Q1 2025 was $115,393, significantly higher than the net loss of $14,474 in Q1 2024[28] - Operating cash flow for the quarter was $239.0 million, or $0.81 per diluted share[7] - Operating cash flow for Q1 2025 was $238,988, compared to $182,015 in Q1 2024, representing a 31.2% increase[28] Production and Operations - Comstock's production cost per Mcfe averaged $0.83, an increase from $0.76 in Q1 2024[22] - The company turned fourteen (11.3 net) operated wells to sales in Q1 2025, with an average initial production rate of 25 MMcf per day[7] - Comstock drilled seven (6.9 net) operated horizontal Haynesville/Bossier shale wells in Q1 2025[9] - Comstock's unhedged operating margin was 77% in Q1 2025, compared to 63% in Q1 2024[22] Assets and Liabilities - Total current assets increased to $338,976 in Q1 2025 from $284,034 in Q1 2024, marking a 19.3% growth[31] - Cash and cash equivalents rose to $32,875 in Q1 2025, up from $6,799 in Q1 2024, indicating a substantial increase in liquidity[31] - Long-term debt increased to $3,050,034 in Q1 2025 from $2,952,090 in Q1 2024, reflecting a 3.3% rise[31] - Total liabilities grew to $4,324,363 in Q1 2025, compared to $4,048,553 in Q1 2024, representing a 6.8% increase[31] - Stockholders' equity attributable to Comstock decreased to $2,121,497 in Q1 2025 from $2,241,023 in Q1 2024, a decline of 5.4%[31] Partnerships and Contributions - Contributions from midstream partner increased to $59,500 in Q1 2025 from $6,000 in Q1 2024, showing a significant rise in partnership support[28] - The company reported a decrease in accounts payable and accrued expenses by $31,141 in Q1 2025, compared to a decrease of $115,470 in Q1 2024[28] Borrowing and Credit - The bank group reaffirmed a $2.0 billion borrowing base under its $1.5 billion revolving credit facility[12]

Core Viewpoint - BKV Corporation and Comstock Resources have entered into an exclusive, non-binding agreement to develop carbon capture, utilization, and sequestration (CCUS) projects at Comstock's natural gas processing facilities in Texas, aiming to enhance sustainability in natural gas production [1][2][3]. Group 1: Agreement Details - The agreement involves the development of CCUS injection wells to permanently sequester carbon dioxide waste from Comstock's Bethel and Marquez facilities in Texas [2]. - The terms of the projects will be subject to further negotiations and the execution of definitive agreements [2]. Group 2: Company Profiles - BKV Corporation is a growth-driven energy company focused on natural gas production and has a strong presence in the Barnett Shale, being one of the top 20 gas-weighted natural gas producers in the U.S. [5]. - Comstock Resources is a leading independent natural gas producer, primarily operating in the Haynesville shale region of North Louisiana and East Texas [6]. Group 3: Leadership Statements - BKV's CEO emphasized the importance of carbon capture for the future of responsible energy and the collaboration with Comstock as a significant opportunity for innovation and sustainability [4]. - Comstock's CEO highlighted the demand for scalable, low-carbon energy solutions and expressed excitement about the partnership with BKV to enhance their infrastructure [4].

Financial Performance - Comstock Resources reported natural gas prices of $3.58 per Mcf before hedging and $3.52 per Mcf after hedging for its production of 115 Bcf in Q1 2025, leading to total natural gas and oil sales of $405.0 million [4] - The operating cash flow for the quarter was $239.0 million, resulting in a net loss of $115.4 million or $0.40 per share, which included a pre-tax unrealized loss of $322.4 million on hedging contracts [4][25] - Adjusted net income for Q1 2025 was $53.8 million or $0.18 per diluted share, excluding the unrealized loss and exploration expenses [4][25] Production and Costs - The average production cost per Mcfe was $0.83, with components including $0.37 for gathering and transportation, $0.30 for lease operating costs, $0.10 for production taxes, and $0.06 for cash general and administrative expenses [5][22] - Comstock's unhedged operating margin was 77% and 76% after hedging in Q1 2025 [5][22] Drilling and Operational Updates - In Q1 2025, Comstock drilled seven operated horizontal Haynesville/Bossier shale wells, with an average lateral length of 11,660 feet, and turned eleven operated wells to sales [7][8] - The company has turned fourteen operated Haynesville/Bossier shale wells to sales since the last update, with initial production rates averaging 25 MMcf per day [8] Capital Expenditures and Financial Position - Comstock's bank group reaffirmed a $2.0 billion borrowing base under its $1.5 billion revolving credit facility [10] - Total revenues for Q1 2025 were $512.9 million, compared to $335.8 million in Q1 2024, indicating significant growth [19]

Core Viewpoint - Comstock Resources (CRK) is anticipated to report a significant year-over-year increase in earnings and revenues for the quarter ended March 2025, with the consensus outlook suggesting a positive impact on its stock price depending on actual results compared to estimates [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on April 30, 2025, with a projected earnings per share (EPS) of $0.16, reflecting a year-over-year increase of +633.3% [3]. - Revenues are forecasted to reach $419.42 million, which is a 24.9% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised upward by 71.11% over the last 30 days, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Comstock is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +12%, suggesting a strong likelihood of beating the consensus EPS estimate [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [8]. - Comstock currently holds a Zacks Rank of 3, which, along with the positive Earnings ESP, suggests a high probability of exceeding EPS estimates [11]. Historical Performance - In the last reported quarter, Comstock had an expected EPS of $0.02 but delivered $0.16, resulting in a surprise of +700% [12]. - Over the past four quarters, Comstock has surpassed consensus EPS estimates two times [13]. Industry Context - In the broader industry context, Northern Oil and Gas (NOG) is expected to report earnings of $1.12 per share for the same quarter, indicating a year-over-year decline of -12.5%, with revenues projected at $558.35 million, up 5% from the previous year [17]. - Northern Oil and Gas has seen a 10.9% downward revision in its consensus EPS estimate over the last 30 days but has an Earnings ESP of 1.96%, suggesting a likelihood of beating the consensus EPS estimate [18].

Group 1 - Comstock Resources (CRK) is outperforming the Oils-Energy sector, with a year-to-date return of approximately 6.3%, while the sector has returned an average of -10.1% [4] - The Zacks Consensus Estimate for CRK's full-year earnings has increased by 72.9% over the past three months, indicating improved analyst sentiment [4] - Comstock Resources holds a Zacks Rank of 2 (Buy), suggesting a positive outlook for the stock [3] Group 2 - Comstock Resources is part of the Oil and Gas - Exploration and Production - United States industry, which has seen a year-to-date loss of about 30.6%, highlighting CRK's relative strength within this group [6] - Another stock in the Oils-Energy sector, Ecopetrol (EC), has also outperformed the sector with a year-to-date increase of 11.1% [5] - Ecopetrol belongs to the Oil and Gas - Integrated - International industry, which is ranked 148 and has moved -7.6% so far this year [7]

Core Insights - Comstock Resources (CRK) has shown solid improvement in earnings estimates, indicating potential investment opportunities [1][2] - The rising trend in estimate revisions reflects growing analyst optimism regarding the company's earnings prospects, which is expected to positively impact its stock price [2][3] Earnings Estimate Revisions - Current-quarter earnings estimate is $0.14 per share, representing a significant increase of +566.67% from the previous year [6] - Over the last 30 days, the Zacks Consensus Estimate for Comstock has increased by 53.33%, with one estimate moving higher and one moving lower [6] - For the full year, the earnings estimate is $0.71 per share, reflecting a change of +395.83% from the year-ago figure [7] - In the past month, three estimates have been revised upward with no negative revisions, indicating a positive trend [7] Zacks Rank and Performance - Comstock has achieved a Zacks Rank 2 (Buy), indicating favorable estimate revisions and strong potential for outperformance [8] - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [8] Market Performance - Comstock's stock has increased by 5.7% over the past four weeks due to strong estimate revisions, suggesting further upside potential [9]

Core Viewpoint - Comstock Resources (CRK) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is based solely on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - Comstock is expected to earn $0.63 per share for the fiscal year ending December 2025, reflecting a 362.5% increase from the previous year's reported number [9]. - Over the past three months, the Zacks Consensus Estimate for Comstock has increased by 83.9% [9]. Impact of Institutional Investors - Changes in earnings estimates are strongly correlated with stock price movements, with institutional investors using these estimates to determine the fair value of shares [5]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, which subsequently affects stock prices [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks generating an average annual return of +25% since 1988 [8]. - The upgrade of Comstock to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11].