Company Overview - Comstock Resources, Inc. is an independent oil and gas exploration and production company based in Frisco, Texas, focusing on the acquisition, exploration, and development of oil and gas properties primarily in Texas and Louisiana [11]. Investment Ratings - Comstock Resources holds a Zacks Rank of 2 (Buy) and has a VGM Score of B, indicating a favorable investment outlook [11]. Momentum and Performance - The company has a Momentum Style Score of A, with shares increasing by 19.7% over the past four weeks [12]. - Four analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate rising by $0.14 to $0.73 per share [12]. - Comstock Resources has demonstrated an average earnings surprise of 172.2%, highlighting its strong performance relative to expectations [12].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1][2]. Company Overview: Comstock Resources (CRK) - Comstock Resources currently holds a Momentum Style Score of B, indicating potential for strong performance based on price changes and earnings estimate revisions [3][12]. - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4][12]. Performance Metrics - Over the past week, CRK shares have increased by 10.22%, significantly outperforming the Zacks Oil and Gas - Exploration and Production - United States industry, which rose by only 0.04% [6]. - In a longer timeframe, CRK's shares have risen by 25.04% over the past month, compared to the industry's 7.35% [6]. - Over the last quarter, CRK shares increased by 24.22%, and over the past year, they have gained 119.13%, while the S&P 500 has seen declines of -5.75% and gains of only 10.63% respectively [7]. Trading Volume - CRK's average 20-day trading volume is 2,086,099 shares, which serves as a bullish indicator when combined with rising stock prices [8]. Earnings Outlook - In the last two months, 4 earnings estimates for CRK have been revised upwards, while only 2 have been revised downwards, leading to an increase in the consensus estimate from $0.59 to $0.73 [10]. - For the next fiscal year, 5 estimates have moved higher with no downward revisions, indicating a positive earnings outlook [10].

Group 1 - Comstock Resources (CRK) is a notable stock in the Oils-Energy sector, which consists of 246 individual stocks and holds a Zacks Sector Rank of 14 [2] - The Zacks Rank system, which emphasizes earnings estimates and revisions, currently gives Comstock Resources a Zacks Rank of 2 (Buy) [3] - Over the past 90 days, the Zacks Consensus Estimate for CRK's full-year earnings has increased by 28.1%, indicating improved analyst sentiment and a positive earnings outlook [4] Group 2 - Year-to-date, Comstock Resources has returned 11.3%, significantly outperforming the average loss of 5.8% in the Oils-Energy sector [4] - Comstock Resources is part of the Oil and Gas - Exploration and Production - United States industry, which includes 36 stocks and currently ranks 203 in the Zacks Industry Rank; this industry has seen an average loss of 26.8% this year [6] - Another stock in the Oils-Energy sector, Clearway Energy (CWEN), has also outperformed the sector with a year-to-date return of 10.7% and a Zacks Rank of 2 (Buy) [5][7]

Core Viewpoint - Comstock Resources, Inc. has announced a dual listing of its common stock on NYSE Texas, highlighting its commitment to the Texas economy and its status as a Founding Member of the new exchange [1][2]. Company Overview - Comstock Resources, Inc. is a leading independent natural gas producer, focusing on the development of the Haynesville shale in North Louisiana and East Texas [4]. - The company's stock is traded on both the New York Stock Exchange and NYSE Texas under the ticker symbol "CRK" [4]. Leadership Commentary - M. Jay Allison, CEO of Comstock, expressed pride in becoming a Founding Member of NYSE Texas and emphasized the strength and diversity of the Texas economy [2]. - Chris Taylor, Chief Development Officer of NYSE Group, welcomed Comstock as a Founding Member, underscoring the NYSE's commitment to supporting listed companies and the Texas economy [2].

Core Insights - Comstock Resources reported a revenue of $512.85 million for the quarter ended March 2025, marking a 52.7% increase year-over-year and exceeding the Zacks Consensus Estimate by 18.98% [1] - The company's EPS for the quarter was $0.18, a significant improvement from -$0.03 in the same quarter last year, also surpassing the consensus estimate of $0.16 by 12.50% [1] Financial Performance Metrics - Average natural gas price was reported at $3.58, higher than the three-analyst average estimate of $3.49 [4] - Total daily production of natural gas reached 1300 million cubic feet, exceeding the average estimate of 1287.82 million cubic feet [4] - Average oil price was $70.20, significantly above the two-analyst average estimate of $63.27 [4] - Total production was reported at 115,091 MMcfe, slightly below the two-analyst average estimate of 116,533.6 MMcfe [4] Revenue Breakdown - Revenues from oil sales were $0.70 million, which is a 19.9% decrease year-over-year and below the average estimate of $0.84 million [4] - Revenues from natural gas sales amounted to $412.29 million, representing a 43.6% increase compared to the year-ago quarter and exceeding the average estimate of $408.31 million [4] Stock Performance - Comstock shares have returned -14.9% over the past month, contrasting with the Zacks S&P 500 composite's -0.7% 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]

Financial Performance - Natural gas and oil sales for Q1 2025 were $413.0 million, an increase of $125.0 million (43%) compared to $288.0 million in Q1 2024, driven by higher natural gas prices[92]. - The company reported a net loss of $115.4 million, or $0.40 per share, for Q1 2025, compared to a net loss of $14.5 million, or $0.05 per share, in Q1 2024[104]. - Interest expense increased to $54.8 million in Q1 2025 from $49.6 million in Q1 2024, primarily due to the issuance of an additional $400.0 million in senior notes[102]. Production and Sales - The average realized price for natural gas in Q1 2025 was $3.58 per Mcf, a 74% increase from $2.06 per Mcf in Q1 2024[92]. - Natural gas production decreased by 18% to 115.0 Bcf in Q1 2025 from 139.4 Bcf in Q1 2024[92]. - Gas services revenue increased by $52.1 million (109%) to $99.9 million in Q1 2025 from $47.8 million in Q1 2024, primarily due to higher natural gas prices[94]. Capital Expenditures and Liquidity - Total capital expenditures for Q1 2025 were $298.3 million, a decrease from $348.2 million in Q1 2024[106]. - As of March 31, 2025, the company had $1.0 billion in liquidity, including $990 million of unused borrowing capacity[111]. - The company expects to spend an additional $780 million to $880 million on drilling, completion, and infrastructure activities in the remaining nine months of 2025[110]. Debt and Financial Obligations - The company had approximately $3.1 billion principal amount of long-term debt outstanding, with $965.0 million at a fixed rate of 5.875% and $1.62 billion at a fixed rate of 6.75%[121]. - The fair market value of the 5.875% senior notes due in 2030 was $909.5 million, while the 6.75% senior notes due in 2029 had a fair market value of $1.58 billion[121]. - The company is subject to financial covenants, including maintaining a leverage ratio of less than 4.0 to 1.0, which will reduce to 3.75 to 1.0 by June 30, 2025[114]. Tax and Regulatory Matters - The company reported $743.0 million in U.S. federal net operating loss (NOL) carryforwards and $1.8 billion in certain state NOL carryforwards, with an estimated $740.6 million and $1.2 billion expected to expire unused[115]. - The company is currently under examination by the IRS and the state of Louisiana, but believes its significant filing positions will be sustained[116]. Market Conditions and Risk - The company’s financial condition is highly dependent on the prevailing market prices of natural gas and oil, which are subject to wide fluctuations[118]. - An increase of 10% in the market price of natural gas would decrease the fair value of the company's natural gas price swaps and collars by approximately $154.2 million[120]. - The company had natural gas price swaps hedging approximately 149.9 Bcf of 2025 production at an average price of $3.48 per MMBtu and 116.8 Bcf of 2026 production at an average price of $3.51 per MMBtu[119]. Taxation and Fees - The company pays a commitment fee of 0.375% to 0.50% on the unused portion of the committed borrowing base under its bank credit facility[114]. - Production and ad valorem taxes decreased by $6.7 million (38%) to $11.2 million in Q1 2025 from $17.9 million in Q1 2024[95].

Financial Data and Key Metrics Changes - In Q1 2025, Comstock Resources reported natural gas and oil sales of $405 million, a 21% increase compared to the previous year [9][11] - Adjusted EBITDAX for the quarter was $293 million, with adjusted net income of $53.8 million or $0.18 per diluted share, a significant recovery from a loss in Q1 2024 [10][11] - Production averaged 1.28 Bcfe per day, reflecting a 17% decrease from Q1 2024 due to a reduction in rig count and deferred completion activities [10][11] 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 [10] - The Elijah One well, turned to sales with an initial production rate of 41 million cubic feet per day, marks a significant step in delineating the Western Haynesville play [8][26] 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, with realized gas prices at $3.58 [11][12] - The company was 54% hedged, which impacted the realized gas price, resulting in a loss of $16 million on third-party gas marketing due to market volatility [12][13] Company Strategy and Development Direction - Comstock is focused on building its assets in the Western Haynesville to capitalize on the growing demand for natural gas, with plans to drill 20 wells and turn 15 to sales in 2025 [42][43] - The company aims to develop its own midstream assets to capture more value from its Western Haynesville operations [9][10] 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 LNG feedstock [7][42] - The company anticipates improved leverage ratios and financial performance due to higher natural gas prices and a strong hedge position [16][44] Other Important Information - Comstock has invested over $1 billion in developing its 520,000 net acres in the Western Haynesville [7] - The company reported a greenhouse gas intensity improvement of 28% and a methane emission intensity rate improvement of 2.5% compared to 2023 [38][39] Q&A Session Summary Question: Can you discuss the reservoir quality of the Elijuan well compared to previous wells? - Management indicated that the reservoir quality of the Elijuan well appears as good as those in the core area, with good thickness and geological support for the drilling decision [50][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 location for potential power generation facilities [59][60] Question: When can we expect another result in the Western Haynesville area? - The next well is planned to be spud in Q4 2025, with further drilling contingent on midstream infrastructure development [66] Question: How many rigs can the Western Haynesville support in the future? - Management believes that with the right conditions, the area could support 15 to 20 new wells annually, focusing on prudent development [94][95]

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]

Financial Performance - Natural gas and oil sales reached $405 million[8] - Operating cash flow was $239 million, equating to $0.81 per diluted share[8] - Adjusted EBITDAX stood at $293 million for the quarter[8] - Adjusted net income amounted to $53.8 million, or $0.18 per diluted share[8] Operational Highlights - Completion activity resumed in late 2024, leading to fourteen (11.3 net) operated wells being turned to sales since the last update, with an average per well initial production rate of 25 MMcf per day[8] - The company drilled 7 gross wells (6.9 net) in Q1 2025, with 11 gross wells (8.3 net) turned to sales[14] - The average lateral length for operated Haynesville wells was 12,359 feet, and for Bossier wells, it was 13,706 feet[14] - The average initial production rate for these wells was 24 Mmcf per day[14,35] Natural Gas Pricing - Realized natural gas prices averaged $3.58 per Mcf in Q1 2025[11] - 54% of gas was hedged, resulting in a realized price after hedging of $3.52 per Mcf[11] - 63% of gas was sold at index (nominated) prices, and 37% was sold at spot (daily) prices[11] Capitalization and Liquidity - Total debt was $3.099 billion as of March 31, 2025[18] - The company has a $1.5 billion secured revolving credit facility[16] - Available liquidity was $1.023 billion, comprising $33 million in cash and cash equivalents and the undrawn portion of the revolving credit facility[18]

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]