2 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 2022 and as updated and supplemented in our Quarterly Reports on ...

Comstock Resources, Inc. (NYSE:CRK) Q1 2023 Earnings Conference Call May 3, 2023 11:00 AM ET Company Participants Jay Allison – Chairman and Chief Executive Officer Roland Burns – President and Chief Financial Officer Dan Harrison – Chief Operating Officer Ron Mills – Vice President-Finance and Investor Relations Conference Call Participants Derrick Whitfield – Stifel Jacob Roberts – Tudor Pickering Holt & Company Bertrand Donnes – Truist Charles Meade – Johnson Rice Phillips Johnston – Capital One Securit ...

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 March 31, 2023 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) (State or other jurisdiction of incorporation or organization) Nevada 94-166746 ...

2 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 2022 and as updated and supplemented in our Quarterly Reports on ...

Part I [Items 1 and 2. Business and Properties](index=8&type=section&id=ITEMS%201%20and%202.%20BUSINESS%20AND%20PROPERTIES) Comstock Resources is an independent natural gas producer focused on **Haynesville and Bossier shale plays**, developing extensive drilling inventory and maintaining financial discipline - Comstock is a leading independent natural gas producer with **99%** of its proved reserves located in the **Haynesville and Bossier shale plays** as of **December 31, 2022**[149](index=149&type=chunk) Proved Reserves and PV-10 Value (as of Dec 31, 2022) | Metric | Value | | :--- | :--- | | **Proved Reserves** | **6.7 Tcfe** | | **PV-10 Value** | **$15.5 billion** | | **Developed Percentage** | **38%** | | **Average Reserve Life** | **~13 years** | - The company's business strategy focuses on prudently growing cash flow and reserves through developing its drilling locations, pursuing strategic acquisitions, focusing on environmental stewardship (**MiQ certified**), and maintaining a disciplined financial strategy with an active hedging program[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) 2022 Drilling Program Summary | Metric | Value | | :--- | :--- | | **Exploration & Development Spending** | **$1.0 billion** | | **Wells Drilled (Gross/Net)** | **118 / 60.6** | | **Average Lateral Length** | **10,138 feet** | | **Production Replacement Rate** | **216%** | Production, Price, and Cost Summary (2020-2022) | Metric | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Natural Gas Production (Mcf)** | **500,616** | **489,274** | **450,836** | | **Oil Production (Bbl)** | **82** | **1,210** | **1,508** | | **Avg. Gas Price ($/Mcf)** | **$6.23** | **$3.63** | **$1.80** | | **Avg. Oil Price ($/Bbl)** | **$92.65** | **$61.95** | **$32.36** | | **Lifting Costs ($/Mcfe)** | **$0.69** | **$0.57** | **$0.53** | - As of **December 31, 2022**, the company had **244 employees** and utilized contractors for certain drilling, completion, and production operations[8](index=8&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from volatile natural gas prices, reserve depletion, high capital needs, environmental regulations, and substantial debt - The business is heavily dependent on the price of natural gas, which is historically volatile and subject to numerous factors beyond the company's control, such as supply/demand, weather, and government regulation[42](index=42&type=chunk)[43](index=43&type=chunk) - The company is subject to stringent and frequently changing environmental laws governing operations, waste disposal, and site remediation These regulations increase costs and could have a material adverse effect on capital expenditures and earnings[1](index=1&type=chunk)[2](index=2&type=chunk)[53](index=53&type=chunk) - Climate change poses physical risks (e.g., extreme weather damaging assets) and financial risks (e.g., reduced demand for products, negative impact on access to capital)[3](index=3&type=chunk)[4](index=4&type=chunk)[5](index=5&type=chunk) - As of **December 31, 2022**, the company had **$2.2 billion** in principal debt This debt requires significant cash flow for service payments and contains covenants that restrict activities such as paying dividends and incurring more debt[273](index=273&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) - The company's hedging activities, designed to mitigate price volatility, carry their own risks, including potential financial losses, counterparties failing to perform, and the inability to fully benefit from price increases[258](index=258&type=chunk)[286](index=286&type=chunk) [Item 1B. Unresolved Staff Comments](index=32&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the **SEC** - There are no unresolved staff comments[288](index=288&type=chunk) [Item 3. Legal Proceedings](index=32&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is not party to any material legal proceedings that would adversely affect its financial condition - The company is not party to any material legal proceedings[289](index=289&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section is not applicable to the company - Not applicable[290](index=290&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) Comstock's common stock trades on the **NYSE**, and the company reinstated a quarterly cash dividend in **Q4 2022** - The company's common stock is listed on the **NYSE** under the symbol "**CRK**" As of **February 16, 2023**, there were **277,510,165 shares** outstanding[262](index=262&type=chunk)[93](index=93&type=chunk) - A quarterly cash dividend of **$0.125 per share** was reinstated in **Q4 2022**, with the first payment of **$34.7 million** made on **December 15, 2022**[262](index=262&type=chunk) 5-Year Cumulative Total Return Comparison (Assumes $100 Invested on 12/31/2017) | Year | Comstock | NYSE Composite | SPDR S&P Oil and Gas E&P ETF | | :--- | :--- | :--- | :--- | | **2017** | **$100.00** | **$100.00** | **$100.00** | | **2018** | **$53.55** | **$91.05** | **$71.90** | | **2019** | **$97.28** | **$114.28** | **$65.11** | | **2020** | **$51.65** | **$122.26** | **$41.41** | | **2021** | **$95.63** | **$147.54** | **$69.05** | | **2022** | **$163.16** | **$133.75** | **$100.37** | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section details the company's improved **2022** financial performance, strong liquidity, capital expenditure plans, and critical accounting estimates [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Natural gas and oil sales surged by **69%** to **$3.1 billion** in **2022**, driven by higher prices, leading to **$1.1 billion** net income Financial and Operational Highlights (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | **Natural Gas & Oil Sales** | **$3,124.7 M** | **$1,850.7 M** | | **Net Income (Loss)** | **$1,140.9 M** | **($241.7 M)** | | **Net Income (Loss) per Diluted Share** | **$4.11** | **($1.12)** | | **Average Gas Sales Price (per Mcf)** | **$6.23** | **$3.63** | | **Realized Loss on Derivatives** | **($862.7 M)** | **($419.9 M)** | - The increase in natural gas and oil sales was primarily due to higher prices received for natural gas production, which rose from an average of **$3.63 per Mcf** in **2021** to **$6.23 per Mcf** in **2022**[327](index=327&type=chunk) - In **2022**, the company commenced gas services activities following the acquisition of a pipeline and gas treating plant, generating **$503.4 million** in revenue and incurring **$465.0 million** in related expenses[299](index=299&type=chunk)[301](index=301&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity of **$1.6 billion** at year-end **2022**, with net cash from operations doubling to **$1.7 billion**, funding **$1.1 billion** in capital expenditures - As of **December 31, 2022**, the company had **$1.6 billion** of liquidity, comprised of **$1.5 billion** of unused borrowing capacity under its bank credit facility and **$54.7 million** of cash[343](index=343&type=chunk) - Net cash provided by operating activities increased **98%** to **$1.7 billion** in **2022** from **$859.0 million** in **2021**, primarily due to higher realized natural gas prices[309](index=309&type=chunk) 2022 Capital Expenditures | Category | Amount (in thousands) | | :--- | :--- | | **Acquisitions** | **$54,620** | | **Exploration & Development** | **$1,032,652** | | **Other Property** | **$18,775** | | **Total Capital Expenditures** | **$1,106,047** | - The company expects to spend approximately **$1.025 billion** to **$1.31 billion** in **2023** on development, exploration, infrastructure, and acreage acquisition, which it plans to fund with operating cash flow[312](index=312&type=chunk)[315](index=315&type=chunk) [Critical Accounting Policies and Estimates](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates for oil and gas reserves, impacting depletion and impairment, and include goodwill impairment tests - The company uses the successful efforts method of accounting, where costs of successful exploration are capitalized, and costs of unsuccessful efforts are expensed[356](index=356&type=chunk) - Estimating proved oil and natural gas reserves is a subjective process that is highly dependent on engineering and geological interpretation These estimates are crucial for calculating depreciation, depletion, and amortization (**DD&A**) and for impairment analysis[347](index=347&type=chunk) - The company evaluates its proved properties for impairment when circumstances indicate the carrying value may not be recoverable Unproved properties are evaluated based on drilling results and future plans[358](index=358&type=chunk) - Goodwill of **$335.9 million** is tested for impairment annually A quantitative assessment as of **October 1, 2022**, indicated no impairment[358](index=358&type=chunk)[319](index=319&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is commodity price volatility, managed through derivative instruments, with limited interest rate risk due to fixed-rate debt - The company's financial condition is highly dependent on the prevailing market prices of natural gas and oil, which are subject to wide fluctuations[361](index=361&type=chunk) - As of **December 31, 2022**, the company had natural gas price collars to hedge approximately **174.9 Bcf** of its **2023** production with an average floor price of **$2.99/MMBtu** and an average ceiling of **$9.96/MMBtu**[378](index=378&type=chunk) - At **December 31, 2022**, the company had approximately **$2.2 billion** of fixed-rate long-term debt, minimizing exposure to interest rate fluctuations The variable-rate bank credit facility had no outstanding borrowings[363](index=363&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=40&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) The company's consolidated financial statements, prepared in conformity with **GAAP**, are included and audited by **Ernst & Young LLP** - The company's consolidated financial statements are included on pages **F-1 to F-25** of this report[364](index=364&type=chunk) - The financial statements were audited by the registered independent public accounting firm, **Ernst & Young LLP**[365](index=365&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=40&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting or financial disclosure matters - None reported[381](index=381&type=chunk) [Item 9A. Controls and Procedures](index=41&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and internal control over financial reporting were effective as of **December 31, 2022**, with an unqualified audit opinion - Based on an evaluation as of **December 31, 2022**, the **CEO** and **CFO** concluded that the company's disclosure controls and procedures were effective[384](index=384&type=chunk) - Management assessed internal control over financial reporting based on the **COSO framework** and determined it was effective as of **December 31, 2022**[385](index=385&type=chunk) - The independent registered public accounting firm, **Ernst & Young LLP**, issued an attestation report with an unqualified opinion on the effectiveness of the company's internal control over financial reporting[369](index=369&type=chunk)[388](index=388&type=chunk) [Item 9B. Other Information](index=43&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) The company reports no other information for this item - None reported[419](index=419&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=23&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) This section details the company's leadership team, including executive officers and directors, and confirms the adoption of a Code of Business Conduct and Ethics Executive Officers and Directors | Name | Position | Age | | :--- | :--- | :--- | | **M. Jay Allison** | Chief Executive Officer and Chairman of the Board | **67** | | **Roland O. Burns** | President, Chief Financial Officer, Secretary and Director | **62** | | **Daniel S. Harrison** | Chief Operating Officer | **59** | | **Elizabeth B. Davis** | Director | **60** | | **Morris E. Foster** | Director | **80** | | **Jim L. Turner** | Director | **77** | - **M. Jay Allison** has served as **CEO** since **1988** and Chairman since **1997**[15](index=15&type=chunk) - **Roland O. Burns** has served as **CFO** since **1990** and President since **2013**[16](index=16&type=chunk) - The company has adopted a Code of Business Conduct and Ethics and a Code of Ethics for Senior Financial Officers, both available on its website[376](index=376&type=chunk) [Item 11. Executive Compensation](index=43&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information for this item is incorporated by reference from the definitive proxy statement - Information is incorporated by reference to the definitive proxy statement to be filed with the **SEC**[395](index=395&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=43&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section provides information on the company's stockholder-approved equity compensation plans as of **December 31, 2022** Equity Compensation Plan Information (as of Dec 31, 2022) | Category | Number of Securities | | :--- | :--- | | **To be issued upon exercise of outstanding options, warrants and rights** | **1,105,108** | | **Authorized for future issuance** | **4,592,055** | - The company believes all officers, directors, and **10%** stockholders complied with **Section 16(a)** filing requirements during **2022**[394](index=394&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=43&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information for this item is incorporated by reference from the definitive proxy statement - Information is incorporated by reference to the definitive proxy statement to be filed with the **SEC**[422](index=422&type=chunk) [Item 14. Principal Accountant Fees and Services](index=43&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) Information for this item is incorporated by reference from the definitive proxy statement - Information is incorporated by reference to the definitive proxy statement to be filed with the **SEC**[423](index=423&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=44&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists the consolidated financial statements and all exhibits filed as part of the Form **10-K** report, including key agreements and audit letters - This item lists the consolidated financial statements and exhibits filed with the report[425](index=425&type=chunk) - Key exhibits filed include the Second Amended and Restated Credit Agreement (**10.1**), employment agreements for the **CEO** and **CFO** (**10.3**, **10.4**), and the Audit Letter on Proved Reserves from **Netherland, Sewell & Associates, Inc.** (**99.1**)[400](index=400&type=chunk)[427](index=427&type=chunk) [Item 16. Form 10-K Summary](index=45&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) This section indicates that a summary of the Form **10-K** is not applicable - The report indicates this item is not applicable[427](index=427&type=chunk) Financial Statements [Consolidated Balance Sheets](index=50&type=section&id=Consolidated%20Balance%20Sheets) As of **December 31, 2022**, total assets increased to **$5.7 billion**, liabilities decreased, and equity more than doubled Consolidated Balance Sheet Summary (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | **$644,987** | **$318,736** | | **Net Property and Equipment** | **$4,622,655** | **$4,007,146** | | **Total Assets** | **$5,694,255** | **$4,668,229** | | **Total Current Liabilities** | **$756,137** | **$633,984** | | **Long-term Debt** | **$2,152,571** | **$2,615,235** | | **Total Liabilities** | **$3,415,941** | **$3,480,450** | | **Total Stockholders' Equity** | **$2,278,314** | **$1,012,779** | [Consolidated Statements of Operations](index=52&type=section&id=Consolidated%20Statements%20of%20Operations) For **2022**, total revenues increased to **$3.63 billion**, resulting in **$2.28 billion** operating income and **$1.14 billion** net income Consolidated Statement of Operations Summary (in thousands) | Account | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$3,628,057** | **$1,850,730** | **$858,195** | | **Operating Income** | **$2,281,481** | **$900,774** | **$163,032** | | **Loss from Derivatives** | **($662,522)** | **($560,648)** | **$9,951** (Gain) | | **Net Income (Loss)** | **$1,140,882** | **($241,725)** | **($52,417)** | | **Net Income (Loss) per Diluted Share** | **$4.11** | **($1.12)** | **($0.39)** | [Consolidated Statements of Cash Flows](index=55&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In **2022**, the company generated **$1.7 billion** in operating cash, used **$1.1 billion** for investing, and **$576.7 million** for financing Consolidated Statement of Cash Flows Summary (in thousands) | Category | 2022 | 2021 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | **$1,698,388** | **$859,005** | | **Net Cash used for Investing Activities** | **($1,097,683)** | **($550,816)** | | **Net Cash used for Financing Activities** | **($576,716)** | **($307,798)** | | **Net Increase in Cash** | **$23,989** | **$391** | | **Cash at End of Year** | **$54,652** | **$30,663** |

Financial Data and Key Metrics Changes - Adjusted EBITDAX increased to $478 million, a 70% growth compared to the fourth quarter of 2021, driven by stronger natural gas prices and production increases [17][24] - Net income for the fourth quarter was $288 million, or $1.05 per share, representing a 191% increase from the fourth quarter of 2021 [24] - Free cash flow from operations was $129 million, 22% higher than the fourth quarter of 2021 [18][21] - The leverage ratio improved to 1.1x, down from 2.4x in 2021 [11][18] Business Line Data and Key Metrics Changes - Production increased 9% in the fourth quarter to 1.4 Bcfe per day compared to the same quarter in 2021 [17] - The company drilled 21 Haynesville/Bossier horizontal wells in the fourth quarter, with an average lateral length of 9,903 feet [14] - The average initial production (IP) rate for wells turned to sales was 26 million cubic feet per day [12][21] Market Data and Key Metrics Changes - Natural gas prices have fallen over 70% since September of the previous year, impacting the company's operational decisions [5] - The quarterly NYMEX settlement price averaged $6.26 per Mcf, while the realized price was $5.57, reflecting a $0.56 differential [27][28] Company Strategy and Development Direction - The company plans to adjust its drilling program to ensure it is funded by operating cash flow, maintaining a strong balance sheet [8][52] - Comstock increased its Haynesville/Bossier shale footprint by almost 100,000 net acres in 2022 without incurring debt or issuing new shares [7] - The company aims to be a leading producer in the Haynesville region, anticipating significant demand for natural gas from LNG shippers starting in 2025 [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by lower natural gas prices but expressed confidence in the company's low-cost structure and ability to maintain production growth [52][96] - The company expects to achieve a 6% production growth in 2023 while maintaining financial discipline [117] - Management highlighted the importance of the Freeport LNG restart as a potential catalyst for natural gas prices in 2023 [95] Other Important Information - The company reinstated its quarterly common stock dividend at $0.125 per share in the fourth quarter [13] - SEC proved reserves grew 9% to 6.7 Tcfe, with a 216% replacement of 2022 production [20][35] Q&A Session Summary Question: What is the company's strategy regarding rig count and production? - Management indicated that they are adjusting rig counts in response to lower natural gas prices and expect to maintain production levels with the current rig count [79][100] Question: How does the company plan to navigate the current market conditions? - The company plans to fund its drilling program with operating cash flow and maintain a strong balance sheet while being flexible in its operations [52][94] Question: Can the company elaborate on its leasing and acquisition strategy? - Management confirmed that they are more than halfway done with their leasing strategy and expect to continue building their position in the Haynesville region [97][121] Question: What are the expectations for production growth in 2023? - The company anticipates a 6% production growth in 2023, supported by a strong balance sheet and operational efficiency [117][118]

Comstock Resources, Inc. (NYSE:CRK) Q3 2022 Earnings Conference Call November 2, 2022 10:00 AM ET Company Participants Jay Allison - Chairman and Chief Executive Officer Roland Burns - President and Chief Financial Officer Daniel Harrison - Chief Operating Officer Conference Call Participants Derrick Whitfield - Stiefel Charles Meade - Johnson Rice Fernando Zavala - Pickering Energy Partners Neal Dingmann - Truist Securities Umang Choudhary - Goldman Sachs Phillips Johnston - Capital One Paul Diamond - Citi ...

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 September 30, 2022 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) Nevada 94-1667468 (State or other jurisdiction of incorporation or organiza ...

| --- | --- | --- | --- | --- | --- | --- | --- | |-------|----------|-------|-------|-------|--------------------------------------|-------|-------| | | | | | | | | | | | NYSE:CRK | | | | Investor Presentation September 2022 | | | 2 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. The ...

[Part I. Financial Information](index=4&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for Q2 2022 show a significant turnaround from net loss to strong net income, driven by higher natural gas sales [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2022, total assets increased to **$5.29 billion**, driven by oil and gas properties, with improved stockholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $530,811 | $318,736 | | **Net Property and Equipment** | $4,313,201 | $4,007,146 | | **Total Assets** | **$5,288,193** | **$4,668,229** | | **Total Current Liabilities** | $964,661 | $633,984 | | **Long-term Debt** | $2,510,253 | $2,615,235 | | **Total Liabilities** | **$3,841,914** | **$3,480,450** | | **Total Stockholders' Equity** | $1,271,279 | $1,012,779 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2022, the company reported a net income of **$376.9 million**, a significant turnaround from a net loss, driven by a **175% increase in total revenues** Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | Six Months 2022 | Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $946,254 | $343,693 | $1,515,668 | $684,178 | | **Operating Income** | $649,117 | $146,496 | $989,787 | $306,222 | | **Net Income (Loss)** | $376,891 | $(179,695) | $265,467 | $(313,820) | | **Diluted EPS** | $1.36 | $(0.80) | $0.96 | $(1.39) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash from operating activities increased by **78% to $685.9 million**, primarily due to higher commodity prices Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $685,933 | $385,583 | | **Net Cash used for Investing Activities** | $(515,361) | $(338,568) | | **Net Cash used for Financing Activities** | $(168,963) | $(57,560) | | **Net Increase (Decrease) in Cash** | $1,609 | $(10,545) | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies and events, including a **$35.6 million acquisition**, active debt management, and significant losses from derivative instruments - In April 2022, the Company acquired a pipeline, natural gas treating plant, and undeveloped deep rights in East Texas for **$35.6 million**[78](index=78&type=chunk) - In May 2022, the company redeemed all outstanding **7.5% senior notes due 2025** for **$258.1 million**, recognizing a loss of **$47.8 million** on the early retirement of debt[81](index=81&type=chunk) - In June 2022, the company repurchased **$26.1 million** of its **6.75% senior notes due 2029** for **$24.9 million**, recognizing a **$1.0 million** gain[83](index=83&type=chunk) Derivative Losses Recognized in Earnings (in thousands) | Period | Loss on Derivatives | | :--- | :--- | | **Three Months Ended June 30, 2022** | $(72,826) | | **Six Months Ended June 30, 2022** | $(510,319) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes increased revenue and profitability to higher natural gas prices, despite hedging losses, while maintaining strong liquidity and debt covenant compliance [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Oil and gas sales for Q2 2022 surged **151% to $861.3 million**, driven by a **168% increase in natural gas prices**, leading to net income despite derivative losses Average Realized Prices (Q2 2022 vs Q2 2021) | Metric | Q2 2022 | Q2 2021 | Change | | :--- | :--- | :--- | :--- | | **Natural Gas Price (per Mcf)** | $6.93 | $2.59 | +168% | | **Price with Hedges (per Mcf)** | $4.85 | $2.46 | +97% | | **Oil Price (per Bbl)** | $104.33 | $61.25 | +70% | - Realized net losses from the oil and natural gas price risk management program were **$257.4 million** for Q2 2022, compared to **$18.8 million** in Q2 2021[95](index=95&type=chunk) - The company sold its Bakken shale properties in October 2021, which accounted for most of its oil production, leading to a significant drop in oil output[92](index=92&type=chunk) [Cash Flows, Liquidity and Capital Resources](index=28&type=section&id=Cash%20Flows%2C%20Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity of **$1.1 billion**, with cash from operations increasing **78% to $685.9 million**, supporting increased capital expenditures - As of June 30, 2022, the company had **$1.1 billion** of liquidity, including **$32.3 million** in cash and unused capacity under its **$1.4 billion** bank credit facility[104](index=104&type=chunk)[108](index=108&type=chunk) - In the first six months of 2022, the company drilled **61 (30.5 net) wells** and completed **61 (30.3 net) Haynesville and Bossier shale wells**[103](index=103&type=chunk) - The company expects to spend an additional **$440 million to $490 million** in the remainder of 2022 to drill **42 (28.9 net) more wells** and complete **33 (27.0 net) wells**[103](index=103&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risks are natural gas and oil price volatility and interest rate changes, mitigated by derivative instruments and fixed-rate debt - The company's financial results are highly dependent on fluctuating natural gas and oil prices[111](index=111&type=chunk) - As of June 30, 2022, the company had natural gas swaps covering **58.9 Bcf of 2022 production** at an average price of **$2.68/MMBtu** and collars covering **196.1 Bcf of 2022-2023 production** with an average floor of **$2.86/MMBtu** and ceiling of **$7.81/MMBtu**[112](index=112&type=chunk) - Of the **~$2.55 billion** in total debt, **~$2.2 billion** is fixed-rate senior notes, while **$350.0 million** under the bank credit facility is subject to variable interest rates[116](index=116&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2022, the CEO and CFO concluded that disclosure controls and procedures are effective, with no material changes in internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[117](index=117&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls over financial reporting[117](index=117&type=chunk) [Part II. Other Information](index=31&type=section&id=PART%20II.%20Other%20Information) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data files - The report includes required certifications from the CEO and CFO under Sarbanes-Oxley Sections 302 and 906[115](index=115&type=chunk) - Interactive Data Files (Inline XBRL) are also filed as exhibits[115](index=115&type=chunk)