Comstock Resources(CRK) - 2025 Q2 - Quarterly Results

Financial Performance 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 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] 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] Six Months 2025 Financial Results 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] Operational Highlights and Strategic Initiatives 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 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] - 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] 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 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] - The joint project aims to integrate Comstock's natural gas supply and infrastructure to support energy solutions for potential data center customers[15] Financial Statements 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 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 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 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 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 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 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 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] - Investors can access a live webcast and a replay via the company's website[17][19]