Comstock Resources(US:CRK)2025-07-31 16:00Financial Data and Key Metrics Changes - In Q2 2025, the company reported oil and gas sales of $344 million, a 24% increase compared to the previous year despite a 14% decrease in production, averaging 1.23 Bcfe per day [9][10] - Adjusted net income for the quarter was $40 million, or $0.13 per diluted share, compared to a loss in Q2 2024 [10][11] - EBITDAX for the quarter was $260 million, with operating cash flow of $210 million [9][10] Business Line Data and Key Metrics Changes - The company turned 21 wells to sales in the first half of 2025, with an average initial production rate of 25 million cubic feet per day [7][10] - The average lateral length for wells turned to sales in the legacy Haynesville area was 11,803 feet, while the Western Haynesville wells had an average lateral length of 7,933 feet [24][22] - The company drilled 16 wells in the first half of 2025, with a total of 19 wells drilled so far this year [13][10] Market Data and Key Metrics Changes - The average NYMEX settlement price for Q2 2025 was $3.44, while the average Henry Hub spot price was $3.16 [11] - The realized gas price for the second quarter was $3.20, reflecting a $0.42 basis differential compared to the NYMEX settlement price [11] Company Strategy and Development Direction - The company is focused on building its asset base in the Western Haynesville, with plans to drill 19 net wells and turn 13 net wells to sales in 2025 [38] - A new gas treating plant has been put into operation, increasing treating capacity by 400 million cubic feet per day [5][39] - The company plans to divest certain non-core properties to accelerate deleveraging of its balance sheet [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth in natural gas demand and the potential for LNG and industrial demand [8][40] - The company is adjusting its production strategy to optimize long-term value, focusing on disciplined drawdown of wells [74][76] - Management indicated that they are not considering issuing equity to fund growth, instead focusing on divesting non-core assets to improve the balance sheet [68][70] Other Important Information - The company has a total of 1,105,000 gross and 826,741 net acres prospective for commercial development in the Haynesville and Bossier Shales [16] - The average lateral length in the drilling inventory has increased to 9,686 feet, providing over 30 years of future drilling locations based on current activity levels [20][21] Q&A Session Summary Question: Insights on Western Haynesville step-out wells - Management discussed the positive confirmation of initial reservoir pressure and productivity from the Jennings well, which was drilled faster and cheaper than previous wells [44][47] Question: Implications of reduced well guidance for 2027 targets - Management clarified that the reduction in well guidance does not significantly impact the 2027 targets, as drilling speeds are improving [56][58] Question: Non-core asset sales strategy - Management emphasized that the focus is on selling non-core drilling inventory rather than production reserves, aiming to create value for the company [83][85] Question: Coring program objectives - The coring program aims to gather data for better understanding of the geology and to optimize completions, aligning with the company's long-term development strategy [87][88]