CRK — Comstock Resources, Inc.

Summary of Comstock Resources, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Q4 2025 Financials:

  • Natural gas and oil sales: $365 million, an 8% increase from Q4 2024.
  • Operating cash flow: $222 million ($0.75 per share).
  • Adjusted EBITDAX: $277 million.
  • Adjusted net income: $46 million ($0.16 per share), unchanged from Q4 2024.
  • Production averaged 1.2 Bcfe per day, a 14% decrease from 2024.
  • Full-year 2025 profit: $396 million ($1.43 per share), including unusual items like a $292 million pretax gain from asset sales.

• Production and Reserves:

  • Proved reserves at year-end: 7.2 Tcfe, with an 8% growth excluding divestitures.
  • Finding cost for 2025: $1.02 per Mcfe.
  • 2025 drilling additions: 1.1 Tcfe, replacing 229% of production.

2. Strategic Updates and Business Highlights:

• Operational Growth: Added three operated rigs in 2025, with plans for an additional rig in early 2026 to drive production growth.
• Partnerships: Collaborating with NextEra on a data center project in the Western Haynesville, aiming for initial capacity of 2 gigawatts, expandable to 8 gigawatts.
• Divestitures: Completed $445 million in asset sales, including Cotton Valley and Shelby Trough, to strengthen the balance sheet and reduce debt.
• Shareholder Return: Achieved the highest total shareholder return of 162% over the past two years among public E&P companies.

3. Forward Guidance and Outlook:

• 2026 Production Plans: Expect to drill 66 wells (19 in Western Haynesville, 47 in legacy Haynesville) and turn 72 wells to sales.
• Financial Flexibility: Maintain strong liquidity of $1.3 billion, allowing for flexible capital spending based on gas price conditions.
• Cost Reduction Initiatives: Implementing rotary steerable drilling technology and upgrading rigs to reduce drilling costs and improve efficiency.

4. Bad News, Challenges, or Points of Concern:

• Production Decline: Overall production decreased by 14% in 2025 compared to 2024, raising concerns about operational efficiency.
• Market Volatility: Gas prices have shown significant volatility, which could impact capital spending and production rates.
• Operational Challenges: Some wells, like the Brown TrueHeart B B, underperformed due to high water production during flowback, indicating potential geological issues.

5. Notable Q&A Insights:

• Flexibility in Capital Spending: Management emphasized the ability to adjust rig and frac crew deployment based on gas price conditions, highlighting operational flexibility.
• Production Cadence: Anticipated significant production growth in the latter half of 2026, with a focus on maximizing output from the Western Haynesville.
• M&A Activity: Management remains focused on developing existing assets rather than pursuing acquisitions, citing confidence in their current inventory and production capabilities.
• Technological Advancements: Plans to deploy rotary steerable drilling technology in the Western Haynesville are expected to enhance drilling efficiency and reduce costs over time.

Overall, while Comstock Resources has demonstrated strong financial performance and strategic growth initiatives, challenges remain in production levels and market volatility that could impact future performance.