CRK — Comstock Resources, Inc.

Comstock Resources, Inc. Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Natural Gas and Oil Sales: $339 million, down from previous year due to lower production.
• Operating Cash Flow: $192 million ($0.66 per share).
• Adjusted EBITDAX: $251 million.
• Adjusted Net Income: $44 million ($0.15 per share), impacted by an $83 million unrealized gain from hedging.
• Production: Averaged 1.1 Bcfe per day, affected by winter weather.
• Operating Costs: Increased to $0.93 per Mcfe, up $0.16 from Q4 2025.
• Liquidity: Approximately $1.3 billion, with $350 million in borrowings under the credit facility.

2. Strategic Updates and Business Highlights:

• New Power Generation Hub: Selected by the U.S. Department of Commerce for a 5.2 GW natural gas-fired facility in Texas, enhancing Comstock's position as a key natural gas supplier.
• Drilling Achievements: Strong results from the Western Haynesville, with six new wells averaging 29 million cubic feet per day and ten legacy Haynesville wells averaging 31 million cubic feet per day.
• Drilling Program: Continued focus on optimizing drilling and completion techniques, including the introduction of horseshoe well designs to reduce costs.

3. Forward Guidance and Outlook:

• Production Growth: Expected to increase by 13-15% in Q2 2026 as new wells come online.
• Capital Expenditure: Anticipated to outspend by $400-$450 million, depending on natural gas prices.
• Long-term Strategy: Focus on maintaining low-cost operations and enhancing drilling efficiency while protecting the balance sheet.

4. Challenges and Points of Concern:

• Production Decline: Q1 production was down 13% compared to previous quarters, attributed to weather impacts and strategic decisions to protect the balance sheet.
• Higher Operating Costs: Increased costs due to lower production levels and higher gas prices affecting margins.
• Investor Patience: Management acknowledged the challenge of cash burn and the need for investors to remain patient as the company works through production and capital alignment.

5. Notable Q&A Insights:

• Investor Concerns: Acknowledgment of the slow pace of resource delineation and its impact on investor sentiment. Management emphasized the importance of long-term value creation over immediate production gains.
• Well Performance Issues: Discussion on underperforming wells due to high water volumes during flowback, with ongoing analysis to improve future well designs and completion strategies.
• Funding and Credit Facilities: Clarification on the Pinnacle credit facility and potential future equity needs for midstream development, with a focus on maintaining financial flexibility.

Overall, Comstock Resources is navigating a challenging environment with strategic initiatives aimed at long-term growth, while addressing immediate operational challenges and investor expectations.