On July 30, 2024, Comstock Resources Inc (CRK, Financial) released its 8-K filing detailing the financial and operating results for the second quarter of 2024. Comstock Resources Inc is an independent energy company operating in the Haynesville shale, a natural gas basin located in East Texas and North Louisiana. The company focuses on the exploration, development, and production of oil and natural gas.
Performance and Challenges
Comstock Resources Inc faced significant challenges in the second quarter of 2024 due to very weak natural gas prices. The company reported natural gas and oil sales, including realized hedging gains, of $278 million, which fell short of the estimated revenue of $296.69 million. The adjusted net loss for the quarter was $58.2 million or $0.20 per share, missing the analyst estimate of -$0.17 per share.
Financial Achievements
Despite the challenges, Comstock Resources Inc achieved several financial milestones. The company generated an operating cash flow of $118 million or $0.41 per diluted share and reported an adjusted EBITDAX of $167 million. Additionally, Comstock enhanced its liquidity by issuing $400 million in 6.75% senior notes.
Income Statement Highlights
Comstock's realized gas price for the second quarter averaged $1.65 per Mcf without hedging and $2.12 per Mcf after hedging. The company experienced a net loss of $123.2 million or $0.43 per share, which included a pre-tax $85.8 million unrealized loss on hedging contracts. Excluding this item, the adjusted net loss was $58.2 million or $0.20 per share.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Natural Gas Sales | $216.5 million | $228.9 million |
| Oil Sales | $1.1 million | $0.9 million |
| Total Revenues | $246.8 million | $288.2 million |
| Net Loss | -$123.2 million | -$45.7 million |
| Adjusted Net Loss | -$58.2 million | -$1.0 million |
Balance Sheet and Cash Flow
For the six months ended June 30, 2024, Comstock reported natural gas and oil sales totaling $614.1 million, including realized hedging gains of $108.5 million. The company generated an operating cash flow of $300.1 million and reported a net loss of $137.7 million or $0.49 per share. Excluding unrealized losses on hedging contracts, the adjusted net loss was $66.8 million or $0.24 per share.
Drilling and Production
Comstock drilled 11 operated horizontal Haynesville/Bossier shale wells in Q2 2024, with an average lateral length of 11,346 feet. The company turned 12 operated wells to sales during the quarter. Since its last update, Comstock has turned 15 operated Haynesville/Bossier shale wells to sales, with an average initial production of 21 MMcf per day.
Analysis
The second quarter of 2024 was challenging for Comstock Resources Inc due to weak natural gas prices. However, the company's ability to generate significant operating cash flow and enhance liquidity through senior notes issuance demonstrates resilience. The steady results from the Haynesville shale drilling program also indicate potential for future growth. Investors should monitor natural gas price trends and the company's hedging strategies to gauge future performance.
For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Comstock Resources Inc for further details.
