Comstock (CRK) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool Thu, May 7, 2026 at 12:12 AM GMT+7 39 min read CRK CL=F Image source: The Motley Fool. Chairman and Chief Executive Officer — Miles Jay Allison President and Chief Financial Officer — Roland O. Burns Chief Operating Officer — Daniel S. Harrison On Slide 3, we summarize the highlights for the first quarter. Lower production, partially driven by production impact from significant winter weather in the first quarter, drove the lower financial results in the quarter compared to 2025. Our natural gas and oil sales were $339 million. We generated $192 million of operating cash flow, or $0.66 per share. Adjusted EBITDAX for the quarter was $251 million, and we reported adjusted net income of $44 million, or $0.15 per share. During the quarter, we had very strong drilling results which will drive production back up for the remainder of the year. Almost all the wells returned to sales in the first quarter were very late in the quarter. Since our last update, we put six new Western Haynesville wells online with an average per-well initial production rate of 29 million cubic feet per day. In our legacy Haynesville, we turned 10 wells to sales with an average lateral length of 12,312 feet and a per-well initial production rate of 31 million cubic feet per day. Now, the power generation hub: On March 19, 2026, the United States Department of Commerce selected our Western Haynesville site to host a new 5.2 gigawatt natural gas-fired power generation hub to be located in Anderson County, Texas, as shown on Slide 4. We are very excited about this development and what it means to have a large commercial customer in our backyard. The project is part of Japan s $550 billion investment commitment in the United States as part of the U.S.-Japanese trade deal. The U.S. and Japan would own the projects while NextEra Energy Resources will develop, build, and operate it. NextEra is actively developing the project, advancing site development, procurement, permitting, and commercial structuring as they work toward definitive agreements with the U.S. and Japan. This project takes advantage of our abundant natural gas supply and a strong transmission infrastructure in the area. The Anderson County facility will have up to 5.2 gigawatts of natural gas-fired generation capable of serving up to 5 gigawatts of large-load demand. Comstock Resources, Inc. will provide the natural gas supply for the facility, which could reach almost 1 billion cubic feet per day by 2031. We will now provide some more details on the financial results we reported yesterday. Roland? Roland O. Burns: Alright. Thanks, Jay. On Slide 5, we cover the first quarter financial results. Our production in the first quarter averaged 1.1 Bcfe per day. Oil and gas sales after hedging in the quarter were $339 million, reflecting the lower production level we had in the quarter. EBITDAX came in at $251 million, and we generated $192 million of cash flow during the first quarter. We reported a $107 million profit for the quarter, or $0.38 per share, but included in that number was a pretax $83 million mark-to-market unrealized gain related to our hedge book. So excluding the mark-to-market gain, exploration expense (which is related to seismic that we are shooting in our Western Haynesville play), and other nonrecurring items and the related income tax effect of those items, we reported adjusted net income of $44 million, or $0.15 per diluted share for the quarter. On Slide 6, we break down our natural gas price realizations in the quarter. The quarterly weighted average NYMEX settlement price averaged $4.96 in the first quarter, and the weighted average Henry Hub spot price was $4.90. Twenty-six percent of our gas was sold in the spot market, so the appropriate NYMEX reference price would have been $4.94 for our production. Our realized gas price during the quarter averaged $4.27, reflecting a $0.69 basis differential compared to the NYMEX settlement price and a $0.67 differential compared to that reference price. Significant disconnect existed during the quarter between the regional hub prices and NYMEX, which drove the higher differentials in the quarter. We also had to purchase higher-priced gas to make up for shut-in production during the winter storm event. In the quarter, we were also 72% hedged, which reduced our realized price down to $3.45. We did improve the overall price realizations by $0.05, to $3.50, with our third-party gas sales during the quarter. On Slide 7, we detail our operating cost per Mcfe and our EBITDAX per-unit cost. These were negatively impacted by the lower production level in the quarter, as much of our field costs are fixed. Our operating cost per Mcfe averaged $0.93 in the quarter, up $0.16 from the fourth-quarter rate. Both lifting cost and G&A were up $0.04, attributable to the lower production level. Production ad valorem taxes increased $0.03 due to the higher gas prices in the quarter, and

Comstock (CRK) Q1 2026 Earnings Call Transcript

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Comstock (CRK) Q1 2026 Earnings Call Transcript

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