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Comstock Resources First Quarter 2022 Results

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Comstock Resources, Inc. reported financial and operating results for the quarter ended March 31, 2022.

Highlights:

• Generated free cash flow from operations of $68 million in the quarter.
• Paid down $85 million of debt in the quarter.
• Adjusted EBITDAX increased 27% to $333 million.
• Operating cash flow (excluding working capital changes) increased 44% to $297 million or $1.07 per diluted share.
• Revenues, after realized hedging losses, were $408 million, 23% higher than 2021's first quarter.
• Adjusted net income to common stockholders was $136 million for the quarter or $0.51 per diluted share.
• Strong results from Haynesville drilling program with 15 (12.0 net) operated wells turned to sales with an average initial production of 29 MMcf per day.

Financial Results

Revenues in the first quarter of 2022 totaled $407.7 million (inclusive of realized hedging losses of $117.2 million). Net cash provided by operating activities (excluding changes in working capital) generated in the first quarter was $296.5 million, and net loss available to common stockholders for the first quarter of 2022 was $115.7 million or $(0.50) per share. Net loss in the quarter included a pre-tax $320.3 million unrealized loss on hedging contracts held for risk management. Excluding this item and certain other items, adjusted net income available to common stockholders for the first quarter of 2022 was $135.8 million, or $0.51 per diluted share.

Comstock's production cost per Mcfe in the first quarter was $0.69 per Mcfe, which was comprised of $0.28 for gathering and transportation costs, $0.23 for lease operating costs, $0.12 for production and other taxes and $0.06 for cash general and administrative expenses. Production cost was $0.67 per Mcfe in the fourth quarter of 2021 and $0.60 in the first quarter of 2021. Comstock's unhedged operating margin was 85% in the first quarter of 2022 and 81% after hedging.

Drilling Results

Comstock drilled 15 (13.1 net) operated horizontal Haynesville/Bossier shale wells in the first quarter of 2022 which had an average lateral length of 10,186 feet. The Company also participated in an additional 14 (0.7 net) non-operated Haynesville shale wells in the first quarter of 2022. Comstock turned 33 (15.2 net) wells to sales in the first quarter of 2022 and currently expects to turn an additional 14 (12.7 net) wells to sales in the second quarter of 2022.

Since its last operational update in February, Comstock has turned 15 (12.0 net) new operated Haynesville/Bossier shale wells to sales. These wells had initial daily production rates that averaged 29 MMcf per day. The completed lateral length of these wells averaged 10,115 feet.