Comstock Resources (CRK) Q1 Results - May 4

Comstock Resources (CRK) Q1 Results - May 4

Postby dan_s » Tue May 04, 2021 5:47 pm

Comstock Resources, Inc.
Tue, May 4, 2021, 3:10 PM

FRISCO, TX, May 04, 2021 (GLOBE NEWSWIRE) -- Comstock Resources, Inc. ("Comstock" or the "Company") (NYSE: CRK) today reported financial and operating results for the quarter ended March 31, 2021.

Highlights of 2021's First Quarter

Adjusted net income to common stockholders was $63 million for the quarter or $0.25 per diluted share. < Compares to my forecast of $34.1 million net income, $0.15 per share.

Production averaged 1,281 MMcfe per day, comprised of 98% natural gas, and was 6% higher than the fourth quarter of 2020. < Compares to my Q1 production forecast of 1.261.6 MMcfe per day.

Average realized price, including hedging, was $2.88 per Mcfe compared to $2.16 per Mcfe in 2020's first quarter.

Revenues, including realized hedging losses, were $332 million, 22% higher than 2020's first quarter.

Adjusted EBITDAX was $262 million, 30% higher than 2020's first quarter.

Operating cash flow (excluding working capital changes) was $207 million or $0.75 per diluted share. < Key Stat which compares to my forecast of $161.7 million operating net income.

All-in first quarter capital spending was $169 million, including $6 million for leasing activities.

Free cash flow after preferred dividends in the first quarter was $33 million.

In March, Comstock refinanced approximately $1.15 billion of senior notes, which saves the Company $19.5 million in annual cash interest payments and extends Comstock's weighted average senior notes maturity from 4.9 years to 6.7 years.

In April, Comstock's $1.4 billion borrowing base was reaffirmed by its bank group.

First Quarter 2021 Financial Results

Revenues reported for the first quarter of 2021 totaled $340 million (excluding realized losses on hedging of $8 million). Net cash provided by operating activities (including changes in working capital) was $193 million, and the Company reported a net loss available to common stockholders for the first quarter of $138 million ($0.60 per share). The net loss in the quarter included a $239 million pre-tax loss on the early retirement of the senior notes and a $13 million unrealized loss on hedging contracts. Excluding these items and certain other unusual items, adjusted net income available to common stockholders was $63 million, or $0.25 per diluted share.

Comstock's production cost per Mcfe in the first quarter was $0.60 per Mcfe, which was comprised of $0.26 for gathering and transportation costs, $0.21 for lease operating costs, $0.08 for production and other taxes and $0.05 for cash general and administrative expenses. Production cost was also $0.60 per Mcfe in the fourth quarter of 2020 and $0.56 per Mcfe in the first quarter of 2020. Comstock's unhedged operating margin was 79% in the first quarter of 2021. Comstock has one of the lowest producing cost structures in its sector creating one of the highest margins among public natural gas companies.

First Quarter 2021 Drilling Results

Comstock drilled 21 (19.0 net) operated horizontal Haynesville/Bossier shale wells in the first quarter which had an average lateral length of 7,351 feet. Comstock also participated in an additional four (0.6 net) non-operated Haynesville shale wells in the quarter. Comstock turned 14 (9.5 net) wells to sales in the quarter and expects to turn an additional 17 wells (15.3 net) to sales in the second quarter of 2021.

Since its last operational update in February, Comstock has turned 13 (11.5 net) new operated Haynesville/Bossier shale wells to sales. These wells had initial daily production rates of 19 MMcf to 32 MMcf per day, with an average of 25 MMcf per day. The completed lateral length of these wells averaged 8,132 feet.

Other Matters

Comstock also announced today that it has partnered with BJ Energy Solutions to deploy BJ's next generation fracturing fleet, which is fueled by 100% natural gas, in its Haynesville shale development program in early 2022. BJ's TITANTM solution will make a substantial contribution toward Comstock's greenhouse gas emission reduction goals while also improving well economics. BJ's TITAN fleet supports the reduction of greenhouse gas emissions while also creating efficiencies including reduced operating costs, improved mobility, smaller well pad sites, and improved operational reliability. The Company's three year contract with BJ locks in current completion rates while providing additional cost saving efficiencies, all while reducing the environmental impact of Comstock's future well completions.
Dan Steffens
Energy Prospectus Group
Posts: 25209
Joined: Fri Apr 23, 2010 8:22 am

Re: Comstock Resources (CRK) Q1 Results - May 4

Postby dan_s » Tue May 04, 2021 6:19 pm

First pass at updating my forecast model comes up with an adjusted valuation of $13.25, primarily because I am dropping 2020 from the valuation. I need to listen to the conference call at 10AM CT on Wednesday to finish updating the valuation.
Dan Steffens
Energy Prospectus Group
Posts: 25209
Joined: Fri Apr 23, 2010 8:22 am

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