https://investors.comstockresources.com/news-releases/news-release-details/comstock-resources-inc-announces-private-offering-675-senior
They have to cover negative FCF with more borrowing...not good. But on bright side, there are people willing to lend them money.
CRK issues 375 m in new debt
Re: CRK issues 375 m in new debt
Curious where they stand on their revolver debt covenants. Can't be good. Stay tuned. Possibly this is premptive.
Re: CRK issues 375 m in new debt
They upsized it to 400 m and got 93 cents on the dollar. Ytm at 93 received is 8.5 %. The name sold off after hours and trying to stay out of an 8 handle.
I shorted more on the dead cat bounce into the 9’s.
They will be hurting bigly if ng stays at these crap levels and I agree with you they risk having a covenant problem and credit line cut.
They are trying to get ahead of it with JJ money and this slug.
How long will it take to piss away the 565 m? I can’t wait for the next earnings announcement and listen to the ceo do the Texas two step..
No, it doesn’t look like the bulls were right on this name. They need a Hail Mary.
I shorted more on the dead cat bounce into the 9’s.
They will be hurting bigly if ng stays at these crap levels and I agree with you they risk having a covenant problem and credit line cut.
They are trying to get ahead of it with JJ money and this slug.
How long will it take to piss away the 565 m? I can’t wait for the next earnings announcement and listen to the ceo do the Texas two step..
No, it doesn’t look like the bulls were right on this name. They need a Hail Mary.
Why don’t they cut cap X TO ZERO
I can only conclude they can’t because they made a multi year drilling commitment and if they don’t drill they lose their leases.
Deja vu all over again
I wonder who put up money for the debt , JJ ??
Deja vu all over again
I wonder who put up money for the debt , JJ ??
Re: CRK issues 375 m in new debt
Some box of chocolates!
Re: CRK issues 375 m in new debt
A few things to ponder:
Jerry Jones has VERY DEEP POCKETS and he believe in the long-term outlook for natural gas prices.
Jerry also has lots of banks in Dallas that would love his business.
NYMEX strip prices are over $3.00/MMBtu starting with the NOV24 contract.
If HH gas averages $3.00 in 2025, Comstock will generate over $1 Billion of operating cash flow next year.
From HFI Research on April 2, 2023
Low prices cure low prices, that's certainly what we are seeing in natural gas fundamentals. The recent price decline that prompted natural gas producers to cutback production is now manifesting into one of the tighter markets we've seen in years going into shoulder season.
March saw Lower 48 gas production average just above ~101 Bcf/d with April early readings right around ~100.7 Bcf/d. As we said many times, the key to balancing the natural gas market this year is lower production, so long as production stays below ~102.5 Bcf/d, we have a tighter market.
Looking at our implied balance going forward, we have the US gas market at a deficit of 2.86 Bcf/d. Assuming this production level holds into year-end (likely impossible outcome), natural gas storage would revert back to the 5-year average.
But as all readers should know, Lower 48 gas production is being throttled back and producers have TILs (turn in line wells) ready to bring online the moment prices jump. As a result, we can't assume ~101 Bcf/d will persist through the summer.
However, there is hope...
Jerry Jones has VERY DEEP POCKETS and he believe in the long-term outlook for natural gas prices.
Jerry also has lots of banks in Dallas that would love his business.
NYMEX strip prices are over $3.00/MMBtu starting with the NOV24 contract.
If HH gas averages $3.00 in 2025, Comstock will generate over $1 Billion of operating cash flow next year.
From HFI Research on April 2, 2023
Low prices cure low prices, that's certainly what we are seeing in natural gas fundamentals. The recent price decline that prompted natural gas producers to cutback production is now manifesting into one of the tighter markets we've seen in years going into shoulder season.
March saw Lower 48 gas production average just above ~101 Bcf/d with April early readings right around ~100.7 Bcf/d. As we said many times, the key to balancing the natural gas market this year is lower production, so long as production stays below ~102.5 Bcf/d, we have a tighter market.
Looking at our implied balance going forward, we have the US gas market at a deficit of 2.86 Bcf/d. Assuming this production level holds into year-end (likely impossible outcome), natural gas storage would revert back to the 5-year average.
But as all readers should know, Lower 48 gas production is being throttled back and producers have TILs (turn in line wells) ready to bring online the moment prices jump. As a result, we can't assume ~101 Bcf/d will persist through the summer.
However, there is hope...
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group