Comstock Resources (CRK) Update - May 25

Comstock Resources (CRK) Update - May 25

Postby dan_s » Tue May 25, 2021 9:49 am

From Bloomberg
Comstock Resources bonds maturing in 2026 have returned 25% since June, aided by a rebound in natural gas prices and a $1.25 billion refinancing in 1Q that extended the company's debt-maturity profile. The leverage profile is expected by consensus and the company to improve in 2021, aided by an increase in production and hedges, which may lock in $200 million in free cash flow. Comstock may need Nymex prices of about $2.50 per 1,000 cubic feet of natural gas to generate sustainable free cash flow on its unhedged production.
Comstock’s $1.4 billion borrowing base was reaffirmed in April, reinforcing the company’s $927 million in available liquidity.
Dan Steffens
Energy Prospectus Group
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Re: Comstock Resources (CRK) Update - May 25

Postby Fraser921 » Tue May 25, 2021 11:01 am

I own this one and GDP Jerry Jones of the Dallas Cowboys fame has a billion plus investment in this name.

I like the Haynesville based production. ALso a new takeaway pipe Acadian express, should be coming online soon
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Re: Comstock Resources (CRK) Update - May 25

Postby dan_s » Tue May 25, 2021 12:52 pm

I think Jerry Jones' large stake in the company might be a negative for some investors because they fear he might sell down his interest. My take on that is that (a) he doesn't need the money and (b) he knows the company has a lot more upside if HH gas stays at $3.00.

I've asked Comstock several times to host a webinar for us, but they seem to want a low profile. If actual results come close to my forecast, they should generate over $300 million of free cash flow from operations this year. Each quarter that matches up to my forecast model will increase the multiple of operating CFPS that I use to value it. A company with this much FCF and no near-term debt problems should be trading for ~5X CFPS. 5X my operating cash flow per share forecast for 2022 is over $19.00 share price.

Hang Tough. Eventually, the Wall Street Gang will figure this one out. A lot more attention will be paid to the "gassers" in Q4 this year.
Dan Steffens
Energy Prospectus Group
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