8 handle has been achieved
It’s all about FCF and CRK is negative
Borrowing money to pay the dividend isn’t smart.
What happens when they cut it to a penny?
Comstock CRK
Re: Comstock CRK- bmo cuts as expected
Re: Comstock CRK- as expected
bmo cuts 11 to 8
citigroup cuts 14 to 10
Will they borrow to pay a dividend??
Currently 8.31, 32 cents from a 7 handle!!
bmo cuts 11 to 8
citigroup cuts 14 to 10
Will they borrow to pay a dividend??
Currently 8.31, 32 cents from a 7 handle!!
Re: Comstock CRK
Looks like it is very close to a big ass buy to me.... I am still up 50% from my original buy and getting a 6% dividend.... as a long term investor I can't cry.
Re: Comstock CRK
Keep in mind that during the first five weeks of Q4 HH gas traded at more than $3.40 and as high as $3.83 on October 31st.
See 6 month chart here: https://tradingeconomics.com/commodity/natural-gas
My Q4 forecast is based on Comstock's realized natural gas price being $2.80/mcf (net of differentials and cash settlements on their hedges), compared to actual realized gas prices of $2.25 in Q2 and $2.41 in Q3.
Comstock also has 250,000 Mcfpd hedged ((16.7% of Q4 production) with collars in Q4 that have $3.00 floors.
So, Comstock's Q4 results should be close to my forecast with operating cash flow within the range of $240 to $250 million, which compares to their actual Q3 adjusted operating cash flow of $167.2 million.
TipRanks: "Since 10-30-2023, 4 ranked analysts set 12-month price targets for CRK. The average price target among the analysts is $12.00. The four recently updated price targets range from $10.00 to $14.00 per share."
My up-to-date forecast for Comstock will be posted to the EPG website later this morning. For the year 2024, my forecasts are based on HH natural gas averaging $3.25/mcf with each company's forecast adjusted for regional differentials and estimated cash settlements on their hedges. For 2024 Comstock has 350,000 mcfpd hedged (~21.6% of their production) with Swaps at $3.55/mcf.
See 6 month chart here: https://tradingeconomics.com/commodity/natural-gas
My Q4 forecast is based on Comstock's realized natural gas price being $2.80/mcf (net of differentials and cash settlements on their hedges), compared to actual realized gas prices of $2.25 in Q2 and $2.41 in Q3.
Comstock also has 250,000 Mcfpd hedged ((16.7% of Q4 production) with collars in Q4 that have $3.00 floors.
So, Comstock's Q4 results should be close to my forecast with operating cash flow within the range of $240 to $250 million, which compares to their actual Q3 adjusted operating cash flow of $167.2 million.
TipRanks: "Since 10-30-2023, 4 ranked analysts set 12-month price targets for CRK. The average price target among the analysts is $12.00. The four recently updated price targets range from $10.00 to $14.00 per share."
My up-to-date forecast for Comstock will be posted to the EPG website later this morning. For the year 2024, my forecasts are based on HH natural gas averaging $3.25/mcf with each company's forecast adjusted for regional differentials and estimated cash settlements on their hedges. For 2024 Comstock has 350,000 mcfpd hedged (~21.6% of their production) with Swaps at $3.55/mcf.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Comstock CRK
That was a great purchase and shows the importance of the correct entry price.
I think NG will rally when we finally get the first good cold snap and taking gassers up.
Im going to be patient and wait to see evidence we are at the bottom.
December is below the standard temps and producers are over producing.
No doubt they will have 200-250 in "Operating cash flow", the problem is they will spend 300 m to achieve it leaving them in a money losing position
q4 cap ex guidance. 255-305
D&C Costs ($ in Millions) $240 - $280
Infrastructure/Other ($ in Millions) $15 - $25
This doesn't address other cash expenses like interest on the debt.
My point is they cant cover op ex , interest expense and dividends and with current prices and have negative FCF even with the "good hedges"
I don't understand why cap ex is ignored. Cap x isn't free.
I think NG will rally when we finally get the first good cold snap and taking gassers up.
Im going to be patient and wait to see evidence we are at the bottom.
December is below the standard temps and producers are over producing.
No doubt they will have 200-250 in "Operating cash flow", the problem is they will spend 300 m to achieve it leaving them in a money losing position
q4 cap ex guidance. 255-305
D&C Costs ($ in Millions) $240 - $280
Infrastructure/Other ($ in Millions) $15 - $25
This doesn't address other cash expenses like interest on the debt.
My point is they cant cover op ex , interest expense and dividends and with current prices and have negative FCF even with the "good hedges"
I don't understand why cap ex is ignored. Cap x isn't free.
Re: Comstock CRK
Are you considering the fact that Comstock has developed a "World Class" asset called the Western Haynesville?
Overspending to acquire and prove up a World Class resource play justifies overspending operating cash flow.
Any upstream company can generate positive free cash flow by not investing capital on finding and developing future reserves.
Overspending to acquire and prove up a World Class resource play justifies overspending operating cash flow.
Any upstream company can generate positive free cash flow by not investing capital on finding and developing future reserves.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group