10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-03262

COMSTOCK RESOURCES, INC.

(Exact name of registrant as specified in its charter)

    Nevada

    94-1667468

    (State or other jurisdiction of
incorporation or organization)

    (I.R.S. Employer
Identification Number)

5300 Town and Country Blvd., Suite 500, Frisco, Texas 75034

(Address of principal executive offices)

Telephone No.: (972) 668-8800

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.50 (per share)	CRK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated ☐	Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares outstanding of the registrant's common stock, par value $0.50, as of May 1, 2024 was 292,202,274.

COMSTOCK RESOURCES, INC.

QUARTERLY REPORT

For the Quarter Ended March 31, 2024

INDEX


	Page
PART I. Financial Information
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	4
Consolidated Statements of Operations – for the three months ended March 31, 2024 and 2023	5
Consolidated Statements of Stockholders' Equity – for the three months ended March 31, 2024 and 2023	6
Consolidated Statements of Cash Flows – for the three months ended March 31, 2024 and 2023	7
Notes to Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3. Quantitative and Qualitative Disclosure About Market Risk	22
Item 4. Controls and Procedures	22
PART II. Other Information
Item 1A. Risk Factors	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 5. Other Information	23
Item 6. Exhibits	23

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

COMSTOCK RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS


	As of
	March 31, 2024			December 31, 2023
	(Unaudited)
	(In thousands)

ASSETS
Cash and cash equivalents	$	6,420		$	16,669
Accounts receivable:
Natural gas and oil sales and gas services		83,756			166,639
Joint interest operations		34,811			48,704
From affiliates		13,445			16,087
Derivative financial instruments		141,821			126,775
Other current assets		77,811			86,619
Total current assets		358,064			461,493
Property and equipment:
Natural gas and oil properties, successful efforts method:
Proved		7,394,854			7,126,519
Unproved		400,792			343,419
Other		67,709			62,382
Accumulated depreciation, depletion and amortization		(2,337,802	)		(2,147,549	)
Net property and equipment		5,525,553			5,384,771
Goodwill		335,897			335,897
Operating lease right-of-use assets		97,728			71,462
	$	6,317,242		$	6,253,623

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	440,956		$	523,260
Accrued costs		80,863			134,466
Operating leases		34,199			23,765
Total current liabilities		556,018			681,491
Long-term debt		2,702,375			2,640,391
Deferred income taxes		461,748			470,035
Derivative financial instruments		23,734			—
Long-term operating leases		63,536			47,742
Reserve for future abandonment costs		31,249			30,773
Total liabilities		3,838,660			3,870,432
Commitments and contingencies
Stockholders' equity:
Common stock—$0.50 par, 400,000,000 shares authorized, 292,202,274 and 278,429,463 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		146,101			139,214
Additional paid-in capital		1,357,908			1,260,930
Accumulated earnings		941,949			958,270
Total stockholders' equity attributable to Comstock		2,445,958			2,358,414
Noncontrolling interest		32,624			24,777
Total stockholders' equity		2,478,582			2,383,191
	$	6,317,242		$	6,253,623

The accompanying notes are an integral part of these statements.

COMSTOCK RESOURCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended March 31,
	2024			2023
	(In thousands, except per share amounts)
Revenues:
Natural gas sales	$	287,083		$	378,032
Oil sales		876			1,942
Total natural gas and oil sales		287,959			379,974
Gas services		47,813			109,604
Total revenues		335,772			489,578
Operating expenses:
Production and ad valorem taxes		17,908			14,906
Gathering and transportation		47,099			45,574
Lease operating		35,072			34,830
Exploration		—			1,775
Depreciation, depletion and amortization		190,689			133,983
Gas services		48,680			101,295
General and administrative		9,171			12,368
Gain on sale of assets		—			(773	)
Total operating expenses		348,619			343,958
Operating income (loss)		(12,847	)		145,620
Other income (expenses):
Gain from derivative financial instruments		39,307			66,409
Other income		331			460
Interest expense		(49,557	)		(38,270	)
Total other income (expenses)		(9,919	)		28,599
Income (loss) before income taxes		(22,766	)		174,219
(Provision for) benefit from income taxes		8,292			(39,716	)
Net income (loss)		(14,474	)		134,503
Net income attributable to noncontrolling interest		(1,847	)		—
Net income (loss) available to Comstock	$	(16,321	)	$	134,503

Net income (loss) per share:
Basic	$	(0.05	)	$	0.49
Diluted	$	(0.05	)	$	0.49
Weighted average shares outstanding:
Basic		277,962			276,551
Diluted		277,962			276,551
Dividends per share	$	—		$	0.125

The accompanying notes are an integral part of these statements.

COMSTOCK RESOURCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)


	Common Shares			Common Stock- Par Value			Additional Paid-in Capital		Accumulated Earnings		Noncontrolling Interest		Total
	(In thousands)
Balance at January 1, 2023		277,517		$	138,759		$	1,253,417	$	886,138	$	—	$	2,278,314
Stock-based compensation		(7	)		(4	)		2,050

SEC Form 10-Q filed by Comstock Resources Inc.