The following is a summary of the Comstock Resources, Inc. (CRK) Q3 2024 Earnings Call Transcript:
Financial Performance:
Comstock Resources reported Q3 2024 oil and gas sales of $305 million, despite being impacted by weak natural gas prices with an average realized gas price before hedging at $1.90.
They generated a cash flow from operations of $152 million and adjusted EBITDAX of $202 million for the quarter.
Reported an adjusted net loss of $0.17 per share for the quarter, largely due to higher depreciation, depletion, and amortization driven by reduced undeveloped reserves under SEC rules reflecting low natural gas prices.Year-to-date production averaged 1.5 Bcfe per day with sales decreasing 7% to $919 million and a net loss of $121 million or $0.42 per share in comparison to 2023.
Business Progress:
Comstock continued expansion in the Western Haynesville, having secured 450,000 net acres and drilled 18 wells there.
Achieved cost reduction in drilling, most recently at approximately $2,814 per lateral foot.
They turned eight wells to sales with an average IP rate locally boosting volumes and plan to turn six more wells by early January 2025.
Mention of innovative 'horseshoe' drilling approach in isolated acreage where they can drill horseshoe-shaped lateral wells that optimize production and cost.
Opportunities:
Positioned to benefit from the anticipated growth in natural gas demand driven by AI growth and expansions in LNG exports.
Effective reduction in well costs in the Western Haynesville could make operations more competitive and profitable.
Exploitation of the horseshoe lateral drilling concept could potentially double as an innovative way to maximize resource extraction and optimize returns.
Risks:
Persistently low natural gas prices are severely impacting financial outcomes and valuing their undeveloped reserves, which might constrain their operational scalability and financial flexibility.
The company's financial health could be impaired by a delayed recovery in natural gas prices, as roughly indicated by their hedging strategies and operational responses to current market dynamics.
Tips: For more comprehensive details, please refer to the IR website. The article is only for investors' reference without any guidance or recommendation suggestions.
