Comstock Resources, Inc. (CRK) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The company demonstrates strong financial health with a significant net income turnaround and high shareholder returns. The strategic focus on Western Haynesville development, cost efficiencies, and midstream expansion are positive. However, the Q&A reveals concerns about production variability and management's lack of specifics on certain metrics. Despite this, the JV with NextEra and financial liquidity are strong positives, outweighing uncertainties, suggesting a positive stock movement.
Key Financial Performance
Natural Gas and Oil Sales (Q4 2025) $365 million, an increase compared to Q4 2024 due to higher natural gas prices.
Operating Cash Flow (Q4 2025) $222 million or $0.75 per share, reflecting improved financial performance.
Adjusted EBITDAX (Q4 2025) $277 million, driven by higher natural gas prices.
Adjusted Net Income (Q4 2025) $46 million or $0.16 per share, unchanged from Q4 2024.
Production (Q4 2025) 1.2 Bcfe per day, lower than 2024 but offset by higher natural gas prices.
Oil and Gas Sales (Full Year 2025) $1.4 billion, a 15% increase compared to 2024 due to improved natural gas prices.
EBITDAX (Full Year 2025) $1.1 billion, reflecting higher sales and operational efficiency.
Cash Flow (Full Year 2025) $861 million, supported by increased sales and cost management.
Adjusted Net Income (Full Year 2025) $160 million or $0.54 per share, compared to a net loss in 2024, driven by higher sales and operational improvements.
Production (Full Year 2025) 1.2 Bcfe per day, 14% lower than 2024 due to asset sales but offset by higher prices.
Proved Reserves (End of 2025) 7.2 Tcfe, an 8% increase excluding asset sales, driven by drilling additions.
Drilling Program (2025) 52 wells drilled with an average IP rate of 27 million cubic feet per day, achieving a finding cost of $1.02 per Mcfe.
Divestitures (2025) $445 million in asset sales, improving the balance sheet and reducing debt.
Shareholder Return (Last 2 Years) 162%, the highest among public E&P companies, driven by operational and financial performance.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Addition of 3 operated rigs: Comstock added 3 operated rigs to its program in 2025, with an additional rig planned for early 2026 to drive production growth in 2026 and 2027.
Drilling program results: Drilled 52 successful Haynesville/Bossier wells with an average IP rate of 27 million cubic feet per day, replacing 229% of 2025 production with 1 Tcfe of proved reserve additions.
Partnership with NextEra: Announced a partnership with NextEra for a data center project in Western Haynesville, with an initial capacity of 2 gigawatts and potential expansion to 8 gigawatts.
Divestitures: Completed $445 million in divestitures, including the sale of Cotton Valley and Shelby Trough assets, improving the balance sheet and reducing debt.
Shareholder return: Achieved the highest total shareholder return among public E&P companies over the last 2 years at 162%.
Cost efficiency: Achieved a total drill and complete cost of $1,347 per foot in 2025, 11% lower than 2024.
Production and reserves: Production averaged 1.2 Bcfe per day in 2025, with proved reserves growing 8% to 7.2 Tcfe.
Western Haynesville development: Focused on building out Western Haynesville assets to support long-term natural gas demand growth driven by LNG exports and data center power needs.
Midstream recapitalization: Plans to recapitalize Pinnacle Gas Services in 2026 by establishing a new bank credit facility and selling equity.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Market Conditions: The company faces challenges from fluctuating natural gas prices, which directly impact financial results. For instance, while higher prices in Q4 2025 improved results, the company remains exposed to price volatility.
Operational Costs: Drilling and completion costs have increased in certain areas, such as a 22% rise in drilling costs in the legacy Haynesville during Q4 2025. This could strain operational budgets if not managed effectively.
Regulatory and Environmental Risks: The company operates in areas with high environmental sensitivity, such as the Western Haynesville. Regulatory changes or environmental restrictions could impact operations and costs.
Supply Chain and Equipment Challenges: The company reported delays and higher costs due to the need for specialized equipment, such as insulated drill pipes and upgraded rigs for high-pressure environments. These challenges could slow down project timelines.
Strategic Execution Risks: The company is heavily investing in the Western Haynesville, a relatively undeveloped area. Any delays or underperformance in this region could significantly impact future growth and financial performance.
Debt and Financial Leverage: Although the company has reduced its leverage ratio to 2.6x, it still carries significant debt. Any downturn in natural gas prices or operational setbacks could strain financial stability.
Technological Dependence: The company is relying on new technologies like rotary steerable drilling systems and high-pressure frac fleets to reduce costs. Any failure or delays in implementing these technologies could increase operational costs.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Production Growth: In 2026, the company plans to have 4 operated rigs in the Western Haynesville and 5 in the legacy Haynesville, with expectations to drill 19 wells and turn 24 wells to sales in the Western Haynesville, and drill 47 wells and turn 48 wells to sales in the legacy Haynesville. This activity is expected to support production growth in 2026 and 2027.
Western Haynesville Development: The company will focus on building out its Western Haynesville asset to benefit from long-term growth in natural gas demand driven by LNG exports and power for data centers. They estimate recoverable reserves in the Western Haynesville could reach 99 Tcf, with 50 Tcf net to their working interest.
Cost Reduction Initiatives: The company aims to create additional drilling efficiencies to drive down drilling and completion costs in 2026 in both the Western and legacy Haynesville areas. New initiatives include applying rotary steerable drilling assembly technology and optimizing casing designs.
Data Center Project: The company expects to commercialize its Western Haynesville data center project in 2026, in partnership with NextEra, to support hyperscaler data center development with an initial capacity of 2 gigawatts and potential expansion up to 8 gigawatts.
Midstream Recapitalization: Plans to recapitalize the Western Haynesville midstream company, Pinnacle Gas Services, by putting in a new bank credit facility and redeeming preferred units held by their partner, funded by selling equity in Pinnacle.
Financial Liquidity: The company maintains strong financial liquidity of $1.3 billion, bolstered by successful 2025 property sales.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Is it fair to say that the budget was put together in a slightly more constructive gas environment? And when it comes time to spend the capital, if the price isn't there, the capital won't be there either?
A:Yes, the budget was created with a volatile gas price environment in mind. The company has the flexibility to adjust its drilling budget, including reducing rigs and frac crews if gas prices disappoint.
Q:Can you offer any color on the cadence of production?
A:Production is expected to be noisy in the first quarter due to disruptions and completion activity delays. Growth is anticipated in the second half of the year, with a focus on achieving leverage goals and higher EBITDAX.
Q:Do you have a view on how the JV with NextEra will scale from 2 gigawatts to 8 gigawatts?
A:The JV with NextEra is expected to scale based on demand, with the potential to grow from 2 gigawatts to 8 gigawatts. The company is well-positioned geographically and owns its midstream, which provides a cost advantage.
Q:How should we think about the cost of addressing the preferred equity at Pinnacle Gas Services?
A:The company plans to recapitalize Pinnacle by replacing preferred equity with common equity and a new credit facility. This will eliminate expensive preferred dividends and allow cash flow to fund CapEx. The goal is to complete this by May.
Q:Have you already fielded interest on the potential equity sell-down for Pinnacle?
A:The process has just started, and the company is optimistic about finding equity investors. The Marquez plant expansion is motivated by future demand, including the NextEra data center project.
Q:Can you provide perspective on the Brown Trueheart BB well's performance?
A:The well underperformed due to high water production during flowback, which impacted the IP rate. However, the down-dip well on the same pad performed better, and the company does not believe there are significant rock quality issues.
Q:What are your views on the recent M&A activity in the Haynesville?
A:The company believes it holds some of the most valuable gas assets in the world and is focused on developing its inventory rather than seeking acquisitions. It aims to demonstrate the value of its Western Haynesville assets.
Q:What is the production trajectory throughout the year?
A:Production is expected to grow significantly over the year, with 65+ wells coming online after the first quarter. The addition of a ninth rig will have a greater impact in 2027 than in 2026.
Q:What are the plans for lateral lengths in the Western Haynesville?
A:The company aims to increase lateral lengths, targeting its first 15,000-foot lateral soon. Longer laterals are expected to improve efficiency and reduce costs.
Q:What is the average EUR per 1,000 foot in the Western Haynesville compared to the legacy Haynesville?
A:The Western Haynesville averages 3 to 4 Bcfe per 1,000 foot, with some wells reaching 3.5 Bcfe. This is comparable to the legacy Haynesville.
Q:What is the implied next 12-month PDP decline rate in your reserve report?
A:The PDP decline rate has slightly decreased from 40% to around 39%, reflecting a growing percentage of production from the Western Haynesville.
Q:Are there any plans to divest more legacy core assets?
A:There are no current plans to divest additional properties, but the company remains open to opportunities if they arise.
Q:When will the cost savings from new technologies in the Western Haynesville be realized?
A:Cost savings from technologies like rotary steerable tools and 10k rig upgrades are expected to be realized gradually, with significant improvements by next year.
Q:Review of Unclear Management Responses
A:Management avoided providing a specific exit rate for production, citing the variability in timing of well completions. Additionally, they did not provide detailed breakdowns of reserve additions by category or specific EUR comparisons between legacy and Western Haynesville.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Allison
Bcfe drilling
Comstock shareholder
Roland
SEC rule
Shelby Trough
Tcfe reserve
Trough asset
Western acreage
Western inventory
Western well
addition
asset sale
bucket
casing string
cost reduction
day legacy
day production
drill cost
drilling rate
end NYMEX
expense income
exploration expense
field
finding cost
foot increase
gain hedge
inventory legacy
item
legacy acreage
legacy area
proceeds
production gas
reserve Tcfe
reserve end
sale legacy
shareholder return
trial
CRK Transcript
Comstock Resources, Inc. (CRK) Q4 2025 Earnings Call Transcript
Positive2-16
The company demonstrates strong financial health with a significant net income turnaround and high shareholder returns. The strategic focus on Western Haynesville development, cost efficiencies, and midstream expansion are positive. However, the Q&A reveals concerns about production variability and management's lack of specifics on certain metrics. Despite this, the JV with NextEra and financial liquidity are strong positives, outweighing uncertainties, suggesting a positive stock movement.
Comstock Resources, Inc. (CRK) Q3 2025 Earnings Call Transcript
Positive11-4
The company's earnings call reveals strong developments in Western and Legacy Haynesville, positive asset divestiture impacts, and robust financial liquidity. Analysts' questions highlight optimism in gas demand and industrial contracts. Despite some unclear responses, the overall sentiment is positive, with strategic expansions and cost efficiencies. Given the market cap, the stock is likely to see a positive reaction in the short term, estimated between 2% to 8%.
Comstock Resources, Inc. (CRK) Q2 2025 Earnings Call Transcript
Positive7-31
The earnings call summary and Q&A session present a mixed but overall positive outlook. The company shows strong financial liquidity and efficiency improvements, despite some increased costs. The successful drilling and strategic partnerships, like with NextEra, indicate potential growth. Although there are concerns about drilling cost increases and unclear management responses, the strong liquidity, strategic initiatives, and optimistic guidance on future projects suggest a positive market reaction. Given the market cap, a positive sentiment is expected to result in a stock price increase between 2% to 8%.
Earnings call transcript: Comstock Resources Q1 2025 beats forecasts, stock rises
Unknown5-1
The earnings call shows mixed indicators: strong financial performance with a 21% increase in sales and improved EBITDAX margin, but a significant debt burden and reduced production. The Q&A reveals management's vague responses on critical issues, raising concerns about transparency. While the shareholder return plan and reduced drilling costs are positive, the high debt and lack of clear guidance on future projects offset these gains. Given a market cap of $3 billion, the stock price is likely to remain stable in the short term, resulting in a neutral sentiment rating.
CRK Slides
CRK Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
