Comstock Resources reported higher production and stronger operating cash generation in the third quarter of 2026, as new Haynesville wells came online. The company also highlighted two balance-sheet developments: a $1.65 billion SOCAR divestiture and a $450 million drilling venture with Jerry Jones that it expects to generate free cash flow in the fourth quarter.
Third-quarter operating and financial results
- Production reached 122.4 billion cubic feet equivalent (Bcfe), up 9% from a year earlier and 8% from the second quarter, driven by drilling activity.
- New wells added to production included 16 in the Legacy Haynesville and six in the Western Haynesville. The Legacy wells averaged 10,812-foot lateral lengths and initial production of 25 million cubic feet per day per well; six were horseshoe wells. The Western wells averaged 9,829-foot laterals and initial production of 33 million cubic feet per day per well.
- Comstock drilled 21 operated horizontal wells during the quarter and turned 23 operated wells to sales.
- Natural gas and oil sales, including realized hedging gains, totaled $359.3 million. Realized hedging gains contributed $39.5 million.
- The company received an average $2.61 per Mcfe before hedging and $2.94 after hedging.
- Cash from operating activities was $180.2 million. Operating cash flow before working-capital changes was $208 million, or $0.71 per share.
- Comstock reported $25 million in net income and $22.3 million of net income available to the company, equal to $0.08 per diluted share. The reported result included a $35.1 million unrealized gain on hedges. Excluding that gain and exploration expense, adjusted net income available to the company was $5.9 million, or $0.02 per diluted share.
- Adjusted EBITDAX was $266 million.
- Production costs averaged $0.80 per Mcfe. Gathering and transportation accounted for $0.41, lease operating costs $0.23, production and other taxes $0.09, and cash general and administrative costs $0.07.
- The operating margin was 69% before hedging and 73% after hedging.
Results for the first nine months
- Production averaged 1,221 million cubic feet equivalent per day. Average realized prices were $3.08 per Mcfe before hedging and $3.09 after hedging.
- Natural gas and oil sales totaled $1.03 billion, including $2.4 million in realized hedging gains.
- Cash from operating activities was $622.4 million; operating cash flow before working-capital changes was $588.4 million.
- Net income available to the company was $138.5 million, or $0.47 per diluted share. It included a $118.9 million unrealized gain on hedges. After excluding that gain, exploration expense and a gain on asset sales, adjusted net income available to the company was $53.6 million, or $0.18 per diluted share.
- Production costs averaged $0.83 per Mcfe, and the operating margin was 73% both before and after hedging.
Balance sheet and financing
- Comstock highlighted a $1.65 billion SOCAR divestiture as a significant balance-sheet benefit. The release did not provide further transaction terms in the material provided here.
- The company said its $450 million Haynesville drilling venture with Jerry Jones is expected to generate free cash flow in the fourth quarter, which would further support the balance sheet.
- The bank credit facility’s maturity was extended to November 15, 2028. It is set to extend further, to November 15, 2031, after the SOCAR transaction closes and debt is retired.
The quarter’s reported net income benefited from a non-cash unrealized hedging gain, while the company’s adjusted earnings measure excludes that gain and other specified items. The SOCAR-related maturity extension is conditional on the transaction closing and debt being retired.