CRK - Earnings call transcript Q2 2024 | Comstock Resources, Inc.

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Operator

Thank you for standing by, and welcome to Comstock Resources Second Quarter 2024 Earnings Conference Call. [Operator Instructions]. I would now like to hand the call over to Jay Allison, Chairman and CEO. Please go ahead.

Miles Allison

Thank you. everybody over the our thank this with to going morning results. want for time spending us I We appreciate your time. Welcome to Operating and XXXX Quarter the Comstock Results Resources Conference Second Financial Call.

Officer; call Please Dan slide and the Ron our Allison, www.comstockresources.com Financial the our Slide Barnes, Chief have Chief of Comstock. statements and our entitled quarterly Chief note discussions you'll of President or view in Officer; Harrison, Mills, Second forward-looking website laws. There, include downloading Finance within presentation And presentations. Operating Executive is a and that X can to will our and Officer a presentation after You and Roland refer the with Jay this VP today securities our find meaning Investor Relations. by to results Quarter going of at results. during me presentation XXXX

to no can believe such expectations we reasonable, be While there prove correct. expectations to the assurance that statements such be be in will

Before I to part presentation, start, comments. the formal a few make in the I'd like of

future along has As Gulf gas the XXX,XXX the in growing acres to which producer gas best chilled a never basin, natural ever demand natural been net Haynesville is The serve company with Coast. the play for pure the located the brighter.

challenge times present with lows basis. inflation-adjusted natural is these the managing through all-time However, an gas prices on at

manage you present shine when to how it's the now rebound So occurs. the brightest the

supportive company with XXXX no this, the the recently until $XXX family liquidity leasing including billion, managed management directly accomplish program. of Jones the very and maturities to financial structure, in a shareholder tools much bond lowest who all Strong the support in our to cost industry's We million who times. have has a major invested team harder very experienced $X.X

our acres that drill. XXX,XXX years in emerging still has net in Haynesville have net in future a represents captured XX drilling promising of X,XXX area with to that over net we addition, well continues locations, we new acres drilling legacy look which Western Our Haynesville -- over XXX,XXX each

as is the with operations down new is will play. and Harrison in costs in address efficient and well more bringing few drilled minutes, Our completion each new group, our Dan a drilling becoming

even as our task our Western is execute the gas and our play our natural wealth numbers create derisking prices due So play. by the in low, well and our encouraged region as know about weaker are well are continue because to more daily by ever quarterly to costs when we than reducing Haynesville to core we being future region trust to new new

a in America are gas We very we I a see volatile the future natural broader world North and have been never seen before, for that for but today. time here I've in

the quarter. X, summarize Now On we'll quarter X, highlights XXXX highlights. the go Slide second for we the second Slide to

results from $XXX operations continue hedging oil it $XXX heavily gas Our EBITDAX $XXX or and was by adjusted our quarter, generated to hedging flow hedging, as $X.XX, as of financial the with weak in $X.XX average the we gas realized impacted price our the quarter, continued result, be for -- a and share prices natural including were and was million cash per gas before and $X.XX sales, million. million was

shale per average XX exploratory to wells operated with the share $XX loss well Haynesville play. the In turned XXX,XXX Western both have more for successful wells Bossier quarter, net Haynesville completed in in Haynesville an totals adjusted acres successful drilled in We was we our Western lateral than drilling We operated continuing sales length play Bossier lateral of now. and the Haynesville quarter X,XXX second Our to XX currently pads position IP recently -- Haynesville Bossier Shield. producing rate advance per XX with We're the and net day Haynesville $X.XX feet. X Western X XX,XXX of from horizontal we million X the wells our the of an average quarter. and the feet, on play, horizontal average and the from and Shale activity length Shale new acreage successful

X the play running the sales over With the pad I'll year, and wells currently second expected drilling, have today. we have the turn Roland from efficiencies financial drilling to the to well We're of to end the the XX X in around rigs reduced the drill times latest days. Roland? Haynesville go results. quarter we next Western

Ronald Mills

we Slide results. the cover quarter Jay. financial Thanks, X, second On

sales SEC quarter XXXX of declining we second in of in quarter. undeveloped use for for an much loss natural quarter. million, the the $XXX the to increased the EBITDAX of loss for cash was in net the attributable the for to net quarter second from resulted quarter determine X% the required as But of XXXX. gas or natural was proved million which million this have day results increase, low flow in our quarter, quarter. per production -- compared We prices reported very decline the very quarter in generated second by which million, gas and adjusted X.X income per $XX adjusted offset $X.XX quarter and of $XXX XXXX. reserves, share from second gas the in $X Bcfe higher $XXX production X% to The oil Our the quarter which of second to reserves the of from low prices the million the of DD&A the in accounted

future the cover our back be books, its As Slide see proved we'll lower natural to levels up we X, DDA quarters. those financial year-to-date the back go reserves in On rate improve, results. gas prices and will end on of

the in first of months was quarter increase realization oil million $XXX of the during was flow average was better bit XXXX. half quarterly the that's of the in a generated despite second prices. natural $X.XX. It natural and the also million, our than months quarter of production, of net of Henry first was was down due adjusted $XXX year X.X EBITDAX income very price as down reported or of X lower X half helmet the year million per months and the production Our the as first a the the price day in first gas an same we per $XXX NYMEX the in months challenging in the loss higher the in half for XXXX's Bcfe first only cash the and million first sales to from which year. Natural X% for were X XXXX On of million, X gas our little year $XX The compared of $X.XX averaged We gas net break share spot for first XXXX. we the price $XX of Hub at $X.XX. quarter. period Slide X, to X%

that margin. settlement we Our quarter during our to price averaged $X.XX, $X.XX. and $X.XX reflecting Mcfe and realized realized our were to price. which Slide EBITDAX $X.XX the differential improved XX% on reference The the second differential cost per a second detail our price we operating our the hedged, quarter, gas to price gas In X, --

our quarter quarter the $X.XX operating $X.XX the $X.XX. $X.XX year. Our rate costs were second Production rate in than Aperam costs quarter, quarter. as of in per $X.XX G&A our were Gathering second Mcfe costs was and last $X.XX, the at first were taxes were cost the same averaged lifting higher

recaps quarter borrowings In the proceeds per our notes. used under XXXX issued we day. our credit of debt, We April pay margin billion. balance wells. recap end -- at activities including billion stayed at X Slide to XX, the Slide was $XXX down April, a in reaffirmed we outstanding program. drilled prices. commitment total EBITDAX months in average second shale XX% Our due on at our the at X elected $X.X and early ended of million million Virtually and XX spending of billion senior $XXX to outstanding quarter, development and gas facility, under and on wells, the $X $XXX with sales due or activity second a the first rate came XX.X XX of in outstanding total from horizontal turned We wells they of of the or had spent sheet natural our XX net in our hedging group the our borrowings X.X wells cubic of our $X.X of notes after facility. We margin our quarter. operated all net the and we X, and this spent quarter year, million Haynesville drilling other in development in Bossier or In weaker to us an had down our during net second giving additional X On XX.X borrowing base the same first bank XX% the even quarter. Haynesville drilling quarter. that million we feet the the on credit bank Bossier

at operations. our quarter, I will So had end to now discuss billion $X.X of of call the liquidity. we turn to the over the Dan second

Daniel Harrison

XX stands second at of you, drilling it Thank the Slide the Roland. On as Okay. current our is end quarter. inventory

Our total operated inventory now locations. has X,XXX gross

XX% X,XXX interest. this We to an locations, average working equates average have net and

laterals X gross split have X,XXX into Bossier go up that average nonoperated and with working inventory. we to inventory between foot. represents XX% drilling our and and inventory nonoperating across groups a Haynesville different locations, split Our short interest is locations net XXX The our the has X,XXX locations, which it

laterals run medium and to Our XX,XXX X,XXX-foot.

feet. lateral the currently and X,XXX first medium XX% long of Bossier. in long feet had XXX XX,XXX our is inventory, our XX% X,XXX end our laterals up and we longer XXX from XX,XXX XXX operated average longer for and laterals XX% with inventory and than Haynesville feet. the operating extra-long slightly laterals, have The of feet, our operated inventory gross split gross up long the stands than is gross X,XXX now gross laterals feet from of at at our The quarter. the that we in Our short total X,XXX inventory laterals laterals. XXX XX,XXX laterals, this of In and the laterals XX% locations over inventory extra-long to feet operated have feet in those have

inventory have sales. current the weight the Slide locations XX drilled of Our based lateral we outlining future average on with based years over provides drilling our is that our XX activity. to turned wells XXXX us on On

wells XX average turned quarter, During of sales feet up we The length to XX,XXX to range links from the individual X,XXX with feet. lateral X,XXX second an feet.

at sales laterals still to lateral stands XX,XXX longest feet. X,XXX the feet. wells XX of had record X during quarter than the turned Our longer

any During we arm the wells did turn to not sales. lateral second extra have quarter, that

our on quarter well, #X feet, which the Martin call. One Western had of acreage. Haynesville this during Ingram well lateral was and turn sales reported was of on was our second a XX last X,XXX to wells the the length This

own laterals remainder average Looking a XX we in wells to than ahead, provided extra-long well XX,XXX been of have sales. individual on ranged XX to of our XXX our sales X year, rates over XXXX rigs with to rigs average million our million will IP lateral activity, million drilled we Slide and the cubic XX for results To these of in ranging a to approximately length well XX that to have total feet, we that total we X from feet lateral have was feet. test feet with turned call, lateral over XX and several day. late wells up run date, turn The wells XX our the The to longer slated our XX,XXX recap activity XX,XXX April. wells per are be after since the we on day of laterals quarter. all a feet the last average feet. length lengths expect sales. XX,XXX first rate of the turn LIBOR Since continuing new wells up XX day, X,XXX drove $XX.XX individual dropping feet Recapping a will new with activity last with cubic from outlines to have we we do

quarter, having at until down will in drilling currently Haynesville. our recently and of on that XX after from and in On pads our Louisiana are wells released reflects acreage quarter. all a the gap we through East completions, on the frac position. dropped quarter acreage sales we that were frac Slide increase frac acreage East to of turn summary November crews rigs our X during our XX% laterals since located a turned up benchmark running the sales Louisiana core crews of the a X long. XX our sales first of the turned be foot second finished drilling for per compared Texas, wells, This our also wells year-end X,XXX been just Haynesville, X to averaged pick and quarter our North $X,XXX wells greater rigs that year. X to Betsmark in the Western we is month, quarter, these the lateral first X-well Two costs anticipate our X total XX to have wells beginning from the fell group. pads Betsmark first fourth long well completed year to the the which lateral we of year. X the In core, just of the quarter. X on D&C our a the In second the after cost This Western these into on again crews our the will X it long Both Texas all we of For X fourth North covers early short we feet D&C temporarily X-month are than And of â€“ and for

quarter a increase area significant is first which where XX% Boston X-well with second drilling quarter the drilling the were a in drilling Lake quarter. Baker costs for difficulties. associated averaged the higher to The our up encountered we foot, pad Our $XXX costs compared

In of a set. intermediate the addition, our were gas additional stream requires facility, casing wells storage which drilled an Betsmark boundary X of to shallow be X inside

new to that planned that a cost X% and Slide flat gained return recently to will utilize of we compared our a industry. slightly in -- traction this lower to remain came first Our We quarters. XX the illustration couple for the Horse have levels costs next lateral On we quarter. the increase development foot. of is do second and expect the has an concept at completion is a $XXX quarter D&C normal in

on one well While been X% the drilling, develop basins, a cost isolated surface significantly the straight been The reducing in represents The also days. test can other would XX,XXX-foot a million before laterals horse only benefits, small that the as handful the To future has acreage with fewer by well cost few only economics. single regular horse we a blocks. X,XXX-foot the from currently Louisiana year. within cost Horse million, in is project in deliver Shale we should providing the to have develop laterals and that Haynesville earlier with The plan was the will originally one our in spud our single section improving which developed Parish, drilled wells us footprint have is emissions acreage concept, X-well a capital DeSoto wellbores. X of to X next of been basin, economics recently only drilled pad some for date portrayed well to have to been drilling for This drilling $XX XX% premium additional developed single-section on located the pads allow TD challenging will technology section horse reach X% X rolling or in a short more XX,XXX-foot this capital now from $X million and capital. slide $XX We lowering to a This by cost. such lateral. laterals this savings

and will to long length regular inventory can our more wells that converting becomes call our back our I'll increase laterals. into match Jay from once summarize further XX,XXX-foot enhancing this hand to laterals further outlook. lateral And technology F the expect efficiencies. by over short well average we performance of We the the of laterals the now our derisked,

Miles Allison

you're I'm owner about Thank horseshoes the and Dallas -- Dan, thinking you. is talking majority the wells. the about Roland. go Horseshoe together. Okay, Dan, of on thank the stock you, Cowboys. cowboys

So you thank for that report.

XX. Page where XX, I'll our go for to to you outlook XXXX. we Slide Let's direct summarize

significantly response low stated we this have really to As prices taken last the the steps in in of number quarter, a natural year. gas we

the count we We During rigs. released operated reduced that drilling to rig our X quarter, rigs. announced we X of our first

February, frac X one our steps, the We XX% spreads, We Over saved those our suspended released to XXXX CapEx that and frac about is commitments that through dividend that services. of any quarter longer of expected a million no In our to did late Jones XXXX. down position late be year-end pressure the now spreads. starting have for dividend also XXXX the pumping from Starting to XX% in stakeholder, reducing in pads quarterly year in long-term fourth Jerry invested the our our level. We $XXX $XXX.X payments. equity an significantly March, has. an XXXX placement our to and additional majority into extending the through add company we million company hedge

We XX% expected enhanced maintain at end April, a those $X.X senior which offering, the of to of are second and million early financial totaled production targeting $XXX our a level continue billion hedge of further very In our just quarter. the a under liquidity years. we position liquidity with strong level through notes we

asset the our exciting price structure lowest remain is industry-leading in position extensive play. We play very, to on gas cost lower than producers. add environment Our and continuing our cost acreage in substantially low natural our to this up the Western other structure very Haynesville an public proving gas as is current focused natural

provide of Bob date. in on. a growth to Ron Western positioned year in began the show next now be on to that our specifics for Atellacreage rest growth turn We I'll Our asset year. up it second natural of in over horizon, Hansell believe substantial position LNG that the exports Western for to half in is over to driven gas great totals the by demand the the net building from region well will XXX,XXX that a that benefit to acres we're the in

Ronald Mills

guidance provide third and Slide the On the XXXX. remainder financial for Jay. quarter XX, Thanks, of we

third range year and midstream million fourth in for costs. third the capital CapEx $XXX actual to year due the we million unchanged $X unchanged quarter both remain just year levels. million guidance D&C for remains expect the million $XXX quarter $X $X The million quarter remains third costs, outlook $XXX full quarter, and The to on million leasing range. CapEx million between fourth our and the to LOE capital full For our to second and leasing $XX million. range and and D&C and full moved the up $XXX prior to from GTC remains

the range due rate Roland the which remains an rate, earlier of -- production the the severance be low by On the guidance as prices. the through to by to expected is ad tax mentioned a of year in being Louisiana, higher same. current alarm, offset The the includes a DD&A valorem rate. lower impact remainder basically higher in

Looking No anticipate to return to XXX% I'll over for interest and outlook to the deferred that in to to more the level call normal kind we the turn ahead, XXXX. environment quarters, we Q&A. other taxes. see our of we would though our anticipate or G&A our prior we in With changes that provided price in that operator continue of that, deferring virtually

Operator

[Operator of comes you. Escalante Thank question line of the Wolfe -- Carlos our first Instructions]. from Research.

Carlos Andres E. Escalante

the the years. future towards property how successful in I program completed do -- on a you is concept I going if quarters If feet. less drilling for see a pace I'm go your and as than Horseshoe under all that number roughly getting potentially quarter. future wells into second allocation wells update, XX% mind the X,XXX Question. your per a quarter Bearing use

Daniel Harrison

did you success majority where our were you wells basically to left where short I already is just will there address here. short of short We last just didn't this short be it's drilled our short concept, well the of -- a we I having the had had drill, laterals. think reported one one bounded we've lateral to if when the have when that's had think Dan. decide drill wells lateral. the -- we But But all by with lateral maybe other inventory Horse I'll a laterals. the have loan of that's got and that that call. kind that we really we all kind We have will of So wells to be and to left, -- few in drilled that's convert really

inventory to won't the think a to of XX-Ks. be we'll all So to them able I convert be XX-K good able convert we but Horse to of wells, chunk the

Carlos Andres E. Escalante

topic. real might And Wonderful. same follow if I on quick up that

of or I think able may say fact of when than it's that the XX inventory. market you to to inventory recognize that years XX XX% you're drilling that at emphasizes be that sort less reticent why may plan that specific be

what's So of the and resonation more on that may concept? first the what a is topic, come? Or many risk the end it on same be here? goal Is of the of to this

Daniel Harrison

want of is this with I many derisked. it new, more anything wants to public first to drilled. want mature, the come. see I see to think the And them it like that's to of think just They see they

So further probably other the a -- they're little I process they bit basins. into think that in

a mainly -- few drilled Horse that wells. I and think the problem this I one was think the the free. was really There was Eagle year -- Ford. and for in it earlier Permian

we been you So almost like to for date. at drilling we're on in, the one TD a it's and we're problem said, I that --

good really feel it. about we So

average length really significantly think good be to our -- inventory. about the up. have more -- XX-Ks, efficiencies I We'll be we reducing will our feel our laterals It we'll up. will short in lateral way

to do risk where So take and it we of some just to need becomes routine out. more the

Ronald Mills

But some you Well, latter them savings, them. bring of you you can of need drill these like forward inventory after million because cost these these does them, when we pushed drill have to the wells, you if wells save couple that our drilling to said, of add if Dan $X to part inventory. you back a our

Miles Allison

because drilled a we've production and low. gets for they've had of some we've the these of while them some And

on these to just we is So our schedule. some protect our leasehold put drilling we'll of why

Operator

Roberts comes of Our the from line next TPH & of Company. Jacob question

Jacob Roberts

and does bit issues a might more on in that what highlighted. any EUR of any speak to the to that And might correlation this you the impact mean there the dig between occurred in you expect? the Can future? wells that to rates? to is wanted the avoided region something IP be and some need Is Baker I we

Daniel Harrison

do the certainly from itself edge of our it's that more acreage is Well, -- has the past That bit in know area, the we wellbore up out a drilling instability. bit just footprint. on -- a is more rock little little stability

wells so drilling expensive, And it really, it of the problems. $X,XXX -- really are normal, to in drills per another that $X,XXX had sidetracks a -- is track We We're the lost over We -- whereas maybe a typically having side the cost that ended X X to us were lateral. -- Texas we Stateline X it. well basically normally, well gave get drilled -- had kind -- up we ones to to of and we up -- drilled twice we so a But wells TD. on. more foot. it's little $X,XXX tried the bit a We that in and in drilled ended back a to $X,XXX had had two sidetrack we that We area. had

but pleasant So experience, it's on definitely a outlier. an very

we all tough on all look it's you is drill. just to where our area -- of edge, was the at kind the of that If out kind acreage knew where

acreage because the had it. it to lose it So it event. -- it's drilled expiring. just We was a or we onetime drill And was

drill full X and wells all we the the to section. way do decide so did development across And

-- event. a that's we So onetime just

pull be QX and a I you out, for think which cost foot where is that QX. we're if back we'll around total for $X,XXX that do at this D&C quarter,

Jacob Roberts

...

the I you X of cost sounds the is things like now side per drill. foot Great. on My update a that. of the sitting wrapped appreciate days question, you're drilling pad has where up. But the done? on appreciate Okay. give so us second sense that the X-well We to drilling can

Daniel Harrison

Yes.

at prices here movement couple a big So working We're We're time we're actually we months. see actually, a that pipe get cost. we in costs seeing significant QX. right we in through in started just some I bit. completing wells of last but going little that QX already the that pipe the inventory seeing have, sales We on turn the of down think end by to the savings

so we'll costs QX basically down into QX come see And definitely should QX. and D&C our and further really

Operator

Meade of Our of from Rice. next question comes Johnson the Charles line

Charles Meade

wanted Good partially morning, get Ron I a just elaboration. heard your I me. -- answered I make but prepared you XQ, a Dan on maybe XQ versus it both it But to I Roland, seems wide think ask in at right, it's question. to an Again, sure was down at and this want but Jay, it your upper that I also bound pretty looking was least lower CapEx, range to it's the and way remarks,

frac And hear it comments that again. -- be to what there that and going maybe a to it crews, the other let running pick that And you're XQ? think wide for so just one to let to you're you it Is September. Is contribute dropped crew like the Dan, your X prepared decline going you recently your of August that I driver I heard in of you X say It sounds are -- I up that going pieces in you're did CapEx right? can range?

Daniel Harrison

first of been Well, We at like it's a around complete. and in of the from the of mean, We're a week basically that's the just a think the the We've right drop just of I the probably we all earlier wells I that, crew up ago. rigs year. kind slated got driver weeks to year. the X, kind but less to to first running that's obviously, We gapped reflection went year. pick X I X this -- couple frac of significant not of totally it October. X think in

bit. I So come year. pipe the earlier, already prices The frac last are The one -- rig pieces We've down. prices earlier significantly little little That's -- finally. see bit a come seen down coming but we mentioned we've down. down come coming costs this the down like seen the of also where costs costs just a we the kind of

frac So the service down, cost coupled QX out one is months for just of the coming overall, on with is the gone for that being X X driver of crew CapEx.

Charles Meade

Got And times it. Haynesville. about That is in the helpful then Western drilling question detail. the the

highlighted days. on that or context is goal the to you fail in XX in how think bigger So drill for you also of it some days XX wells what many put where the And Can early you your a next drill? days reasonable to XX guys months?

Daniel Harrison

Yes.

with days progress TD -- drilling have of kind I in on so XX-day the Haynesville. Western made different especially days. pads that X when to well We generally wells XX the couple comes our think the down -- now we've in number these were into of like on these Haynesville we place we Western and shaved on it to wells started, around that links last mark days, and But been we've the were great higher of temperatures. XX so the

drilling So got laterals. we running that's gain look pretty there. think the efficiencies still We've room to significant. in still there's And I some some

think a I we bit. little can So down number move that

Charles Meade

number might those long you have But Correct... of with that laterals... those low days the were

Daniel Harrison

both. were those And Yes.

on foot was the X,XXX lateral. a a of one had -- think XX,XXX-foot one just I was lateral under we

in the those higher So the Haynesville both temperatures. with

everything -- temperatures. are I say drilled, the that that's TDDs, basically I toughest that's basically So kind we've of today, lateral lengths, mean, drilled we've wells what the

working said, still a a work on a made like improvement down lower. are And we those little bit So few big there. yes, things numbers we've big, to I

Ronald Mills

these these because your end well savings year wells, equate huge -- savings, the Got are so could drilling drilling lot saved the and -- days up a well, you'll the it. drilling even X go time. XX mean, I I say, drilling days that wells XXth Charles, XX if we're shaped off that that's XX days efficiencies from probably it questions That we've that's now, X, Well, money. to days. already another that. per month from a we've use you whole If to that's of of you cost half XX our it's water XX/XX, with on number mean that you with of deeper drilling means rigs, wells, is same XX days of

Operator

...

Our of from next question Truist. line the Bertrand comes of Donnes

Bertrand Donnes

kind you lower than the like look promising would the have I there do does The there? expectations the from the get on you early, productivity like? maybe these And any example of that are pro but Or a give the but amount lose a it Do of of how thoughts IP wells? the decline? very Just you the wells on combined cost Or Horseshoe the on of recoveries? forma you it's wells. X% lower shape laterals? gotten shorter full that X well staying know side. looks any Is

Miles Allison

it's good really Yes, a question.

straight lateral well. do we there's the XXX-foot of the stage XXX the to really the is -- a perforate The sections lateral, expect line, and straight the of foot across across foot the XX,XXX well between a So section be definitely only as same you X the difference you XXXX performance mild that can't on complete get lease the the line. with horse

on We're foot. X got you horse sections, you X,XXX a X,XXX-foot on well, a XX-K. So basically

as to as So on the more amount perforate XX-K. a little get you bit that's a XX-K, straight completed across the far

the to unit we -- expect but same. a the totally on be performance So basis, per

Bertrand Donnes

then shifting gears. And

drops year, program? kind maybe a just maybe already On get I'm it's steady now stable. they if strip of impression also like our on the looking over wondering you last check private can the debating see the some been them? a of we or the there's Or but Do actively side activity? discussions been right settled private dropping some have operators your that X you on some It in they've temperature looks side are with of and into throughout at rig the data Haynesville, side. months on the the the so, the

Roland Burns

of that our don't lot back have of kind a really rigs with kind of than insight cut other rate. they other operators operators. coordinate dramatically we I knowing how same and schedules private think very we yes, the Well, the But kept

any on we So seen haven't activity rise. increase that's the in

I think gas kind prices of they're waiting justify to really when see that.

lot public been mainly has than then count dropped on the Southwestern else, everybody the the so has that, with of other Yes, side, rig And a rigs. higher but

Miles Allison

Roland. agree I Yes. with

quo of I kind think until move you'll gas up... sees see prices status everybody these

Ronald Mills

X,XXX year. well Haynesville, first there, core, drill One, they core in if at decline you miles, a either the the you've when the at is a call look what got Bojer square XX% you

Western So careful like gas hadn't the we answer need seen real drilling of that whereas about in you to price, be in in decline. type $X.XX

So that whether drill would these wells. aggressively you're public or private don't be you another reason that

Operator

comes question next Our from Energy Partners. the Kevin line Pickering MacCurdy of of

Kevin MacCurdy

I wanted to ask about activity toggles.

Now that a little of a the less debt covenant is concern.

the are year result you any into the activity is in there gas changes other XQ? which prices, Or state holiday would to levels? extending frac there any consider this given of Just would situation

Miles Allison

think much we're pretty think -- I said. see the we really -- we further today QX don't going. extending know just we've it what I prices where based holiday I on think frac into it and got is see I

really mean, And kind answer but I look we it... of a I our schedule, kind think at short there, so of

Roland Burns

look the We at it time. all

gas can as see those the the still of we through obviously you levers pull prices So you if see improving get very year. that, we end

I changes so nomadically. think, less have XX to so and And kind of

in that's drive kind our think fourth the what would level I quarter. activity of

Miles Allison

And contractually something I things Right. frac obviously, change. change really we're not crews, with definitely we set outlook it. with can we obviously, obligated, mean, can

Ronald Mills

Daniel, something the we -- where do we've so quarter, fortunately, deteriorate. hit that to position do fourth XX% at in swap continue that's the prices hedged And our

least hedged end that And for XXX-plus our up have is of XX of -- goal of production. adequately opening, quarter. with I we've We will our all XX, hedge as at range. at so least think 'XX XX% we far the in production said at in to the XX% hedged And we the 'XX,

hedge XX% out XX-plus environment getting So the environment. the percent of into we are

Kevin MacCurdy

moved not ask, And -- the necessarily thing from Haynesville tomatoes. basically, treating Or moved go a wanted did impacts really, it we spawned impacts helpful. the ton have the Western down flow lost hurricane? were into that quarter? up core DAN. There up third power. weather have area, And of really did the guys of impacts did to Yes, operations, into we just our the any have just you Basically, to, didn't the area. our -- in on but they from facilities We treating I into Barrel. but all see impacts any is go any That's that the Hurricane our hurts XQ third-party hurricane we us

it kind at -- just So In it July. for we really XX of their have really our mercy production. approximately that hurts and did does days... We're a to week

Ronald Mills

that the quarter is in guidance. And impact incorporated third

Operator

comes Mariani next the Our question of line of from Roth. Leo

Leo Mariani

heading I fourth the little kind in into more the just dig into quarter. expectations a of to bit wanted

talked production previously year-over-year. XX% of slipped of I fourth potentially. down couple quarter being you think have I January guys about around wells kind a know into

as crew to CapEx? with CapEx it like wanted I see CapEx, move XX sense, if a more getting get fourth looks maybe to ready a So that's to back? frac to look respect higher like Just trying And quarter valid. still that's should the quarter roughly then second of comes XQ little

Ronald Mills

So... the in it a dropping return a Good frac are that of mentioned. of the change terms February will then 'XX. that's to occurring dropping and in XX activity holiday right, quarter and why of different about of the those levels. rigs is of quarter third we've versus looks be show of questions. kind of between lag the terms up more the function A can no as with fourth function fourth X- level to CapEx and level quarter fourth XX%. fourth lot March the we've all third down you CapEx timing of so on production. quarter in that quarter like in And earlier There's what seeing about, that X-month It and you're absolutely in And X talked that That's the in quarter. the it discussed

Miles Allison

year end part. a the we in of right a on the the in But on January. coming before Maybe production And and that. really Western then the way most year. gas wells Haynesville on are and up lines the that right that coming the the the And of in the no a Western lot really, all second lot like early market wells few for around half of with actually

So...

Daniel Harrison

and the December, then maybe the Hodges the week Leo, are week Those come to a Yes, else. it pads, the to we the X modeled drilled in that's in. X on and wells first miles, or That's home pad really per that's the dealer XXXX. January we the when wells power the of of last

Leo Mariani

next That's XXXX, kind X.XX% get trying early just year, helpful know, here then a sense, I looking for currently. strip to I to of little for And mean a Okay. at obviously, that very color. X.XX% but today, prices

it the to how out, about rigs. back Comstock adds currently was kind that those rigs level X of kind of As think of next kind you a to back it rigs that Is you back where year? right to get thinking that today of kind is you're to at look the for get here bring of couple to

Miles Allison

decisions. has we help will for than year definitely it it's coming the then what make Yes. a mean, we into early. and well that I stronger we see the materializes if more That price and get there, our said, level hedge But also well even what obviously market we is 'XX out do for And program having like support then fourth 'XX. futures and way quarter December until those -- position don't to activity still the Comstock. that that really November, works into had next set in Like I

Okay.

Operator

Sachs. Mehta Our next question Neil Goldman comes from the line of of

Neil Mehta

Yes. Two questions.

The perspective or A&D term larger-sized first large Are optimize or scale think our proceeds the medium And about of make from there even next opportunities smaller bolt-ons? to way as just your to over acquisitions the both do market. we you divestitures the was potential on course how year? a

Miles Allison

them. We I -- mean incoming all all all time. at of opportunities we We look the have

to and going go not last of quarter. we did acreage at some But like end is production down. in to the outspend that And we acquire focus forward now the the up, right our going them react is real our

to need that. care take we So of

bit inbound that do business want Ron calls to to acreage, what they're Our with leased that. utilities, that us, has There data mainly are a acreage their clean and we budgeted haven't for up of centers their more we little storage. have,

goes our inventory, that core. inventory, have in inventory, is XXX,XXX-plus inventory X,XXX M&A That's adds said that goal market we in our we about Haynesville, our the net is the Western have with is locations So beginning, incredible should our if with we acres that very in goal. like really the goal the

Harrison a little had that's and wells Dan geological it focus, We've seems for X operations, a acreage successful wells and be to different, better. you new each test tested like is, little can success. that if if years. we've your They're We've seemed and goal to that added and group bit the X with but of Our you had the to days, was a And XX used asked days you the third well compared of drill that earlier, question better. XX we almost those these these XX to in. drill drill days. be a in now you wells from little Well, group, wells

day, a that the lot wells you lot efficiencies of third That's old money well a we same the the saved for you efficiencies like of and now in numbers, get X So money. see. amount that of every

and binge prove world-class in wells have continue when created that with comes market great together our well footprint geology perform to goal the -- well. not We're want test power this for to spent I is Haynesville. just clean a they the big gas think up up now on demand prove to And our continue of by and the industrial continue wealth we this they area. and we we to Western M&A lot LNG and Yes. if derisk to the That's generation putting great that So have, demand. focus. seismic us like we to just have the We at a in it money the like all.

Neil Mehta

cost cost in a a That's asked the your is you interest of that or great supply the get breakevens for of we of ancillary. is Henry capital -- return perspective. G&A What mind all question just Western burdened your When the breakeven of earn then Hub to and think fully sort the Haynesville. And and of one is follow-up equivalent? lot

Roland Burns

start Well, per in traditional our money Haynesville cost a completion more X lot continuing double. on rigs with yes, going that drilling we to par is makes and very mean, found. but far internal reserves. as cost I a be the where pad more more the that have year with kind of drilling it's more have -- it get program down of X Western difference costs. the to actually the an efficient the Western the course, we But I similar we're we'll as Haynesville of it a we work reserves be areas lot as evolving -- are and kind to with puts with we a are return have see the in in next well, -- and rate Haynesville mean, of reserves

So different it's different. a of type are play. The declines

there's we're how -- out Western to trying what figure still produce wells. So Haynesville to -- the

the because into getting the far them way the end, stage. they're Western so returns, probably of we as the get more tighter there's out a we're that to you where production But well you'll months, first And see X more Haynesville X difference well a a development in there lot a get show. in as that now comparable. producing little cost then months. But traditional And of Haynesville a out bit very the second getting especially more a production much of we're kind with

So we're -- pleased with and that. very

Miles Allison

add think Xs. will I Tier inventory to that, Well, if on you this of Tier at which run X, depletion, to you out happen, you if look go to

X because run in Tier there the bang of Xs. the out you're quite for So not buck is X Tier or

compared in if So we and big M&A acquired to you and derisked have area. just inventory same M&A. all is X, did to going if acreage you materially our this Heynesville a stronger is be the have we more than is Western our Tier

Operator

of Securities. question line next Jungwirth Capital the from come Phillips Our One of

Phillip Jungwirth

QX and follow-up up months It's be year, balance of obviously stay your as levels? flat, The question. or Leo's frac perspective, back look QX, in of much if down rigs out you a expect volumes to year do few versus to just for But a from you momentum next X first directionally into would you XX bring very the is crew TBD. at really the that the

Daniel Harrison

up, coming but wells Yes. Haynesville Will Western those on. be

Operator

Tuohyy of comes question of next Parks Brothers from the Our Noel line Research. Investment

Noel Parks

to It's Good you. job No.

to run Just couple want had I by. a

pressure Haynesville of understand and you things had heat terms that so instruments was I the bit with the talk at where able in and to and to and some if with the wondering those So could forth. had stand work depth Western adaptation be greater I tools a about levels.

slate -- Just you're where next going are proprietary that the that in be of anything any doing to you implementing of you're wells?

Daniel Harrison

Dan. is This

far in have tools we a little Haynesville basically the essentially our differently. providers that how MWD them Western as the same for use same the But in the core use basically we motors, apply Western our the bit -- we Haynesville as tools, we that in core. So the we

to some that providers can't Western full in the the the be have there able there our guys have core but to working same are in breadth up tools Now down core. work the of Haynesville, of working in doesn't we the

tools. same So

Noel Parks

you shape Haynesville And so just mentioned and joking cetera. might your thoughts -- about that wondering what et just mentioned effect curve, you on far were declines it. production Roland And Got and the or are of rates, that -- influence might forth. the just how produce how so you and have Western going wells have

Roland Burns

and how the how that them But the core. got conservative produce years with on Well, much years core. the we learning and we started them. the more We them years Haynesville we in in how we hard the the Obviously, definitely and Western were tip pull wells Western producing can being we're of in how of curve. in produce history to compared Haynesville, just can we've know off we

started we out conservative, very -- very we So drawdowns. low

-- we've -- little production But it. get We good. them do ahead them a everything of process. slowly bit kind just pulling we're and the harder and sure make really -- we to source can trying we're to they pull little which want hard. taking of want kind of so better too of drawdowns time We're don't a looks just maybe just in our definitely just kind And get we to watch a rates, starting up ourselves bit that just

Miles Allison

the tubing And over that. produce we

Daniel Harrison

we because the casing, rating Western core, what is strings. years the and the quite But those very the a of in back burst the the later. in time. tube We come of we while couple wellhead, casing casing cases, those up flowing don't everything do up that the just pressures long tube a we Yes. what flow And wells the complete for in initial for, high pressure up we're completing well. of in some on We our Haynesville, maybe

sales, that day up all turn wells tubing. the So to they those are flowing

So production it's a little bit different profile.

the lot a get drop hole You pressure more you before surface. down reach

if higher difference So surface Haynesville a up the pressures the all as probably be All wells up core Western the we're pressures, are flowing flow casing. biggest as far But downhole. the would were. up, tubed the obviously, casing, that's lot wells

Miles Allison

the And you're about asking drilling.

that completions in What up. produces ingredients it's core, it. kind right, If said I some do wells and do use What we What everybody use you kitchen do our you have? in efficiencies you and mean, I lot the of is a have? type at you Dan product. the of of look casing the you final of and tools of that tube pipe the mean type same not the intermediate there's you the but how drill

got at first when XX it XX the a group XX,XXX-foot drilling there So it well really come and success in took that the difficult very would you're you be and good XX,XXX-foot now days. days, first if and we've Well, to time. had operations you're your vertical have them lateral

of the that create then that to can it, footprint when spend you you held with the of costs you by to well, of at set, effect you money to low lot have do and cost you lower captured being those have a real So most very skill in, we lot a it footprint have and can to perfect and production.

So this that's play. in the difference

Operator

the Our Diamond question of Citi. comes of from next line Paul

Paul Diamond

might drill on given to those X-odd-percent below want that Just the think place where set and X,XXX to of kind expectations much cadence When would I'm production larger or about, you theories be drilling much opportunity inventory just down convert a to them able these across you how cadence? trying quick call foot. current had understand I wells. of -- your the you of how the it, in one.

Miles Allison

it's Yes, question. really good a

right we that XX% now So we're the right, total or about And those the of do you're XX% long laterals. many actually over how our is of short inventory can of process currently through have think we we laterals. convert working

majority just of over. fixed you number, And can, I have majority I'd But the the looking think them say really I a probably don't can like of them said, that only I at we give we to moving mean, the have -- today. are would of real I have kind right opportunity. be of side-by-side the I you you X not have the that X,XXX reason obviously, to because, could have laterals Horseshoe

Some our sticks inventory, one of short got you in just basically. stick our

X candidate. think So them a -- candidate. every other But horseshoe horse side, every of one got than a if obviously, that, those that wouldn't by be side I is you of

convert. through So we inventory. process right They'll XX% that we're now, go those our lateral about bucket, one now, of that's long can right our which of working into which seeing

we a boost still in that of which need with to some short or significantly great. be economics. we'll drill would really That percentage we'll our lot It'll a reason, in and what mean normally reason that So be economics wells opens short. that we can on it. more a or -- for schedule lower. XX%, should has whatever, put leaseholder will with that will for that's I drilling kind decide laterals good fit the to we, up drill above lot we basically XX%, good get up --

Paul Diamond

of into kind portends Understood. my That follow-up. actually

working economically horseshoe existing to foot? would Assuming our foots an how XX,XXX with, under a current guys are you X,XXX XX, assumptions compare

Daniel Harrison

improvement. substantial. those mean it's off $X the but substantial million, to substantial you're I yes, basically rate numbers laterals. return, So per X,XXX I front of don't save million in of going me, yes, $X have

So drives parameters higher. key all the it just significantly

So said, like cost. I the

modest the kind a drill But any where to a premium. essentially I X% cost up. the same. horse to is costs said end going within I drill straight X% drill that's the our are to on XX-K well mean, plus of of So we to well

the Horse as be to at for same the our look we essentially XX-K laterals. all So of other economics

Operator

from of Our next Brody line America. comes Bank Gregg of question of the

Gregg Brody

Update.

wells like in other a guy really that suggest curious, pop that been up a these I've do is credit see oral I'm there's few There's now. there physics seems number something that basins. And places. data. U-shape just we a the of is I about realize As should started in to them just in on lateral about is Or these? one growing think that can tricky we it some

Daniel Harrison

Right.

mean drill Sometimes, the is invention, old drilling of the do drill the a I say XX-degree you right? necessity So you're these the to already, -- XX-degree lateral. we you mother laterals turn turn,

the tools, same the stay -- just motors turn the around way it it's So make goes and another you that with you XXX until degrees. just we you run, same all just it

But little there got casing and the people Now just risk think -- you is your more kind curve. horseshoe there. really I probably looking to in I of have until kind go look, it push get you're do to drill mean, at A of bit of to or a you inventory don't improvement. the around lot well, to

the get -- it after to becomes ultimate mean, you down Ford got small. and the routine and risk little got when already the do industry think bit shown all prove your to more plugs your perforating think just And curve. show think around in -- people But that's is just of -- for guns and pretty frac I I other I that of stages, to those I have risk is I and I results. to areas. more mean these you think The complete get pumping Permian it have all out kind you're You basically and to but pumped diminished. the really, the a the has you greatly Eagle

Ronald Mills

example, will Well know mean well, TD, let we're night. close on to our that I and pretty first I

Daniel Harrison

foot We're X TD, probably we drilling XXX within have at problems and had

Ronald Mills

in TD Yes, were feet problems than that's my first of XXX well, it. no point,

Gregg Brody

asked converted that converted. Should it's just at get -- be I'm think we that's locations ones you that X,XXX early can are about have it be your And to X,XXX in could it's potential about is much earlier there? the -- didn't feet? were trying days, sense that when it. the to of I also a looked -- -- you that think that and much to about X,XXX know of we feet the curious -- I being how you but of range how if Or you quantify up a would should think

Daniel Harrison

take really turn Well, that. that's a good a kind and horseshoe about it already had a internal XX,XXX of we've yet. discussions into some X,XXX-foot Can lateral question, and you

of to They do there with faster, But kind ready time. that look, out not the tools better. gets Now longer, and we're get get better they get yet. industry

and in If for the they you the and demand services show tools get they up have they get developed demand and certain time, refined. for

I think, that So lot I than economics has will yes, look, I the time, a a think XXX. I lateral better think in X,XXX-foot mean the industry there. maybe go

like X a just of got I lateral. rush not and it's do horseshoes. But to if going sections laterals. right what XX,XXX X not laid be -- options now. X,XXX-foot a drill mean up It's XX,XXX to the acreage, really bunch we'll it's going do see and how XX,XXX straight out can doing We're are. or drill what if to sections, typically, start it's your your there you I you horse So

probably more You question. a mean, but I know will bit push mean, that that's And it's think so of good pipe and when links pushing try little I tripping around hole. to little probably the very some think, -- time obviously, a you're in XXX-degree -- the horseshoe more adds in I what yes, people in I a there'll have do that pulling bend be and and the think out further. drag, bit torque drag. the I They future,

the of drag a XX,XXX-foot So the in hole, level more a sense. is you well you going makes like and straight kind at XX,XXX-foot look may when out of of horseshoe maybe if that the equivalent

Gregg Brody

today. few just might don't getting for guys. credit That your does. see my come follow-ups you just back a some I to you And routes, then to get that XX credit

to or I X.X%. that suspended would going next quarter pretty X a amendment year. not you the then I X the as part for was just just think dividend Is get it is And not, of know okay And through that to that, you're if into easy this fair? get?

in think out you look you today? as how future, about the Just do that

Roland Burns

with were, part we could prices the in Greg, Yes, a end up question the quarter close need will EBITDAX, big The answer the a of knew kind a where obviously, gas is waiver they exactly. in we think calculation looked of be temporary we to quarter. didn't they we And exactly a it's pretty I that -- Chris, can remember being we if which prices it, kind driver and get fourth ratio. biggest -- a it's think that level. what gas the but we also stay in it. We of do one fold we needed But it's

go didn't it. and out we So get

going likely we things So be would in stayed kind to get there. as were that exactly thought they came of to we X%, knew X% would. We

really we'll it dividend, the talking bono second get leverage of looking we I in until obviously, about we kind not So we're the down way it off as as And in think the quarter. the dividend the hard future. quarter and then a third monitor in

our And that So back to think be is ratio. first debt good used to it's get for then free the I generating some -- to get much flow. cash priority will leverage reduction

'XX In fact, were we and to we we'd to under leverage. seeing like got to to back fact -- Xx that levels closer back get in

Ronald Mills

gas We to third again, were the we $X.XX we And the take on didn't quarter. Monday. really did second be in quarter, expect in monitoring

right third So valley now. to you hedges a to price and in going okay, a the after to then have think little monitor that, I and of well, and say, big question. growth the got some that kind we're quarter price we're that the appreciation help. going would look quarter, in you that and we good really at do And It's come fourth expect production

Operator

Daniel question of Partners. from Our next the line comes Jay Jeff of Energy

Jeff Jay

one of trend expect something over normal quick seen Where go down given for do normal there and real or achieving? me. D&C will the levels. last to forgotten you you're cost out see costs kind all like guess the looks -- kind you inflation deflation so. I efficiencies you thought we've the you Earlier, that's what you a I'm service said of year think would those Just given like see the to

Roland Burns

So we think our...

of below And Our bit of back will that is things when are finished we to X,XXX the to were a are quarter this actually I because kind trend an X,XXX, this where good the drilled -- of really product X,XXX wells Haynesville now some report that indication completed main a they not wells kind it's $X,XXX last area. legacy of way think but is year. little we and completed

and drilling on incurred versus is the maybe additional here you're some we process more They'll so of cost quarter. the and costs be different here's back that come of And information scoring incurred costs where here one And will costs the be add about. real indicative were but you the here's in incurred. show than periods each being different are they'd being wells, completion hearing

you group also, they that turned of numbers. the to and dominate sales, to are a more certain costly the So if be ones have that -- wells and happened different

period lot wells you the there. they quarter those Vista case the and weren't comparable would in have other been had really just drilling of what problems As looked if the and high-cost Lake pretty quarter, these of area this that -- a plus wells to kind in ethos at have distorted

Miles Allison

We to less got wells average down. it

Roland Burns

the in quarter, that that we'll see versus year. even to current try to allow cost occurred yes, seeing they're you trending probably maybe provide something last But how will maybe the supplemental some

Operator

conference like Thank you. for turn remarks. the right. would closing Jay Sir? All now back I to to Allison

Miles Allison

gone the Thank always know, over vision. you company, again. an But hour. We've had you as we've a

have And which of feet. a do XXX we that And gas a had I out to supply you think if a rebirth horsey then always could is vision. XX,XXX step monitor Greg vision. see a play, we is are these where miles vision we drill wells now the to the about, Western We answer type gas major X,XXX-foot asked Haynesville, is. have we and

down, and storage -- come the Well, we've for last X-year was -- average. average. gas weeks, level that after look week is about the week you that's after X-year it's probably If above like XX% the above been X looking XX% X or week,

of the right into mid the coming call summer. the what way. the So real it's coming We're XXX weeks we of

over a that. XX So Bs right We we at now. LNG do day see see

it's So September, back, Freeport see startups and Buckman. we Stage past and October, you is Corpus then look the of and back, X

we LNG strong XX into a the fleet, runs quarter So see of that XXXX. from goes and fourth

to compliment to to in we and again, $XXX sharing of We're million Jones protect acreage for balance And manage. we've trick to been committed all I acquiring. our committed are sheet. for that the we is areas So the the everything share the writing that want can

acreage that to that backstop they think I check. and willing as were we're run fortunate, and the

So shape to good in be there. going we're

for you time. it. thank So We appreciate your

Operator

This today's you conference for Thank call. participating. concludes

You disconnect. may now

Comstock Resources (CRK) 31 Jul 242024 Q2 Earnings call transcript