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Introduction & Market Context
Comstock Resources Inc (NYSE:CRK) presented its third-quarter 2025 results on November 4, highlighting improved financial performance driven by higher natural gas prices, despite a year-over-year decline in production volumes. The company’s stock closed 4.46% higher at $19.23 following the earnings announcement, though it showed a 2.91% decline in pre-market trading the following day.
The natural gas producer reported adjusted earnings of $0.09 per share, exceeding analyst expectations of $0.0787, while revenue reached $449.85 million against forecasts of $423.4 million. This performance reflects Comstock’s strategic positioning in the Haynesville shale play amid growing natural gas demand from LNG exports and AI data centers.
Quarterly Performance Highlights
Comstock reported natural gas and oil sales of $335 million for the third quarter, including realized hedging gains, representing a significant improvement over the same period in 2024. Operating cash flow reached $190 million ($0.65 per diluted share), while adjusted EBITDAX climbed to $249 million.
As shown in the following quarterly financial results comparison, the company’s improved performance is evident across key metrics despite lower production volumes:
For the nine months ending September 30, 2025, Comstock’s financial results show even more pronounced improvement compared to the same period in 2024:
The company’s financial turnaround is largely attributed to improved natural gas price realizations, which reached $2.75 per Mcf in Q3 2025 compared to $1.90 in Q3 2024, as illustrated in the following chart:
Comstock has maintained its industry-leading cost structure, with EBITDAX margins improving to 77% in Q3 2025, positioning the company favorably against competitors in the current natural gas price environment.
Strategic Initiatives
During the quarter, Comstock continued its strategic focus on core Haynesville/Bossier shale assets while divesting non-core properties. The company completed the sale of legacy Cotton Valley wells in East Texas and North Louisiana for $15 million and entered into an agreement to sell Shelby Trough assets in East Texas for $430 million, with closing expected in December 2025.
CEO Jay Allison emphasized during the earnings call that "natural gas has become the go-to energy source in the United States," highlighting the strategic importance of the company’s focus on natural gas production. He also noted that Comstock’s liquidity exceeds $900 million and will grow further following the Shelby Trough divestiture.
The company’s extensive Haynesville/Bossier shale footprint remains its core strategic asset, as illustrated in the following map:
Operational Improvements
Comstock continues to enhance operational efficiency through innovative drilling techniques and longer lateral lengths. The company highlighted its horseshoe well design, which converts four sectional laterals into two 2-mile lateral wells, providing drilling cost savings of approximately 35%.
The company completed its second horseshoe well during the quarter, the Roberts 26-23 #1 with an 11,453-foot lateral, drilled and completed at a cost of $1,329 per lateral foot and yielding a 26 MMcf per day initial production rate. Comstock plans to drill eight horseshoe wells in 2025 and ten in 2026, with 118 future horseshoe locations identified in its Legacy Haynesville inventory.
In the third quarter, Comstock turned 28 wells to sales in its Legacy Haynesville area with an average lateral length of 11,919 feet and an average per well initial production rate of 25 MMcf per day. The company’s drilling results are detailed in the following slide:
In Western Haynesville, three wells were turned to sales during the quarter with an average lateral length of 8,566 feet and an average initial production rate of 32 MMcf per day, demonstrating the productivity of this expanding area of operations.
The company has consistently increased lateral lengths over time, contributing to improved capital efficiency:
Financial Position & Outlook
Comstock’s capitalization structure includes a $1.5 billion secured revolving credit facility with a $2 billion borrowing base. As of September 30, 2025, the company reported total debt of $3,169 million against common equity of $2,618 million, with cash and cash equivalents of $19 million.
To manage price volatility, Comstock has implemented a comprehensive hedging strategy for 2025 and 2026:
For the fourth quarter of 2025, Comstock provided guidance for production between 1,200 and 1,300 MMcfe per day, with drilling and completion costs projected at $250-$300 million. The company plans to maintain four rigs drilling in Legacy Haynesville and expects to drill 33 wells and turn 35 wells to sales in 2025.
Looking forward, Comstock emphasized its focus on building assets in the Western Haynesville area while maintaining the industry’s lowest producing cost structure. With enhanced liquidity from the Shelby Trough divestiture and a strategic focus on its core Haynesville/Bossier assets, the company appears well-positioned to capitalize on growing natural gas demand from LNG exports and AI data centers, despite near-term production declines.
Full presentation:
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