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The call conveyed a predominantly positive strategic and operational outlook supported by robust liquidity, strong drilling results (multi-well high IPs), a large Western Haynesville inventory, meaningful cost-saving initiatives (horseshoe wells, longer laterals, equipment upgrades) and a major commercial development (5.2 GW NextEra power hub) that could drive long-term demand. Near-term challenges included weather-driven production declines, basis/hedge-related realized price pressure, some underperforming wells (water during flowback), and higher per-unit costs in the quarter. Management framed these issues as temporary and actionable (bigger fracs, conservative drawdown, technology adoption, additional frac fleet), emphasized balance-sheet protection and a deliberate pace of development to preserve value.
Management guided that production, which averaged 1.1 Bcfe/d in Q1, should rebound for the remainder of 2026 with Q2 volumes expected to rise roughly 13–15% as late‑quarter wells ramp; operationally they plan to run four frac fleets through year (fourth fleet added this month), operate nine rigs total (five on legacy, four on Western), drill 16 horseshoe wells in 2026, and continue a multi‑hundred‑million dollar development program (Q1 D&C spend $343M; management has said it may outspend roughly $400–450M depending on gas prices) while protecting the balance sheet (end‑Q1 upstream borrowings $350M on a $2.0B borrowing base with $1.5B elected commitment, a $150M Pinnacle midstream facility with $47M outstanding, LTM leverage 2.9x and ~ $1.3B liquidity); technical guidance emphasizes bigger fracs and more conservative drawdown to boost EURs and predictability (legacy benchmark drilling ~$700/ft and completions ~$652/ft vs Western drilling ~$1,534/ft and completions ~$1,537/ft), and management highlighted long‑term demand potential from the planned 5.2 GW Anderson County power hub that could require nearly 1 Bcf/d by 2031.
Natural gas and oil sales of $339 million in Q1; operating cash flow of $192 million ($0.66 per share); adjusted EBITDAX of $251 million; adjusted net income of $44 million ($0.15 per share). Reported net income was $107 million ($0.38 per share) including a pretax $83 million unrealized hedge gain.
Turned 13 wells to sales (11.7 net) in Q1 with average per-well IP of 31 MMcf/d; six new Western Haynesville wells averaged 29 MMcf/d IP; legacy Haynesville recent wells averaged 31 MMcf/d with average laterals of 12,312 ft. Company expects production to recover and grow in subsequent quarters (management cited ~13–15% higher Q2 production expectation).
Total prospective footprint of ~874,868 gross / 806,980 net acres; Western Haynesville grown to >540,000 net acres. Western inventory ~3,331 gross / 2,546 net locations; legacy operated inventory 955 gross / 740 net locations. Over 80% of gross operated inventory have laterals >8,500 ft and average legacy lateral length is ~10,019 ft.
U.S. Department of Commerce selected the company's Western Haynesville site to host a NextEra-built 5.2 GW natural gas-fired power generation hub under the U.S.–Japan investment program. Comstock would supply gas (potentially ~1 Bcf/d by 2031), creating a large long-term commercial customer near its acreage.
Drilling & completion spend of $343 million in the quarter; drilled 17 wells (15.3 net) and turned 13 wells to sales; operating three full-time frac fleets since January and adding a fourth fleet (to run four fleets through year-end).
Legacy benchmark long-lateral wells averaged 26 days to TD and 921 ft/day (a 3% increase vs 2025). Legacy drilling cost averaged $700/ft (3% higher vs Q4) while legacy completion cost decreased to $652/ft (9% lower vs Q4). Record long lateral drilled in Western Haynesville ~14,800 ft with promising results.
Ended Q1 with approximately $1.3 billion of liquidity; upstream borrowings $350 million with a $2.0 billion borrowing base and $1.5 billion elected commitment; new $150 million midstream credit facility (Pinnacle) with $47 million outstanding; last-twelve-month leverage ratio ~2.9x.
Introduced a horseshoe well design combining two adjacent short laterals into a single longer lateral; realized ~35% drilling cost savings versus two 5,000-ft sectional laterals. Camp Tech horseshoe well IP of 41 MMcf/d; plan to drill 16 horseshoe wells in 2026.
Good day, and thank you for standing by. Welcome to Q1 2026 Comstock Resources, Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.
Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Miles Jay Allison. Please go ahead.
Thank you, everyone. Thank you for joining us. Welcome to the Comstock Resources, Inc. First Quarter 2026 Financial and Operating Results Conference Call. You can view a slide presentation during or after this call by going to our website at comstockresources.com and downloading the quarterly results presentation. There you will find a presentation titled First Quarter 2026 Results. I am Miles Jay Allison, chief executive officer of Comstock Resources, Inc. Here with me is Roland O.
Burns, our president and chief financial officer, Daniel S. Harrison, our chief operating officer, and Ronald Eugene Mills, our VP of finance and investor relations. Please refer to slide two in our presentation and note that our discussions today will include forward looking statements within the meaning of securities laws. While we believe the expectations of such statements to be reasonable, there can be no assurance that such expectations will prove to be correct. If ever...