crk-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-03262

COMSTOCK RESOURCES, INC.

(Exact name of registrant as specified in its charter)


Nevada			94-1667468
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

5300 Town and Country Blvd., Suite 500, Frisco, Texas 75034

(Address of principal executive offices)

Telephone No.: (972) 668-8800

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.50 (per share)	CRK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐

Emerging growth company ☐

Accelerated filer x

Non-accelerated ☐

Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

The number of shares outstanding of the registrant's common stock, par value $0.50, as of November 2, 2022 was 233,757,678.

COMSTOCK RESOURCES, INC.

QUARTERLY REPORT

For the Quarter Ended September 30, 2022

INDEX


			Page
PART I. Financial Information

Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021			4
Consolidated Statements of Operations – for the three months and nine months ended September 30, 2022 and 2021			5
Consolidated Statements of Stockholders' Equity – for the three months and nine months ended September 30, 2022 and 2021			6
Consolidated Statements of Cash Flows – for the nine months ended September 30, 2022 and 2021			7
Notes to Consolidated Financial Statements			8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			19

Item 3. Quantitative and Qualitative Disclosure About Market Risk			23

Item 4. Controls and Procedures			24

PART II. Other Information

Item 6. Exhibits			24

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	As of
	September 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands)
ASSETS
Cash and cash equivalents	$	38,648	$	30,663
Accounts receivable:
Oil and gas sales	548,979		217,149
Joint interest operations	57,601		29,755
From affiliates	20,758		20,834
Derivative financial instruments	2,368		5,258

Other current assets	40,470		15,077
Total current assets	708,824		318,736
Property and equipment:
Oil and natural gas properties, successful efforts method:
Proved	5,520,425		4,756,394
Unproved	306,095		302,129
Other	25,295		6,690
Accumulated depreciation, depletion and amortization	(1,411,793)		(1,058,067)
Net property and equipment	4,440,022		4,007,146
Goodwill	335,897		335,897


Operating lease right-of-use assets	99,622		6,450

	$	5,584,365	$	4,668,229

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	617,463	$	314,569
Accrued costs	150,327		135,026
Operating leases	38,024		2,444
Derivative financial instruments	285,713		181,945
Total current liabilities	1,091,527		633,984
Long-term debt	2,261,697		2,615,235
Deferred income taxes	345,806		197,417
Derivative financial instruments	—		4,042
Long-term operating leases	61,676		4,075
Reserve for future abandonment costs	29,235		25,673
Other non-current liabilities	8		24
Total liabilities	3,789,949		3,480,450
Commitments and contingencies
Mezzanine equity:
Series B Convertible Preferred stock — 5,000,000 shares authorized, 175,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	175,000		175,000
Stockholders' equity:
Common stock—$0.50 par, 400,000,000 shares authorized, 233,757,678 and 232,924,646 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	116,879		116,462
Additional paid-in capital	1,098,605		1,100,359
Accumulated earnings (deficit)	403,932		(204,042)
Total stockholders' equity	1,619,416		1,012,779
	$	5,584,365	$	4,668,229

The accompanying notes are an integral part of these statements.

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(In thousands, except per share amounts)
Revenues:
Natural gas sales	$	994,979	$	488,303	$	2,376,774	$	1,133,783
Oil sales	1,936		22,873		6,324		61,571
Total oil and gas sales	996,915		511,176		2,383,098		1,195,354
Gas services	193,090		—		322,575		—
Total revenues	1,190,005		511,176		2,705,673		1,195,354
Operating expenses:
Production and ad valorem taxes	24,531		16,675		60,080		36,468
Gathering and transportation	44,740		35,402		113,797		96,596
Lease operating	28,608		26,576		79,873		77,150
Exploration	—		—		3,363		—
Depreciation, depletion and amortization	129,065		128,739		354,994		359,313
Gas services	181,818		—		305,271		—
General and administrative	10,165		8,052		27,451		23,952
Gain on sale of assets	—		(14)		(21)		(93)
Total operating expenses	418,927		215,430		944,808		593,386

Operating income	771,078		295,746		1,760,865		601,968
Other income (expenses):
Loss from derivative financial instruments	(271,335)		(510,319)		(781,654)		(756,026)
Other income	56		197		506		1,008

Interest expense	(41,393)		(49,954)		(132,204)		(170,645)
Loss on early retirement of debt	—		—		(46,840)		(352,599)
Total other expenses	(

SEC Form 10-Q filed by Comstock Resources Inc.