What's Happening?
Comstock Resources Inc. has reported a significant increase in its third-quarter earnings, driven by improved natural gas prices and robust drilling results in the Haynesville and Bossier shales. The company
is also proceeding with the sale of its Shelby Trough assets for $430 million. During the quarter, Comstock's natural gas and oil sales, including hedging gains, rose to $335 million, generating $190 million in operating cash flow. The company produced 112 billion cubic feet (Bcf) of natural gas, realizing $2.99 per thousand cubic feet (Mcf) after hedging. Production costs averaged $0.77 per Mcfe, resulting in a 74% operating margin. Comstock's drilling activity was concentrated in the Haynesville and Bossier shales, with 17 wells drilled and 12 turned to sales. The company also sold legacy Cotton Valley wells in East Texas and North Louisiana for $15 million and agreed to divest its Shelby Trough properties, which include 36,000 net acres and 155 producing wells. The transaction is expected to close in December 2025, with proceeds aimed at reducing debt.
Why It's Important?
The strategic moves by Comstock Resources highlight the company's focus on optimizing its asset portfolio and capitalizing on favorable market conditions. By increasing production in the Haynesville and Bossier shales, Comstock is positioning itself to benefit from rising natural gas prices, which have bolstered its financial performance. The sale of the East Texas assets for $430 million will provide significant capital that can be used to reduce debt, thereby strengthening the company's balance sheet. This divestiture aligns with Comstock's strategy to concentrate on high-yielding assets and improve operational efficiency. The developments are significant for stakeholders, including investors and the broader energy market, as they reflect a shift towards more profitable and sustainable operations.
What's Next?
Comstock Resources plans to host its quarterly earnings call on November 4, 2025, at 10 a.m. CT via webcast and teleconference. This call will likely provide further insights into the company's strategic direction and financial outlook. The completion of the Shelby Trough asset sale in December 2025 will be a critical milestone, potentially impacting the company's debt levels and future investment strategies. Stakeholders will be keenly observing how Comstock utilizes the proceeds from the sale and whether it will continue to pursue similar divestitures or acquisitions to enhance its asset portfolio.
