Comstock Resources (NYSE:CRK) highlighted higher fourth-quarter natural gas prices, significant asset-sale proceeds used to reduce debt, and an expanded drilling program designed to support production growth in 2026 and 2027 during its fourth-quarter 2025 earnings call.
Fourth-quarter results lifted by gas prices and divestiture gains
Management said higher natural gas prices drove improved fourth-quarter financial results versus the year-ago period. Comstock reported fourth-quarter oil and gas sales of about $365 million and operating cash flow of $222 million, or $0.75 per share. Adjusted EBITDAX was $277 million, and adjusted net income was $46 million, or $0.16 per diluted share.
Fourth-quarter production averaged 1.2 Bcfe per day. Management noted oil and gas sales increased 8% year over year despite lower production.
Full-year 2025: lower volumes, higher sales and improved profitability
For full-year 2025, Comstock said production averaged 1.2 Bcfe per day, down 14% from 2024. However, improved natural gas prices lifted oil and gas sales 15% to $1.4 billion. Full-year EBITDAX totaled $1.1 billion, and operating cash flow was $861 million.
Comstock reported full-year profit of $396 million, or $1.43 per share, including the pre-tax gain on 2025 property sales, a mark-to-market gain on hedges, and the Eagle Ford impairment. Excluding unusual items and related taxes, adjusted net income was $160 million, or $0.54 per diluted share, compared with a net loss in 2024, the company said.
On pricing, management said fourth-quarter NYMEX settlement averaged $3.55, while the Henry Hub spot price averaged $3.69. Comstock realized an average natural gas price of $3.29 in the quarter, reflecting basis differentials. The company said it was 57% hedged in the quarter, which reduced its realized price to $3.27.
Operations: drilling, well results, and costs across legacy and Western Haynesville
Comstock said it added three operated rigs to its program in 2025, with an additional rig expected in early 2026. In 2025, the company drilled 52 successful operated Haynesville/Bossier wells (44.2 net) with an average initial production (IP) rate of 27 MMcf/d. Management said the drilling program replaced 229% of 2025 production with 1 Tcfe of drilling-related proved reserve additions and an overall finding cost of $1.02 per Mcfe.
In the fourth quarter, Comstock turned four Western Haynesville wells to sales, bringing the 2025 Western Haynesville total to 12 wells. Those four wells averaged 8,399 feet of lateral length and averaged 29 MMcf/d IP per well. In the legacy Haynesville, the company turned 35 wells to sales during 2025 with average lateral length of 11,738 feet and average IP of 25 MMcf/d.
Operating costs in the fourth quarter averaged $0.77 per Mcfe, roughly flat sequentially, and EBITDAX margin was 77%, up 3% from the third quarter. Lifting costs improved slightly and production taxes declined, offset by higher gathering and cash G&A, management said.
Comstock spent $270 million on development in the fourth quarter and $1.055 billion for the year. The company turned 47 of the 52 wells drilled in 2025 to sales (40.3 net).
On drilling performance, the company said legacy Haynesville drilling speed declined in the fourth quarter due in part to wells drilled inside the Bistineau Gas Storage Field requiring an additional casing string and the drilling of horseshoe wells. In the Western Haynesville, management said quarter-to-quarter performance is influenced by vertical depth, temperature, and lateral length, with fourth-quarter wells being deeper and hotter.
Comstock also discussed initiatives aimed at lowering costs and improving efficiency, including rotary steerable drilling system trials in the legacy Haynesville and plans to begin trials in the Western Haynesville. The company said it expects a rig upgrade to 10,000 PSI in the Western Haynesville by late summer and described plans to upgrade a frack fleet to 20,000 PSI.
Balance sheet, divestitures, and liquidity
In the third and fourth quarters, Comstock completed $445 million of divestitures, selling legacy Cotton Valley assets in September and Shelby Trough assets in December. Management said it recognized a pre-tax gain of $292 million on the divestitures and used proceeds to reduce debt.
The Shelby Trough sale closed in December for net proceeds of $417 million after expenses, and Comstock used the proceeds to pay down borrowings under its revolver. The company ended the fourth quarter with $260 million outstanding under its credit facility. Management said the borrowing base is $2 billion with an elected commitment of $1.5 billion, and liquidity was nearly $1.3 billion at year-end.
Comstock reported a trailing 12-month leverage ratio of 2.6x and said it expects leverage to continue improving through 2026 with expected EBITDAX growth.
2026 outlook: more wells to sales, Western Haynesville focus, and Pinnacle recapitalization
Management said 2026 will continue to prioritize development of the Western Haynesville to position the company for longer-term natural gas demand growth tied to LNG exports and data center power buildout. Comstock expects to drill 19 Western Haynesville wells and turn 24 to sales in 2026. In the legacy Haynesville, the company expects to drill 47 wells and turn 48 to sales, with one rig potentially moving to the Western Haynesville later in the year.
Executives said the company has flexibility to reduce activity if natural gas prices weaken, noting the ability to take rigs and frack crews out of action with notice.
Comstock also reiterated plans to commercialize a Western Haynesville data center project in 2026 in partnership with NextEra, which plans “behind-the-meter” power generation to support hyperscaler development with initial capacity of 2 GW and potential expansion to 8 GW, as previously announced by the company.
On midstream, management said it is working to recapitalize Pinnacle Gas Services, including putting in place a new bank credit facility and redeeming preferred units held by its partner. The company said it intends to fund the redemption by selling common equity in Pinnacle and described the preferred dividend as expensive. Management indicated the recapitalization goal is to have much of the plan in place by May, with completion of an equity sale targeted for the summer, and said Pinnacle could become free cash flow positive in the second half of 2026 after major capital projects are completed.
About Comstock Resources (NYSE:CRK)
Comstock Resources, Inc is an independent energy company engaged in the acquisition, exploration, development and production of oil and natural gas properties in the United States. The company focuses on generating long-term value through the efficient development of unconventional resource plays and conventional prospects. Its activities encompass drilling, completion and production operations, as well as the marketing of natural gas, natural gas liquids and crude oil.
Comstock holds a core position in the Haynesville Shale of Northwest Louisiana, one of the most active natural gas plays in North America, and has built a complementary portfolio in the Delaware Basin of West Texas.
