Comstock Resources, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Natural gas and oil sales, including realized hedging gains, increased to $359.3 million for the quarter, compared to $334.968 million in the third quarter of 2025.
• Cash flows from operating activities were $180.2 million for the quarter, up from $153.1 million in the prior year period.
• Operating cash flow before changes in working capital was $208.0 million ($0.71 per share) for the quarter, compared to $190.4 million ($0.65 per share) in the third quarter of 2025.
• Net income available to the Company was $22.3 million ($0.08 per diluted share) for the quarter, down from $111.1 million ($0.40 per diluted share) in the prior year period.
• Adjusted net income available to the Company was $5.9 million ($0.02 per diluted share) for the quarter, compared to $20.9 million ($0.07 per diluted share) in the prior year period.
• Net income was $25.4 million and adjusted EBITDAX was $266.5 million for the quarter, compared to $118.1 million and $249.1 million, respectively, in the prior year period.
• For the nine months ended September 30, 2026, natural gas and oil sales totaled $1.03 billion, down from $1.08 billion in the same period of 2025.
• Cash flows from operating activities for the nine months were $622.4 million, down from $675.4 million in the prior year period.
• Net income available to the Company for the nine months was $138.5 million ($0.47 per diluted share), compared to $114.7 million ($0.46 per diluted share) in the prior year period.
• Adjusted net income available to the Company for the nine months was $53.6 million ($0.18 per diluted share), compared to $103.0 million ($0.35 per diluted share) in the prior year period.
• Production cost per Mcfe averaged $0.80 for the quarter, compared to $0.77 in the prior year period.
• Unhedged operating margin was 69% for the quarter, compared to 72% in the prior year period; hedged operating margin was 73% for the quarter, compared to 74% in the prior year period.
• Long-term debt increased to $3.36 billion as of September 30, 2026, from $2.81 billion as of December 31, 2025.

Guidance and Future Outlook:

• A $450 million Haynesville shale drilling venture with Jerry Jones is expected to generate free cash flow in the fourth quarter to further strengthen the balance sheet.
• The SOCAR divestiture is expected to close by year-end 2026, subject to customary conditions and governmental approvals.
• Upon closing the SOCAR transaction and retiring debt, the bank credit facility maturity date will extend further to November 15, 2031.

Business Segments and Product Lines:

• Production grew 9% year-over-year to 122.4 Bcfe in the third quarter of 2026 and 8% sequentially from the second quarter of 2026.
• Sixteen Legacy Haynesville wells were turned to sales with an average lateral length of 10,812 feet and an average initial production rate of 25 MMcf per day; six were horseshoe wells.
• Six Western Haynesville wells were turned to sales with an average lateral length of 9,829 feet and an average initial production rate of 33 MMcf per day.
• Comstock drilled 21 (13.9 net) operated horizontal Haynesville/Bossier shale wells with an average lateral length of 10,967 feet.
• Comstock turned 23 (20.4 net) operated wells to sales in the third quarter of 2026.
• Since the last operational update in July 2026, 22 (17.1 net) operated Haynesville/Bossier shale wells were turned to sales with an average initial production rate of 27 MMcf per day and an average completed lateral length of 10,544 feet.
• Gas services revenue was $64.5 million for the quarter, compared to $141.3 million in the prior year period; gas services margin was $5.1 million compared to a loss of $0.4 million in the prior year period.

Market and Competitive Landscape:

• The Company is a leading independent natural gas producer focused on the Haynesville shale in North Louisiana and East Texas.
• Average natural gas price realized before hedging was $2.61 per Mcfe for the quarter, compared to $2.75 in the prior year period.
• Average natural gas price realized after hedging was $2.94 per Mcfe for the quarter, compared to $3.00 in the prior year period.
• Average oil price realized was $87.43 per barrel for the quarter, compared to $61.91 in the prior year period.

Risks and Challenges:

• The press release notes that actual results may differ materially from forward-looking statements due to factors and uncertainties, including assumptions regarding market conditions and operational execution.
• Specific risks are detailed in the Company's filings with the SEC, which are referenced as containing information on assumptions and uncertainties affecting actual results.

Management Commentary and Tone:

• Management highlighted that growth in production drove the third quarter 2026 financial results.
• The SOCAR divestiture is described as an action that will "substantially enhance Comstock's balance sheet."
• The extension of the bank credit facility is presented as a strategic move to extend maturity dates contingent on the SOCAR transaction.

Other Key Points:

• Comstock entered into a definitive purchase and sale agreement with the State Oil Company of the Republic of Azerbaijan (SOCAR) to sell non-operated working interests in 20% of its Legacy Haynesville assets, 15% of its Western Haynesville assets, and 15% of its interest in Pinnacle Gas Services LLC for an aggregate cash purchase price of $1.65 billion.
• SOCAR's interest in Western Haynesville upstream assets will reduce to 7.5% after five years and upon achieving a 15% return on investment.
• The effective date of the SOCAR transaction is July 1, 2026.
• The bank credit facility maturity was extended to November 15, 2028, with a further extension to November 15, 2031 expected after the SOCAR transaction closes.
• After the SOCAR transaction, aggregate commitments under the bank credit facility will remain $1.5 billion, with a borrowing base initially set at $1.6 billion.
• Net income for the quarter included a pre-tax $35.1 million unrealized gain on hedging contracts.
• Net income for the nine months included a pre-tax $118.9 million unrealized gain on hedging contracts.
• Capital expenditures for exploration and development were $382.9 million for the quarter and $1.12 billion for the nine months.