4 unchanged sentences
Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.
−Removed: An extended period of depressed oil and natural gas prices would adversely affect our business, financial condition, cash flow, liquidity, results of operations and our ability to meet our capital expenditure obligations and financial commitments.
+Added: An extended period of depressed natural gas prices would adversely affect our business, financial condition, cash flow, liquidity, results of operations and our ability to meet our capital expenditure obligations and financial commitments.
Our business is heavily dependent upon the price of, and demand for, natural gas.
4 unchanged sentences
• the price and quantity of exports of natural gas;
−Removed: • political conditions and events in other oil-producing and natural gas-producing countries, including embargoes, hostilities in the Middle East and other sustained military campaigns, and acts of terrorism or sabotage;
−Removed: • the actions of the Organization of Petroleum Exporting Countries, or OPEC;
+Added: • political conditions and events in other natural gas-producing countries, including embargoes and other sustained military campaigns, and acts of terrorism or sabotage;
• domestic government regulation, legislation and policies;
15 unchanged sentences
Furthermore, while our revenues may increase if prevailing oil and natural gas prices increase significantly, our finding costs for additional reserves could also increase.
−Removed: Our hedging transactions could result in financial losses or could reduce our income.
−Removed: To the extent we have hedged a significant portion of our expected production and our actual production is lower than we expected or the costs of goods and services increase, our profitability would be adversely affected.
−Removed: To achieve more predictable cash flows and to reduce our exposure to adverse fluctuations in the prices of natural gas, we have entered into and may continue to enter into hedging transactions for certain of our expected natural gas production.
−Removed: These transactions could result in both realized and unrealized hedging losses.
−Removed: Further, these hedges may be inadequate to protect us from continuing and prolonged declines in the price of natural gas.
−Removed: To the extent that the natural gas prices remain at current levels or declines further, we will not be able to hedge future production at the same level as our current hedges, and our results of operations and financial condition would be negatively impacted.
−Removed: The extent of our commodity price exposure is related largely to the effectiveness and scope of our derivative activities.
−Removed: For example, the derivative instruments we utilize are primarily based on NYMEX futures prices, which may differ significantly from the actual natural gas prices we realize in our operations.
−Removed: Furthermore, we have adopted a policy that requires, and our revolving credit facility also requires, that we enter into derivative transactions related to only a portion of our expected production volumes and, as a result, we will continue to have direct commodity price exposure on the portion of our production volumes not covered by these derivative financial instruments.
−Removed: Our actual future production may be significantly higher or lower than we estimate at the time we enter into derivative transactions.
−Removed: If our actual future production is higher than we estimated, we will have greater commodity price exposure than we intended.
−Removed: If our actual future production is lower than the nominal amount that is subject to our derivative financial instruments, we might be forced to satisfy all or a portion of our derivative transactions without the benefit of the cash flow from our sale or purchase of the underlying physical commodity, resulting in a substantial diminution in our profitability and liquidity.
−Removed: As a result of these factors, our derivative activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows.
−Removed: In addition, our hedging transactions are subject to the following risks:
−Removed: • we may be limited in receiving the full benefit of increases in natural gas prices as a result of these transactions;
−Removed: • a counterparty may not perform its obligation under the applicable derivative financial instrument or may seek bankruptcy protection;
−Removed: • there may be a change in the expected differential between the underlying commodity price in the derivative instrument and the actual price received;
−Removed: • the steps we take to monitor our derivative financial instruments may not detect and prevent violations of our risk management policies and procedures, particularly if deception or other intentional misconduct is involved.
+Added: Substantial exploration and development activities could require significant outside capital, which could dilute the value of our common shares and restrict our activities.
+Added: Also, we may not be able to obtain needed capital or financing on satisfactory terms, which could lead to a limitation of our future business opportunities and a decline in our oil and natural gas reserves.
+Added: We expect to expend substantial capital in the acquisition of, exploration for and development of natural gas reserves.
+Added: In order to finance these activities, we may need to alter or increase our capitalization substantially through the issuance of debt or equity securities, the sale of non-strategic assets or other means.
+Added: The issuance of additional equity securities could have a dilutive effect on the value of our common shares, and may not be possible on terms acceptable to us given the current volatility in the financial markets.
+Added: The issuance of additional debt would likely require that a portion of our cash flow from operations be used for the payment of interest on our debt, thereby reducing our ability to use our cash flow to fund working capital, capital expenditures, acquisitions, dividends and general corporate requirements, which could place us at a competitive disadvantage relative to other competitors.
+Added: Our cash flow from operations and access to capital is subject to a number of variables, including:
+Added: COMSTOCK RESOURCES, INC.
+Added: • our estimated proved reserves;
+Added: • the level of natural gas we are able to produce from existing wells;
+Added: • our ability to extract natural gas liquids from the natural gas we produce;
+Added: • the prices at which natural gas liquids and natural gas are sold;
+Added: • our ability to acquire, locate and produce new reserves.
+Added: If our revenues decrease as a result of lower natural gas prices, operating difficulties or declines in reserves, our ability to obtain the capital necessary to undertake or complete future exploration and development programs and to pursue other opportunities may be limited, which could result in a curtailment of our operations relating to exploration and development of our prospects, which in turn could result in a decline in our oil and natural gas reserves.
+Added: Prospects that we decide to drill may not yield natural gas in commercially viable quantities or quantities sufficient to meet our targeted rate of return and firm transportation commitments.
+Added: A prospect is a property in which we own an interest, or have operating rights to, and that has what our geoscientists believe, based on available seismic and geological information, to be an indication of potential oil or natural gas.
+Added: Our prospects are in various stages of evaluation, ranging from a prospect that is ready to be drilled to a prospect that will require substantial additional evaluation and interpretation.
+Added: There is no way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable.
+Added: The use of seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities.
+Added: The analysis that we perform using data from other wells, more fully explored prospects and/or producing fields may not be useful in predicting the characteristics and potential reserves associated with our drilling prospects.
+Added: If we drill additional unsuccessful wells, our drilling success rate may decline and we may not achieve our targeted rate of return.
+Added: Further, unsuccessful drilling may impact our ability to fulfill our firm transportation commitments.
Our operations may incur substantial liabilities due to compliance with environmental laws and regulations.
1 unchanged sentence
These laws, among other things, govern the issuance of permits to conduct exploration, drilling and production operations, the amounts and types of materials that may be released into the environment, the discharge and disposition of waste materials, the remediation of contaminated sites and the reclamation and abandonment of wells, sites and facilities.
−Removed: Numerous governmental departments issue rules and regulations to implement and
−Removed: enforce such laws, which are often difficult and costly to comply with and which carry substantial civil and even criminal penalties for failure to comply.
+Added: Numerous governmental departments issue rules and regulations to implement and enforce such laws, which are often difficult and costly to comply with and which carry substantial civil and even criminal penalties for failure to comply.
The regulatory burden on the oil and natural gas industry from these environmental laws and regulations increases our cost of doing business and consequently affects our profitability.
14 unchanged sentences
To the extent financial markets view climate change and GHG emissions as a financial risk, this could negatively impact our cost of and access to capital.
+Added: COMSTOCK RESOURCES, INC.
Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
12 unchanged sentences
The occurrence of any of the foregoing could have a material adverse effect on the price of our stock and our business and financial condition.
−Removed: Substantial exploration and development activities could require significant outside capital, which could dilute the value of our common shares and restrict our activities.
−Removed: Also, we may not be able to obtain needed capital or financing on satisfactory terms, which could lead to a limitation of our future business opportunities and a decline in our oil and natural gas reserves.
−Removed: We expect to expend substantial capital in the acquisition of, exploration for and development of natural gas reserves.
−Removed: In order to finance these activities, we may need to alter or increase our capitalization substantially through the issuance of debt or equity securities, the sale of non-strategic assets or other means.
−Removed: The issuance of additional equity securities could have a dilutive effect on the value of our common shares, and may not be possible on terms acceptable to us given the current volatility in the financial markets.
−Removed: The issuance of additional debt would likely require that a portion of our cash flow from operations be used for the payment of interest on our debt, thereby reducing our ability to use our cash flow to fund working capital, capital expenditures, acquisitions, dividends and general corporate requirements, which could place us at a competitive disadvantage relative to other competitors.
−Removed: Our cash flow from operations and access to capital is subject to a number of variables, including:
−Removed: • our estimated proved reserves;
−Removed: • the level of natural gas we are able to produce from existing wells;
−Removed: • our ability to extract natural gas liquids from the natural gas we produce;
−Removed: • the prices at which natural gas liquids and natural gas are sold;
−Removed: • our ability to acquire, locate and produce new reserves.
−Removed: If our revenues decrease as a result of lower natural gas prices, operating difficulties or declines in reserves, our ability to obtain the capital necessary to undertake or complete future exploration and development programs and to pursue other opportunities may be limited, which could result in a curtailment of our operations relating to exploration and development of our prospects, which in turn could result in a decline in our oil and natural gas reserves.
We pursue acquisitions as part of our growth strategy and there are risks associated with such acquisitions.
16 unchanged sentences
While our current operations are focused in Texas and Louisiana, we may pursue acquisitions or properties located in other geographic areas.
+Added: COMSTOCK RESOURCES, INC.
Market conditions or operational impediments may hinder our access to natural gas markets or delay our production.
2 unchanged sentences
Our ability to market our production depends in a substantial part on the availability and capacity of gathering systems, pipelines and processing facilities, which, in some cases, may be owned and operated by third parties.
−Removed: Our failure to obtain such
−Removed: services on acceptable terms could materially harm our business.
+Added: Our failure to obtain such services on acceptable terms could materially harm our business.
We may be required to shut in wells due to a lack of market demand or because of the inadequacy or unavailability of pipelines or gathering system capacity.
23 unchanged sentences
Complying with these covenants may cause us to take actions that we otherwise would not take or not take actions that we otherwise would take.
−Removed: Prospects that we decide to drill may not yield natural gas in commercially viable quantities or quantities sufficient to meet our targeted rate of return and firm transportation commitments.
−Removed: A prospect is a property in which we own an interest, or have operating rights to, and that has what our geoscientists believe, based on available seismic and geological information, to be an indication of potential oil or natural gas.
−Removed: Our prospects are in various stages of evaluation, ranging from a prospect that is ready to be drilled to a prospect that will require substantial additional evaluation and interpretation.
−Removed: There is no way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically viable.
−Removed: The use of seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities.
−Removed: The analysis that we perform using data from other wells, more fully explored prospects and/or producing fields may not be useful in predicting the characteristics and potential reserves associated with our drilling prospects.
−Removed: If we drill additional unsuccessful wells, our drilling success rate may decline and we may not achieve our targeted rate of return.
−Removed: Further, unsuccessful drilling may impact our ability to fulfill our firm transportation commitments.
Our business involves many uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses.
5 unchanged sentences
In addition to their costs, unsuccessful wells can hurt our efforts to replace production and reserves.
+Added: COMSTOCK RESOURCES, INC.
Our business involves a variety of operating risks, including:
30 unchanged sentences
Although we utilize various procedures and controls to monitor and protect against these threats and to mitigate our exposure to such threats, there can be no assurance that these procedures and controls will be sufficient in preventing security threats from materializing.
−Removed: any of these events were to materialize, either to the Company or a third party upon which we rely, they could lead to losses of sensitive information, critical infrastructure, personnel or capabilities, essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations, or cash flows.
+Added: If any of these events were to materialize, either to the Company or a third party upon which we rely, they could lead to losses of sensitive information, critical infrastructure, personnel or capabilities, essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations, or cash flows.
We are subject to extensive governmental laws and regulations that may adversely affect the cost, manner or feasibility of doing business.
Our operations and facilities are subject to extensive federal, state and local laws and regulations relating to the exploration for, and the development, production and transportation of, oil and natural gas, as well as the safe operations thereof.
−Removed: Future laws or regulations, adverse changes in the interpretation of existing laws and regulations or our failure to comply with existing legal requirements may harm our business, results of operations and financial condition.
+Added: Future laws or regulations, adverse changes in the interpretation of existing laws and regulations or our failure to comply with existing legal
+Added: COMSTOCK RESOURCES, INC.
+Added: requirements may harm our business, results of operations and financial condition.
We may be required to make large and unanticipated capital expenditures to comply with present and future governmental laws and regulations, such as:
14 unchanged sentences
As such, there can be no assurance that material cost and liabilities will not be incurred in the future.
−Removed: The widespread outbreak of an illness, pandemic or any other public health crisis may have material adverse effects on our business, financial position, results of operations and/or cash flows.
−Removed: In December 2019, a novel strain of coronavirus (SARS-CoV-2), which causes COVID-19, was reported to have surfaced in China.
−Removed: The spread of this virus caused business disruption beginning in January 2020, including disruption to the oil and natural gas industry.
−Removed: In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic, and the U.S.
−Removed: economy began to experience pronounced effects.
−Removed: The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, reduced global demand for oil and natural gas, and created significant volatility and disruption of financial and commodity markets.
−Removed: The extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected time frame, is uncertain and depends on various factors, including the demand for oil and natural gas, the availability of personnel, equipment and services critical to our ability to operate our properties and the impact of potential governmental restrictions on travel, transports and operations.
−Removed: There is uncertainty around the extent and duration of the disruption.
−Removed: The degree to which the COVID-19 pandemic or any other public health crisis adversely impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, its impact on the economy and market conditions, and how quickly and to what extent normal economic and operating conditions can resume.
−Removed: In 2021, the pandemic did not significantly disrupt our operations apart from the impact it had on oil and natural gas prices.
+Added: Our hedging transactions could result in financial losses or could reduce our income.
+Added: To the extent we have hedged a significant portion of our expected production and our actual production is lower than we expected or the costs of goods and services increase, our profitability would be adversely affected.
+Added: To achieve more predictable cash flows and to reduce our exposure to adverse fluctuations in the prices of natural gas, we have entered into and may continue to enter into hedging transactions for certain of our expected natural gas production.
+Added: These transactions could result in both realized and unrealized hedging losses.
+Added: Further, these hedges may be inadequate to protect us from continuing and prolonged declines in the price of natural gas.
+Added: To the extent that the natural gas prices remain at current levels or declines further, we will not be able to hedge future production at the same level as our current hedges, and our results of operations and financial condition would be negatively impacted.
+Added: The extent of our commodity price exposure is related largely to the effectiveness and scope of our derivative activities.
+Added: For example, the derivative instruments we utilize are primarily based on NYMEX futures prices, which may differ significantly from the actual natural gas prices we realize in our operations.
+Added: Furthermore, we have adopted a policy that requires, and our revolving credit facility also requires, that we enter into derivative transactions related to only a portion of our expected production volumes and, as a result, we will continue to have direct commodity price exposure on the portion of our production volumes not covered by these derivative financial instruments.
+Added: Our actual future production may be significantly higher or lower than we estimate at the time we enter into derivative transactions.
+Added: If our actual future production is higher than we estimated, we will have greater commodity price exposure than we intended.
+Added: If our actual future production is lower than the nominal amount that is subject to our derivative financial instruments, we might be forced to satisfy all or a portion of our derivative transactions without the benefit of the cash flow from our sale or purchase of the underlying physical commodity, resulting in a substantial diminution in our profitability and liquidity.
+Added: As a result of these factors, our derivative activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows.
+Added: In addition, our hedging transactions are subject to the following risks:
+Added: • we may be limited in receiving the full benefit of increases in natural gas prices as a result of these transactions;
+Added: • a counterparty may not perform its obligation under the applicable derivative financial instrument or may seek bankruptcy protection;
+Added: • there may be a change in the expected differential between the underlying commodity price in the derivative instrument and the actual price received;
+Added: • the steps we take to monitor our derivative financial instruments may not detect and prevent violations of our risk management policies and procedures, particularly if deception or other intentional misconduct is involved.
+Added: COMSTOCK RESOURCES, INC.
UNRESOLVED STAFF COMMENTS
4 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.