What changed in this filing

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Item 1. Financial Statements

2025-11-04 compared with 2025-07-31 · 114 added, 74 removed, 421 unchanged (31% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

(In thousands)

28 unchanged sentences

Common stock—$ 0.50 par, 400,000,000 shares authorized, 293,054,806

and 292,260,645 shares issued and outstanding at June 30, 2025

and 292,260,645 shares issued and outstanding at September 30, 2025

and December 31, 2024, respectively

8 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(In thousands, except per share amounts)

8 unchanged sentences

General and administrative

Loss (gain) on sale of assets

Total operating expenses

1 unchanged sentence

Other income (expenses):

Gain (loss) from derivative financial instruments

Gain from derivative financial instruments

Interest expense

24 unchanged sentences

Balance at June 30, 2024

Stock-based compensation

Stock issuance costs

Net income (loss)

Contributions from noncontrolling interest

Distributions to noncontrolling interest

Balance at September 30, 2024

Balance at January 1, 2025

9 unchanged sentences

Balance at June 30, 2025

Stock-based compensation

Contributions from noncontrolling interest

Distributions to noncontrolling interest

Balance at September 30, 2025

The accompanying notes are an integral part of these statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

Deferred income taxes

Loss (gain) on sale of assets

Depreciation, depletion and amortization

(Gain) loss on derivative financial instruments

Gain on derivative financial instruments

Cash settlements of derivative financial instruments

2 unchanged sentences

Decrease in accounts receivable

Decrease in other current assets

(Increase) decrease in other current assets

Increase (decrease) in accounts payable and accrued expenses

3 unchanged sentences

Prepaid drilling costs

Proceeds from sales of assets

Net cash used for investing activities

9 unchanged sentences

Net cash provided by financing activities

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

3 unchanged sentences

NOTES TO CONSOLIDA TED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

and its wholly-owned subsidiaries (collectively, "Comstock" or the "Company").

In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Comstock as of June 30, 2025, and the related results of operations and cash flows for the periods being presented.

In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Comstock as of September 30, 2025, and the related results of operations and cash flows for the periods being presented.

Net income (loss) and comprehensive income (loss) are the same in all periods presented.

3 unchanged sentences

These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock's Annual Report on Form 10-K for the year ended December 31, 2024.

The results of operations for the period through June 30, 2025 are not necessarily an indication of the results expected for the full year.

The results of operations for the period through September 30, 2025 are not necessarily an indication of the results expected for the full year.

Pinnacle Gas Services ("PGS") is a joint venture entity formed by the Company and an affiliate of Quantum Capital Solutions.

2 unchanged sentences

Accordingly, Comstock is considered the primary beneficiary and consolidates the assets, liabilities and results of operations of PGS in the accompanying consolidated financial statements.

PGS assets that cannot be used by Comstock for general corporate purposes include $ 243.2 million and $ 140.3 million of other property and equipment as of June 30, 2025 and December 31, 2024 , respectively.

PGS assets that cannot be used by Comstock for general corporate purposes include $ 303.3 million and $ 140.3 million of other property and equipment as of September 30, 2025 and December 31, 2024 , respectively.

Other PGS assets that cannot be used by Comstock and PGS liabilities for which creditors do not have recourse to Comstock's assets are not material to the Company's consolidated financial statements.

1 unchanged sentence

Other Current Assets

Other current assets at June 30, 2025 and December 31, 2024 consisted of the following:

Other current assets at September 30, 2025 and December 31, 2024 consisted of the following:

September 30,

(In thousands)

11 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

Ending capitalized exploratory well costs

As of June 30, 2025 and December 31, 2024, the Company had no exploratory wells for which costs have been capitalized for a period greater than one year.

As of September 30, 2025 and December 31, 2024, the Company had no exploratory wells for which costs have been capitalized for a period greater than one year.

The Company periodically assesses the need for an impairment of the capitalized costs for its proved natural gas and oil properties.

10 unchanged sentences

As a result of these changes, there may be future impairments in the carrying values of these or other properties.

The Company had goodwill of $ 335.9 million as of June 30, 2025 that was recorded in 2018.

The Company had goodwill of $ 335.9 million as of September 30, 2025 that was recorded in 2018.

The Company is not required to amortize goodwill as a charge to earnings;

8 unchanged sentences

Comstock currently has no finance-type leases.

Right-of-use lease assets representing the Company's right to use an underlying asset for the lease term and the related lease liabilities represent our obligation to make lease payments under the terms of the contracts.

Right-of-use lease assets representing the Company's right to use an underlying asset for the lease term and the related lease liabilities represent the Company's obligation to make lease payments under the terms of the contracts.

Short-term leases that have an initial term of one year or less are not capitalized;

10 unchanged sentences

The terms on the Company's other drilling rig contracts are presently either for periods of one year or less, or they are on terms that provide for cancellation with 30 or 45 days advance notice without a specified expiration date.

The Company has elected not to recognize right-of-use lease assets for contracts with terms of one year or less.

The costs associated with drilling and completion operations are accounted for under the successful efforts method, which generally require that these costs be capitalized as part of the Company's proved natural gas and oil properties on its balance sheet unless they are incurred on exploration wells that are unsuccessful, in which case they are charged to exploration expense.

Lease costs recognized during the three months and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Lease costs recognized during the three months and nine months ended September 30, 2025 and 2024 were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

4 unchanged sentences

Short-term lease cost (drilling rig costs included in natural gas and oil properties)

Cash payments for operating leases associated with right-of-use lease assets included in net cash provided by operating activities were $ 1.0 million for each of the three months ended June 30, 2025 and 2024 and $ 1.9 million for each of the six months ended June 30, 2025 and 2024.

Cash payments for operating leases associated with right-of-use lease assets included in net cash used for investing activities were $ 22.5 million and $ 14.3 million for the three months ended June 30, 2025 and 2024, respectively, and $ 40.9 million and $ 35.2 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025 and December 31, 2024, the operating leases had a weighted-average term of 1.9 years and 2.0 years, respectively, and the weighted-average discount rate used to determine the present value of future operating lease payments was 7.2 % and 7.3 % , respectively.

As of June 30, 2025, the Company also had expected future payments for short term leased drilling services of $ 13.3 million .

As of June 30, 2025, expected future payments related to contracts that contain operating leases were as follows:

Cash payments for operating leases associated with right-of-use lease assets included in net cash provided by operating activities were $ 1.1 million and $ 1.0 million for the three months ended September 30, 2025 and 2024 and $ 3.0 million and $ 2.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Cash payments for operating leases associated with right-of-use lease assets included in net cash used for investing activities were $ 24.3 million and $ 16.1 million for the three months ended September 30, 2025 and 2024, respectively, and $ 65.1 million and $ 51.2 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025 and December 31, 2024, the operating leases had a weighted-average term of 1.7 years and 2.0 years, respectively, and the weighted-average discount rate used to determine the present value of future operating lease payments was 7.2 % and 7.3 % , respectively.

As of September 30, 2025, the Company also had expected future payments for short term leased drilling services of $ 10.1 million .

As of September 30, 2025, expected future payments related to contracts that contain operating leases were as follows:

(In thousands)

July 1 to December 31, 2025

October 1 to December 31, 2025

Total lease payments

3 unchanged sentences

Accrued Costs

Accrued costs at June 30, 2025 and December 31, 2024 consisted of the following:

Accrued costs at September 30, 2025 and December 31, 2024 consisted of the following:

September 30,

(In thousands)

Accrued interest payable

Accrued drilling costs

Accrued transportation costs

Accrued income and other taxes

Accrued ad valorem and other taxes

Accrued interest payable

Accrued employee compensation

3 unchanged sentences

The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented:

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

Reserve for future abandonment costs at beginning of period

New wells placed on production

New wells and facilities placed on production

Liabilities settled

10 unchanged sentences

COMSTOCK RESOURCES, INC.

The Company had the following natural gas price derivative financial instruments at June 30, 2025:

The Company had the following natural gas price derivative financial instruments at September 30, 2025:

Future Production Period

Six Months Ending

Three Months Ending

December 31, 2025

10 unchanged sentences

Consolidated Balance Sheet Location

September 30,

(In thousands)

12 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Gain (loss) on Derivatives Recognized in Earnings

4 unchanged sentences

Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period and included in general and administrative expenses for awards of restricted stock and performance stock units ("PSUs") to the Company's employees and directors.

The Company recognized $ 5.5 million and $ 4.1 million of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and PSUs to its employees and directors during the three months ended June 30, 2025 and 2024, respectively, and $ 10.0 million and $ 7.5 million for the six months ended June 30, 2025 and 2024, respectively.

The Company recognized $ 5.6 million and $ 3.9 million of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and PSUs to its employees and directors during the three months ended September 30, 2025 and 2024, respectively, and $ 15.6 million and $ 11.4 million for the nine months ended September 30, 2025 and 2024, respectively.

In February 2025, the Company granted 787,595 shares of restricted stock to its directors and employees, which were valued at $ 17.80 per share.

In June 2025, the Company granted an additional 53,188 shares of restricted stock to its directors and employees, which were valued at $ 23.82 per share.

As of June 30, 2025, Comstock had 1,979,667 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $ 12.43 per share.

Total unrecognized compensation cost related to unvested restricted stock grants of $ 21.3 million as of June 30, 2025 is expected to be recognized over a period of 2.3 years.

As of September 30, 2025, Comstock had 1,957,381 shares of unvested restricted stock outstanding at a weighted average grant date fair value of $ 12.44 per share.

Total unrecognized compensation cost related to unvested restricted stock grants of $ 18.3 million as of September 30, 2025 is expected to be recognized over a period of 1.9 years.

COMSTOCK RESOURCES, INC.

In June 2025, the Company granted 529,670 PSUs to its executive officers, which were valued at $ 36.77 per unit.

As of June 30, 2025, Comstock had 1,603,916 PSUs outstanding with a weighted average grant date fair value of $ 19.46 per unit.

As of September 30, 2025, Comstock had 1,603,916 PSUs outstanding with a weighted average grant date fair value of $ 19.46 per unit.

The number of shares of common stock to be issued related to the PSUs is based on the Company's stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 3,207,832 shares of common stock.

Total unrecognized compensation cost related to these grants of $ 24.6 million as of June 30, 2025 is expected to be recognized over a period of 2.4 years.

Total unrecognized compensation cost related to these grants of $ 21.8 million as of September 30, 2025 is expected to be recognized over a period of 2.2 years.

Segment Reporting

22 unchanged sentences

The amount of natural gas or oil sold may differ from the amount to which the Company is entitled based on its revenue interests in the properties.

The Company did not have any significant imbalance positions at June 30, 2025 or December 31, 2024.

The Company recognized accounts receivable of $ 140.5 million and $ 145.4 million as of June 30, 2025 and December 31, 2024 , respectively, from purchasers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists.

The Company did not have any significant imbalance positions at September 30, 2025 or December 31, 2024.

The Company recognized accounts receivable of $ 128.9 million and $ 145.4 million as of September 30, 2025 and December 31, 2024 , respectively, from purchasers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists.

COMSTOCK RESOURCES, INC.

5 unchanged sentences

The Company has not had any significant credit losses in the past and believes its accounts receivable are fully collectible.

Accordingly, no allowance for doubtful accounts has been recorded for the six months ended June 30, 2025 and 2024 .

Accordingly, no allowance for doubtful accounts has been recorded for the nine months ended September 30, 2025 and 2024 .

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates.

7 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(In thousands)

5 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Tax at statutory rate

6 unchanged sentences

Effective tax rate

The significant variance in the effective tax rate from the statutory tax rate for both the three and six months ended June 30, 2025 was primarily due to the impact of mark-to-market changes in the Company's derivative financial instruments.

The Company's federal income tax returns for the years subsequent to December 31, 2020 remain subject to examination, with the Company's 2022 and 2023 federal income tax returns currently under examination with the United States Internal Revenue Service.

1 unchanged sentence

The Company is also currently under examination with the state of Louisiana.

In both the federal and state examinations, the Company believes that its filing positions and deductions will be sustained under audit or the final resolution will not

COMSTOCK RESOURCES, INC.

have a material effect on the consolidated financial statements.

In both the federal and state examinations, the Company believes that its filing positions and deductions will be sustained under audit or the final resolution will not have a material effect on the consolidated financial statements.

Therefore, the Company has not established any significant reserves for uncertain tax positions.

COMSTOCK RESOURCES, INC.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into United States federal law.

The Company expects to benefit from certain provisions contained in the OBBBA, including increased interest expense deductions and bonus depreciation, but the Company is still evaluating the impact of this law on its income tax disclosures and consolidated financial statements.

The Company expects to benefit from certain provisions contained in the OBBBA, including increased interest expense deductions and bonus depreciation and has included these expected benefits in its income tax provision for the three and nine months ended September 30, 2025 .

Fair Value Measurements

9 unchanged sentences

Fair Values – Reported

The following presents the carrying amounts and the fair values of the Company's financial instruments as of June 30, 2025 and December 31, 2024:

June 30, 2025

The following presents the carrying amounts and the fair values of the Company's financial instruments as of September 30, 2025 and December 31, 2024:

September 30, 2025

December 31, 2024

9 unchanged sentences

(2) The carrying value of the floating rate debt on the Company's outstanding approximates fair value.

(3) The fair value of the Company's fixed rate debt was based on quoted prices as of June 30, 2025 and December 31, 2024 , respectively, a Level 1 measurement.

(3) The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2025 and December 31, 2024 , respectively, a Level 1 measurement.

Earnings Per Share

Unvested restricted stock containing non-forfeitable rights to dividends are included in common stock outstanding and are considered to be participating securities and included in the computation of basic and diluted earnings per share pursuant to the two-class method.

At June 30, 2025 and December 31, 2024, 1,979,667 and 2,091,087 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a non-forfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company's stockholders.

At September 30, 2025 and December 31, 2024, 1,957,381 and 2,091,087 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a non-forfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company's stockholders.

COMSTOCK RESOURCES, INC.

1 unchanged sentence

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(In thousands)

5 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

(In thousands, except per unit amounts)

1 unchanged sentence

Weighted average grant date fair value per unit

Basic and diluted loss per share for the three months and six months ended June 30, 2025 and 2024 were determined as follows:

Three Months Ended June 30,

Basic and diluted loss per share for the three months and nine months ended September 30, 2025 and 2024 were determined as follows:

Three Months Ended September 30,

(In thousands, except per share amounts)

6 unchanged sentences

Diluted income (loss) attributable to common stock

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands, except per share amounts)

9 unchanged sentences

Supplementary Information with Respect to the Consolidated Statements of Cash Flows

Cash payments made for interest and income taxes and other non-cash investing activities for the six months ended June 30, 2025 and 2024, respectively, were as follows:

Six Months Ended

Cash payments made for interest and income taxes and other non-cash investing activities for the nine months ended September 30, 2025 and 2024, respectively, were as follows:

Nine Months Ended

September 30,

(In thousands)

3 unchanged sentences

Non-cash investing activities include:

Decrease in accrued capital expenditures

Increase (decrease) in accrued capital expenditures

Liabilities assumed in exchange for right-of-use lease assets

7 unchanged sentences

The Company is still evaluating the impact of this standard on its financial statement disclosures.

(2) DIVESTITURE OF NATURAL GAS AND OIL PROPERTIES

On September 2, 2025, the Company sold its interest in natural gas properties in East Texas and North Louisiana for net proceeds of $ 15.2 million.

The properties sold included the Company's interest in 883 ( 770.9 net) producing wells and 46 ( 27.3 net) inactive wells.

The Company incurred a $ 2.5 million pre-tax loss on the divestiture.

The Company's reserve for future abandonment costs was reduced by $ 13.8 million as a result of the divestiture.

The properties produced approximately 7.9 MMcfe per day in August 2025.

(3) LONG-TERM DEBT

At June 30, 2025, long-term debt was comprised of the following:

At September 30, 2025, long-term debt was comprised of the following:

(In thousands)

4 unchanged sentences

Debt issuance costs, net of amortization

As of June 30, 2025, the Company had $ 475.0 million outstanding under a bank credit facility.

As of September 30, 2025, the Company had $ 580.0 million outstanding under a bank credit facility.

Aggregate commitments under the bank credit facility are $ 1.5 billion, which matures on November 15, 2027.

Borrowings under the bank credit facility are subject to a borrowing base, which was redetermined on April 29, 2025 and is currently set at $ 2.0 billion.

Borrowings under the bank credit facility are subject to a borrowing base that is currently set at $ 2.0 billion.

The borrowing base is re-determined on a semi-annual basis and upon the occurrence of certain other events.

Borrowings under the bank credit facility are secured by substantially all of the assets of the Company and its subsidiaries and bear interest at the Company's option, at either SOFR plus 2.25 % to 3.25 % or an alternate base rate plus 1.25 % to 2.25 %, in each case depending on the utilization of the borrowing base.

The Company also pays a commitment fee of 0.375 % to 0.5 %, which is dependent on the utilization of the borrowing base.

The bank credit facility places certain restrictions upon the Company's and its subsidiaries' ability to, among other things, incur additional indebtedness, pay cash dividends, repurchase common stock, make certain loans, investments and divestitures and redeem the senior notes.

The only financial covenants are the maintenance of a leverage ratio of less than 3.75 to 1.0, which reduces to 3.5 to 1.0 on September 30, 2025, and an adjusted current ratio of at least 1.0 to 1.0.

The Company was in compliance with the covenants as of June 30, 2025.

In April 2024, the Company issued $ 400.0 million principal amount of 6.75 % senior notes due 2029 (the "New 2029 Notes") in a private placement and received net proceeds after offering costs and deducting the initial purchasers' discounts of $ 365.2 million ,

The Company also pays a commitment fee of

COMSTOCK RESOURCES, INC.

which were used to pay down the outstanding borrowings on the Company's bank credit facility.

The New 2029 Notes have substantially identical terms as the Company's $ 1,223.9 million aggregate principal amount of 6.75 % senior notes due 2029, which mature on March 1, 2029 and accrue interest at a rate of 6.75 % per annum, payable semi-annually on March 1 and September 1 of each year.

0.375 % to 0.5 %, which is dependent on the utilization of the borrowing base.

The only financial covenants are the maintenance of a leverage ratio of less than 3.5 to 1.0 and an adjusted current ratio of at least 1.0 to 1.0.

The Company was in compliance with the covenants as of September 30, 2025 .

(4) COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

The Company records a loss contingency for these matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

The Company does not believe the resolution of these matters will have a material effect on the Company's financial position, results of operations or cash flows and no material amounts are accrued relative to these matters at June 30, 2025 or 2024 .

(5) RELATED PARTY TRANSACTIONS

2 unchanged sentences

Comstock also provides natural gas marketing services to the partnerships, including evaluating potential markets and providing hedging services, in return for a fee equal to $ 0.02 per Mcf for natural gas marketed.

The Company received $ 260 thousand and $ 269 thousand for the three months ended June 30, 2025 and 2024, respectively, and $ 599 thousand and $ 548 thousand for the six months ended June 30, 2025 and 2024 for drilling, operating and marketing services provided to the partnerships.

The Company received $ 0.2 million and $ 0.3 million for the three months ended September 30, 2025 and 2024, respectively, and $ 0.8 million for each of the nine months ended September 30, 2025 and 2024 for drilling, operating and marketing services provided to the partnerships.

The fees received for the services are reflected as a reduction of general and administrative expenses in the accompanying consolidated statements of operations.

In connection with the operation of the wells, the Company had a $ 3.3 million and $ 5.5 million receivable from the partnerships at June 30, 2025 and December 31, 2024 , respectively.

In connection with the operation of the wells, the Company had a $ 2.0 million and $ 5.5 million receivable from the partnerships at September 30, 2025 and December 31, 2024 , respectively.

(6) SUBSEQUENT EVENTS

On October 10, 2025, the Company entered into an agreement with an unaffiliated third-party to sell interests in 155 ( 74.5 net) producing wells in Nacogdoches, San Augustine and Shelby counties Texas, including approximately 36,000 primarily undeveloped net acres, for $ 430 million in cash, subject to adjustment and customary closing conditions.

The properties produced approximately 9.3 MMcf per day of natural gas in September 2025.

The sale is expected to close in the fourth quarter of 2025 and has an effective date of October 1, 2025.

The Company expects to recognize a pre-tax gain from the sale of the unproved property and other property and equipment portion of the divestiture between $ 290 million and $ 310 million.

COMSTOCK RESOURCES, INC.

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.

What changed 10-Q

Item 1. Financial Statements