COMSTOCK RESOURCES INC 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Controls and Procedures. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) are designed to provide reasonable assurance that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. We performed an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2025. The evaluation was performed with the participation of senior management of each business segment and key corporate functions, and under the supervision of the Chief Executive Officer and Chief Financial Officer. Based on our evaluation of our disclosure controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2025 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and to provide reasonable assurance that information required to be disclosed by us is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that materially affected or are reasonably likely to materially affect our internal control over financial reporting. Management's Report on Internal Control over Financial Reporting. We are responsible for establishing and maintaining adequate internal control over financial reporting for the Company. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, we conducted an assessment, including testing, using the criteria in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the "COSO criteria"). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. As of December 31, 2025, we assessed the effectiveness of the Company's internal control over financial reporting based on the COSO criteria, and based on that assessment we determined that the Company maintained effective internal control over financial reporting as of December 31, 2025. Ernst & Young LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of the Company's internal control over financial reporting as of December 31, 2025. The report, which expresses an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2025, follows below. 41 COMSTOCK RESOURCES, INC. Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Comstock Resources, Inc. Opinion on Internal Control over Financial Reporting We have audited Comstock Resources, Inc. and subsidiaries' internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Comstock Resources, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 19, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ ERNST & YOUNG LLP Dallas, Texas February 19, 2026 42 COMSTOCK RESOURCES, INC. ITEM 9B. OTHER INFORMATION None . ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. PAR T III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item is incorporated herein by reference to "Business – Directors and Executive Officers" in this Form 10-K and to our definitive proxy statement which will be filed with the SEC within 120 days after December 31, 2025. Code of Ethics . We have adopted a Code of Business Conduct and Ethics that is applicable to all of our directors, officers and employees as required by New York Stock Exchange rules. We have also adopted a Code of Ethics for Senior Financial Officers that is applicable to our Chief Executive Officer and Senior Financial Officers. Both the Code of Business Conduct and Ethics and Code of Ethics for Senior Financial Officers may be found on our website at www.comstockresources.com. Both of these documents are also available, without charge, to any stockholder upon request to: Comstock Resources, Inc., Attn: Investor Relations, 5300 Town and Country Blvd., Suite 500, Frisco, Texas 75034, (972) 668-8800. We intend to disclose any amendments or waivers to these codes that apply to our Chief Executive Officer and senior financial officers on our website in accordance with applicable SEC rules. Please see the definitive proxy statement for our 2026 annual meeting, which will be filed with the SEC within 120 days of December 31, 2025, for additional information regarding our corporate governance policies. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the SEC within 120 days after December 31, 2025. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table summarizes certain information regarding our equity compensation plans as of December 31, 2025: Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) Number of securities authorized for future issuance under equity compensation plans (excluding outstanding options, warrants and rights) Equity compensation plans approved by stockholders 3,207,832 9,451,616 (1) Represents performance share unit awards that would be issuable based upon achievement of the maximum awards under the terms of the performance share unit awards. We do not have any equity compensation plans that were not approved by stockholders. Further information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the SEC within 120 days after December 31, 2025. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the SEC within 120 days after December 31, 2025. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the SEC within 120 days after December 31, 2025. 43 COMSTOCK RESOURCES, INC. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Financial Statements: 1. The following consolidated financial statements and notes of Comstock Resources, Inc. are included on Pages F-1 to F-25 under Item 83 Financial Statements and Supplementary Data of this Annual report: Report of Independent Registered Public Accounting Firm F- 1 Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 3 Consolidated Statements of Operations For the Years Ended December 31, 2025, 2024 and 2023 F- 4 Consolidated Statements of Stockholders' Equity F- 5 Consolidated Statements of Cash Flows For the Years Ended December 31, 2025, 2024 and 2023 F- 6 Notes to Consolidated Financial Statements F- 7 2. All financial statement schedules are omitted because they are not applicable, or are immaterial or the required information is presented in the consolidated financial statements or the related notes. (b) Exhibits: The exhibits to this Annual Report required to be filed pursuant to Item 15(c) are listed below. Exhibit No. Description 2.1 Contribution Agreement dated May 9, 2018, by and among Arkoma Drilling, L.P., Williston Drilling, L.P. and the Company (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K/A dated May 9, 2018). 2.2 Amendment No. 1 to the Contribution Agreement, dated as of August 14, 2018, by and among Arkoma Drilling, L.P., Williston Drilling, L.P. and the Company (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K dated August 13, 2018). 3.1 Second Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated August 13, 2018). 3.2 Amendment to Second Amended and Restated Articles of Incorporation of the Company, dated July 16, 2019 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated July 15, 2019). 3.3 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated August 21, 2014). 3.4 First Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated August 17, 2018). 3.5 Amendment No. 2 to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K dated July 15, 2019). 4.1 Indenture dated March 4, 2021, by and among the Company, each of the guarantor subsidiaries named therein, and American Stock Transfer & Trust Company, LLC for the 6.75% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated March 4, 2021). 4.2 Indenture dated June 28, 2021, by and among the Company, each of the guarantor subsidiaries named therein, and American Stock Transfer & Trust Company, LLC for the 5.875% Senior Notes due 2030 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated June 28, 2021). 4.3 Indenture dated April 9, 2024, by and among the Company, each of the guarantor subsidiaries named therein, and Equiniti Trust Company, LLC for the 6.75% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated April 9, 2024). 4.4 Shareholders Agreement, dated June 7, 2019, by and among the Company, Arkoma Drilling CP, LLC, Williston Drilling CP, LLC, Arkoma Drilling, L.P., Williston Drilling, L.P., New Covey Park Energy LLC and Jerral W. Jo nes (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated June 10, 2019). 44 COMSTOCK RESOURCES, INC. 4.5* Description of Securities. 10.1 Second Amended and Restated Credit Agreement dated as of November 15, 2022, among the Company, Wells Fargo Bank National Association as Administrative Agent and the lenders party thereto from time to time (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated November 15, 2022). 10.2 First Amendment to Second Amended and Restated Credit Agreement dated as of October 27, 2023, among the Company, Wells Fargo Bank National Association as Administrative Agent and the lenders party thereto from time to time (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023). 10.3 Second Amendment to Second Amended and Restated Credit Agreement dated as of October 30, 2024, among the Company, Wells Fargo Bank National Association as Administrative Agent and the lenders party thereto from time to time (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024). 10.4# Comstock Resources, Inc. 2019 Long-term Incentive Plan Amended and Restated as of April 7, 2025 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated June 3, 2025). 10.5# Employment Agreement dated September 7, 2018 by and between the Company and M. Jay Allison (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated September 7, 2018). 10.6# Employment Agreement dated September 7, 2018 by and between the Company and Roland O. Burns (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated September 7, 2018). 10.7 Amended and Restated Lease between Stonebriar I Office Partners, Ltd. and Comstock Resources, Inc. dated December 22, 2023 (incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K for the year ended December 31, 2023. 19.1 Insider Trading section of our Code of Business Conduct and Ethics (incorporated by reference to Exhibit 19.1 to our Annual Report on Form 10-K for the year ended December 31, 2024). 19.2 Insider Trading sections of our Policy on Compliance with Federal Securities Laws for our Directors and Officers (incorporated by reference to Exhibit 19.2 to our Annual Report on Form 10-K for the year ended December 31, 2024). 21* Subsidiaries of the Company. 23.1* Consent of Ernst & Young LLP. 23.2* Consent of Independent Petroleum Engineers Netherland, Sewell & Associates, Inc. 31.1* Chief Executive Officer certification under Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Chief Financial Officer certification under Section 302 of the Sarbanes-Oxley Act of 2002. 32.1+ Chief Executive Officer certification under Section 906 of the Sarbanes-Oxley Act of 2002. 32.2+ Chief Financial Officer certification under Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Executive Compensation Clawback Policy (as amended and restated) adopted by the Compensation Committee of the Board of Directors of Comstock Resources, Inc., effective as of June 6, 2023 (incorporated by reference to Exhibit 97.1 to our Annual Report on Form 10-K for the year ended December 31, 2023). 99.1* Audit Letter of Netherland, Sewell & Associates, Inc. on Proved Reserves as of December 31, 2025. 101.INS* XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document 104* Cover Page Interactive Data File (embedded within the Inline XBRL document) _______________ * Filed herewith. + Furnished herewith. # Management contract or compensatory plan document. ITEM 16. FORM 10-K SUMMARY Not applicable. 45 COMSTOCK RESOURCES, INC. SIGNA TURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COMSTOCK RESOURCES, INC. By: /s/ M. JAY ALLISON M. Jay Allison Chief Executive Officer Date: February 19, 2026 (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ M. JAY ALLISON Chief Executive Officer and February 19, 2026 M. Jay Allison Chairman of the Board of Directors (Principal Executive Officer) /s/ ROLAND O. BURNS President, Chief Financial Officer, February 19, 2026 Roland O. Burns Secretary and Director (Principal Financial and Accounting Officer) /s/ ELIZABETH B. DAVIS Director February 19, 2026 Elizabeth B. Davis /s/ MORRIS E. FOSTER Director February 19, 2026 Morris E. Foster /s/ JIM L. TURNER Director February 19, 2026 Jim L. Turner 46 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES FINANCIAL STATEMENTS INDEX Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F- 1 Consolidated Balance Sheets as of December 31, 2025 and 2024 F- 3 Consolidated Statements of Operations For the Years Ended December 31, 2025, 2024 and 2023 F- 4 Consolidated Statements of Stockholders' Equity F- 5 Consolidated Statements of Cash Flows For the Years Ended December 31, 2025, 2024 and 2023 F- 6 Notes to Consolidated Financial Statements F- 7 47 REPORT OF INDEPENDEN T REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Comstock Resources, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Comstock Resources, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 19, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Depreciation, Depletion and Amortization of Proved Natural Gas and Oil Properties Description of the Matter At December 31, 2025, the net book value of the Company's proved natural gas and oil properties was $5,445 million, and depreciation, depletion and amortization expense ("DD&A") was $641 million for the year then ended. As described in Note 1 to the consolidated financial statements, the Company follows the successful efforts method of accounting for its natural gas and oil properties. Under this method, the capitalized costs of proved properties are depleted using the unit-of-production method based on proved reserves, as estimated by the Company's engineers. Proved natural gas and oil reserve estimates are impacted by various inputs, including historical production, natural gas and oil price assumptions, and future operating and capital cost assumptions, among others, and requires the expertise of the Company's engineers in evaluating and interpreting the relevant data. Because of the complexity involved in estimating natural gas and oil reserves, management used independent petroleum engineers to audit the estimates prepared by the Company's engineers as of December 31, 2025. F- 1 Auditing the impact of proved natural gas and oil reserves on DD&A is especially complex because of the use of the work of the Company's engineers and the independent petroleum engineers and the evaluation of management's determination of the inputs described above used by the engineers in estimating proved natural gas and oil reserves. How We Addressed the Matter in Our Audit Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's estimates of proved natural gas and oil reserve volumes. The work of management's specialists was used in performing the procedures to evaluate the reasonableness of the proved natural gas and oil reserve volumes. As a basis for using this work, the specialists' qualifications were understood and the Corporation's relationship with the specialists was assessed. The procedures performed also included i) evaluating the methods and assumptions used by the specialists, ii) testing the completeness and accuracy of the data used by the specialists related to historical production volumes, iii) evaluating the specialists' findings related to estimated future production volumes by comparing the estimate to relevant historical and current period information, iv) for proved undeveloped reserves, we evaluated management's development plan for compliance with SEC requirements, as applicable. /s/ ERNST & YOUNG LLP We have served as the Company's auditor since 2003. Dallas, Texas February 19, 2026 F- 2 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, 2025 2024 ASSETS (In thousands) Cash and cash equivalents $ 23,930 $ 6,799 Accounts receivable: Natural gas and oil sales and gas services 203,549 145,398 Joint interest operations 35,400 23,956 From affiliates 3,596 5,492 Derivative financial instruments 19,206 4,865 Other current assets 75,257 97,524 Total current assets 360,938 284,034 Property and equipment: Natural gas and oil properties, successful efforts method: Proved 8,984,969 8,054,250 Unproved 391,065 424,648 Other 386,656 150,023 Accumulated depreciation, depletion and amortization ( 3,547,196 ) ( 2,940,532 ) Net property and equipment 6,215,494 5,688,389 Goodwill 335,897 335,897 Operating lease right-of-use assets 94,733 73,777 $ 7,007,062 $ 6,382,097 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 501,695 $ 421,814 Accrued expenses 153,248 146,173 Operating leases 46,937 35,927 Derivative financial instruments 27,636 8,940 Total current liabilities 729,516 612,854 Long-term debt 2,809,066 2,952,090 Deferred income taxes 437,098 345,116 Derivative financial instruments — 66,757 Long-term operating leases 47,692 37,740 Reserve for future abandonment costs 20,787 33,996 Total liabilities 4,044,159 4,048,553 Commitments and contingencies Stockholders' equity: Common stock—$ 0.50 par, 400,000,000 shares authorized, 293,054,806 and 292,260,645 shares issued and outstanding at December 31, 2025 and 2024, respectively 146,527 146,130 Additional paid-in capital 1,376,053 1,366,274 Accumulated earnings 1,124,230 728,619 Total stockholders' equity attributable to Comstock 2,646,810 2,241,023 Noncontrolling interest 316,093 92,521 Total stockholders' equity 2,962,903 2,333,544 $ 7,007,062 $ 6,382,097 The accompanying notes are an integral part of these statements. F- 3 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STA TEMENTS OF OPERATIONS Year Ended December 31, 2025 2024 2023 (In thousands, except per share amounts) Revenues: Natural gas sales $ 1,425,857 $ 1,043,886 $ 1,259,450 Oil sales 2,292 3,597 5,161 Total natural gas and oil sales 1,428,149 1,047,483 1,264,611 Gas services 500,202 206,097 300,498 Gain on sale of assets 291,938 875 125 Total revenues and other operating income 2,220,289 1,254,455 1,565,234 Operating expenses: Production and ad valorem taxes 40,453 57,437 91,803 Gathering and transportation 166,108 194,890 184,906 Lease operating 122,662 130,504 132,203 Depreciation, depletion and amortization 641,163 795,397 607,908 Gas services 516,224 205,407 282,050 General and administrative, net 48,685 39,435 37,992 Impairment of natural gas and oil properties 29,071 — — Exploration 10,071 — 1,775 Total operating expenses 1,574,437 1,423,070 1,338,637 Operating income (loss) 645,852 ( 168,615 ) 226,597 Other income (expenses): Gain from derivative financial instruments 82,537 10,196 187,639 Other income 3,144 1,211 1,771 Interest expense ( 222,797 ) ( 210,621 ) ( 169,018 ) Total other income (expenses) ( 137,116 ) ( 199,214 ) 20,392 Income (loss) before income taxes 508,736 ( 367,829 ) 246,989 (Provision for) benefit from income taxes ( 88,533 ) 149,075 ( 35,095 ) Net income (loss) 420,203 ( 218,754 ) 211,894 Net income attributable to noncontrolling interest ( 24,592 ) ( 10,897 ) ( 777 ) Net income (loss) available to Comstock $ 395,611 $ ( 229,651 ) $ 211,117 Net income (loss) per share — basic $ 1.43 $ ( 0.76 ) $ 0.76 Net income (loss) per share — diluted $ 1.43 $ ( 0.76 ) $ 0.76 Weighted average shares outstanding: Basic 290,779 287,010 276,806 Diluted 294,131 287,010 276,806 Dividends per share $ — $ — $ 0.500 The accompanying notes are an integral part of these statements. F- 4 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STA TEMENTS OF STOCKHOLDERS' EQUITY Common Shares Common Stock- Par Value Additional Paid-in Capital Accumulated Earnings (Deficit) Noncontrolling Interest Total (In thousands) Balance at December 31, 2022 277,517 $ 138,759 $ 1,253,417 $ 886,138 $ — $ 2,278,314 Stock-based compensation 1,103 550 9,317 — — 9,867 Income tax withholdings on equity awards ( 190 ) ( 95 ) ( 1,804 ) — — ( 1,899 ) Net income — — — 211,117 777 211,894 Payment of common stock dividends — — — ( 138,985 ) — ( 138,985 ) Contributions from noncontrolling interest — — — — 24,000 24,000 Balance at December 31, 2023 278,430 139,214 1,260,930 958,270 24,777 2,383,191 Stock-based compensation 1,622 812 14,449 — — 15,261 Income tax withholdings on equity awards ( 291 ) ( 146 ) ( 3,227 ) — — ( 3,373 ) Issuance of common stock 12,500 6,250 94,200 — — 100,450 Stock issuance costs — — ( 78 ) — — ( 78 ) Net income (loss) — — — ( 229,651 ) 10,897 ( 218,754 ) Contributions from noncontrolling interest — — — — 60,500 60,500 Distributions to noncontrolling interest — — — — ( 3,653 ) ( 3,653 ) Balance at December 31, 2024 292,261 146,130 1,366,274 728,619 92,521 2,333,544 Stock-based compensation 1,255 628 20,594 — — 21,222 Income tax withholdings on equity awards ( 461 ) ( 231 ) ( 10,779 ) — — ( 11,010 ) Stock issuance costs — — ( 36 ) — — ( 36 ) Net income — — — 395,611 24,592 420,203 Contributions from noncontrolling interest — — — — 215,500 215,500 Distributions to noncontrolling interest — — — — ( 16,520 ) ( 16,520 ) Balance at December 31, 2025 293,055 $ 146,527 $ 1,376,053 $ 1,124,230 $ 316,093 $ 2,962,903 The accompanying notes are an integral part of these statements. F- 5 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2025 2024 2023 (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 420,203 $ ( 218,754 ) $ 211,894 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Deferred income taxes 91,982 ( 124,919 ) 44,301 Impairment of natural gas and oil properties 29,071 — — Gain on sale of assets ( 291,938 ) ( 875 ) ( 125 ) Depreciation, depletion and amortization 641,163 795,397 607,908 Gain on derivative financial instruments ( 82,537 ) ( 10,196 ) ( 187,639 ) Cash settlements of derivative financial instruments 20,135 207,803 80,328 Amortization of debt discount, premium and issuance costs 11,976 11,476 7,964 Stock-based compensation 21,222 15,261 9,867 (Increase) decrease in accounts receivable ( 60,496 ) 56,584 278,697 (Increase) decrease in other current assets 17,518 ( 22,893 ) 745 Increase (decrease) in accounts payable and accrued expenses 81,308 ( 88,547 ) ( 37,094 ) Net cash provided by operating activities 899,607 620,337 1,016,846 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 1,349,280 ) ( 1,097,478 ) ( 1,425,086 ) Prepaid drilling costs 5,002 11,988 ( 34,010 ) Proceeds from sales of assets 428,868 1,214 41,295 Net cash used for investing activities ( 915,410 ) ( 1,084,276 ) ( 1,417,801 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings on bank credit facility 750,000 645,000 820,000 Repayments on bank credit facility ( 905,000 ) ( 710,000 ) ( 340,000 ) Issuance of Senior Notes — 372,000 — Issuance of common stock — 100,450 — Debt and stock issuance costs ( 36 ) ( 6,855 ) ( 144 ) Income tax withholdings on equity awards ( 11,010 ) ( 3,373 ) ( 1,899 ) Common stock dividends paid — — ( 138,985 ) Contributions from noncontrolling interest 215,500 60,500 24,000 Distributions to noncontrolling interest ( 16,520 ) ( 3,653 ) — Net cash provided by financing activities 32,934 454,069 362,972 Net increase (decrease) in cash and cash equivalents 17,131 ( 9,870 ) ( 37,983 ) Cash and cash equivalents, beginning of the year 6,799 16,669 54,652 Cash and cash equivalents, end of the year $ 23,930 $ 6,799 $ 16,669 The accompanying notes are an integral part of these statements. F- 6 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSO LIDATED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies Accounting policies used by Comstock Resources, Inc. and subsidiaries reflect natural gas and oil industry practices and conform to accounting principles generally accepted in the United States of America. Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of Comstock Resources, Inc., its wholly owned or controlled subsidiaries and a variable interest entity for which Comstock is the primary beneficiary (collectively, "Comstock" or the "Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company accounts for its undivided interest in natural gas and oil properties using the proportionate consolidation method, whereby its share of assets, liabilities, revenues and expenses are included in its financial statements. Net income (loss) and comprehensive income (loss) are the same in all periods presented. All adjustments are of a normal recurring nature unless otherwise disclosed. Certain amounts in prior period footnote disclosures have been reclassified to conform with current period presentation. Comstock entered into an agreement with an affiliate of Quantum Capital Solutions ("Quantum"), in 2023 to form Pinnacle Gas Services, LLC ("PGS"), a midstream company in Comstock's Western Haynesville area. As part of the transaction, Comstock contributed a high-pressure pipeline and a natural gas treating plant. Quantum committed to contribute up to $ 300 million to fund future expansion costs. Quantum is entitled to a 12 % dividend on its invested capital and 80 % of any distributions from Pinnacle until an investment return hurdle is met. After the return hurdle is met, Quantum's ownership reduces to 30 %. Comstock operates and manages PGS pursuant to a management services agreement. The Board of PGS is comprised of five members: three selected by Comstock and two selected by Quantum. PGS is considered a variable interest entity to Comstock. Comstock has the power to direct the activities that most significantly impact the performance of PGS and has the obligation to absorb losses or right to receive benefits that could potentially be significant to PGS. 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 include $ 363.9 million of other property and equipment as of December 31, 2025 . 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. The portion of PGS net income and stockholders' equity not attributable to Comstock's controlling interest are shown separately as noncontrolling interests in the accompanying consolidated statements of operations and statements of stockholders' equity. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Changes in the future estimated natural gas and oil reserves or the estimated future cash flows attributable to the reserves that are utilized for impairment analyses could have a significant impact on the future results of operations. Concentration of Credit Risk, Accounts Receivable and Credit Losses Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents, accounts receivable and derivative financial instruments. The Company places its cash with high credit quality financial institutions and its derivative financial instruments with financial institutions and other firms that management believes have high credit ratings. Substantially all of the Company's accounts receivable are due from either purchasers of natural gas and oil or participants in natural gas and oil wells for which the Company serves as the operator. Generally, operators of natural gas and oil wells have the right to offset future revenues against unpaid charges related to operated wells. Natural gas and oil sales are generally unsecured. The Company's policy is to assess the collectability of its receivables based upon their age, the credit quality of the purchaser or participant and the potential for revenue offset. 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 years ended December 31, 2025, 2024 and 2023 , respectively. F- 7 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other Current Assets Other current assets at December 31, 2025 and 2024 consist of the following: As of December 31, 2025 2024 (In thousands) Prepaid drilling costs $ 53,134 $ 58,136 Other receivables 9,929 4,140 Production tax refunds receivable 5,827 4,074 Income tax receivable 3,024 28,813 Prepaid expenses 2,968 2,361 Other 375 — $ 75,257 $ 97,524 Fair Value Measurements The Company holds or has held certain financial assets and liabilities that are required to be measured at fair value in the financial statements. These include cash and cash equivalents held in bank accounts and derivative financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements: Level 1 — Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Level 2 — Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument. Level 3 — Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions. The following presents the carrying amounts and the fair values of the Company's financial instruments as of December 31, 2025 and 2024: As of December 31, 2025 2024 Carrying Value Fair Value Carrying Value Fair Value Assets: (In thousands) Commodity-based derivatives (1) $ 19,206 $ 19,206 $ 4,865 $ 4,865 Liabilities: Commodity-based derivatives (1) 27,636 27,636 75,697 75,697 Bank credit facility (2) 260,000 260,000 415,000 415,000 6.75 % senior notes due 2029 (3) 1,607,880 1,603,582 1,603,679 1,581,283 5.875 % senior notes due 2030 (3) 965,000 931,225 965,000 899,863 (1) The Company's commodity-based derivatives are classified as Level 2 and measured at fair value using a market approach using third party pricing services and other active markets or broker quotes that are readily available in the public markets. (2) The carrying value of our floating rate debt outstanding approximates fair value. (3) The fair value of the Company's fixed rate debt was based on quoted prices as of December 31, 2025 and 2024 , respectively, a Level 1 measurement. F- 8 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Property and Equipment The Company follows the successful efforts method of accounting for its natural gas and oil properties. Costs incurred to acquire natural gas and oil leasehold are capitalized. Acquisition costs for proved natural gas and oil properties, costs of drilling and equipping productive wells, and costs of unsuccessful development wells are capitalized and amortized on an equivalent unit-of-production basis over the life of the remaining related natural gas and oil reserves. Equivalent units are determined by converting oil to natural gas at the ratio of one barrel of oil for six thousand cubic feet of natural gas. This conversion ratio is not based on the price of oil or natural gas, and there may be a significant difference in price between an equivalent volume of oil versus natural gas. Exploratory well costs are initially capitalized as proved property in the consolidated balance sheets but charged to exploration expense if and when the well is determined not to have found commercial proved natural gas and oil reserves. The changes in capitalized exploratory well costs are as follows: Year Ended December 31, 2025 2024 (in thousands) Beginning capitalized exploratory project costs $ 68,223 $ 96,233 Additions to exploratory well costs pending the determination of proved reserves 490,429 354,557 Determined to have found proved reserves ( 348,525 ) ( 382,567 ) Ending capitalized exploratory well costs $ 210,127 $ 68,223 As of December 31, 2025 and 2024, the Company had no exploratory wells for which costs have been capitalized greater than one year. The estimated future costs of dismantlement, restoration, plugging and abandonment of natural gas and oil properties and related facilities disposal are capitalized when asset retirement obligations are incurred and amortized as part of depreciation, depletion and amortization expense. Exploration expense includes geological and geophysical expenses and delay rentals related to exploratory natural gas and oil properties, costs of unsuccessful exploratory drilling and impairments of unproved properties. As of December 31, 2025 and 2024, the unproved properties primarily relate to future drilling locations that were not included in proved undeveloped reserves. Most of these future drilling locations are located on acreage where the reservoir is known to be productive but have been excluded from proved reserves due to uncertainty on whether the wells would be drilled within the next five years as required by SEC rules in order to be included in proved reserves. The costs of unproved properties are transferred to proved natural gas and oil properties when they are either drilled or they are reflected in proved undeveloped reserves and amortized on an equivalent unit-of-production basis. Costs associated with unevaluated exploratory acreage are periodically assessed for impairment on a property by property basis, and any impairment in value is included in exploration expense. Exploratory drilling costs are initially capitalized as proved property but charged to expense if and when the well is determined not to have found commercial proved natural gas and oil reserves. Exploratory drilling costs are evaluated within a one-year period after the completion of drilling. The Company assesses the need for an impairment of the costs capitalized for its proved natural gas and oil properties when events or changes in circumstances, such as a significant drop in commodity prices, indicate that the Company may not be able to recover its capitalized costs. If impairment is indicated based on undiscounted expected future cash flows attributable to the property, then a provision for impairment is recognized to the extent that net capitalized costs exceed the estimated fair value of the property. The Company determines the fair values of its natural gas and oil properties using a discounted cash flow model and proved and risk-adjusted probable reserves. Significant Level 3 assumptions associated with the calculation of discounted future cash flows included in the cash flow model include management's outlook for natural gas and oil prices, future natural gas and oil production, production costs, capital expenditures, and the total proved and risk-adjusted probable natural gas and oil reserves expected to be recovered. Management's natural gas and oil price outlook is developed based on multiple third-party longer-term price forecasts as of each measurement date. The expected future net cash flows are discounted using an appropriate discount rate in determining a property's fair value. The natural gas and oil prices used for determining asset impairments will generally differ from those used in the standardized measure of discounted future net cash flows because the standardized measure requires the use of an average price based on the first day of each month of the preceding year. Unproved properties are evaluated for impairment based upon the results of drilling, planned future drilling and the terms of the natural gas and oil leases. In the fourth quarter of 2025, the Company measured the fair value of its Eagle Ford shale proved property using Level 3 unobservable inputs at $ 1.2 million and as a result, the Company recognized an impairment charge of $ 7.8 million. Comstock also recognized an impairment charge to its Eagle Ford shale unproved property of $ 21.3 million. This F- 9 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS charge primarily resulted from diminished activity in the area on its leasehold acreage by operators, low oil prices and the Company's capital allocation strategy, which prioritizes higher-return projects in the Haynesville and Bossier shales. The Company's estimates of undiscounted future net cash flows attributable to its natural gas and oil properties may change in the future. The primary factors that may affect estimates of future cash flows include future adjustments, both positive and negative, to proved and appropriate risk-adjusted probable natural gas and oil reserves, results of future drilling activities, future prices for natural gas and oil, and increases or decreases in production and capital costs. As a result of these changes, there may be future impairments in the carrying values of our natural gas and oil properties. Other property and equipment consists primarily of pipelines and natural gas treating plants ("midstream assets"), computer equipment, furniture and fixtures, office buildings and an airplane which are depreciated over estimated useful lives ranging from three to 50 years on a straight-line basis. The following table presents the balances of other property and equipment and accumulated depreciation as of December 31, 2025 and 2024: As of December 31, 2025 2024 (in thousands) Midstream assets $ 363,855 $ 140,263 Accumulated depreciation ( 4,914 ) ( 1,976 ) Net midstream assets 358,941 138,287 Other property and equipment 22,801 9,760 Accumulated depreciation ( 1,982 ) ( 3,063 ) Net other property and equipment 20,819 6,697 Total $ 379,760 $ 144,984 The Company also assesses the need for an impairment of its midstream assets when events or changes in circumstances, such as a significant decline in natural gas volumes gathered and processed, indicate that the Company may not be able to recover its capitalized costs. If impairment is indicated based on undiscounted expected future cash flows attributable to the pipelines and natural gas treating plants, then impairment is recognized to the extent the capitalized costs of the pipelines and natural gas treating plants exceed their estimated fair value. Significant Level 3 assumptions associated with the calculation of discounted future cash flows included in the cash flow model include management's outlook for future natural gas gathering and processing volumes, operation costs and capital expenditures and the expected future net cash flows are discounted at an appropriate rate to determine fair value. Goodwill The Company had goodwill of $ 335.9 million as of December 31, 2025 and 2024. Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets in a business combination. The Company is required to conduct an annual review of goodwill for impairment and performs the assessment of goodwill on October 1st of each year. If the carrying value of goodwill exceeds the fair value, an impairment charge would be recorded for the difference between fair value and carrying value. The Company performed its assessment of goodwill as of October 1, 2025 and determined there was no indication of impairment. Leases The Company had right-of-use lease assets of $ 94.7 million and $ 73.8 million as of December 31, 2025 and 2024, respectively, related to its corporate office lease, certain office equipment, vehicles and drilling rigs with corresponding short-term and long-term liabilities. The value of the lease assets and liabilities are determined based upon discounted future minimum cash flows contained within each of the respective contracts, including the effects of early termination provisions. The Company determines if contracts contain a lease at inception of the contract. Since most of the Company's lease contracts do not provide an implicit discount rate, the Company uses its incremental borrowing rate at the commencement date of the lease. To the extent that contract terms representing a lease are identified, leases are identified as being either an operating lease or a finance-type lease. Comstock currently has no finance-type leases. Right-of-use lease assets represent the Company's right to use an underlying asset for the lease term and the related lease liabilities represent its 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; however, F- 10 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS amounts paid for those leases are included as part of its lease cost disclosures. Short-term lease costs exclude expenses related to leases with a lease term of one month or less. Comstock contracts for a variety of equipment used in its natural gas and oil exploration and development operations. Contract terms for this equipment vary broadly, including the contract duration, pricing, scope of services included along with the equipment, cancellation terms, and rights of substitution, among others. The Company's drilling and completion operations routinely change due to changes in commodity prices, demand for natural gas and oil, and the overall operating and economic environment. Accordingly, Comstock manages the terms of its contracts for drilling rigs and completion equipment so as to allow for maximum flexibility in responding to these changing conditions. The Company's hydraulic fracturing fleet contracts are on terms of less than one year and include rights of substitution. As of December 31, 2025 , the Company had four drilling rig lease contracts with a three-year term with options to extend the term by mutual agreement at mutually acceptable terms or terminate the contracts at any time without default by the lessor. 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 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 our proved natural gas and oil properties on our balance sheet unless they are incurred on exploration wells that are unsuccessful, in which case they are charged to exploration expense. For drilling rig leases, the Company has elected the practical expedient to not separate lease components from non-lease components in the determination of their lease asset and liability values. Lease costs recognized during the years ended December 31, 2025, 2024 and 2023 were as follows: Year Ended December 31, 2025 2024 2023 (In thousands) Operating lease cost included in general and administrative expense $ 1,700 $ 1,686 $ 1,768 Operating lease cost included in lease operating expense 2,326 2,208 2,060 Operating lease cost included in proved natural gas and oil properties 48,321 34,644 56,755 Variable lease cost (drilling and completion costs included in proved natural gas and oil properties) 8,221 2,555 28,406 Short-term lease cost (drilling costs included in proved natural gas and oil properties) 31,160 26,276 89,163 $ 91,728 $ 67,369 $ 178,152 Cash payments for operating leases associated with right-of-use assets included in cash provided by operating activities were $ 4.0 million , $ 3.9 million and $ 3.8 million for the years ended December 31, 2025, 2024 and 2023, respectively. Cash payments for operating leases associated with right-of-use assets included in cash used for investing activities were $ 87.7 million , $ 63.5 million and $ 174.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, the operating leases had a weighted average remaining term of 2.4 years and 2.0 years, respectively, and the weighted-average discount rate used to determine the present value of future operating lease payments was 6.8 % and 7.3 % , respectively. As of December 31, 2025, expected future payments related to contracts that contain operating leases were as follows: (In thousands) 2026 $ 51,848 2027 29,113 2028 14,470 2029 7,430 Total lease payments 102,861 Imputed interest ( 8,232 ) Total lease liability $ 94,629 Accrued Expenses Accrued expenses at December 31, 2025 and 2024 consist of the following: F- 11 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2025 2024 (In thousands) Accrued interest payable $ 64,042 $ 64,041 Accrued drilling costs 36,148 34,493 Accrued transportation costs 28,304 28,031 Accrued employee compensation 14,926 14,076 Accrued income and other taxes 4,000 1,350 Accrued lease operating expenses 3,744 2,630 Other 2,084 1,552 $ 153,248 $ 146,173 Reserve for Future Abandonment Costs The Company's asset retirement obligations relate to future plugging and abandonment costs of its natural gas and oil properties and related facilities disposal. The Company records a liability in the period in which an asset retirement obligation is incurred, in an amount equal to the estimated fair value of the obligation that is capitalized. Thereafter, this liability is accreted up to the final retirement cost. Accretion of the discount is included as part of depreciation, depletion and amortization in the accompanying consolidated statements of operations. The following table summarizes the changes in the Company's total estimated liability: Year Ended December 31, 2025 2024 (In thousands) Reserve for future abandonment costs at beginning of the year $ 33,996 $ 30,773 New wells placed on production 193 136 Changes in estimates and timing 484 1,497 Liabilities settled ( 155 ) ( 40 ) Divestitures ( 15,471 ) ( 157 ) Accretion expense 1,740 1,787 Reserve for future abandonment costs at end of the year $ 20,787 $ 33,996 Stock-based Compensation The Company has stock-based employee compensation plans under which stock awards, comprised primarily of restricted stock and performance share units ("PSUs"), are issued to employees and non-employee directors. The Company follows the fair value-based method in accounting for equity-based compensation. Under the fair value based method, compensation cost is measured at the grant date based on the fair value of the award and is recognized on a straight-line basis over the award vesting period. Forfeitures are recognized as they occur. Segment Reporting The Company presently operates in one business segment, the exploration and production of North American natural gas and oil, primarily in the Haynesville and Bossier shale. This is consistent with the internal reporting provided to the Company's Chief Executive Officer , who is the chief operating decision maker ("CODM"). The CODM evaluates the performance of the Company and allocates resources based on consolidated financial information. The measure of segment profit or loss used by the CODM is consolidated net income, which is provided in the accompanying consolidated statements of operations. The significant segment expenses regularly provided to the CODM are operating expenses and certain significant non-operating items, such as gains or losses from derivative financial instruments, interest expense and income tax expense. These items are also detailed in the accompanying consolidated statements of operations. Derivative Financial Instruments and Hedging Activities F- 12 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company accounts for derivative financial instruments (including derivative instruments embedded in other contracts) as either an asset or liability measured at its fair value. Changes in the fair value of derivatives are recognized currently in earnings and in net cash flows from operating activities. The fair value of derivative contracts that expire in less than one year are recognized as current assets or liabilities. Those that expire in more than one year are recognized as long-term assets or liabilities. Major Purchasers In 2025, the Company had three major purchasers of its natural gas production that accounted for 18 % , 11 % and 10 % of its total natural gas and oil sales. In 2024 , the Company had two major purchasers of its natural gas production that accounted for 21 % and 12 % of its total natural gas and oil sales. In 2023 , the Company had three major purchasers of its natural gas production that accounted for 20 % , 17 % and 10 % of its total natural gas and oil sales. The loss of any of these purchasers would not have a material adverse effect on the Company as there is an available market for its natural gas and oil production from other purchasers. Revenue Recognition and Gas Balancing Comstock produces natural gas and oil and reports revenues separately for each of these two primary products in its statements of operations. Revenues are recognized upon the transfer of produced volumes to the Company's customers, who take control of the volumes and receive all the benefits of ownership upon delivery at designated sales points. Costs incurred to gather or transport each product prior to the transfer of control are recognized as operating expenses. Gas services revenues represent sales of natural gas purchased for resale from unaffiliated third parties and fees received for gathering and treating services provided by PGS to third parties. Revenues are recognized upon completion of the gathering and treating of contracted natural gas volumes and delivery of purchased natural gas volumes to the Company's customers. Profits and losses earned in the gathering and treating of natural gas produced by the Company's natural gas wells are eliminated in consolidation. Revenues and expenses associated with natural gas purchased for resale are presented on a gross basis in the Company's consolidated statements of operations as the Company acts as the principal in the transaction by assuming the risks and rewards from ownership of the natural gas volumes purchased and the responsibility to deliver the natural gas volumes to their sales point. All natural gas and oil and gas services revenues are subject to contracts that have commercial substance, contain specific pricing terms, and define the enforceable rights and obligations of both parties. These contracts typically provide for cash settlement within 25 days following each production month and are cancellable upon 30 days' notice by either party for oil and vary for natural gas based upon the terms set out in the confirmations between both parties. Prices for sales of natural gas and oil are generally based upon terms that are common in the natural gas and oil industry, including index or spot prices, location and quality differentials, as well as market supply and demand conditions. As a result, prices for natural gas and oil routinely fluctuate based on changes in these factors. Prices for gathering and treating services are generally fixed in nature but can vary due to the quality of the gas being treated. Each unit of production (thousand cubic feet of natural gas and barrel of crude oil ) represents a separate performance obligation under the Company's contracts since each unit has economic benefit on its own and each is priced separately according to the terms of the contracts. Comstock has elected to exclude all taxes from the measurement of transaction prices, and its natural gas and oil revenues are reported net of royalties and exclude revenue interests owned by others because the Company acts as an agent when selling natural gas and oil, on behalf of royalty owners and working interest owners. Natural gas and oil sales revenue is recorded in the month of production based on an estimate of the Company's share of volumes produced and prices realized. Gas services revenue is recorded in the month the services are performed and purchased gas is sold based on an estimate of natural gas volumes and contract prices. The Company recognizes any differences between estimates and actual amounts received in the month when payment is received. Historically, differences between estimated revenues and actual revenues received have not been significant. 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 December 31, 2025 or 2024. The Company has recognized accounts receivable of $ 203.5 million and $ 145.4 million as of December 31, 2025 and 2024 , respectively, from customers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists. F- 13 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS General and Administrative Expenses General and administrative expenses are reported net of reimbursements of overhead costs that are received from working interest owners of the natural gas and oil properties operated by the Company of $ 30.5 million , $ 30.7 million and $ 29.7 million for the years ended December 31, 2025, 2024 and 2023 , respectively. Income Taxes The Company accounts for income taxes using the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis, as well as the tax consequences attributable to the future utilization of existing net operating loss and other carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that the change in rate is enacted. 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 December 31, 2025 and 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 shareholders. Weighted average shares of unvested restricted stock outstanding were as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Unvested restricted stock 2,145 2,187 1,248 PSUs represent the right to receive a number of shares of the Company's common stock that may range from zero to up to two times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the performance period. The treasury stock method is used to measure the dilutive effect of PSUs. Year Ended December 31, 2025 2024 2023 (In thousands, except per unit amounts) Weighted average PSUs 1,479 1,272 662 Weighted average grant date fair value per unit $ 19.46 $ 13.21 $ 15.92 None of the Company's participating securities participate in losses and as such are excluded from the computation of basic earnings per share during periods of net losses. For the year ended December 31, 2023, the weighted average shares of unvested restricted stock and PSUs were excluded from the computation of earnings per share because to include them would have been antidilutive to the calculation. F- 14 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Basic and diluted income (loss) per share were determined as follows: Year Ended December 31, 2025 2024 2023 (In thousands, except per share amounts) Net income (loss) $ 420,203 $ ( 218,754 ) $ 211,894 Income allocable to unvested restricted stock ( 3,077 ) — ( 327 ) Basic net income (loss) $ 417,126 $ ( 218,754 ) $ 211,567 Income allocable to unvested restricted stock 3,077 — — Diluted net income (loss) $ 420,203 $ ( 218,754 ) $ 211,567 Basic weighted average shares outstanding 290,779 287,010 276,806 Effect of dilutive securities: PSUs 2,170 — — Restricted stock 1,182 — — Diluted weighted average shares outstanding 294,131 287,010 276,806 Basic income (loss) per share $ 1.43 $ ( 0.76 ) $ 0.76 Diluted income (loss) per share $ 1.43 $ ( 0.76 ) $ 0.76 Supplementary Information with Respect to the Consolidated Statements of Cash Flows For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash payments made for interest and income taxes and other non-cash investing and financing activities were as follows: Year Ended December 31, 2025 2024 2023 (In thousands) Cash payments for: Interest $ 210,820 $ 190,016 $ 161,009 Income tax payments (refunds): Federal $ ( 31,000 ) $ — $ 24,700 State (1) $ — $ 37 $ 5,083 Non-cash investing activities include: Increase (decrease) in accrued capital expenditures $ 1,655 $ ( 1,383 ) $ ( 18,562 ) Liabilities assumed in exchange for right-of-use lease assets $ 67,179 $ 34,668 $ 195,402 (1) State tax payments were made in Texas and Louisiana. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures". ASU 2023-09 requires additional disclosures around effective tax rates and cash income taxes paid and is effective for public entities for annual periods beginning after December 15, 2024. ASU 2023-09 was implemented retrospectively in this 2025 Annual Report. See (9) Income Taxes for the impact on the Company's disclosures. In November 2024, the FASB issued ASU 2024-03 "Disaggregation of Income Statement Expenses". ASU 2024-03 requires additional disclosure, in the notes to the financial statements, of specified information about certain costs and expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and depreciation, depletion and amortization recognized as part of oil and gas-producing activities included in each relevant expense caption. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 and will not have an impact on the Company's reported results of operations, financial position or liquidity but will have an impact on the Company's financial statement disclosures. The Company is still evaluating the impact of this standard on its financial statement disclosures. F- 15 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (2) Acquisitions and Dispositions of Natural Gas and Oil Properties Acquisitions During 2025, 2024 and 2023, the Company spent $ 54.7 million , $ 106.4 million and $ 98.6 million on its leasing program to acquire 17,856 , 265,290 and 79,741 net acres, respectively, of undeveloped acreage in the Western Haynesville area through direct leasing or through acquisitions of undeveloped rights from third-party operators. Dispositions On December 2, 2025, the Company sold its interest in its Shelby Trough assets in East Texas for net proceeds of $ 417.2 million. The assets sold included 163 ( 74.8 net) producing wells and 36,000 net leasehold acres in Nacogdoches, San Augustine and Sabine counties in Texas. The Company realized a $ 292.3 million pre-tax gain on the sale of the unproved property. The producing wells and associated proved undeveloped reserves were valued at $ 120.5 million and recorded as a retirement of the Company's proved property. The Company's reserve for future abandonment costs was reduced by $ 1.7 million as a result of the divestiture. On September 2, 2025, the Company sold its interest in its Cotton Valley assets in East Texas and North Louisiana for net proceeds of $ 15.2 million. The assets sold included the Company's interest in 883 ( 770.9 net) producing wells and 46 ( 27.3 net) inactive wells. The Company incurred a $ 1.5 million pre-tax loss on the divestiture and the Company's reserve for future abandonment costs was reduced by $ 13.8 million. The Company sold its interests in certain non-operated natural gas and oil properties for $ 1.2 million and $ 41.3 million in 2024 and 2023, respectively. (3) Natural Gas and Oil Producing Activities Set forth below is certain information regarding the aggregate capitalized costs of natural gas and oil properties and costs incurred by the Company for its natural gas and oil property acquisition, development and exploration activities: Capitalized Costs As of December 31, 2025 2024 (In thousands) Proved properties: Leasehold costs $ 3,194,699 $ 3,244,996 Wells and related equipment and facilities 5,790,270 4,809,254 Accumulated depreciation depletion and amortization ( 3,540,300 ) ( 2,935,493 ) 5,444,669 5,118,757 Unproved properties 391,065 424,648 $ 5,835,734 $ 5,543,405 Costs Incurred Year Ended December 31, 2025 2024 2023 (In thousands) Property acquisitions: Unproved property $ 54,670 $ 106,386 $ 98,553 Exploration and development: Developmental leasehold costs 14,562 13,461 27,905 Exploratory drilling and completion costs 490,429 354,557 244,129 Development drilling and completion costs 517,375 503,550 974,664 Other development costs 32,493 30,500 25,130 Asset retirement obligations 444 1,594 ( 19 ) Total capital expenditures $ 1,109,973 $ 1,010,048 $ 1,370,362 F- 16 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (4) Long-term Debt Long-term debt is comprised of the following: As of December 31, 2025 2024 (In thousands) Bank Credit Facility $ 260,000 $ 415,000 6.75 % Senior Notes due 2029: Principal 1,623,880 1,623,880 Discount, net of amortization ( 16,000 ) ( 20,201 ) 5.875 % Senior Notes due 2030: Principal 965,000 965,000 Debt issuance costs, net of amortization ( 23,814 ) ( 31,589 ) $ 2,809,066 $ 2,952,090 The discount and premium on the 6.75 % senior notes due 2029 are being amortized over its life using the effective interest rate method. Debt issuance costs are amortized over the lives of the bank credit facility and senior notes on a straight-line basis which approximates the amortization that would be calculated using an effective interest rate method. The following table summarizes Comstock's principal amount of debt as of December 31, 2025 by year of maturity: 2026 2027 2028 2029 2030 Total (In thousands) Bank Credit Facility $ — $ 260,000 $ — $ — $ — $ 260,000 6.75 % Senior Notes due 2029 — — — 1,623,880 — 1,623,880 5.875 % Senior Notes due 2030 — — — — 965,000 965,000 $ — $ 260,000 $ — $ 1,623,880 $ 965,000 $ 2,848,880 As of December 31, 2025, the Company had $ 260.0 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 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 restricted subsidiaries and bear interest at the Company's option, at either adjusted SOFR plus 2.25 % to 3.25 % or an alternate base rate plus 1.25 % to 2.25 %, in each case depending on the unused portion of the committed 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 weighted average interest rate on borrowings under the bank credit facility were 6.76 % and 7.32 % during the years ended December 31, 2025 and 2024, respectively. The bank credit facility places certain restrictions upon the Company's and its restricted 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 3.5 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 December 31, 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, 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. F- 17 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (5) Commitments and Contingencies The Company has drilling rig contracts with terms ranging from less than one year to three years . The service contracts with terms less than one year are generally for terms ranging from 30 to 45 days. The Company has four drilling rigs under contract with initial terms of three years that were put into service in 2023, 2024 and 2025 . These four rigs qualify as operating leases and their corresponding lease obligation is reflected on the Company's balance sheet as of December 31, 2025. In 2025, the Company took delivery of one additional drilling rig with a one-year term, which has a remaining commitment of $ 3.2 million. The Company has natural gas transportation and gathering contracts which extend to 2035. Commitments under these contracts are $ 85.4 million for 2026, $ 84.2 million for 2027, $ 79.3 million for 2028, $ 67.6 million for 2029, $ 27.7 million for 2030 and $ 58.9 million for 2031 through 2035. During the years ended December 31, 2025, 2024 and 2023, expenditures under these contracts totaled $ 86.3 million , $ 92.8 million and $ 96.5 million , respectively. From time to time, the Company is involved in certain litigation that arise in the normal course of its operations. 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 adverse effect on the Company's financial position, results of operations or cash flows and no material amounts are accrued relative to these matters at December 31, 2025 or 2024 . (6) Stockholders' Equity The authorized capital of the Company is 405,000,000 shares, of which 400,000,000 shares are common stock, $ 0.50 par value per share, and 5,000,000 are preferred stock, $ 10.00 par value per share. In March 2024, the Company issued 12,500,000 shares of common stock in a private placement to two entities controlled by Comstock's majority stockholder, receiving proceeds of $ 100.5 million. Following the issuance, Comstock's majority stockholder's beneficial ownership in the Company increased to 67 %. As a result of open market purchases made by the Company's majority stockholder during the third quarter of 2024, beneficial ownership increased to 71 %. (7) Stock-based Compensation The Company grants restricted shares of common stock and PSUs to key employees and directors as part of their compensation. Grants are made pursuant to the Company's 2019 Long-term Incentive Plan (the "2019 Plan"), which was approved by the Company's shareholders on May 31, 2019. Future authorized equity awards available under the 2019 Plan as of December 31, 2025 were 9,451,616 shares of common stock. Stock-based compensation expense is included in general and administrative expenses. During the years ended December 31, 2025, 2024 and 2023 the Company had $ 21.2 million , $ 15.3 million and $ 9.9 million , respectively, in stock-based compensation expense. Restricted Stock The fair value of restricted stock grants is amortized over the vesting period, generally one year to three years , using the straight-line method. The fair value of each restricted share on the date of grant is equal to the market price of a share of the Company's stock. A summary of restricted stock activity is presented below: Number of Restricted Shares Weighted Average Grant Price Outstanding at January 1, 2025 2,091,087 $ 9.25 Granted 840,783 $ 18.18 Vested ( 962,854 ) $ 10.53 Forfeitures ( 11,635 ) $ 12.25 Outstanding at December 31, 2025 1,957,381 $ 12.44 F- 18 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2025 2024 2023 (In thousands, except per share data) Fair value of vested restricted stock $ 22,126 $ 7,536 $ 4,241 Grant date weighted average fair value $ 18.18 $ 7.78 $ 9.80 Compensation expense recognized for restricted stock grants $ 12,507 $ 9,884 $ 6,519 Unrecognized compensation expense related to unvested shares $ 15,389 Expected recognition period 1.7 years Performance Share Units The Company issues PSUs as part of its long-term equity incentive compensation. PSU awards can result in the issuance of common stock to the holder if certain performance criteria are met during a performance period. The performance periods consist of three years . The performance criteria for the PSUs are based on the Company's annualized total stockholder return ("TSR") for the performance period as compared with the TSR of certain peer companies for the performance period. The costs associated with PSUs are recognized as general and administrative expense over the performance periods of the awards. The fair value of PSUs was measured at the grant date using the Geometric Brownian Motion Model. Significant assumptions used in this simulation include the Company's expected volatility and a risk-free interest rate based on U.S. Treasury yield curve rates with maturities consistent with the vesting periods, as well as the volatilities for each of the Company's peers. Assumptions regarding volatility included the historical volatility of each company's stock and the implied volatilities of publicly traded stock options. Significant assumptions used to value PSUs included: Year Ended December 31, 2025 2024 2023 Risk free interest rate 3.9 % 4.4 % 4.2 % Range of implied volatility: Minimum 29 % 33 % 38 % Maximum 55 % 58 % 68 % A summary of PSU activity is presented below: Number of PSUs Weighted Average Grant Price Outstanding at January 1, 2025 1,290,755 $ 13.21 Granted 529,670 $ 36.77 Earned ( 216,509 ) $ 24.50 Outstanding at December 31, 2025 1,603,916 $ 19.46 Year Ended December 31, 2025 2024 2023 (In thousands, except per unit data) Number of PSUs granted 530 706 391 Grant date fair value $ 19,476 $ 6,837 $ 4,906 Grant date fair value per unit $ 36.77 $ 9.69 $ 13.64 Compensation expense recognized for PSUs $ 8,716 $ 5,375 $ 3,348 Unrecognized compensation expense related to unvested shares $ 19,105 Expected recognition period 2.0 years The fair value of PSUs is amortized over the vesting period of three years , using the straight-line method. The final number of shares of common stock issued may vary depending upon the performance multiplier and can result in the issuance of zero to 3,207,832 shares of common stock based on the achieved performance ranges from zero to two hundred percent. F- 19 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (8) Retirement Plan The Company has a 401(k) profit sharing plan which covers all of its employees. At its discretion, Comstock may match the employees' contributions to the plan. Matching contributions to the plan were approximately $ 2.2 million , $ 2.1 million and $ 1.9 million for the years ended December 31, 2025, 2024 and 2023 , respectively. (9) Income Taxes 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. The following is an analysis of the consolidated income tax provision (benefit): Year Ended December 31, 2025 2024 2023 (In thousands) Current - Federal $ ( 3,449 ) $ ( 24,200 ) $ ( 4,570 ) Current - State — 44 ( 4,636 ) Deferred - Federal 94,461 ( 88,001 ) 52,520 Deferred - State ( 2,479 ) ( 36,918 ) ( 8,219 ) $ 88,533 $ ( 149,075 ) $ 35,095 In recording deferred income tax assets, the Company considers whether it is more likely than not that its deferred income tax assets will be realized in the future. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible. The Company believes that after considering all the available objective evidence, historical and prospective, with greater weight given to historical evidence, management is not able to determine that it is more likely than not that all of its deferred tax assets will be realized. As a result, the Company established valuation allowances for its deferred tax assets and U.S. federal and state net operating loss carryforwards that are not expected to be utilized due to the uncertainty of generating taxable income prior to the expiration of the carryforward periods. The Company will continue to assess the valuation allowances against deferred tax assets considering all available information obtained in future periods. The tax effects of significant temporary differences representing the net deferred tax liabilities were as follows: As of December 31, 2025 2024 (In thousands) Deferred tax assets: Interest expense limitation $ 209,968 $ 207,053 Net operating loss carryforwards 212,344 79,628 Research and development and other tax credits 28,688 17,411 Asset retirement obligation 7,654 6,991 Unrealized hedging losses 1,956 16,701 Other 7,209 4,731 467,819 332,515 Valuation allowance on deferred tax assets ( 52,693 ) ( 53,687 ) Deferred tax assets 415,126 278,828 Deferred tax liabilities: Property and equipment ( 850,365 ) ( 621,561 ) Other ( 1,859 ) ( 2,383 ) Deferred tax liabilities ( 852,224 ) ( 623,944 ) Net deferred tax liability $ ( 437,098 ) $ ( 345,116 ) F- 20 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The difference between the customary rate of 21.0% and the effective tax rate on income (losses) is due to the following: Year Ended December 31, 2025 2024 2023 (In thousands) Tax at statutory rate $ 106,834 $ ( 77,244 ) $ 51,868 Tax effect of: Tax credits: Research and development ( 10,334 ) ( 32,414 ) — Other income tax credits ( 3,024 ) ( 1,586 ) — Valuation allowance on deferred tax assets — ( 779 ) ( 968 ) State income taxes, net of federal benefit (1) ( 2,479 ) ( 36,884 ) ( 11,881 ) Other ( 2,464 ) ( 168 ) ( 3,924 ) Total $ 88,533 $ ( 149,075 ) $ 35,095 Year Ended December 31, 2025 2024 2023 Tax at statutory rate 21.0 % 21.0 % 21.0 % Tax effect of: Tax credits: Research and development ( 2.0 ) 8.8 — Other income tax credits ( 0.6 ) 0.4 — Valuation allowance on deferred tax assets — 0.2 ( 0.4 ) State income taxes, net of federal benefit (1) ( 0.5 ) 10.0 ( 4.8 ) Other ( 0.5 ) 0.1 ( 1.6 ) Effective tax rate 17.4 % 40.5 % 14.2 % (1) State taxes in Texas and Louisiana contributed to the tax effect of this category. At December 31, 2025, Comstock had the following carryforwards available to reduce future income taxes: Types of Carryforward Years of Expiration Carryforward Amount (In thousands) Net operating loss – U.S. federal 2026-2037 $ 740,631 Net operating loss – U.S. federal Unlimited $ 634,990 Net operating loss – State Unlimited $ 1,807,981 Interest expense – U.S. federal Unlimited $ 818,854 Interest expense – State Unlimited $ 874,763 Research and development tax credits – U.S. federal 2045-2046 $ 17,653 Research and development tax credits – State 2043-2046 $ 11,035 The Company's ability to use net operating losses ("NOLs") generated before its ownership change in 2018 to reduce taxable income is limited under IRC Section 382. NOLs that exceed the Section 382 limitation in any year continue to be allowed as carry forwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. U.S. federal NOLs incurred prior to 2018 generally have a 20-year life until they expire. NOLs generated in 2018 and after would be carried forward indefinitely. NOLs arising after the date of an ownership change are not affected by the 382 limitation. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carry-forward periods, then it will lose the ability to apply those NOLs as offsets to future taxable income. The Company estimates that all of the U.S. federal NOL carryforwards expiring in 2037 and $ 1.2 billion of the estimated state NOL carryforwards will expire unused. F- 21 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company's federal income tax returns for the years subsequent to December 31, 2021 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. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2022. The Company is also currently under examination with the state of Louisiana. In both the federal and state examinations, the Company believes that its significant filing positions 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. In July 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into United States federal law. The Company is benefiting from certain provisions contained in the OBBBA, including increased interest expense deductions and bonus depreciation and has included these benefits in its income tax provision for the year ended December 31, 2025 . (10) Derivative Financial Instruments and Hedging Activities Comstock generally uses commodity price swaps, basis swaps and collars to hedge natural gas prices to manage price risk. Swaps are settled monthly based on differences between the prices specified in the instruments and the settlement prices of futures contracts. Generally, when the applicable settlement price is less than the price specified in the contract, Comstock receives a settlement from the counterparty based on the difference multiplied by the volume or amounts hedged. Similarly, when the applicable settlement price exceeds the price specified in the contract, Comstock pays the counterparty based on the difference. Comstock generally receives a settlement from the counterparty for floors when the applicable settlement price is less than the price specified in the contract, which is based on the difference multiplied by the volumes hedged. For collars, generally Comstock receives a settlement from the counterparty when the settlement price is below the floor and pays a settlement to the counterparty when the settlement price exceeds the cap. No settlement occurs when the settlement price falls between the floor and cap. All of the Company's derivative financial instruments are used for risk management purposes and, by policy, none are held for trading or speculative purposes. Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company's derivative financial instruments involve payment or receipt of premiums. The Company classifies the fair value amounts of derivative financial instruments as net current or noncurrent assets or liabilities, whichever the case may be, by commodity contract. None of the Company's derivative contracts are designated as fair value or cash flow hedges. The Company recognizes cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses) in the consolidated statements of operations and as separate components within cash flows from operating activities in the consolidated statements of cash flows. All of Comstock's natural gas derivative financial instruments are tied to the Henry Hub-NYMEX price index. The Company had the following outstanding natural gas price derivative financial instruments at December 31, 2025: Future Production Period Ending December 31, 2026 Natural Gas Price Swap Contracts: Volume (MMBtu) 116,800,000 Average Price per MMBtu $ 3.51 Natural Gas Price Collar Contracts: Volume (MMBtu) 167,900,000 Price per MMBtu: Average Ceiling $ 4.35 Average Floor $ 3.50 Subsequent to December 31, 2025, the Company entered into natural gas collar contracts to hedge an additional 58.4 Bcf of 2027 natural gas production at an average ceiling price of $ 4.37 per MMBtu and an average floor price of $ 3.50 per MMBtu. F- 22 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The aggregate fair value of the Company's derivative financial instruments is presented on a gross basis in the accompanying consolidated balance sheets. The classification of derivative financial instruments between assets and liabilities consists of the following: As of December 31, Type Consolidated Balance Sheet Location 2025 2024 (in thousands) Asset Derivative Financial Instruments: Natural gas price derivatives Derivative Financial Instruments – current $ 19,206 $ 4,865 Liability Derivative Financial Instruments: Natural gas price derivatives Derivative Financial Instruments – current $ 27,636 $ 8,940 Natural gas price derivatives Derivative Financial Instruments – long-term $ — $ 66,757 The Company recognizes cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). Gains and losses related to cash settlements and changes in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows: Year Ended December 31, Gain/(Loss) Recognized in Earnings on Derivatives 2025 2024 2023 (In thousands) Natural gas price derivatives $ 82,537 $ 10,196 $ 187,639 (11) Related Party Transactions The Company operates natural gas and oil properties held by partnerships owned by its majority stockholder. Comstock charges the partnership for the costs incurred to drill, complete and produce the wells, as well as drilling and operating overhead fees. Comstock also provides natural gas marketing services to the partnerships in return for a fee equal to $ 0.02 per Mcf for natural gas marketed. The Company received $ 1.1 million , $ 1.1 million and $ 1.3 million in 2025, 2024 and 2023, respectively, for operating and marketing services provided to the partnership. 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 $ 3.6 million and $ 5.5 million receivable from the partnerships at December 31, 2025 and 2024 , respectively. (12) Subsequent Event In January 2026, PGS entered into an agreement with Quantum under which PGS agreed to redeem all of the outstanding Class B Units of PGS in exchange for cash consideration of $ 440 million plus any accrued but unpaid distributions. The redemption is expected to be completed in the first half of 2026. F- 23 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (13) Natural Gas and Oil Reserves Information (Unaudited) Set forth below is a summary of the Company's proved natural gas and oil reserves: Year Ended December 31, 2025 2024 2023 Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas (MMcf) Proved Reserves: Beginning of period 331 3,762,098 548 4,940,226 549 6,697,570 Revisions of previous estimates ( 8 ) ( 29,753 ) ( 49 ) ( 1,180,157 ) ( 47 ) ( 1,803,628 ) Extensions and discoveries — 3,737,848 — 531,258 116 570,751 Sales of minerals in place ( 88 ) ( 15,870 ) ( 118 ) ( 1,681 ) — — Production ( 37 ) ( 450,202 ) ( 50 ) ( 527,548 ) ( 70 ) ( 524,467 ) End of period 198 7,004,121 331 3,762,098 548 4,940,226 Proved Developed Reserves: Beginning of period 331 2,731,812 548 2,734,175 480 2,531,462 End of period 198 2,840,638 331 2,731,812 548 2,734,175 Proved Undeveloped Reserves: Beginning of period — 1,030,286 — 2,206,051 69 4,166,108 End of period — 4,163,483 — 1,030,286 — 2,206,051 Revisions of previous estimates. Revisions of previous estimates in 2024 and 2023 were primarily attributable to the significantly lower natural gas and oil prices that were used to determine proved reserves at the end of each year, which resulted in many of the Company's proved undeveloped locations being excluded from reserves since they did not generate an adequate return at those lower prices. Extensions and discoveries. Extensions and discoveries for 2025, 2024 and 2023 were primarily comprised of proved reserve additions attributable to the wells drilled in the current year that were not classified as proved undeveloped in prior years and additional proved undeveloped locations that are planned to be drilled in the Company's current development plan that were not included in the prior year's reserve estimates. 2025 extensions and discoveries include proved undeveloped reserves that were excluded in 2024 and 2023 due to low natural gas prices. Sales of minerals in place. During 2025, the Company sold certain natural gas and oil properties for $ 432.4 million . During 2024, the Company sold its interest in certain non-operated wells for $ 1.2 million . The following table sets forth the standardized measure of discounted future net cash flows relating to proved reserves: As of December 31, 2025 2024 2023 (In thousands) Cash Flows Relating to Proved Reserves: Future Cash Flows $ 21,515,086 $ 6,959,475 $ 11,829,623 Future Costs: Production ( 5,544,264 ) ( 2,760,616 ) ( 4,019,901 ) Development and Abandonment ( 4,797,691 ) ( 1,014,446 ) ( 2,285,853 ) Future Income Taxes ( 1,347,093 ) ( 22,990 ) ( 341,677 ) Future Net Cash Flows 9,826,038 3,161,423 5,182,192 10% Discount Factor ( 5,958,964 ) ( 1,563,229 ) ( 2,807,562 ) Standardized Measure of Discounted Future Net Cash Flows $ 3,867,074 $ 1,598,194 $ 2,374,630 The following table sets forth the changes in the standardized measure of discounted future net cash flows relating to proved reserves: F- 24 COMSTOCK RESOURCES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2025 2024 2023 (In thousands) Standardized Measure, Beginning of Year $ 1,598,194 $ 2,374,630 $ 12,609,636 Net change in sales price, net of production costs 1,833,985 ( 1,478,758 ) ( 14,069,134 ) Development costs incurred during the year which were previously estimated 438,081 452,533 1,004,650 Revisions of quantity estimates ( 45,201 ) ( 693,905 ) ( 1,583,876 ) Accretion of discount 160,277 250,170 1,551,704 Changes in future development and abandonment costs ( 456,583 ) 764,629 1,095,844 Changes in timing and other 176,754 94,058 ( 374,087 ) Extensions and discoveries 1,853,922 380,544 215,249 Sales of minerals in place ( 1,747 ) ( 3,542 ) — Sales, net of production costs ( 1,098,926 ) ( 664,653 ) ( 855,699 ) Net changes in income taxes ( 591,682 ) 122,488 2,780,343 Standardized Measure, End of Year $ 3,867,074 $ 1,598,194 $ 2,374,630 The standardized measure of discounted future net cash flows was determined based on the simple average of the first of month market prices for natural gas and oil for each year. Prices used in determining quantities of natural gas and oil reserves and future cash inflows from natural gas and oil reserves represent prices received at the Company's sales point. These prices have been adjusted from posted or index prices for both location and quality differences. Prices used in determining natural gas and oil reserves quantities and cash flows are as follows: Year Ended December 31, 2025 2024 2023 Crude Oil: $/barrel $ 61.98 $ 71.07 $ 72.63 Natural Gas: $/Mcf $ 3.07 $ 1.84 $ 2.39 Proved reserve information utilized in the preparation of the financial statements were based on estimates prepared by the Company's petroleum engineering staff in accordance with guidelines established by the Securities and Exchange Commission and the Financial Accounting Standards Board, which require that reserve reports be prepared under existing economic and operating conditions with no provision for price and cost escalation except by contractual agreement. All of the Company's reserves are located onshore in the continental United States of America. The Company retained an independent petroleum consultant to conduct an audit of the Company's 2025 reserve estimates. The purpose of this audit was to provide additional assurance on the reasonableness of internally prepared reserve estimates. The engineering firm was selected for their geographic expertise and their historical experience. Future development and production costs are computed by estimating the expenditures to be incurred in developing and producing proved natural gas and oil reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. Future income tax expenses are computed by applying the appropriate statutory tax rates to the future pre-tax net cash flows relating to proved reserves, net of the tax basis of the properties involved. The future income tax expenses give effect to permanent differences and tax credits, but do not reflect the impact of future operations. F- 25