Comstock Resources' Q1 2025: Unpacking Contradictions in Haynesville Reservoir Quality and Production Growth Strategy

Reservoir quality and de-risking in the Western Haynesville, midstream infrastructure and funding strategy, production growth strategy, estimated lateral lengths in Legacy Haynesville acreage, and production growth expectations are the key contradictions discussed in Comstock Resources' latest 2025Q1 earnings call.



Strong Financial Performance:
- Comstock Resources reported natural gas and oil sales of $405 million for Q1 2025, marking a 21% increase compared to the previous quarter.
- The increase in sales was attributed to higher natural gas prices, with the NYMEX settlement price averaging $3.65 per MMBtu in the first quarter.

Production and Acreage Development:
- The company's production averaged 1.28 Bcfe per day in Q1 2025, a 17% decrease from the previous year, reflecting a decision to drop rigs and defer completion activities.
- Comstock continues to expand its acreage position, acquiring 520,000 net acres in the Western Haynesville, with plans to drill 20 wells and turn 15 wells to sales in the Western Haynesville in 2025.

Operating Cost Efficiency:
- Comstock's operating cost per Mcfe averaged $0.83 in Q1 2025, an increase from the previous quarter, driven by lower natural gas production levels and fixed costs in lifting and gathering.
- Despite increased costs, the company achieved an EBITDAX margin of 76%, up from 73% in the previous quarter, reflecting improved natural gas prices.

Emission Reduction and Sustainability:
- Comstock reported a 28% improvement in greenhouse gas intensity and a 2.5% reduction in methane emission intensity compared to the previous year.
- These improvements are due to the deployment of optical gas imaging and aircraft leak monitoring technology, along with the use of natural gas and dual-fuel powered frack fleets to reduce CO2 emissions.