Comstock Resources (CRK) 8 Aug 202020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Second Quarter 2020 Comstock Resources Incorporated Earnings Conference Call. [Operator Instructions] Now it’s my pleasure to turn the call to Jay Allison, Chairman and Chief Executive Officer. Please go ahead.

Thank you. Everyone that’s on the call, welcome to the Comstock Resources second quarter 2020 financial and operating results conference call.

slide to our and our quarterly presentation. a call for downloading view result going by website can presentation act during this the You at www.comstockresources.com presentation Quarter There, titled find a XXXX you’ll Results. Second Chief Allison, of Jay am Executive I Comstock. Officer and With Dan Financial and Mills, Harrison, me Finance of Officer; Officer; our Operating Chief VP our Chief and is Burns, Ron Roland President our Investor Relations.

our forward-looking discussions Slide X, of refer within X in Please today meaning it’s to our that include disclaimer. to presentations a go securities note you statements If the will and Slide laws.

and believe the expectations statements we correct. there While reasonable, to can prove no expectations such such that to assurance be be be will

Before get comments. Slide some make we X to I’ll

the Haynesville-Bossier availability proximity and play, gas predictability, we a natural and results. historic pipelines Every close and Two he America. of inbound all, morning privilege ago, call Comstock First it’s put wealth, He you has and was have take we results has you’re a to that to train that X call proven the conductor to believed He this because call and a is talk quarterly the call billion take the which Tier Mexico, in from Comstock Jones a as natural report the proven in phone if have listen to ours States United that received why midstream able has the years $X management this Jones. and someone wise. Jerry in Gulf When is create from his family, his Resources to that can great an above half geological today. and Jerry of be on hear believed gas of you Haynesville-Bossier well each shale into to everybody. Comstock

our to results fruition X.X the a we set would revealed not seeing. had have that will is give quarter X the you ever the valve report Jones’ to continue we or XXXX America. last equity second-quarter vision to that forward stressed sector for we of this to quarter. do not look the Comstock that the area We ago Comstock to margins debt energy the in But weaknesses wise who owners commit shown to this executed that us able as it years in to in quarterly that all own with Tier second will of and money. Without the forward the gas you, the quarter spend was we of commitment, has during we we’ll test for your coming on have how would structure low-cost make company, all you decisions it because either been transactions that report best-in-class don’t The natural

stock economics. to of bonds trusting issued offering Board the we you $XXX acquisition. of cost preferred will Covey improved us, our a into Comstock’s one the low the equity deliver of we all The that’s industry-leading to financial the as the series as in used and million financial under second for during quarter to the we that with buyers gave ability to oil days, the down an underwritten go our redeem of as and In a facility that a Roland enhancing borrowings offering difficult credit repay liquidity thank management June, report the revolving our issued say $XXX XXX We financial most XXXX the Yet gas. part equity executed XX on. the of notes that on greatly were we days continue in in to may laser-focused Directors on entered million well a of buyers of were senior that as May, that strength. convertible company, Then us XX to history Park

commit appreciated. on during greatly free times generation shrinking our the over industry growth, cash to down focus current and through cost balance flow gas sheet with environment, of paying gas the that focus trying our support and our is of oil on in Your debt financial and Comstock you drilling depth will our to and stakeholders and margins natural oil backers inventory. we managing best-in-class We leading continue structure, price low the equity

see the natural strengthening to We’re fundamental because very next in months future of we’re well-positioned the over gas XX fact, we time. for and during what see eager unfolds window that

quarter, in a April rigs four. us quarter to our the we and we X, go operationally was Slide for reduced released fairly down to as quiet you our drilling second crews If completion operated

gas the offering dilution notes bank the from our were $XXX $XXX equity business plan our complete potential prices able redeem reduced increased this gas and currently. first we We hedge offering convertible to our first up bank in upstream continued uncertain its had to de-risked to in the during we borrowings associated we we The facility. credit further taking with end quarter, second since XXXX pandemic, warm XX%. by the also up of futures natural pay availability and of offering By increasing from cash credit face volatile borrowings COVID-XX million environment to position natural in by since million. conversion. second $XXX quarter activity the our for to facility, common of had the offering busy prioritize offering that on equity the with outstanding bank our gas We follow the planned XXX% low winter Series free We to A The liquidity $XXX to million the of XXXX. As of We generation. $XX at have quarter avoid freeing a XX% the us down following million than common the quarter XXXX. natural million at advantage were financial our improvement senior flow the with enhance strength. current our lower allowed larger first XXXX this financial very was the working value preferred The stock offering

capturing a On front, which reduced will talk operations Harrison we about the completion momentarily. and Dan costs drilling are

quarter for second down second foot Our from and lateral XX% XXXX quarter are drilling completion costs cost.

in further production the late costs low year in still The expect gas low second Dan flow We will prices XXXX quarter. quarter to did free half and deferred and total the generated to $XX in natural of prices we oil well and go the in cash bringing date decline gas activity XXXX. new We natural as in to the second the oil limit in we million. completion generated strong better gas flow, Despite we the our our cash had free quarter, very align prices in with profits million XXXX anticipated $XX the to over.

XXXX. higher oil is the of and lease and hedges sales second Our gas sales quarter XX% than million, $XXX in floating that were

Our share adjusted per EBITDAX per $X.XX in adjusted XX% was and to higher million, was than XXXX. XX% was net Operating or manage the came million did XXXX. which or We at $X.X higher $X.XX of than for flow share quarter. million $XXX $XXX cash income have

as million and XX% issued the shares exchange XX into proceeds $X.XX share. to to exchange over A done be the issued XX.X we shares recap In On common and you and cash we been were exchanged used XXX stock. If offering eliminating we June, In of for billion market and at Slide shares Securities. at holders the Effectively the per newly due the and and $XX values would above was paying. The primary million underwritten Convertible convertible redeem we reason notes Thank issued use the converted. was was the May of We Covey $XXX Roland stock saved we facility. borrowings senior ratings The equity the addressed year we offering redemption million million liquidity in July from million intended the XX,XXX,XXX to our our facility we The have share. the offering, value. May, A $X.X stock million agencies. offering, by offering The acquired the revolving the XXXX. portion go along In of a beginning the financial last upgrade second under credit proceeds from used an March downgraded Park our have for per Burns Slide company notes $XXX our The the with credit results dividend that credit which priced borrowings. when two repay liquidity. senior us a at improve an of was of bank XX,XXX,XXX offering company, we at sheet stock $X preferred you. offering preferred XXXX to per quarter. our Preferred from shares heavily in senior quarter. need to shares I equity Roland? completed our note issued with X, Series to both had a led Series was will out financial in $XX to the was to we tax the $XXX rating term successful saved The The XX, its our July Moody’s balance of summarize by for certain had on and S&P. that We completion financial X. now to X.X% April face notes by convertible the accretive

production caused decline and XXXX. first the XXXX. Covey turned slightly that produced day In only second All had Low On billion from of Park We second the per quarter right. of X.X combined Jay. X% wells the XXXX than feet since during the we from Covey and was our from sales and higher day feet quarter Haynesville-Bossier wells to Thanks, net per in Comstock X.X in production quarter Comstock the X.X Slide quarter. was completion cubic second to X activity Park’s Haynesville-Bossier cubic production quarter. the the billion

continued us gas continue schedule since cash completion call, our free weakness to flow low prices despite last in Given generate allow we’ve the to our prices. conference adjusted gas to

of year months production the While the to we expect prices to in order similar plan winter as a number still to moved later of before, the to has in gas returning sales the the align when natural we of wells to timing wells complete new to improve. more

year. from the X this the exit production quarter, growth new XXXX not time we principally setting the production in these of some for in on to show wells this third late quarter. Slide be As strong we beginning for We to the in later third turn last the net third add third production this months and two plan decline a at to this frac the plan expect XX did of crew crews six further. sales frac wells to the our to for in activity. Much recaps quarter little offset shut-in will result, up growth back but a a and for year of a had we add quarter year. We rate frac

non-operated was production shut-in our Our XX% natural in We oil of second compared year. prices. due quarter had the quarter low substantial of the as of X% to oil curtailments also oil this our quarter. gas second curtailed production experienced production the X% very second in to the quarter first the in shut-in or in

in shut-in operator completion but Given to in slide given the came program. X% be cover X% quarter, second activity to shut-in X%. X, at expected of offset our the we we the hedging the closer On our was percentage low completion the activity in activity quarter, to amount significant

which selling $X.XX XXXX, from we to had we first from gas our our the our price XX% volumes During realized of per received Mcf gas hedged, Mcf months per the production. of $X.XX six increased

of XX% price that the volumes our our actually versus that to realized had received. also hedged per we We per oil barrel barrel $XX.XX $XX.XX oil increased and

the we ended million gas gas added Our saw the year. this natural of additional in that first collars the an year, protect realized quarter million totaled year. next to swaps reported day added to this most book. have at of natural quarter. of XX collars feet the average we’ve also at feet of prices year price another months With exposure added in XXX this us floor of Then feet fourth of Since for XXXX gas $XX.X million hedge in cubic third the higher earnings, in swaps fourth improvement $X.XX substantially cubic cubic hedge second we we but XX prices last quarter, for give we the for us to that gas we million XX natural million and are we’ve natural in futures which of quarter of six our gains, substantially a expecting

per remaining Mcf. million For XXXX of the barrels hedges $X.XX about gas XXX rest have our of oil cubic average weighted floor is our of hedged. feet XXXX, hedged X,XXX of our gas The we price in

For weighted now for hedges floor cubic protection expected we $X.XX. the those hedges XXXX, XXXX have production average covering of feet is price our gas million XXX and

XXX certain when exercised year. per feet hedged increases an gas fourth to floor XXXX day Our average swaptions of if of this cubic are the million quarter $X.XX price at in

We XX% second have our quarter are X, targeting production of financial XXXX summarize our to hedged. we Slide for anticipated year. to the of XX% this On results

for production in This totaled quarter XXX% second second barrels the year. production including is quarter Our the of our Bcfe than oil. XXX of XXX,XXX higher last

$XX.XX and oil including in gains Our including $X.XX which our million, average gas gas hedging and was barrel quarter sales XX% our hedging. Mcf, per $XXX prices than averaged XXXX. realized higher were Oil the prices per

year. balance for was XXX Oil $XXX.X first XX which second this six per was unusual XXXX. $X.X other Slide for from for driven production XX% XXXX. value the growth future or the the attributable oil. million, the XXX% hedging $XX results the the and was in for prices higher. averaged net that natural XX% $XX.XX price $XXX than our quarter. million averaged including we since realized higher gas is XXX,XXX barrels gains our summarize than barrel price quarter. mark-to-mark had But We quarter in reported than months excluding EBITDAX was XXXX. prices Overall, at of of which higher or loss realization at million XXXX million, was first of positions natural hedging and we cash Operating versus than half was was per and by a quarter. loss period was seen Production of our That realization due XXXX. the was same half million which came million, uncertain mostly from Adjusted or natural Our Adjusted to of share. first was than loss the gas was income X.XX hedging a share. XXXX operating X, higher were gas down financial production that of the sales including higher six for or XXXX including in per the loss some the the $XXX.X million $X.XX came mark-to-market our the $X.XX XX% for down net we’ve XXX% XX% gas gains. prices and million unrealized But higher $X.XX in of quarter offsetting that Adjusted Mcf, or We was items per mainly did XXXX. diluted XX% March and again $XXX hedge to cash first that report XX% hedging $XX.X of flow second the loss $XX EBITDAX months loss flow per net mainly in change of of billion the Oil that for in positions gas share On higher hedge $XXX unrealized the sheet. the Bcfe substantial

unrealized income from per half share. the other the net year million for the mark-to-market So we XX, $X.XX excluding or our loss Slide was operating first unusual per items, hedging in the On $XX Mcfe. that, of detail cost the

include [indiscernible] quarter. in did franchise Our recorded quarter and detail Slide in field adjustments were averaged per operating the the and rate On taxes taxes of compared that Mcfe. $X.XX our we tax second costs $X.XX. cost Mcfe. costs averaged Gathering in Production cost first overhead quarter some second costs we $X.XX in were as $X.XX the second The the to $X.XX. field-level level prior corporate XX, per period quarter the

activities first unchanged $X.XX the quarter. which and show depletion per the million exactly the operated we is million in had Slide depreciation, cost what quarter, first months quarter. XX, X% spent in averaged XXXX our averaged Slide Mcfe our $X.XX we G&A was That quarter quarter we had than quarter, which amortization cash We capital from that on produced. in second XX, Mcfe $X.XX per second $XX the properties. Our second in $XX and lower was we shale to expenditures. development the second Haynesville of first related six which On the of our in recap

For XX program. six Haynesville spent We this million our $XXX operated wells of the spent including this drilled so year. or net XX.X far million first year, Shale we horizontal operated $XXX on months Haynesville

this that pay We preferred shares. after completed the in X.X six resulting non-operated XXXX. in free of $XXX the so XX months We We flow dividend also spent flow cash far or cash on net $XX drilled of we $XX the operating million this we in on million wells other first million year. activities about year of or generated

and to April, on to in rig we’ve free plan responsive year. six prices sixth cash week We flow. rig operated fifth our remain the down back very of the add added was rig rigs continue changing January, the by four significant gas from in After and focused to generating dropping end operated to a natural remain which a count this we

for second drilling million completion our at we the of our the sheet balance activity end free net Slide shows activity have we annual focused as to approximately this million we to capital to XX and $XXX remain be wells expect or as carry in of wells the we’re to or X.X X and XX sales. at year Haynesville $XXX drill year, various think on wells look or flow flow the spend to turn expect this $XXX of quarter. net we to XX set free the XXXX. At operated targeting million cash Haynesville to into net our end XX.X ahead stages uncompleted over wells end XXXX significant to we’ll million generating XX XX.X drilled on net expenditure We of planning XX.X $XXX We cash drilling of year. and also or to in have and

Jay During of very that and outstanding $XXX the are to second our million we XX.X issuing quarter, million facility. in active Series portion term markets preferred the A of the common unsecured borrowings as stock said the credit capital stock were redeem notes new shares to out issuing a of

have revolving equity down debt on exchanges for the currently for some cash million and free newly completed generating we what we totaling we’ll position With pay also free generate $XXX in common then XXXX have We to facility of We issued million ending it current $XX $X.X XXXX XXXX. year generate our in with will for XX now $XXX million. drawn shares. and further for what a in rest quarter exchange at the and and flow stands this of expect what the our cash rest million XXX of we’re we’ll flow cash credit liquidity

just X.X% our million due until XXXX. senior XXXX and and senior the outstanding, very the then notes our XXXX and to no I’ll below, $XXX XXXX, Dan covenant $X gas low non no note maturities under to leverage maturities have second over to senior current We detail. notes price billion in of oil more current turn billion remains of and of ratio cover now $X.XX due continue positioned three-quarters comprised until Xx of in senior of quarter to our ratio debt results With environment. it our well weather so in notes we’re drilling

you’re going current of the Okay. Slide acreage Thanks, Roland. Over XX to outline the position. on see

average future a the our currently So held with have on call. position XX% and the of acreage the since majority XX%. at production. on acreage We changes We’ve been by acres. of the acreage net of acreage had have an X,XXX XX% locations now our currently interest material XXX,XXX identified we’re position working control last We drilling the we operating got There standing acreage. no we in net have

not frac time turned wells in wells As since stands so crews to additional sales still we XXX play a well our the result sales our our of early we’ve any count of call April in last since at turned releasing to re-entered the XXXX. gross

a process fifth moving in running and currently rig four rigs this We’re week. we’re the in of

to this a before add inventory to this we to XX. second sometime of to wells XX XX number back the DUC well second our of heading operated rig of June a Over two sixth fall. plan to into our drill at end plan we higher the increased frac within operated updated at anticipated quarter. the started This breakdown of the at prepare of end to also couple have next to the DUCs the holiday, by quarter. Due the DUCs third We months as Slide work end a of time. on maximum early the put We of year-end. currently April, We prices add frac advantage and count in the gas is down the drilling and a an crew take Haynesville-Bossier crews

with the locations. XX% inventory inventory. stands Our interest remaining our at inventory X,XXX at operated average X,XXX total currently net locations represents gross operated of an operated on This working

average In we XXX non-operated addition interest on inventory gross with to which inventory. have inventory, also net working non-operated our X,XXX wells, the non-operated at XX% an locations remaining operated represents the

medium As for the laterals. X,XXX XXX laterals, and inventory, gross have short we XXX currently operated laterals long

second quarter operated inventory approximately in that on the trades actually in gross works was for primarily due by the actually closing few to time we’ve key Our now. had some this X% and a increased

These near track driving lengths three we drivers, the $X,XXX represents returned cost. lateral long the an which only our the in and the second ago on Bossier. greater XX% This feet. second to activity drilling previous industry company are The levels with forecasted date cost Regarding gross ventures, the located at the locations in progress is On efficiencies trend our from per operated be to that costs a all-in and inventory main released to This our lowest wells the service years and in quarter. on chart all based the have X% the sales costs quarter, the lateral activity Haynesville same are This the reflects which down cost of This before results continue X,XXXft. the located in locations our long low Obviously continue down provides locations to increased Slide in term. quarter of XX% than over to our D&C remaining to D&C illustrates the XX. April pay make our seven frac we completion medium the for is of of than costs XX% the continue reduction of XX different quarter the the of with associated D&C a with lower cost year the historically lower crews. levels. month laterals

are is continuing the smaller has pump well We costs. up that primarily in This and to design a started early year. frac our infill lower modified on we this in also in our been co-developed factor locations and

stated hold goal we’re a environment. reducing confident we’re our to As maintaining per be D&C costs the level we going our on to cost feel and last this current in to call, near-term down of at foot these service $X,XXX able costs

the can some comments. to Jay the over on return the for still deliver to to back is highest operations. it value create being deployed turn we final going goal That capital and Our that’s the most summarizes I’m

Roland. call, Thank over it Thank and I’ll for open you, everybody we’ll up from some the the Ron questions. go to over for you, turn on Dan. outlook it guidance

the to I’d we’re generation company this managing and primarily XX, to flow This we and for on to stated as over year. free oil the direct go you current and natural if you low So our to summarize the rest of focused XX where environment. like over gas outlook year price we really, cash Slide

from well outlook for drilling gas economics. and activities industry-leading continued oil natural by we XXXX the resulting in improved low and reduction a even Haynesville to expectations XXXX low, substantially is our structure, While for cost at generates our With and strength in today’s program gas-directed prices. gas oil collapse due XXXX less natural declines significant associated completion has supply our prices. The our current driven structure remain and in related gas basins, for returns in relatively gas activities gas natural late production of natural XXXX prices for and low the economic low-cost industry-leading drilling have natural

schedule adjusted X% intentionally our of the X% to cash expect order the the our even and pro third free we’re sheet. drilling in We pay production cut balance and XXXX, debt way the have down and in strengthen generate We completion with to forma still schedule. to completion we growth back wells used activity reduced flow our number

grow XXXX being Importantly, agility for and We prioritize are previously volumes to have completion cash investment XXXX adequate early on hedged almost XXXX in XXXX XX% of to our of our but lower have over our production financial We’ve production as flow longer-term maintained basis. recent million of our of the over just until a following half remainder into production growth, deferred free and offering. strong bond production $XXX in liquidity the schedule due the XXXX later anticipated. goals and

now, the of going some year. to turn the to to So provide it Ron for Ron? over I’m specific guidance rest

which and the we’ve we shifting on schedule sales this turned XX, call year into a and On the on for wells slide schedule, financial the of Jay. the completion our Thanks, of to the provide rest guidance which updated to deferred XXXX. reflects mentioned guidance impact for is of the this year later number analysts. This

on of on with XXXX the production drilling day, which XXXX. show associated to completion our As per is and and we to We expected to to spending up total part million those a of associated result, gas. the production the $XXX guidance million our $XXX activities X.XX as natural now to production be completions impact early XX% impact this X.X in expect year XX% Bcfe anticipate later deferred and will Bcfe

and $X.XX from transportation per to gathering Our to $X.XX expected production and average $X.XX Mcfe, $X.XX average to per guidance Mcfe, to with at $X.XX DD&A items per per $X.XX unchanged are to $X.XX cost to cost taxes LOE expected Mcfe, Mcfe. prior at $X.XX

to $X.XX G&A anticipate average $X.XX will We cash continue to Mcfe. per

call, take who For follow analysts the we’ll the the rest questions of company. the from

Instructions] is ahead. from Please Our with Rice. [Operator go Johnson question McIntosh Dun first

Jay, and morning, Dan. Good Ron Roland,

Good morning.

more on are you clear is flat. pretty try little Just completions price back but push looking about to the color a CapEx year, to higher the of fairly give and wanted a capture half gas out to

are and how volumes your the can– and the on trajectory they XXXX all to just for bring of flow year year, you spending cash in So this CapEx? on balance lines thinking about next

then we know plus. kind want to X%, into what pretty with have budget upon I going depends $XXX well we that, do, this, growth. comfortable what have that CapEx look that we million should mean, depends So, we CapEx results we’re to we of this like. assure what flow free X% then some we’re look and million you and mentioned we of have budget cash $XXX X%, I number is that at And we upon and and should back mean look our to want also can what like that. want growth just to prices that our with risk-adjust X%, and the all we

price the So we comes grow. hedging, really where to with risk-adjust in, but the paid commodity you XX% get that’s don’t the

go to two your [indiscernible] we’d our pay like you a do but oil pole or we it, impact I if to down which business Now, a want like times, to if a and you highest possible, lot think this with and we maintain your the of it, said too of growth to period three The position have out two down, if to is, last where stay pay pole in are is key there. we we really or are, take a half profits. I the kind gas, margins high are a operator if we leverage could and you great you maintain of it have we not and strides grow RBL don’t that. and need our to cost think we the you that so maintain don’t We’d would debt. in low of we’re near think years, can like don’t little or

have cost lower that’s capital, of one position. Does really we you of because your cure think an that answer unenviable think of question? capital. cost if need our in our I all goals, to we’re And that I

And then would. you maybe to just that, to add if

program right Jay rig over, you think all looking we’re toward– all those parameters factors as X-operated mean, I today a look fits think now. I we at that went those

we’ve year, are the be to, be answer. level the our Now, by natural different a in end that the stronger that level from out the so bit that’s now hedging supported so group and we gas program. there, is planned be reason have at things that months with could prices locked a of little might by higher And would activity different and already operations one three that

a year a really little aligning type and generation, balance that, production seems up everything to next bit same to activity, in think flow some higher time, see very that’s And we a attractive growth of free year. to so, cash substantial year, that the be of year next all very we great at

do got you’ve the in shares, a lot Series as there’s the A that know, I mean, out preferred, the said needed that You post-COVID of get knew we the intentionally we and like of noise that the Park we we numbers. Denham look of did Covey we with we because numbers did use noise to the the look that. stretched we like RBL, on what four should

might we the issued we first quarter when too. take profits a hard bonds, liquidity and cash free to attention see flow any million have So it’s quarter the wanted and can did then, have even pretty you we to the almost $XX of in and

for our We need that, risk are have with we that goal, or we’re to six it. can for hedging, probably we right fourth to program we can change had Because committed but going now rigs. at we on change six we whether start keep quarter We XXXX the now, hedge out those rigs of nine have see, XXXX rigs. that’s can the hedging. bring not, to top, should a were you As we

XXXX, January end five, four. course, at to drop up had four, we’ll Of of and we in down six,

we because are service been well call is you were Dan rig really the these in to should to prices. foot fatigue as had these cost position like and again, the collapsing down, said. see, get of contracts have service well, per these toggling a well companies it, So with most low definitely We

way lower $X,XXX, that done down, and not commodity probably you costs rig coming can and our control do at shown way, thousand hopefully now, things already coming telling a XXXX-XXXX, haven’t our the we’re that, prices $X,XXX in count you we we we We’re we’ve get so are those before. we’re are

So May us equity I and offering the and market June bond for think offering. the trust the that’s why in

prices, companies beginning, how gas I really quarter, many like phrased stress-tested margin, hedges shows that still the whole that margin very a Jay your the know fundamentally that very Dan, at And EBITDAX is low. very highest– this oil industry, hedges. the if we think just is the these cost achieved even the it low prices, highest can I company We our in you’re that if say had no still you quarter. tracked with don’t had even impairments. this of it that XX% you low XX%, and And probably don’t use away, you strip companies of any the we entire we

prices that that the think low So I strong because company of can really did structure. see what the withstand you these cost is

analogy, everybody see of. behind you certain the [indiscernible] good. went we card mean, And know, look what are pretty you made I a

that back challenging Yes, currently are about. better absolutely. take, despite like a hopefully the gets Thanks level half thinking year in of it’s high executing you’re clear but next for that the you into a the year at color. And and here

front? else capital is there an M&A potentially like second got of have anything to you a seeing on on sheet over remarkable what leverage Ultimately, the about for for the target said, quick congrats do environment still is in under could Just pull to look on levers are is could deleveraging, challenging long-term balance the And done I that a the that and or markets follow-up, are two But for you deals. as QX. two quarter. mean off really progress a expedite of and what said, was deleveraging? talk some you times, you I you I a What option other of getting in maybe made lot you

we we’d to on be like are M&A funnel know, You the ourselves in for the that area. transaction front, to companies position to Haynesville-Bossier the a have trying be, to

the we markers half and the the quality said have. and we’ve that low inventory of margins cost are Now,

de-lever now, but do right out to we to we anything mean, have don’t have for would like opportunities continue getting get sake know, that to we there, would bigger that shape. get to grow, not to are company. We you seeking would aggressively of the I the anything bigger. do, So we we’re in good really

to that. going not do We’re

some will have think opportunities. we I

whether be the and the I or there’ll that will Board some we’ll we think want and decisions about not. make to make, grow Jones

out management, company, we’re and very in always respected times not opportunities fact, I’ll are discussions we’ve really the And there. In through transparent we’ve because you got hard know, been really, we’ve with misbehaved. that tell we’re you, as a

something, the to deal a they’d would to they So big they companies, that know other like a top Comstock culture plus I have, of like us. think think with do I most and that’s we

and are commodity just X.X are stake, I that to XXXX, think, plans Dun, levered. today��s with based ahead our basic about if we here there knitting, future, times stick and we the for look there prices just we’re to stick our out under on

our to I and it happen too. game and think option stick be overnight, but So disciplined achieve doesn’t an plan organic growth. through It that’s very

in we you to we’re So I just can stick derisk will the company, the achieve think our moves at capital in leverage think to withstand will goal. volatility we plan, the taken sure to we’ve the that’s the and really make think we And looking if how it our that markets. markets,

makes then on company, if comes that our you And a it. – that know, as would act plan better something is else probably and us we

thanks. – the you All thank Thank sorry, for the for great, right, call you color.

Looking forward to following along.

you. Thank

you. Thank

ahead. with comes Please One. Johnston Capital question next go from Our Phillips

you the float, with of to that and trading your scaled now liquidity sure thank the guys, in larger there, the now aspect those investors most kicking talking now Comstock’s Hey, you’ve increased been I’m Comstock company’s that size Based you. the terms Jay, has up is the back that screens. on potential under-appreciated on focus-radar tires today? conversations, to what would think many story

question. great Yes, it’s a

on undiscovered, their to is the had of vision the has think nobody on Haynesville itself asked kind has the Appalachian educated and XXXX been everybody be I Haynesville-Bossier.

there at vision is binoculars opportunities select to and Gulf And LNG, you Mexico, to corridor, could to where said, take your group Mexico, close is that’s we one them, come of analysts, a of pipeline midstream look okay, have think the the what the you close of And to Jerry’s I the industrial you’re close are, the that there. well, I closer we Haynesville. closer but because where created any was. opportunity don’t did where to

one, I we’ve So its that is properly it’s Haynesville think I because exposed in infancy. the think don’t education.

Haynesville-Bossier think ten than we’re the top that that gas two, seven, are down companies in the I more we public. six, of antibody, there public, Appalachian, Haynesville. landscape I mean, eight, you got you’ve have don’t sell

not The player the private they’re big really Haynesville. small, others or are mainly a or they’re in

think I education, So one.

the big know wow, cost financed equity do when roadshows did the said, you that and like do think roadshows, I calls for Wow, structure which Roland fund those telephonic from your margins some that. is compare execution, they both favorable we’ve didn’t we alluded that. the and have managers wow, you to some We Appalachian. to, bond,

actually I yes, revenue, like lot to companies the had it, way, prove to say we a they’re of So you, think and these all we got do over– you of dig kind it of a of with have A Chapter to lot proven of of lot measures, lot off wells a the a these paying, have XX, particularly end impairments. in at lot companies. second quarter lot of fell when the going

get if institutional but to said really percentages, the because company and look were you diluted tells set, is need the without they there, shares the Jones that we’re you I’ll buyers say the some, down going a is our it share the think current but big did again, look you can but just if float, broadcast reason And have need a to I really, it. through think we and have at float. well now out as percentages, float at we you more just you issue okay, we– $X top out I

on mean I plan with mean, on I that’s until million grave. I thing shares, the Denham when plan went monetizing died the think equity, million, got it’s Denham those they shares, XX million, holding XX XX didn’t the they to they same initially those. there private and

that think I you’re going time, that’s at to see some think float So they as going in point and help. to I

we’ve So to more float. have got

analysts new to did during the of that results. it’s and, I think of are kind give in. them you come I did amazing bought look the $XXX and $X.XX, you scary, money. all research you came if hard ratings. our good at last made out really and I they mean we’ve number did when quarter, out built come it but continue yesterday, things some $XXX got to whatever, know, get trading out you we We at at or to pretty We bought were bonds they bonds

money. bought at equity $X you If $X and change, made you at

for and that money these making base. protecting all are we’re We’re our then people those

know, base our people. You

in of respected. a Roland of tell get bit, We think years. to we I year We capital. but got has out for to real cost to he’s he’s efficient need going on deliver– got done cost here, deliver to lower is brought or story it’s Mills We got didn’t period. have the have little out we Ron the got really sell world great to there, job mainly to to that that period. sell work be Dan funds. our someone connected to over real down We that operations. Harrison the just call, super well, think I story, we’ve that So on Is two a going our well, was get with analyst XX debt a

hope So, answers question. that your

Yes, absolutely does.

process the about especially in big-picture Haynesville on you fixing I Haynesville. XX. thoughts just quarter it the asked landscape, of consolidation Chapter the the last mentioned now Maybe I’ll industry ask pre-packaged You again, that

Well, acquisitions. number PAT let tell me at look we how one,

at of quality think do do County we I Parish, rock all, First Harrison understand rock to and we Caddo quality, in roads we rock Parish, and look quality. DeSoto Sabine,

you companies. was commitments So, look got Covey, Again, what kind where have of product that geologist. and understand as he David good to think rock. at rebacks David is I groups the I fabulous leader the and drilled, when the the group we bankers we’ve think We have. transportation lot really our of that, head the we comes in know out said most know and midstream of here cost, over a when where management, our you he’s firm and We the M&A at that’s do a know it

that grow. make And much, we’re We at a as and we do to of is those but all company. doesn’t to coveting have big. looked most companies want want said, we’ve Roland not growth So you us much, those acreage, of much to know, better something more

them we those and delivered, at better. them. if happy. Now, And we’re better, out And to and them Then, to always to out period. backstop. I eyes figure the you, is open do of We I’d hopefully not we’re smart and always same there we how deal, some we’re we time, at to and willing think a become look at can are they transactions that could everybody look to then, enough enough do smart tell really figure have good become

great asked question. a You

pocket, from period. investment, If going out billion $X you’re a protect not you else’s or your your somebody pulled fund, pocket to

a may you, of most wrote So phone might got have, have we the might from call but who none that’s And the telling we’ve man check I’m board, all have that management, thing pocket, we that have we his a those don’t, have things, period. a that game-changer, may we our them a of got I come we they where part, years I to big difference the trustworthiness the others. that’s way, That’s opportunities and with can deal think that two go you so that’s ago, these in think the attractive half versus that and the Comstock. want some

very from it Jay. Appreciate you That’s me, Thank it. much.

Kashy And our Harrison from question Please next comes Simmons Thank Energy. with you. ahead. go

taking you Good thank my morning everyone and for questions.

the second it how is impact think be a the standpoint, intensity. to data half costs and was in if as you looking a you’re the there I from look by based D&C presentation, productivity $X,XXX some you on going just seems see wondering to to designs? portion the $X,XXX are the guys costs clearly that modeling to think could of in can at, through driven us completion prior year. like you the early lower that from how was below benefit in completion the at are of improvement of near-term intensity We the help about So reductions on commentary as

we’re looks those pretty months these looking continuing are on right performance ore the of good wells. we now so out so extrapolate production far monitor probably really to that Dan, Everything hard It’s good. is to This wells. six on without getting at

recovering we side-by-side at what and the the we jobs were three comparing just on we have these getting time. wells We’re larger co-developed in downsized four complete what we’re jobs. Where locations the same where on the locations relatively or infield

data, So to of difference far to on and the a larger that haven’t really seen pump we back big the jobs. going continuing justify

production last drilling we that’s to and make relatively We’ll into some if tweaks our monitor were where continue year where that’s We’ve the some also costs quarter. headed. need first at, we really – we’re made and So still flat, will. we’re to the

DUC benefit turned we we’re doing at there. to had of in starting to think the we’re few XX drilled the quarter I end We the of QX. things sales we some but wells a second – see seven only

look just at down you cost, QX. drill we are If since there XX% to our XX%

think going our So that the holding of we’re goal along another stress with I probably to barrel to foot. the QX. in Who we’ve saw costs, I the and we’ve is more this basically whole end pumpers, to in just service that of going the the same. stay coming? frac and QX in on down obviously calls reached and flat, into completion step bottom COVID That’s per seen so QX. get from call $X,XXX thought That’s QX put or the service pressure pandemic below

place targets before us a will really was little so that these that that help in had maintain a We So hit $X,XXX foot. unexpected. bit

in Then question. and you positive standpoint per and year the know based think know good what on all from for you foot, X-rig imply NPV CapEx are you through thinking into that help that us if was a I is helpful the that program my decision. next wondering segue this a $X,XXX would could At today. still just to next That’s good it’s about what

think and levels in million to for think we’re similar those higher. etcetera, of CapEx looking wells $XXX you’re to completed the I program that $XXX Yes, at slightly next when maybe targeting gets the year, if just Probably I area. probably timing year, million this

be to that I of think overall program. going that’s cost the

go little a $XXX be of middle that to the Ron, road That’s good going good? south. is number. or that of a use million and number north can kind You

versus that That’s incremental least based rig average good going year. and minus one and we’re on incremental rig to incorporates plus at this or average one what –

so frac probably have toggle at a Remember, we given will more will any have third DUCs two we than and don’t crews time. XX frac crew

bringing to be wells will more That sales.

We bringing probably sales from that’s that effect XX wells have to carryover of program. net kind XXXX, for a but

that So achieve, for complete well and of it cost lines expected the current pretty all prices. factors. up can with It those drill sets XXXX we good especially a the commodity combination really up really

you look our if when all Might them We Comstock inventory toward footprint. drilling too, at a be wells all XXX,XXX-acre locations Comstock Comstock-Covey. collars those our a at Covey. drilled in has program look blend been you you more little south-east in of XX-XX inventory, When Covey the and

So each those of both assets locations other. have those complemented in

skewed you why we area. when little costs, That’s So drilled look one It’s at everywhere. these not they’re focused important. toward

maybe Elm in – very and the the wells but inventory, sense. your make drill and all You’re not top going Grove our to it of doesn’t

to be shut entire trying them. in year You’d the complete

the entire a because an field of you use too also overly gives overall focus gathering push hard possible having lowest cost part efficiently on, program time. different it that. footprint area to Keeping all planning of do don’t bring achieve the the minimize lot one any one a result We you on large you downtime, lot So of don’t and spread at acreage. out how having a and the is wells create we best around the areas,

which you management wells That’s these have. a numbers more we and group again think We’ve completed completed of those look hence lateral here. I Comstock and lot drilled a Covey that at experience when there a got extended of hadn’t XXX. includes been that’s

detail. of Thank That’s great lot a you.

question. Great

Thank you.

with question SunTrust. comes next ahead. from Our Fitzpatrick go Please Welles

Hey, good morning.

Good morning.

seems XXXX It folks Can guys at indications the thought. you and are maybe as some initially early little slowing that half a PE non-op to pace second bit, guys spend? would down not have like the quite any but spend the non-op

the of first sorry I’m question. very missed we part the

spend? spend then thoughts half non-ups back on and also non-ops for the any Just

rest of they Non-op because We light our activity for pretty of AFEs that amount activity non-op will of a that think for year be the the out. most for that’s Comstock. circulating

be going first So that over for $XX especially year, do million a next that but there non-op was year for year, spend from the completed, the a carried I million for is of $XX budget last million quarter. last the we But for to few projects overall the is in are months. have lot of think remainder stuff the total of the area in to six $XX that

Okay. Perfect.

part The acreage actually of that’s Those that. help. trades

time can They complete, quarter, in motivated is Everybody money for in I take second think the count get did to wells. quarter spent do location acreage overall complete long kind exchange have our in just just to the bigger some that’s extent of how we to can of the operators longer. a always first some with significant of interest ones either think stuff and that so lot do we the swap but that. figure help the own we the back we so out and a a the just actually I to forth, goal we

is What our think that laterals. increased too I of some helps long like percentage It eliminating non-outspend. of eliminate. also we we

in XX% U.S. the beauty our of operate HBP. we’ve production beauty we of is the The got but story and XX% and non-outside

it’s we’re that [indiscernible]. don’t any see wells We seeing of out do radical there that right non-op. are but So of not any that We a operator now. non-op some happen drilling

Good to hear.

a side. on but That’ll party in mills? there Eastern of Was different acreage. you It your George more looks flow the or data. anything a little the it’s bit six this of the back recently the late had it to to months. operator drilled well? You talk months completion like the five be six on to Can jump Maybe on month to for some at state the back crossover I’m least

along a over growth. We mills in on of labels in the limitations put do some year. area. Tier is area So over infrastructure of November that definitely now X George that the have in well We last

all gathers Tier that in primary gatherer the one stays area have gas We X the that system relatively area that being full.

in for million but far months months at give so million it some put that’s day might Bcf max we and in George as essentially or here this will, bit I million wells, getting but million particular there and need month that rig limited XX the as XX auto, about is after exact We a will we we’re to absolute XX to mills. So that them IP in range the be add and several in net XX a online. stayed several look right it for you detail it to a

Okay, perfect. you. see Thank to Great you.

Thank you.

our from next And you. Parks & with question Coker Noel Thank is Palmer.

open. line Your is

morning. Good

morning. Good

talk challenges in I still? remaining you could it cost accomplished to already your to give pretty still perspective lowering lower hopped what I’m a it seem on say, it to confidence can the down to in little you to that you degree good about drive further have go and from are as that bringing you per some on well foot late. down we $X,XXX, going what improvement $X,XXX the $X,XXX,

driven fairly That’s trend basically been relatively for has several trend. pretty quarters much by during now. been been drilling downward costs We a on have – unchanged that our

was frac much really the side, by the entirely pretty costs. So that mainly completion almost driven

the for health several frac we’ve quarters. Just seen

Is to mid-XXXX since plummeted provide back Just in really timeframe. our probably costs.

the I first think there the Obviously like probably I going a earlier, now. frac done don’t much we’ve they’re probably today. probably felt think good we job. quarter kind the there I reached lower where the at see of I I bottom pretty than we’re just here. barrel in of we’ve said were costs but

point bit it’s further, really from today, inefficiencies. this that down forward cost little we’re as as efficient very I getting think just a really far

continue just getting can. maximum we make We’ll to of we’re to frac gone the that’s NPV obviously answer. have the performance that part job sure We monitor downsides on the those,

the little all here to better get foot. just So that from efficiencies. about it’s bit getting It’s a forward a $X,XXX to

the the we So It’s just aside will activities kind that really because destroying that’s a entire wells, lift drilling the frac down are. sooner, costs it’s of like just kind of well just do. of couple again count saving cost drop I rig a those couple any on pandemic be a the of getting the the is of did what basically of little it efficiencies kind where step wells. these piece The from demand QX that with from extra drop activities. at extra in but COVID-XX the frac better problems, Hitting the minimizing is, said,

the in conventional anything Haynesville? just just And different could it and over did given at me thanks. the of there in got or Louisiana in inventory you have that Great, week companies earlier transaction the one out actually there, other question, any the is back regions years. any the this in into lure asset a thinking We your just point operate wondering have play North

that. on the company focused we not the ask be probably would about to so We’re conventional

got us we’re to that, we stick out commented We’re so what on just of our probably going and here, court. with

The add your other Dan, Remember, with, XXXX. color first like on here to I’d since question. been he has

XXXX the today. he forth in involved single probably touched Haynesville been is ever well that So tier and from through that. way He every all all has in the we’ve

would somebody authority he hedge Dan that’s important be anybody you think you learned to have the would to answers. I question, given who those I ask the know give and than don’t if really rate, So more authority needs when

So that’s I important. think

detail little there. a So

Haynesville. see. on the creates to we’ve staff got got, good you a got experienced people lot add a pretty staff that that. We’ve of our just here, numbers I’ll obviously That’s and in what

a to make fact, and lot I’ll In if typically long. you too all answer open give we but of the were it would take

forward look I some time. to so Thanks much. Okay, it other

for Thanks time. your

bet. You

this would Thank I remarks. to Q&A you. our final Jay back for call his turn And today. Allison for session concludes the to like

to thankful spent telling All positioned with bring and thing be next you also the that about to all and we are us think most and XX the Time to hour valuable we’re last are the where very company. excited very we I we you right. very is have so months the we’re thankful I’m

it. for That’s thanks time. your So

program. and thank for ladies gentlemen, in that With today’s you participating we

Have disconnect. now may You day. a great