Comstock Resources (CRK) 31 Oct 232023 Q3 Earnings call transcript

Good day, and thank you for standing by, and welcome to the Q3 2023 Comstock Resources, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to introduce your host for today's call, Jay Allison, Chairman and CEO. Please go ahead.

Good morning, everyone. morning, degrees. this Texas, Frisco, it's XX In The Series, prices and took a were the World lead in I about this Texas $X.XX Rangers up morning. saw natural gas

our Western Western low our smiles from turn only Western our gas as focused The were sales to results proving X say is of wells position. so turned realized And emerging Haynesville. The the sell that continued high day in our M, gas all So business. Western April and our out of to big wells cost gas XX% returned margins. XXXX. starting well, that only the something pleased we far. This We with since quarter recently solid extremely Reported the world of natural to our to Haynesville Haynesville our all net which we way. The have the we're price started sales build Western year, profitable is the third our are we're extremely extensive as no about of wells of Haynesville operating the sell continuing extensive the as here. other well it, up we hedged last we make the Haynesville production were Circle "top-of-the-class" X wells operated results position area part right to deliver XX with structure our of and turned on with highlights legacy on Haynesville/Bossier a $X.XX to acreage started a with update acreage

proving weak is we new accountable program, reaffirmed a LNG play Capital holding that support legacy thank dividend partner much-needed expanding Louisiana get bank this the Western group to natural entering resource partner in production and drilling billion of Quantum and of steady go new to for up just end. prices, needed step gas this the excited a development stakeholders, Texas being the we're our major finding $X base have Coast. A with midstream facilities to near our want export and lending borrowing while along the our build our During providing are our for into us. to Haynesville them We Haynesville adventure to publicly Gulf to Western Solutions with out right time our

call. main you'll slides, to we you financial Comstock go XXXX the quarter the conference to Resources welcome If and operating third results

Quarter you'll the I Allison, Jay or website CFO; this our VP Chief is You presentation. And am COO; and Dan results of Investor Comstock. of our President can to There, presentation during Relations. Roland quarterly going and by view a me find Ron Harrison, Executive Burns, call or and our Mills, with www.comstockresources.com presentation Finance after a titled slide downloading our at Third results. XXXX Officer

If X, laws. statements you that note refer our Slide securities to discussions forward-looking of go our to and include the Slide meaning please within presentations X today in

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

share the What financial X. (sic) million. $XXX and in were realized million quarter. prices including summarize of $XXX or quarter. we'll heavily was adjusted third Oil million flow $XXX do the results the million of Slide the Now hedging $XXX to The gas and from quarter. sales, in we per is the if by generated you'll flip natural low gas operations impacted EBITDAX we'll continued were We cash highlights $X.XX

the quarter. for net adjusted income was Our $X.XX

length day. rate of We're XX.X with having Haynesville an feet last success with per our wells feet. Since average in strong average great or the an results drilling to to program. shale wells lateral million continue of operated XX.X or conference XX We have XX production Haynesville net from in and call, Bossier we've initial our drilled exploratory net the operated sales quarter XX,XXX We cubic Western successful connected horizontal play. XX

Pinnacle were Our with entered drilled production a to next day. gathering sixth plant, Bethel slide. If to shows shale. up of have the drilling and turned sales the support wells us Quantum which Slide production acquired We Pinnacle treating rates, allow and last of in everyone venture both our into built our would cubic visibly we system seventh million to XXX area expand to will Bossier processing Capital have new to the the our to initial is per Western recently recently feet with Solutions out program, our fund Western in part year. turn Haynesville X, combined which midstream were which on with we strong Haynesville I'll the this grow

wells prolific XXXX. We're treating is area to out these contribute will XXX% partnership, which will and have build and Solutions, called to out financial and return hurdle turn system. Group system be increase of third how Pinnacle a We'll quarter results. up capacity the gathering been see investment partnership capacity distributions this receives build we to to reduces to Given now QL cover the Quantum Quantum of $XXX in Services over excited of the to running XX% mid-spring for the Pinnacle we gathering of system Roland out preferred this million up will then that partnership achieved, operate XX%. I'll of have it treating will required capital is Quantum out the direct system set to until Gas build handle the and Roland? activities. the to with affiliate growth. to Capital that with the future an a partner effect, the by contribute to fourfold, and to To QL Capital

quarter results. Thanks, All we the financial X, Slide Jay. On covered third right.

averaged day, third $XXX as was quarter of third net year million the third only we quarter. generated results the we this million, to price the we third Our Slide EBITDAX million quarter same months production our for at income million as sales gas lower year oil quarter X in in Bcfe X.X the in quarter $XXX $XXX the X higher had for impacted as cash first compared as then in average year which XXXX. was $X.X Oil the day. of the than totaled of and for and period quarter reported of the same flow million, in the $XXX $XXX sales X, year's higher X% for 'XX. On second of and in quarter. We of which in the have our year. Slide second Low Bcfe realizations the this price quarter, lower the first last was XX% natural and in EBITDAX period significantly to per and of reported third in third $XXX was year. compared this our $XX averaged cash million, gas we adjusted X higher XX% X the to in $XXX million first $XXX million of That of X than year that last the NYMEX quarter, very $X.XX. quarters the million of which net X, quarterly for detail natural was X% first is which the prices price $X X% We came we to $X.XX. million It first financial averaged spot year. than this period months and compared generated third gas settlement sales flow for last The this close income quarters adjusted in the the million, XXXX. is of the compared months to and gas in which the quarter. same quarter during quarter Production the $XXX of was per

price Katy gas reference that $X.XX returned resell price. $X.X detail from and our differential per were Slide our Haynesville in quarter which to The generated profits restart gas Our of the million to the normal due been prices Hub the the our Houston of following activity, Channel price excess We've Ship produced we gas. improvements buy price $X.XX, operating some We about another cost to EBITDAX using to hedged, our in gas averaged realized LNG during average settlement this in by differential $X.XX Mcfe improved this third the realized $X.XX. On price our more of third-party differential and levels realization the margin. transportation the Freeport $X.XX. facility. In XX% which third to the quarter, a X, we reflecting quarter to improved and

averaged and taxes higher per higher higher Our Louisiana. relate operating X% quarter. our the cost state imposed The $X.XX to taxes costs increased of Mcfe the valorem rate. It's in third production ad quarter second in unit than

flat and at Our quarter were second gathering quarter costs this lower the costs X% lifting other our were rate $X.XX. at than $X.XX

in second Mcfe. per margin compared -- quarter quarter rate our on valorem in this third X than the quarter at we increased we And second $X.XX ad XX% compared months year. On in drilling came $X.XX recap at as of lower That hedging came the other taxes this the in level. our quarter first of X, and in production quarter. activity was EBITDAX second Our had the spending Slide to the G&A the $X.XX this for development year. XX% $X.XX after to

wells million million XX so we turned drilling outstanding the an drilled program. ended months XX, In million billion development our first with average $XXX XX activity we this giving our the of X on net on our third We far quarter The including sales. in total turned activities, quarter. Spending totaled day. On year. of year, $XX operated the cubic development wells facility, we we've Bossier million our a IP of far, wells this on balance to XX borrowings operated credit had program, us So XX.X operated or million sales Haynesville $XXX in $X.X our and to has of $XXX rate spent shale debt. per and XX other sheet feet or at the our to total Slide interest drilling of under net end recap we wells

quarter borrowing base turn billion operations liquidity this the to was $X.X detail. the almost to month, in $X financial now bank reaffirmed ended we group billion. I'll by with of Dan discuss over more third Our recently and it our

Okay. Thank Roland. you,

the are got X,XXX is into our of inventory a the X,XXX run drilling X third quarter. categories divided that our Haynesville feet. the our is with and We XX at breakdown that laterals Slide So feet. drilling to and from Bossier X,XXX laterals end of current to up medium between short split the inventory The

our beyond XX,XXX. inventory. Our X,XXX XX% working across This currently X,XXX inventory at interest equates long XX,XXX to laterals, operated the net at long operated total a in stands gross locations feet average X,XXX laterals to and The extra locations.

with laterals which our gross feet. the down inventory laterals, in gross in X/X nonop which laterals Breaking slightly of years provides the The has inventory laterals. average long than locations. On Our average wells stands operated at inventory X,XXX end operated quarter. which extra gross up interest working feet, our stands operated medium the XXX inventory. the laterals, XXX the of we XXX XXX exceeding sales. gross feet nonoperated at and long average is the length the XX% XXX drilled the XXX Slide date a The future on represents and XX% feet, locations, gross Bossier. XX% us at inventory inventory, X,XXX XX from chart, now short lateral XX% The is X,XXX to to locations Haynesville lengths or inventory in of net has X,XXX second have we've -- XX greater turned progress the is the locations and have the XX split the lateral operated XX,XXX lateral that for outlines drilling length across on of based our inventory

longest stands sales third feet, range to wells thanks feet up the X,XXX we feet, XX at feet. an long the XX,XXX continued quarter, program. XX,XXX with lateral During still to of our lateral individual and record links average drilling success XX,XXX length of to The our from turned lateral

with third the of date, feet, wells total XX,XXX wells we XX wells feet feet. exceeded quarter, over of that XX,XXX During To a XX over had XX we've to and exceeded laterals and with X the XX,XXX drilled laterals XX,XXX feet. sales X laterals turned these of

completed that on sales new XX,XXX both the #X the Haynesville. Based current MS During X Bossier and seventh These the in Haynesville Western wells in sixth also represent wells the these third XX year-end. another Cazey additional we were X to on of turned of schedule, than shale. wells the be feet. feet vintage Lanier quarter, producing longer wells we the by and had will sales turn XX,XXX XX #X to than acreage. wells our The new longer and wells our Western now plan the

to be day rate the will call. feet approximately average million again expect last We at length up individual ranged average feet. Slide average XX,XXX to quarter XXXX, up cubic lateral to XX,XXX sales since day, year-end tested XX The IP sixth million We've X,XXX new to the day. new rates IP million new The test vintage an a a and a a XX wells time feet feet. Included seventh with of our with feet with our a individual wells of was lateral feet Haynesville activity. of well XX by turned lateral which well to feet sales XX the August. laterals our lateral September. #X and length with XX XX,XXX outlines the sales a an in from Lanier the million was day. are Bossier an from was The in in a rate turned this MS, Western and this of tested the well, turned well was XX The Cazey was the also million IP in We completed acreage. had cubic day. XX,XXX completed in We is length cubic XX well X,XXX-foot and tested in in of Bossier, rate completed which

North is we drilling In running in Haynesville addition to turn our core wells well We X rigs producing we XX and actively located do acreage. and Texas the legacy currently This feet and D&C laterals greater on have to for are first currently waiting ninth long. wells through long acreage benchmark on sales our have completion, third covers having costs our quarter Louisiana X are that to the expect wells. Slide that January. East the X Western our than X,XXX tenth well that our summarizes on lateral wells, that

our our to turned on we benchmark the second acreage, wells averaged that our were increase quarter, sales wells. In lateral and foot third benchmark XX $X,XXX a reflects East were wells, wells the Louisiana the cost long compared to the on which D&C of quarter, During XX Texas, core XX X% a XX these quarter. North

XX% some Our a the quarter. lateral a increase due compared averaged encountered $XXX length quarter in third the drilling quarter the drilling costs is in the which issues lower to quarter partially average foot, to second and

foot. completion decline This the quarter in decrease third Our costs compared came completion a X% slight a in a to service at mirrors is quarter. second The decrease costs. in $XXX cost

levels. And in activity we with we frac X going our earlier also this crews, into are to expect running which X levels. next call running We experienced expect year, We're next is rig up to activity working and our the year. Jay. the And have turn over We to now associated do rigs. also currently back lower the forecasted the these same frac year. I'll to wrap keep the crews keep X in activity

you, Roland. Thank Okay. Dan. Thank you,

continuing asset of be XXXX. gas play. our the great add summarize in to our substantial half to I we up that For well horizon, the growth to a benefit for the growth Haynesville everyone, begins Slide XX. rest believe will in play in by show Slide from the prolific LNG that the very we'll we'll for to direct that Haynesville region We building to extensive acreage proving next in second exports the positioned of year. this natural in on that where turn we position XX, is you are demand driven in our Western We up Western on outlook our focused remain to

plan per the we'll $X.X our lower rest price the that the dividend structure financial in than that gas provide required public the cost structure Ron almost to now retain the producers. environment new current otherwise liquidity, We quarter. I'll natural production strong of common of reduce very our is to as cost support share. we $X.XXX And lastly, capital growth natural Ron? an guidance for to lowest our quarterly partnership other asset billion Our specific be continue XXXX is the of gas Haynesville midstream to Western the will end year. maintain the expenditures substantially totaled have some at industry-leading which expect in would

guidance provide signs be improvements is seen million. earlier this deflationary to the in We pressures we've fourth to we will financial quarter relative of CapEx on service costs most million Jay. of quarter XXXX. And for $XXX Slide Fourth some believe guidance of Thanks, year. XX, $XXX D&C the XXXX. On seen those

CapEx basis, billion. In spending, the remain million terms of other to $X.XX of our infrastructure billion infrastructure and of other $X.XX and to $XX we $XX a On our budget and million combined annual past continue during to quarter. within fourth should spending D&C guidance

$XX in above, we now leasing what drilling spending additional million to quarter activity. addition spent we on for million our to noted program fourth anticipate $XX the In

Our LOE average $X.XX $X.XX while Louisiana the valorem are expected still our remain total Production due production valorem to defer the in $X.XX we cash while roughly $X.XX gathering per taxes to the to the this be XX% beginning plus to quarter noncash in in taxes, quarter. quarter, $X.XX the range, now quarter, costs expected with $X.XX into Mcfe XXX% per $X.XX tax while average range the quarter, the interest to and to quarter. the increase put noncash the to be with third in at to to taxes which expected to range, SOFR remain to is Mcfe go in of reported is effect expense $X.XX Louisiana our higher still On per quarter. our cash year. the costs will of million to is higher G&A to unit ad $X million $XX million Mcfe per taxes expected rate to transportation that $X higher is of to to to to additional in effective $X fourth XX% $XX fourth million rate remain along the ad are expected are DD&A in an the $X and fourth per our roughly is in XX% fourth in tax expect rates, expected interest to million million the for G&A. Due our in expected rate

over Now to I'll turn the the to call answer questions. operator back

[Operator Stifel. from Whitfield question Derrick our And from first Instructions] comes

on your partnership. Congrats

you. Thank

partnership, fourfold comment of confirm If prepared a about could per correct, the for thinking you egress a you're to correct, on in comment Quantum Western well? in day the you're remarks. Regarding your I my If X Haynesville. you are how numbers suggests mainline that's made capacity in Bcf as solving wanted

Well, 'XX, And we X.X when you're I a then. that at that exportable gas. in market part And latter at And now in see lot now just to of between the when Haynesville, footprint may we we we and to look think and depends around that's inventory, and X our day. type looked we upon year the we'll between be after Western our every looked the to need gas as and going what of think at and probably maybe a feed for XXXX, Bs. B have we drilling production corner of another look the you're that, need what needs LNG, the as another to going wells

this which Blue do mean, We we well performance. at, we we So need looked well, looking is to what looked them source and build Ribbon the to out. around and when months that visiting they started do ago, for at is in infrastructure started when with financing our footprint a Quantum, I

as our at the as What second of looked is we had Pinnacle far pipeline. when facility, Bethel We the the in XXX-mile XXXX midstream bought that block company. quarter starting in also

So again, count We the looked will all add. at evaluated that. rig which, we we

the to in a in year. Haynesville is Our the Haynesville goal next Western rig add --

in think X go we and then footprint. to we we rig another rigs from would what So that's XXXX, add our HPP, and X

come in the So would X out the to And gathering we with available if at between for to up the we mid-XXXX we Quantum, globe. That's midstream X growing this, day you on XXXX. the funding at least America is and to now and we transportation future it's us think with and at is which the a at with because years we backed done it which like for XXXX, would this that kind and based million did of then takeaway, the have have -- XXX that day that Quantum Western a Western of known need the having number. everything Haynesville investments model with into at the modeled they into financing upon and a and how that think look and and where we're good now Haynesville. I the really and that you've would serve you we the fourfold then like like from the with That have capacity by years, and in look that's -- I make said, I with question going, you to mean for in and about where both really Bs we you're our pleased kind for looked by what banks look partner gas, you. we would

Western And going announcement leasing you the 'XX, happen Bs feedstock X only company. what's acreage for and why the and check new upon we where with come so from. for the X first had that all -- Because to ago, our building in drilled we years a And to Haynesville are stated have rest the you where 'XX this is we've today, drilling a that's that really give look when do what the we the dependent good and LNG. ago, to those we're they been them started and that us. company, but X build started That's the world ago. where We thank entering was approve well they years we we going. Remember, were publicly X mark venture with doing of that's through years

on that. did You math your

to Western you Jay. Thanks talked too. operating about at In the seeing the for of the and current color, similar past, have returns the kind it, legacy Appreciate the all conditions. guys Haynesville asset Haynesville

you the curve and in learning Haynesville, that gains stages in you're what operational could early efficiency understanding in could still to speak the the cost of over With seeing improve degree Western you're time? your the

is Yes, Dan. this

the seen off, we cost curve on probably in I'd of part Western our we've have We're the still. We've on it XX Like mentioned, in our learning Haynesville. you -- So the structure is made early. strides days say, great around steep cut we kind M from We first where coming pipeline, at well drilled when the the sight to do of Circle things future. times that drill further in cost we're will up get line today. to some the a of in be the down have

So completion we it's much that. And higher on doesn't feel horsepower here. think about potential out. day frac these down big that's savings wells pretty confident cost then a do cost in the have the we a probably side, It's pretty little thing I bit to for day because and same

really completion and would just would from be typical -- gains the So multi-well come pads side on operational the improvements. efficiency doing

comment would the at once really M. Dan on group, looking I when and we Circle drilled things complex the that were

a become simpler. things Some those of little

and to and turn well now drilled focusing to If the well, sales, we not on and ninth your and much started eighth so drilling you Bossier. seventh tenth it you're your Haynesville, now

So that. see I do

and kind as think of on come the to cost inventory, shows Quantum is the forward. We're hand-wringing a some It's more going We answers But think our your question. do we we building results lasting goal, first company. that, that kind of what the wealth. have do and M of as have the as focus where We our continuing And of down. far can you much well. that. require well lasting think as build that I like worth, that We Circle company. seen of to this would the has comes don't in long-term looks not us drill performance think the and and I near-term future it

next Meade question Johnson our And comes from from Charles Rice.

Dan, to Good crew and morning whole you, Jay, there. the Ron, Roland,

to It's hear you from always you. good

be us weather. with the XX-degree with should You here

You'd happier. be

decisions willing this, high-quality $XXX what the I ask And I commitment, of amount put JV. kind down some here them but have your commitment at the volume kind some of to that imagining and kind maybe were a question to here. maybe capital. about would I'm outside you're it's firm But anyway, it. that to to be about a million much through about share real I'm like for into in money from looked XXs to business way volumes -- have the to want something happier. And else? that's that system? commitment, -- That's of like Quantum this I of a the a morning. but going they great minimum not We just maybe you've how that got you're the Jay, partner gas? the the also, usually can Mcf denominated, entity put that can you to you in pay midstream curious you they going that's put rate work, talk Pinnacle money that per be going that are paying is way general, to as producer to about of

that the about $X.XX processing for I a transportation, And wells acquired to we've same the on Mcf. to And been Charles, we that system charge we Yes, charging continue charge we're went and that's since the good question. to first think all that year. per last going rate

to in back no have rate less we half a really there's small what It's subsidiary the production we very we same that be. had. to is the And the So rate. here yes, far change that project than have our MVC of historically that's own

kind So new that of entity. midstream -- of kind just the supports

Got it.

understood I if right, Roland. -- that's So you

commitment, it's paying less that than you're midstream what volume guys So some was this projecting with half but it's as consistent from and far already you as there what just are of rates, asset?

That's correct.

Okay. Got it.

out think with Just we X. a start big with so Charles, the adjustment production have, risk existing we I that day

those work offline. the do from to they I can we X XX%, numbers, that reverts we'll should but And XX% ownership be go to or But guess that able then out Got it. work rather where ourselves. between when do figure whatever, we

put I high you I obviously, question, clearly, to own these you've up had XX. X the about you you over guys. effort your to look can or even big guys results, you Haynesville, are want -- ask X at I Western or -- Second are mid- again guys in the XXs When think guys is for IPs a this

is So which what I if are other perhaps cost over if being you there's that? now, I where any on maybe D&C pressure the is think time, wonder to wells? And these derisked. want that what aspect are the costs. you your important D&C is not data share then But what drawdown points, of your but you target -- share could like

and I'll Well, Dan. leave to it start then out I'll

that's half. not in IP we're X, rigging system number think, I rate cut the a with high

that you need I these wells flowing don't rates real The these rate. rates at. an IP mean we're second IP that are

that's unusual. Number think what I EUR in typical number may X, is legacy wells EURs, which that's I said, that the they drilling, well. double the we're be we in the as a mean, I think X,

Charles, big play said, those barf first exploration X, X Number terrible. So going you take in always XXXX, game bag exploitation first to you are they cost big I look backend of and be the or think a than wells play the because We in legacy normal. in wells X a footprint the the need little is the changers. Haynesville/Bossier any higher for

we fairly the at that days think that we're wells not a these in today legacy least cut he's we the X equal I will conference as we is on or where have call wells XX that drilling stated Haynesville the wells that and these drilling. it if And costs Western to, is the competitive, down come our last think said think already down wells. days I by smile. Dan make --

start we won't That's type maintain thing today. will bottle class for in X,XXX these where are of the you don't really curve wells the why really because out and that over of we've drilled if a when think these the the wells core know what wells hole know say pressures ever Haynesville, they while top the of is I are looks we falling we the like these and this are and Western wells best touched. some

anything? So you Dan, want do comment to

Totally correct there.

D&C of little comment just a cost. kind So I'll on the bit

a made drill more the Bossier, vertical the get takes the to due got the sales year. the lot this to the have we've be produced will So of have a X XX have we temps. Haynesville, next we temperature what be first Bossier. drilling lot in of -- different to more of kind next gotten higher casing to X It I lot totally to at targeted headway And at basically, X entirely here a than got we we design We've are -- of heat. We've and lot part of is hole. of core. to going in but the wells in the laterals turn targeted those due up the a down -- temperature, not a just wells we've better partially the a think days

going we I that the put still are it's field, in focus things turn one emphasize cost thing got single So to to here we've we've to work wells targeted got amount. And We some going to here. considerable the is our that. get want to we're feel But to then out down. drilling the

up Either everything core, X up the X at cost the or well So when in a pad. you multi-well there pads. is look

So X%, a are these X% cost, wells. just you're down single pad getting multi-well versus here via less X%,

have of cost a going is that in on what you're EURs lot is forward a alone I that But potentially improvements bit. up at little Jay going mean the then -- totally up to core. going And the driving to future. the in definitely our double right. we we're cost So is looking make

that think, the borrowing answer $X our I reaffirmed Charles, is, if base billion. really is for

that. looked so support So that I they at the us, XX or banks mean,

at Quantum has it. I think looked

we are had right clarity we when we the we're X M. Circle now drilled of years of going, where ago some a confusion that we first where think the see and I with lot

see get they the off. wells, will then still once is, to good. and are had set road, you basis, really that but sample results we quarterly tell us months the been enough EUR report the down to complete the and be the have a easing And we'll on is cost that will we've what drill as and you'll to which of what wells Some these drill real

our And from comes Company. Jacob question TPH Roberts next & from

Halloween. Happy

Halloween. on offer right. That's fall

right. That's

be entirely On comment XX this on your what that then if Comstock could just partnership, were that if you will would the on be of provide reduce about have of curious Quantum number? outlays. should be and we XXXX? you Slide comment somewhere able to maintain of thinking lower to else spend level? the expecting on the responsible. XXXX I'm how relative been a kind And on to offset this we going Or CapEx same Is should capital view Are cadence kind

year, year rigs. starting to we're that going At out CapEx. about of then next the be started we the at. Well, more Talking this with beginning

think, -- drilling would we cost and service bit. down little rates a overall, and are So we

responsibility. The now And there's kind lower the phased in. the It's it a to over made and achieved. of over in well not X-year we've results signs midstream based the of So this then take before we going Haynesville capital. build that We're partnership that a in layered is midstream lot to partnership be going handle point investments build out be huge Western we all day to that X -- on of to the will volume. a on period going to

of we a capacity we We this and that have system, bit made now a quite to upgrades because acquired year. base

And so them as have start capacity, toolkit great great to do is gathering starting we kind out. add need of then we additional we'll a treating we build lines -- we'll this as what additional here. And

spending million $XXX for So venture I between think year, next is million. $XXX this and the probably

been of so source. that from CapEx, So this kind have now funded would part other we'll our of and be base

think a get I you talk XXXX? Can to mentioned in XXXX. Western X a by need to But know Bs to And on the you you Haynesville X the might level rig count looking a question. rigs plan is -- it. day Great. step really XXXX then the and on you about little Appreciate to long-term Jay, that bit up this this

X Haynesville. Well, have, go think, XXXX. fourth questions. have have have One think in by rig we hold really footprint questions. We it's as -- to X to big to our rigs probably we how many a the -- we One, Western rather we

mean not or the upon in That's time because we to -- of some years think we that and leased this XX So to look ago, at point the I it's unitization, rigs hold of probably that's laterals over count. We need XX how depending it beauty rigs. the the lease needed X all we It's how all X play that rig at the starting acreage. we acreage. X rigs.

wells So has rig. we performed, built. in for several as started the now And another had wells, get Remember, built financial second Haynesville. to think, a those I one get Dan wells Roland ago, shown the results, rig. the And third One, calls and using months X new said have we rigs drill and February. Western went rig Cactus the are we've we'll from X in it has these as another one, November in a to in really

X question. that's So

question model, with They a want like and you if have you Second take is, JV we a midstream quantum. a road. to the see down look with what

So where to X we you that with out a up that XXXX, and model day. that's end Bs

So to in to you we've we to have as got X we X gone -- to and rigs core, now we've look X get there, X the And X. though, X X core. the at if from

X earlier in and presentation. we core should next year, X Haynesville. That and his mentioned Western in rig talked have that legacy count has the the about, the X So in Dan still or we

And in the So Western see rigs. what our XXXX We Haynesville commodity X results We deploy we of any just numbers in areas keep we prices. with and them don't rigs. different see adding happens then gross the of for XXXX.

count. that's rig It's where So same the in guidance. go we

And our Donnes from question comes from Truist. next Bertrand

for just young off press and with to for release on thanks out children. us night Halloween Hollywood Jay, want start not say I putting your --

that on guess [indiscernible]. I

or agreement. parties for a was there then expand to maybe happy kind more any a interest to $XXX of just going exactly. million the go medium both and beyond that, just party where first in then talks the eventually Exactly, that data question, And with on gas little am there third the Were to And into allowing it. is I get system? start

designed It's to it was think kind flexibility. we needed. I got lots of of what be

to -- what not we need. any -- out system as out volume. So build it's continue not We're to us our well particular just building we're the tell going results the

on spend to going we're like act not the amount day whole let's X. So

flexibility we're So smaller got a to expand I stay and -- then or at lots think it's of level.

that's partner. this this hired be really to all And So the why a that's this make operate project it, out. of decisions. build -- experienced group then Quantum like partnership. Comstock run will going financial the midstream We've kind very will our we and

going on as based we wells got spend how to flexibility what we we're far need. tell the lots as us of And So it's much spend.

also the we was, it I relationship contracted that's obviously, it gives think lot I more all have to lot and if flexibility, state a use We a us reserve to of funds. back to and that a got refurbishing system -- need to just and those And the nice we've a of think like it. And the the we expand so need system, phenomenal or legacy needs see from a that have earlier, -- lot I that's flexibility just base of buying last it made didn't -- year capital. capacity, -- spend how if we if acquisition getting don't the said we it we

we overall this why like that's partnership. really So

And then potentially...

eye gas. short it an need natural the we term, on for provides out I for we what obvious keep the long-term think but

So us does term, gives partner for what That's it you. longer for the flexibility a too. Tier X

own Yes. acreage On other not volumes we in the a available there? volumes plant. of lot third-party mostly out There's there, third-party all this

of Well, that have It's that's we in was volumes Pinnacle XXXX. the the why bought we and created. plant didn't the have, volumes those value that which we

XQ maybe the the maybe then XX% -- maybe there in was, there? on something maybe a dollars, package earlier there. I acreage we've or guys. of end And attractive acquisition around got program, small update quarter, we're rethinking hey, saw is towards you step think is last a follow-up an just looks somewhere Or October? Was the like great, That's then the And up. in just that

that lease all. that we've some core the the grab mineral It's a at will Well, we majority acreage end. the that of get you expansion we be already back we land and It the I ago additive. we years, to footprint communicated tell and open even Tier go where acreage which in ago, from, we That's call of would it an words, that nominal where kind we we I finalize set leases ago X think to this years no, would big X, we that. In of just more we as add would goes think have, at the into of over It we with if this and then can acreage all That to have years had out XX% at get core be X it year, like loaners those are. get with years and end have we and as core be on what to X, anything -- we of from over X for is we've point classified. get that X land would or over that if X rounding other X will of not we like think expand that I the all. or -- or can acreage an year is ago those seasonal out we grab we'll just see not we that I with is not. coming it. But the

our And Securities. Phillips next from Johnston question comes Capital One from

as not to us volumes the like today? are third-party the it this say to in then because gross it's approximately your But ramp it's day is know you by if X the -- on you out. well, I all, with Comstock significant help play able is could point. are what your relatively early, and not and was of production I a volumes guess but sort mostly, ultimately -- sound question that's starting current broken 'XX Bs if XXX My but volumes. does maybe up

would double I No. out do company, and what you do add then M&A ask see hold my I'm If we have you Haynesville the wells we're M&A third year, if of big I rig size these how M&A. going I'd don't know think the I'm to if be. a a to a going and up. Phillips, me derisking the know next Western big to here And

new have see wells perform. the how We to

day. you try if a type we Bs geology and that of because on throw with is out to is between we Quantum, then now So just now these anyone that that have us grow the to keep should there it do that way that in where have something long XXXX, show focused is and think that's X we not about we simple. We model try the volumes have a But the between that let we that be down road.

Sure. Yes.

the that, Okay. were And by in QX. helped of of first cash question and then course, you for a half some of maybe the some guys year, here In capital fairly inflows Roland. sizable reversed working

in year, either Just wondering like year? use And next capital source material you if a cash expect what rigs throughout QX? that might of or assume would will working to look next X we be you continue run

think working have the of where them the capital elements change. year. earlier And were X one they spending there's levels from come down the in Well, I and levels, spending is of

spending. months lag that mean cash think so like of see it's X really month I you So I a you've impact lags, seen that between -- numbers it and X --

secondly, the will think the kind of while. And of at of gas will level spending won't that -- but working be X or a is rig element from would source because be stay So prices. kind I of then all capital that kind forward now we're a going use for -- other

will prices ago capital will gas we're working part be months that that's of change. receiving a gas lag mean and higher X the from be are priced. So lower still if obviously, -- I now it

seeing. hoping up you'll that's to what gas higher capital see bit that continue of quarter a you prices we're continue going of working to from adjustment little before. keep as a prices obviously, negative And gas see and the effect So you're

were gas the little lowest a prices were, In they quarter, the bit better. year lot a With we fourth in the better. they're third second for quarter, quarter, had

they hopefully, So year, be to better. next continue

million a which is I $XXX hedging the into swapped of go Ron, at day we'll add that think think position. were XXX, We a did I hedges, good number.

last XXXX. We're, that or So XX% weeks. in probably for X hedged I we the X did think,

to in the at of think I look you be world we'd like Comstock, XX%-plus. If the perfect

listening still We the that. on, looking we gas extra demand do We part hedges everyone some to to XXXX. 'XX as should those see think we So really should know through add think just and go in latter will it we're of to consistent. that for pretty 'XX the you appear the mitigate risk then

is that our goal, So Phillips.

Leo Mariani from And comes from MKM. our question next Roth

to service kind kind bit Eastern costs you're traditional a little in Haynesville. terms of talk you of core of leading-edge kind and seeing the what of Could

that quarter sense? mean, at earlier I like Could you come just kind think said. of up in was you looking maybe you us X%, a your those some. give I have alluded D&C Third

and edge to do see doing that of you the starts in what financials? kind show leading the up So you when cost service do in think in the

So Leo, this is Dan.

the than went are they just this they down else down. rig We -- down. course, we've higher earlier part XX% other costs come year. been biggest we the But down come mean, service rates have seen the They've earlier have back seen probably year, on this that easing anything we've -- up of since And -- went the the seen rates I but when probably of the I'd are rig say ones direction. decrease

earlier driven frac probably X% since I in our just the X%, decrease I a think That's on cost. more probably not really like the that's completion much. side, quite X%, mean by year. as

much which level of even next with to slide and us they continue next We'll to maybe or I see into potentially this here have materialize year. down and also activity think they Permian in see pick And the continue wait may prices, quarter just to just if these the affects year. or gas next that -- what how year. out how trend we'll up really fourth kind into

you're I there. cost at difference. that the may per in big well cost is, that when the add time oldest a So looking Drilling are costs completed comment Leo, X there's

report all couple the is this back the we completed. And can't drilled until well quarter, -- a so at costs a them least probably of of more there lag because were ago. because these or in quarters wells ago even but Completion quarter are

So this older numbers between that quarter. which the drilling there's get a are reported costs, disconnect

comes cost drilling the see you'll down So last.

out costs So continue see I you like, we because wells complete, to I recent should go we -- probably in what think -- if get drilling costs would look quarter. what -- with we'll look as you the that may do more reporting chart kind expect to down of future first more see and we get to we'll come this start

I think seeing think, in that we're I current this costs see, scorecard. the we that's when now really show up particular

wells if Yes, good that's report when mean you a really I at we point. sales. they look to you by if -- turn --

of that of when lot the in cost sales turned far a QX wells. back So drilling that drilling actually as as the we're in [indiscernible] XQ, wells done was to

So..

Savings aren't correct. That's here yet in that number.

with helpful, just to That's great kind up a bit just Obviously, were then the on And CapEx future guys. financing deal, that's to able Okay. of guys maybe follow mitigate you little see. side. to this some

I guess bit fair little gas a popped we what of could the noticed up thinking of extent term look liquidity think kind you about out? this about that, as the near quarter. see to some revolver kind of that see in forward. needs sort maximum But on to So term some were a future the point you out you to going debt prices kind we'll I would that Are of guys and revolver that funding debt future? climb we do more, guess

gas repaying bit I in that mean get back a back as balance. think over I would I little doubt over us prices we a good I -- up it, puts mean, that Leo. see $X. kind of

we very a The second and that prices, these gas revolver into the had bit, third lean low that quarter trend reversing. but little had to see

And question Diamond Paul our from Citi. from comes next

play? your and of more bit that the Is year. the Could know X where something next you it guys kind bit still you think term? plans Bossier. a talked of for I development roughly Or fits I inflects the just is of detail a versus on development that's that long breakdown of get Haynesville about X

Yes.

Haynesville that is just to the or overall? Western -- in you So relation

Western Haynesville.

Yes.

that we stated. currently we've producing So are X wells as now got

All then bunch. that are X exception have to next got from sales producing any Bossier And we X. turned the turn of in producer this sales in We and Haynesville makes year don't into with those wells January. that all more year, the for

what which to scheduled in earlier, next X just XX are year to sales and of X we'll turn those the will full and Haynesville, year, we the -- So have Bossier. that's is wells had that said be correct,

of something forward? being that to that is is continue perform? And we as how going the -- kind still the expect felt on wells Or should out

a role in mean, I play wells the obviously, how perform that. will

I hole chances temp -- kind we see lot a bottom we Bossier when the early is We dealing high kind increase that of knew with And you'll of targeted a got at we've leaned in first think better mix. We time, play, to obviously this temperature. just since a entered play. specifically the -- that on success. our the we've of

the Haynesville. on more in leaned we've drilling So

there, a these it's I will the in early, performer better better performer. like to just still think the than we -- Haynesville going core. be the Bossier a be see I up Bossier, Bossier like But like the wells to be look just We expect but up better Haynesville fantastic. the little -- it's you'll think a

basically so performing ... the if better cost going get to wells the wells Haynesville just your can the And beat you are same,

Understood.

of the to Over feet. quick there's months? around to given about the Haynesville, been in sitting how XX where next X you you length get -- kind as Is of in the envelope, your kind Western lateral XX,XXX I the are that pressure, think where in guess, efforts of kind core. Just do Haynesville as I far length Western in can know higher the follow-up. the back guys is of extend lateral

third so play well Well, well. the feet. we drilled the X that the in XX,XXX Bossier already that drilled to Maybe, we've was out was

going X, right -- if we average So the the those the we're XX,XXX you XX, that is turn now to got feet average to that to of X,XXX feet. looks probably And XX,XXX lateral year, on next look if at you wells. lateral first at length group sales planned about our look length at wells be

down getting see get where the due us improvement. technology longer years sometimes, can lot So end you you just X, know really never here the temperature. whole X I you to a with out But the up road don't

pretty it think So I our But that XX,XXX-foot wouldn't to totally be roll much target. is mark out. going I

from next our And comes question from Research. Noel Brothers Parks Tuohy Investment

rate and of this the environment. So changed I big interest about that's wanted bit to the factors cycle ask that's a in one

went curious, you thinking was with negotiation through I So Quantum. process about

I Just coming even rates? or long if out the were as looking curious of gas they have interest What returns leverage in we for with scenarios looking your might you've just a your result to as LNG their wonder how if given greater longer at own you're prices mix. And to term. and you fairly or affect did do thought your term? that returns any planning volatility

very the we very rates this up of rates then our both in Well, of been that year long-term The have interest up fixed. floating in on is comment we a And lot, interest that lot the environment. board. then the showing have good rate rates. a rate rates We're interest at of also obviously, fixed are up cost raising and new that's have kind debt across much a that's have low a the so fortunate attractive midstream, rates -- to a

next the So forward X of after rates exposed we where to kind we'll years. period is back hopefully, of sometime rates as we at too to -- get least over higher don't the environment an company the down. Comstock think And X kind come the that look to interest

wondered sort given of of sort of country, X here. of the eye more thing operators grid in it of hearing One if industrial the just people you get DAS parts And about to just expand grid grid country. or as an micro I and about some with small, either to on the to their thing note a were want reliability individual contracts technology catching the the share getting maybe I regulation access aside worried many able being users, -- grid. getting from to Great. we've up on sorry, But seen, part just inquiries we're just but lot about it's my depends still other and with of Right. LNG,

getting customers like just were any I feelers out might So do for that you -- something anything to hearing if wondered that? be looking

area. lot put great a Coast, the And access where the that big there construction users. pull That's Gulf Louisiana not question. we in in the coming new of a growing really best a there's in team LNG reach users. addition for demand industrial LNG related really to of initiative place the had -- the kind demand they that's area industrial We see Gulf We've No. to all Coast, new we along a luckily big and more out the can to

LNG by easy gas And up was relatively large now the It's contracted to so get. supply being users. where

we they as sales So we or connect a lot supply base long-term would forward, demand I down as you'll of gas to And have to us all for of -- the from play market. more type is. to get their and offer stronger They more probably what can customers. users, either contracts really directly and where tied we're can Louisiana, predict we Western either have Acadian, go go our growing even lot from reliable pricing maybe think those a interest are see to LNG a and on shippers a they industrial to Haynesville seeing very our of and our we're directly shipper or anchor new forward users. We those portfolio of can we users play that that like in more

where or really more And signed just thinking terms something tied you sort what be years until about XX nothing have I'm do when it's years, sure discussions long final market all? of are people or or just is there wouldn't outreach, contracts those X that done. But at

years time. short-term a far is I the gas about Longer-term interest all of just people as to market very, think same mean worried contracts the and are common. pulling obviously, -- think the I X contracts, the I on at very XX contracts. being as is they're X supply everybody because sudden,

-- directly So working able that's is in end on the or key to And a blank contracts. users. of have gas an lot not connect as yes, and continue to canvas where in interest of contracts transportation it's us acquiring we the parties. to been committed from lot be work long-term to something these Haynesville, The the we're we've a getting longer-term our kind other especially a for on, new Western seeing

Fernando next comes Energy Pickering our And from question Zavala Partners.

me. one quick a Just for

plan rig into it production to the do legacy X rig cadence? Or you from a program? little rate the you move year. be think Haynesville bit that Haynesville -- move to flat think Do legacy can with to next a held With rig with Haynesville declines X your your X Western

hard hold it think chance good X I it's will a flat it that rigs. be with to just

high grade to We are we going -- that the to some be of most high part. looking maybe grade at prolific can

Dan even -- stable at that's build IP like period it the for those, produce that the so best the then with to Haynesville very also starts as have long Western we almost the said, though kind We has markets we becomes That base, to where base, part production, of But I and what of transport a nice like of think lower production a we that. a -- look when time. production and -- them lower best declines. much the at utilize a

think the Haynesville I can -- I how kind the balance over have short that to part X. we'll corporate a that term, production more Western decline base. longer our meaningful to So lower we think as rate we'll takes In see of of have term,

our next And from comes of Brody Bank America. from question Gregg

$XXX will year. need there So is of a you capital than capital? but wrong need Or It that. Is be is -- plans a per there seems X to can kind to million the that you like down $XXX And spent about $XXX you from Maybe get raise to million more might revolver in million the fill you coming of said million, raise to facility? is next day, more to the enough? $XXX Quantum. I'm there Bcf million $XXX maybe mentioned About to there.

it to capital that's leverage after the on those become to in. assets going. We of really at has put much come time. Well, that, plan the entity I don't We this think amount self-financing think equity gets will that

of there's -- we based a lot future still kind on it to of written So the on how build a that. that is see adequate be seeing lot is of do that, it we're up. But

So up financing base. we've in will -- is have an of so kind subsidiary, own potential that That be -- that of its lots that flexibility. got set will unrestricted

future, could its facility, -- it the anticipated have own own box here. but that's do of credit it it sense, to if right out have in could So makes its the not

doesn't -- not It's... does said -- have of -- Comstock you guaranteed have any has it's that. you Did unrestricted,

anything in. That's from will that's subsidiary, that Quantum guaranteeing right? correct. Yes. coming in kind of equity Comstock the be company not is commitment And dollars

here. so kind unlevered the a build-out. we And basis. And cash run will flow help kind reinvested of plans to tend immediate be it then at its the It's very an of into own also

Yes, for that makes you. then last And question sense.

to at -- capital. there access approval Or available it your there it? some is you get process Is million of to all Just certain discretion? $XXX is tranches of to

investment. That is up on, the available. $XXX cetera. the part part an And out budgets And committed there million approved to the with it's approval actually, is that's million. of obviously, $XXX expand additional But based then and et additional can we it

Allison to further I no over Jay And questions. call remarks. I'm showing for turn like would back now the closing to

want I That's for spending probably thank everyone valuable to your asset. Again, Perfect. time. most

with thank for you us. time So spending the

that keep presentation, the listening want appraising we an that want partner is Haynesville maintain developmental want results to risk solid gas build if We to manage Haynesville. hedges want the our a even to the to the the wells to in to for we be we to Quantum Haynesville shale We clarify, from to Q&A to As reported and the of on all Western as to we play Western And prices, for and adding with arises. eye some sheet. midstream adjust natural I XXXX balance dividend. weak drilling was great our exploitation we just by Western the drilling. want our We goal program. And opportunity turn want

dance reading on the Western was the of I partner that the Well, titled reports, I one dance As I would know for floor. analyst was a finding them upon Haynesville. all expand

Jones on Comstock the now, family. the dance we family think we have and for floor the Jones with equity have all the I right stakeholders

have sponsors. We bank our

Quantum. bond We have we and now have our holders

we kind that Jitterbug? Texas Well, So you question and That's day, deal it? perfect is it this goal. hope that is, what is gas. Texas. And of around pleased may Is Eye it our -- dance our Is the goal. today. the it walls a that old participation a come, be a globe is, the it to over goal, not is we're our for with consumers That's Cotton We our X-step? Is Joe? across thank but feet your you headline. Thank in every people that the and America for need years the

you for participating. conference today's concludes call. This Thank

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