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Summary of Significant Accounting Policies (Tables) | 6 Months Ended
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Jun. 30, 2018
Accounting Policies [Abstract] |
Results of Operations for Properties | Results of operations for properties that were sold were as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In thousands) |
Total oil and gas sales |  | $ | 4,535 |  |  | $ | 11,881 |  |  | $ | 17,747 |  |  | $ | 25,416 |
Total operating expenses(1) |  |  | (1,743 | ) |  |  | (12,293 | ) |  |  | (6,134 | ) |  |  | (26,598 | )
Operating income (loss) |  | $ | 2,792 |  |  | $ | (412 | ) |  | $ | 11,613 |  |  | $ | (1,182 | )
| (1) | Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense. No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale. |
Summary of Accrued Expenses | Accrued expenses at June 30, 2018 and December 31, 2017 consist of the following:
|  | As of June 30, 2018 |  |  | As of December 31, 2017 |
|  | (In thousands) |
Accrued drilling costs |  | $ | 6,028 |  |  | $ | 5,874 |
Accrued interest payable |  |  | 20,937 |  |  |  | 21,277 |
Accrued transportation costs |  |  | 2,882 |  |  |  | 3,269 |
Accrued employee compensation |  |  | 2,561 |  |  |  | 6,449 |
Asset retirement obligation – assets held for sale |  |  | — |  |  |  | 4,557 |
Accrued ad valorem taxes |  |  | 1,200 |  |  |  | — |
Other |  |  | 1,848 |  |  |  | 1,029 |
|  | $ | 35,456 |  |  | $ | 42,455 |
Summary of Changes in Reserve for Future Abandonment Costs | The following table summarizes the changes in Comstock's total estimated liability for such obligations during the six months ended June 30, 2018 and 2017:
|  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |
|  | (In thousands) |
Future abandonment costs — beginning of period |  | $ | 10,407 |  |  | $ | 15,804 |
Accretion expense |  |  | 280 |  |  |  | 431 |
New wells placed on production |  |  | 4 |  |  |  | 4 |
Liabilities settled and assets disposed of |  |  | (69 | ) |  |  | (36 | )
Future abandonment costs — end of period |  | $ | 10,622 |  |  | $ | 16,203 |
Schedule of Gas Derivative Contracts Volume and Prices | The Company had the following outstanding derivative financial instruments used for natural gas price risk management at June 30, 2018:
|  | Future Production Period |  |  |
|  | Three Months Ending September 30, 2018 |  | Three Months Ending December 31, 2018 |  | Six Months Ending December 31, 2018 |  | Year Ending December 31, 2019 |  | Total |
Swap contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Volume (MMbtu) |  |  | 5,400,000 |  |  | 5,400,000 |  |  | 10,800,000 |  |  |  | 4,200,000 |  |  | 15,000,000 |
Price per MMbtu |  | $ | 3.00 |  | $ | 3.00 |  | $ | 3.00 |  |  | $ | 3.00 |  | $ | 3.00 |
Collar contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Volume (MMbtu) |  |  | 2,700,000 |  |  | 2,700,000 |  |  | 5,400,000 |  |  |  | 5,400,000 |  |  | 10,800,000 |
Price per MMbtu |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ceiling |  | $ | 3.30 |  | $ | 3.30 |  | $ | 3.30 |  |  | $ | 3.30 |  | $ | 3.30 |
Floor |  | $ | 2.50 |  | $ | 2.50 |  | $ | 2.50 |  |  | $ | 2.50 |  | $ | 2.50 |
Volume (MMbtu) |  |  | 2,700,000 |  |  | 2,700,000 |  |  | 5,400,000 |  |  |  | 5,400,000 |  |  | 10,800,000 |
Price per MMbtu |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ceiling |  | $ | 3.50 |  | $ | 3.50 |  | $ | 3.50 |  |  | $ | 3.50 |  | $ | 3.50 |
Floor |  | $ | 2.50 |  | $ | 2.50 |  | $ | 2.50 |  |  | $ | 2.50 |  | $ | 2.50 |
Schedule of Derivative Instruments | None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following:
Type |  | Consolidated Balance Sheet Location |  |  | Fair Value |  |  | Gross Amounts Offset in the Consolidated Balance Sheet |  |  | Net Fair Value Presented in the Consolidated Balance Sheet |
|  |  |  |  |  |  | (in thousands) |  |  |  |  |
Fair Value of Derivative Instruments as of June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Asset Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Natural gas price derivatives |  | Derivative Financial Instruments – current |  |  | $ | 79 |  |  | $ | (79 | ) |  | $ | — |
Liability Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Natural gas price derivatives |  | Derivative Financial Instruments – current |  |  | $ | 309 |  |  | $ | (79 | ) |  | $ | 230 |
Fair Value of Derivative Instruments as of December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |
Asset Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Natural gas price derivatives |  | Derivative Financial Instruments – current |  |  | $ | 1,318 |  |  | $ | — |  |  | $ | 1,318 |
Schedule of Gains and Losses from Derivative Financial Instruments | Gains and losses related to the change in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:
| Location of Gain/(Loss) Recognized in Earnings on Derivatives |  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  |  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  |  | (in thousands) |
| Gain (loss) from derivative financial instruments |  | $ | (1,638 | ) |  | $ | 5,295 |  |  | $ | 964 |  |  | $ | 13,155 |
Consolidated Income Tax Provision (Benefit) | The following is an analysis of consolidated income tax provision (benefit):
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In thousands) |
Current - State |  | $ | 24 |  |  | $ | 21 |  |  | $ | 34 |  |  | $ | 97 |
- Federal |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Deferred - State |  |  | (597 | ) |  |  | 496 |  |  |  | (1,051 | ) |  |  | 855 |
- Federal |  |  | 451 |  |  |  | — |  |  |  | 1,477 |  |  |  | — |
|  | $ | (122 | ) |  | $ | 517 |  |  | $ | 460 |  |  | $ | 952 |
Difference Between Federal Statutory Rate and Effective Tax Rate | The difference between the Company's effective tax rate and the 21% federal statutory rate in effect in 2018 and the 35% rate in effect in 2017 is caused by valuation allowances on deferred taxes and state taxes. The impact of these items varies based upon the Company's projected full year loss and the jurisdictions that are expected to generate the projected losses. The difference between the federal statutory rate and the effective tax rate is due to the following:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In thousands) |
Tax at statutory rate |  |  | 21.0 | % |  |  | 35.0 | % |  |  | 21.0 | % |  |  | 35.0 | %
Tax effect of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Valuation allowance on deferred tax assets |  |  | (24.1 | ) |  |  | (42.1 | ) |  |  | (24.3 | ) |  |  | (40.1 | )
State income taxes, net of federal benefit |  |  | 3.9 |  |  |  | 5.0 |  |  |  | 3.5 |  |  |  | 4.3 |
Nondeductible stock-based compensation |  |  | (0.4 | ) |  |  | (0.4 | ) |  |  | (0.7 | ) |  |  | (1.4 | )
Effective tax rate |  |  | 0.4 | % |  |  | (2.5 | )% |  |  | (0.5 | )% |  |  | (2.2 | )%
Basic and Diluted Losses Per Share | Basic and diluted loss per share for the three months and six months ended June 30, 2018 and 2017 were determined as follows:
|  | Three Months Ended June 30, |
|  | 2018 |  |  | 2017 |
|  | Loss |  |  | Shares |  |  | Per Share |  |  | Loss |  |  | Shares |  |  | Per Share |
|  | (In thousands, except per share amounts) |
Basic and diluted net loss attributable to common stock |  | $ | (34,003 | ) |  |  | 15,340 |  |  | $ | (2.22 | ) |  | $ | (21,442 | ) |  |  | 14,749 |  |  | $ | (1.45 | )
|  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |
|  | Loss |  |  | Shares |  |  | Per Share |  |  | Loss |  |  | Shares |  |  | Per Share |
|  | (In thousands, except per share amounts) |
Basic and diluted net loss attributable to common stock |  | $ | (75,889 | ) |  |  | 15,212 |  |  | $ | (4.99 | ) |  | $ | (44,373 | ) |  |  | 14,488 |  |  | $ | (3.06 | )
Weighted Average Shares of Unvested Restricted Stock | Weighted average shares of unvested restricted stock outstanding during the three months and six months ended June 30, 2018 and 2017 which were excluded from the computation of the loss per share were as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In thousands) |
Unvested restricted stock |  |  | 857 |  |  |  | 659 |  |  |  | 846 |  |  |  | 582 |
Common Stock Stock Options and Convertible Stock Anti-Dilutive to Earnings Excluded from Weighted Average Shares Used in Computation of Earning Per Share | All stock options, unvested PSUs, warrants exercisable into common stock and contingently issuable shares related to the convertible debt that were anti-dilutive to earnings and excluded from weighted average shares used in the computation of earnings per share due to the net loss in each period were as follows:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
|  | (In thousands except per share/unit data) |
Weighted average warrants for common stock |  |  | 116 |  |  |  | 433 |  |  |  | 167 |  |  |  | 511 |
Weighted average exercise price per share |  | $ | 0.01 |  |  | $ | 0.01 |  |  | $ | 0.01 |  |  | $ | 0.01 |
Weighted average PSUs |  |  | 514 |  |  |  | 313 |  |  |  | 466 |  |  |  | 273 |
Weighted average grant date fair value per unit |  | $ | 13.83 |  |  | $ | 17.12 |  |  | $ | 13.83 |  |  | $ | 17.12 |
Weighted average contingently convertible shares |  |  | 40,017 |  |  |  | 36,181 |  |  |  | 39,617 |  |  |  | 36,331 |
Weighted average conversion price per share |  | $ | 12.32 |  |  | $ | 12.32 |  |  | $ | 12.32 |  |  | $ | 12.32 |
Cash Payments Made for Interest and Income Taxes | Cash payments made for interest and income taxes for the six months ended June 30, 2018 and 2017, respectively, were as follows:
|  | Six Months Ended June 30, |
|  | 2018 |  |  | 2017 |
|  | (In thousands) |
Interest payments |  | $ | 36,122 |  |  | $ | 37,846 |
Income tax payments |  | $ | 2 |  |  | $ | 3 |

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