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Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2021
Accounting Policies [Abstract]  
Summary of Lease Cost Recognized
Lease costs recognized during the three months ended March 31, 2021 were as follows:
Three Months Ended
March 31, 2021
(In thousands)
Operating lease cost included in general and administrative expense$429 
Operating lease cost included in lease operating expense232 
Short-term lease cost (drilling rig costs included in proved oil and gas properties)11,458 
$12,119 
Summary of Liabilities Under Contract Contain Operating Leases
As of March 31, 2021, expected future payments related to contracts that contain operating leases were as follows:
(In thousands)
April 1 to December 31, 2021$1,670 
20222,260 
20231,927 
20241,708 
Total lease payments
7,565 
Imputed interest(351)
Total lease liability$7,214 
Summary of Accrued Costs
Accrued costs at March 31, 2021 and December 31, 2020 consisted of the following:
As of
March 31, 2021
As of
December 31, 2020
(In thousands)
Accrued capital expenditures$26,839 $24,959 
Accrued interest payable24,597 67,265 
Accrued transportation costs23,867 25,353 
Accrued employee compensation4,562 7,519 
Other4,445 4,457 
Accrued ad valorem taxes3,000 — 
Accrued lease operating expenses2,613 3,466 
$89,923 $133,019 
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 periods presented:
Three Months Ended
March 31,
20212020
(In thousands)
Reserve for future abandonment costs at beginning of period$19,290 $18,151 
New wells placed on production
328 186 
Liabilities settled and assets disposed of
— (11)
Accretion expense
297 287 
Reserve for future abandonment costs at end of period$19,915 $18,613 
Schedule of Gas Derivative Contracts Volume and Prices The Company had the following oil and natural gas price derivative financial instruments at March 31, 2021:
Future Production Period
Nine Months Ending December 31, 2021Year Ending December 31, 2022Total
Natural Gas Swap Contracts:
Volume (MMBtu)
159,228,737 (1)23,650,000 182,878,737 
Average Price per MMBtu
$2.53 (1)$2.58 $2.54 
Natural Gas Collar Contracts:
Volume (MMBtu)
103,630,000 25,400,000 129,030,000 
Price per MMBtu:
Average Ceiling
$3.02 $3.24 $3.06 
Average Floor
$2.47 $2.51 $2.48 
Natural Gas Swaptions Contracts:
Volume (MMBtu)
— 43,800,000 (2)43,800,000 (2)
Average Price per MMBtu
— $2.51 (2)$2.51 (2)
Natural Gas Basis Swap Contracts:
Volume (MMBtu)
11,000,000 (3)10,950,000 (3)21,950,000 (3)
Average Price per MMBtu($0.12)($0.16)($0.14)
Crude Oil Collar Contracts:
Volume (Bbls)
412,500 412,500 
Price per Bbl:
Average Ceiling
$51.67 $51.67 
Average Floor
$41.67 $41.67 
_____________________________
(1)For the nine months ending December 31, 2021, natural gas price swap contracts include 33,000,000 MMBtu at an average price of $2.51 that are part of certain natural gas price swaption contracts which include a call to extend the price swap by the counterparty as described in (2) below.
(2)The counterparty has the right to exercise a call option to enter into a price swap with the Company on 43,800,000 MMBtu in 2022 at an average price $2.51. The call option expires for 36,500,000 MMBtu at an average price of $2.52 in October 2021 and 7,300,000 MMBtu at an average price of $2.50 in November 2021.
(3)Contracts fix the differential between NYMEX Henry Hub and the Houston Ship Channel indices.
Schedule of Derivative Instruments The aggregate fair value of the Company's derivative instruments are presented on a gross basis in the accompanying consolidated balance sheets. The classification of derivative financial instruments between assets and liabilities, consists of the following:
TypeConsolidated Balance Sheet LocationMarch 31, 2021December 31, 2020
(in thousands)
Asset Derivative Financial Instruments:
Natural gas price derivativesDerivative Financial Instruments  – current$2,633 $8,913 
Oil price derivativesDerivative Financial Instruments  – current1,994 — 
$4,627 $8,913 
Natural gas price derivativesDerivative Financial Instruments  – long-term$3,524 $661 
Liability Derivative Financial Instruments:
   Natural gas price derivativesDerivative Financial Instruments  – current$54,414 $45,158 
   Oil price derivativesDerivative Financial Instruments  – current5,451 831 
   Interest rate derivativesDerivative Financial Instruments  – current955 1,016 
$60,820 $47,005 
   Natural gas price derivativesDerivative Financial Instruments  – long-term$21 $1,308 
   Interest rate derivativesDerivative Financial Instruments – long-term177 1,056 
$198 $2,364 
Schedule of Gains and Losses from Derivative Financial Instruments Assets (Liabilities) Gains and losses related to cash settlements and changes in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:
Gain (Loss) on Derivatives
Recognized in Earnings		Three Months Ended March 31,
20212020
(In thousands)
Natural gas price derivatives$(18,877)$42,975 
Oil price derivatives(3,544)18,924 
Interest rate derivatives672 — 
$(21,749)$61,899 
Consolidated Income Tax Provision
The following is an analysis of the consolidated income tax benefit (provision):
Three Months Ended
March 31,
20212020
(In thousands)
Current - Federal$— $— 
Current - State(136)(61)
Deferred - Federal34,919 (11,503)
Deferred - State(4,816)173 
$29,967 $(11,391)
Difference Between Federal Statutory Rate and Effective Tax Rate The difference between the federal statutory rate of 21% and the effective tax rate is due to the following:
Three Months Ended
March 31,
20212020
Tax at statutory rate21.0 %21.0 %
Tax effect of:
Valuation allowance on deferred tax assets
0.5 (0.5)
State income taxes, net of federal benefit
(3.0)0.3 
Nondeductible stock-based compensation
(0.2)0.5 
Effective tax rate18.3 %21.3 %
Reconciliation of Beginning and Ending Balances for Derivative Instruments
The following is a reconciliation of the beginning and ending balances for derivative instruments classified as Level 3 in the fair value hierarchy:
Three Months Ended
March 31, 2021
(In thousands)
Balance at beginning of year$(22,588)
Total loss included in earnings
9,712 
Settlements, net
1,919 
Transfers out of Level 3(6,418)
Balance at end of period$(17,375)
Summary of Carrying Amounts and Fair Values of Financial Instruments
The following presents the carrying amounts and the fair values of the Company's financial instruments as of March 31, 2021 and December 31, 2020:
March 31, 2021December 31, 2020
Carrying ValueFair ValueCarrying ValueFair Value
Assets:(In thousands)
Derivative financial instruments (1)
$8,151 $8,151 $9,574 $9,574 
Liabilities:
Derivative financial instruments (1)
$61,018 $61,018 $49,369 $49,369 
Bank credit facility (2)
$550,000 $550,000 $500,000 $500,000 
7.50% senior notes due 2025 (3)
$189,304 $253,565 $473,728 $628,691 
9.75% senior notes due 2026 (3)
$844,068 $951,498 $1,577,824 $1,769,625 
6.75% senior notes due 2029 (3)
$1,257,443 $1,275,000 $— $— 
______________
(1)The Company's natural gas price swaps and basis swap agreements, its interest rate swap agreements and its crude oil and natural gas price collars are classified as Level 2 and measured at fair value using a market approach using third party pricing services and other active markets or broker quotes that are readily available in the public markets.  The Company's natural gas swaption contracts provide the counterparty the right, but not the obligation, to extend terms of an existing swap on predetermined dates. Due to subjectivity of the inputs used to value the counterparty rights in the contracts, these contracts are classified as Level 3 in the fair value hierarchy.
(2)The carrying value of our floating rate debt outstanding approximates fair value.
(3)The fair value of the Company's fixed rate debt was based on quoted prices as of March 31, 2021 and December 31, 2020, respectively, a Level 1 measurement.
Weighted Average Shares of Unvested Restricted Stock Weighted average shares of unvested restricted stock outstanding were as follows:
Three Months Ended
March 31,
20212020
(in thousands)
Unvested restricted stock1,035 1,085 
Common Stock and Convertible Stock Dilutive in Weighted average unearned PSUs outstanding Weighted average unearned PSUs outstanding were as follows:
Three Months Ended
March 31,
20212020
(In thousands, except per unit amounts)
Weighted average PSUs1,136 927 
Weighted average grant date fair value per unit$9.33 $9.58 
Weighted Average Shares of Convertible Preferred Stock Weighted average shares of convertible preferred stock outstanding were as follows:
Three Months Ended
March 31,
20212020
(In thousands)
Weighted average convertible preferred stock43,750 96,250 
Basic and Diluted Income (Loss) Per Share
Basic and diluted income (loss) per share were determined as follows:
Three Months Ended March 31,
20212020
LossSharesPer ShareIncomeSharesPer Share
(In thousands, except per share amounts)
Net income (loss) attributable to common stock$(138,440)$29,956 
Income allocable to unvested restricted shares— (37)
Basic income (loss) attributable to common stock(138,440)231,377 $(0.60)29,919 188,916 $0.16 
Effect of Dilutive Securities:
Convertible preferred stock— — 12,072 96,250 
Diluted income (loss) attributable to common stock$(138,440)231,377 $(0.60)$41,991 285,166 $0.15 
Cash Payments Made for Interest and Income Taxes
Cash payments made for interest and income taxes and other non-cash investing activities for the three months ended March 31, 2021 and 2020, respectively, were as follows:
Three Months Ended
March 31,
20212020
(In thousands)
Cash payments for:
Interest payments$97,990 $55,207 
Non-cash investing activities include:
Increase (decrease) in accrued capital expenditures$1,880 $(13,190)