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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Summary of Lease Cost Recognized
Lease costs recognized during the three months ended March 31, 2022 and 2021 were as follows:
Three Months Ended March 31,
20222021
(In thousands)
Operating lease cost included in general and administrative expense$435 $429 
Operating lease cost included in lease operating expense270 232 
Short-term lease cost (drilling rig costs included in proved oil and gas properties)11,035 11,458 
$11,740 $12,119 
Summary of Liabilities Under Contracts That Contain Operating Leases
As of March 31, 2022, expected future payments related to contracts that contain operating leases were as follows:
(In thousands)
April 1 to December 31, 2022$2,135 
20232,673 
20242,321 
202567 
20261 
Total lease payments
7,197 
Imputed interest(246)
Total lease liability$6,951 
Summary of Accrued Costs
Accrued costs at March 31, 2022 and December 31, 2021 consisted of the following:
As of
March 31, 2022December 31, 2021
(In thousands)
Accrued drilling costs$34,494 $19,995 
Accrued interest payable26,643 60,305 
Accrued transportation costs21,119 22,859 
Accrued income and other taxes12,233 15,655 
Accrued employee compensation4,573 12,320 
Accrued lease operating expenses2,783 2,036 
Other1,477 1,856 
$103,322 $135,026 
Summary of Changes in Total Estimated Asset Retirement Obligation Liability The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented:
Three Months Ended
March 31,
20222021
(In thousands)
Reserve for future abandonment costs at beginning of period$25,673 $19,290 
New wells placed on production
381 328 
Accretion expense
362 297 
Reserve for future abandonment costs at end of period$26,416 $19,915 
Schedule of Oil and Natural Gas Price Derivative
The Company had the following oil and natural gas price derivative financial instruments at March 31, 2022:
Future Production Period
Nine Months Ending December 31, 2022Year Ending December 31, 2023Total
Natural Gas Swap Contracts:
Volume (MMBtu)88,000,000 — 88,000,000 
Average Price per MMBtu$2.68 $2.68 
Natural Gas Collar Contracts:
Volume (MMBtu)104,925,000 128,925,000 233,850,000 
Average Price per MMBtu:
Average Ceiling$3.88 $9.85 $7.17 
Average Floor$2.62 $2.98 $2.82 
Natural Gas Basis Swap Contracts:
Volume (MMBtu)8,250,000 (1)— 8,250,000 (1)
Average Price per MMBtu($0.16)($0.16)
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(1)Contracts fix the differentials between NYMEX Henry Hub and the Columbia Gulf Mainline 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:
As of
TypeConsolidated Balance Sheet LocationMarch 31, 2022December 31, 2021
(In thousands)
Asset Derivative Financial Instruments:
Natural gas price derivativesDerivative Financial Instruments  – current$2,601 $4,528 
Oil price derivativesDerivative Financial Instruments  – current— 730 
$2,601 $5,258 
Natural gas price derivativesDerivative Financial Instruments  – long-term$10,008 $— 
Liability Derivative Financial Instruments:
Natural gas price derivativesDerivative Financial Instruments  – current$513,645 $181,215 
Oil price derivativesDerivative Financial Instruments  – current— 730 
$513,645 $181,945 
Natural gas price derivativesDerivative Financial Instruments  – long-term$— $4,042 
Schedule of Gains and Losses from Derivative Contracts Gains and losses related to cash settlements and changes in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:
Gain (Loss) on Derivatives
Recognized in Earnings		Three Months Ended March 31,
20222021
(In thousands)
Natural gas price derivatives$(437,493)$(18,877)
Oil price derivatives— (3,544)
Interest rate derivatives— 672 
$(437,493)$(21,749)
Consolidated Income Tax Benefit (Provision)
The following is an analysis of the consolidated income tax benefit (provision):
Three Months Ended
March 31,
20222021
(In thousands)
Current - Federal$3,961 $— 
Current - State2,460 (136)
Deferred - Federal13,424 34,919 
Deferred - State11,777 (4,816)
$31,622 $29,967 
Difference Between Federal Statutory Rate and Effective Tax Rate The difference between the federal statutory rate of 21% and the effective tax rate is due to the following:
Three Months Ended
March 31,
20222021
Tax at statutory rate21.0 %21.0 %
Tax effect of:
Valuation allowance on deferred tax assets(3.6)0.5 
State income taxes, net of federal benefit
4.6 (3.0)
Nondeductible stock-based compensation
0.1 (0.2)
Effective tax rate22.1 %18.3 %
Reconciliation of Beginning and Ending Balances for Derivative Instruments The following is a reconciliation of the beginning and ending balances for derivative instruments using Level 3 measurements in the fair value hierarchy:
Three Months Ended
March 31, 2021
(In thousands)
Balance at beginning of year$(22,588)
Total loss included in earnings9,712 
Settlements, net1,919 
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, 2022 and December 31, 2021:
As of
March 31, 2022December 31, 2021
Carrying ValueFair ValueCarrying ValueFair Value
Assets:(In thousands)
Commodity-based derivatives (1)
$12,609 $12,609 $5,258 $5,258 
Liabilities:
Commodity-based derivatives (1)
$513,645 $513,645 $185,987 $185,987 
Bank credit facility (2)
$150,000 $150,000 $235,000 $235,000 
7.50% senior notes due 2025 (3)
$199,758 $248,066 $196,998 $248,066 
6.75% senior notes due 2029 (3)
$1,256,685 $1,287,500 $1,256,874 $1,337,500 
5.875% senior notes due 2030 (3)
$965,000 $950,525 $965,000 $989,125 
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(1)The Company's commodity-based derivatives are classified as Level 2 and measured at fair value using third party pricing services and other active markets or broker quotes that are readily available in the public markets.
(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, 2022 and December 31, 2021, 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,
20222021
(In thousands)
Unvested restricted stock947 1,035 
Common Stock and Convertible Stock Dilutive in Weighted average unearned PSUs outstanding The treasury stock method is used to measure the dilutive effect of PSUs.
Weighted average unearned PSUs outstanding were as follows:
Three Months Ended
March 31,
20222021
(In thousands, except per unit amounts)
Weighted average PSUs1,050 1,136 
Weighted average grant date fair value per unit$8.11 $9.33 
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, 2022 and 2021, respectively, were as follows:
Three Months Ended
March 31,
20222021
(In thousands)
Cash payments for:
Interest payments$75,928 $97,990 
Non-cash investing activities include:
Increase in accrued capital expenditures$14,499 $1,880 
Liabilities assumed in exchange for right-of-use lease assets$1,089 $4,791