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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
9 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Schedule of Other Current Assets

Other current assets at September 30, 2025 and December 31, 2024 consisted of the following:

 

 

As of

 

 

September 30,
2025

 

 

December 31,
2024

 

 

(In thousands)

 

Prepaid drilling costs

 

$

52,698

 

 

$

58,136

 

Production tax refunds receivable

 

 

5,588

 

 

 

4,074

 

Other receivables

 

 

3,113

 

 

 

4,140

 

Prepaid expenses

 

 

3,023

 

 

 

2,361

 

Income tax receivable

 

 

3,228

 

 

 

28,813

 

Other

 

 

902

 

 

 

 

 

$

68,552

 

 

$

97,524

 

Capitalized Exploratory Well Costs

The changes in capitalized exploratory well costs are as follows:

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(In thousands)

 

Beginning capitalized exploratory well costs

 

$

151,973

 

 

$

69,800

 

 

$

68,223

 

 

$

96,233

 

Additions to exploratory well costs pending the determination of proved reserves

 

 

114,215

 

 

 

60,930

 

 

 

345,319

 

 

 

219,778

 

Determined to have found proved reserves

 

 

(62,062

)

 

 

(837

)

 

 

(209,416

)

 

 

(186,118

)

Ending capitalized exploratory well costs

 

$

204,126

 

 

$

129,893

 

 

$

204,126

 

 

$

129,893

 

Summary of Lease Cost Recognized

Lease costs recognized during the three months and nine months ended September 30, 2025 and 2024 were as follows:

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(In thousands)

 

Operating lease cost included in general and administrative expense

 

$

427

 

 

$

423

 

 

$

1,277

 

 

$

1,263

 

Operating lease cost included in lease operating expense

 

 

629

 

 

 

564

 

 

 

1,673

 

 

 

1,652

 

Operating lease cost included in natural gas and oil properties

 

 

12,364

 

 

 

9,171

 

 

 

36,029

 

 

 

25,473

 

Variable lease cost (drilling rig costs included in natural gas and oil properties)

 

 

4,227

 

 

 

1,306

 

 

 

6,824

 

 

 

4,670

 

Short-term lease cost (drilling rig costs included in natural gas and oil properties)

 

 

7,669

 

 

 

5,582

 

 

 

22,268

 

 

 

21,096

 

 

$

25,316

 

 

$

17,046

 

 

$

68,071

 

 

$

54,154

 

Summary of Liabilities Under Contracts That Contain Operating Leases

As of September 30, 2025, expected future payments related to contracts that contain operating leases were as follows:

 

(In thousands)

 

October 1 to December 31, 2025

 

$

12,847

 

2026

 

 

48,204

 

2027

 

 

18,003

 

2028

 

 

3,334

 

2029

 

 

2

 

Total lease payments

 

 

82,390

 

Imputed interest

 

 

(5,263

)

Total lease liability

 

$

77,127

 

 

Summary of Accrued Costs

Accrued costs at September 30, 2025 and December 31, 2024 consisted of the following:

 

As of

 

 

September 30,
2025

 

 

December 31,
2024

 

 

(In thousands)

 

 

 

 

 

 

 

 

Accrued drilling costs

 

$

35,382

 

 

$

34,493

 

Accrued transportation costs

 

 

28,637

 

 

 

28,031

 

Accrued ad valorem and other taxes

 

 

24,021

 

 

 

1,350

 

Accrued interest payable

 

 

22,012

 

 

 

64,041

 

Accrued employee compensation

 

 

7,967

 

 

 

14,076

 

Accrued lease operating expenses

 

 

3,057

 

 

 

2,630

 

Other

 

 

2,836

 

 

 

1,552

 

 

$

123,912

 

 

$

146,173

 

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:

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

(In thousands)

 

Reserve for future abandonment costs at beginning of period

 

$

33,996

 

 

$

30,773

 

New wells and facilities placed on production

 

 

156

 

 

 

109

 

Liabilities settled

 

 

(99

)

 

 

(40

)

Wells sold

 

 

(13,760

)

 

 

(157

)

Accretion expense

 

 

1,437

 

 

 

1,331

 

Reserve for future abandonment costs at end of period

 

$

21,730

 

 

$

32,016

 

Schedule of Natural Gas Price Derivative

The Company had the following natural gas price derivative financial instruments at September 30, 2025:

 

 

Future Production Period

 

Three Months Ending
December 31, 2025

 

Year Ending
December 31, 2026

 

Total

Natural Gas Price Swap Contracts:

 

 

 

 

 

 

Volume (MMBtu)

 

50,140,000

 

116,800,000

 

166,940,000

Average Price per MMBtu

 

$3.48

 

$3.51

 

$3.50

Natural Gas Price Collar Contracts:

 

 

 

 

 

 

Volume (MMBtu)

 

13,800,000

 

167,900,000

 

181,700,000

Average Price per MMBtu:

 

 

 

 

 

 

Average Ceiling

 

$3.80

 

$4.35

 

$4.31

Average Floor

 

$3.50

 

$3.50

 

$3.50

Schedule of Derivative Instruments

The classification of derivative financial instruments of assets or liabilities, consists of the following:

 

 

 

 

As of

 

Type

 

Consolidated Balance Sheet Location

 

September 30,
2025

 

 

December 31,
2024

 

 

 

 

(In thousands)

 

Asset Derivative Financial Instruments:

 

 

 

 

 

 

Natural gas price derivatives

 

Derivative Financial Instruments – current

 

$

8,140

 

 

$

4,865

 

Natural gas price derivatives

 

Derivative Financial Instruments – long-term

 

$

166

 

 

$

 

Liability Derivative Financial Instruments:

 

 

 

 

 

 

Natural gas price derivatives

 

Derivative Financial Instruments – current

 

$

22,284

 

 

$

8,940

 

Natural gas price derivatives

 

Derivative Financial Instruments – long-term

 

$

31,232

 

 

$

66,757

 

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:

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

Gain (loss) on Derivatives Recognized in Earnings

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(In thousands)

 

Natural gas price derivatives

 

$

142,822

 

 

$

75,163

 

 

$

48,330

 

 

$

89,218

 

 

$

142,822

 

 

$

75,163

 

 

$

48,330

 

 

$

89,218

 

Consolidated Income Tax Benefit

The following is an analysis of the consolidated income tax provision (benefit):

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(In thousands)

 

Current - Federal

 

$

(1,516

)

 

$

(1,962

)

 

$

(3,227

)

 

$

(1,962

)

Current - State

 

 

(36

)

 

 

 

 

 

 

 

 

37

 

Deferred - Federal

 

 

22,524

 

 

 

(8,662

)

 

 

22,605

 

 

 

(50,242

)

Deferred - State

 

 

(2,349

)

 

 

(4,072

)

 

 

(2,544

)

 

 

(16,927

)

 

$

18,623

 

 

$

(14,696

)

 

$

16,834

 

 

$

(69,094

)

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
September 30,

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Tax at statutory rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

Tax effect of:

 

 

 

 

 

 

 

 

 

 

 

 

State income taxes, net of federal benefit

 

 

(1.1

)

 

 

10.2

 

 

 

(0.5

)

 

 

7.8

 

Noncontrolling interest

 

 

(2.8

)

 

 

 

 

 

(2.8

)

 

 

 

Research and development and other income tax credits

 

 

(5.6

)

 

 

 

 

 

(6.8

)

 

 

 

Nondeductible stock-based compensation

 

 

2.1

 

 

 

(0.2

)

 

 

1.2

 

 

 

(0.9

)

Valuation allowance on deferred tax assets

 

 

 

 

 

 

 

 

(0.6

)

 

 

(0.2

)

Other

 

 

 

 

 

5.4

 

 

 

(0.3

)

 

 

2.0

 

Effective tax rate

 

 

13.6

%

 

 

36.4

%

 

 

11.2

%

 

 

29.7

%

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 September 30, 2025 and December 31, 2024:

 

As of

 

 

September 30, 2025

 

 

December 31, 2024

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

 

 

(In thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity-based derivatives (1)

 

$

8,306

 

 

$

8,306

 

 

$

4,865

 

 

$

4,865

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity-based derivatives (1)

 

$

53,516

 

 

$

53,516

 

 

$

75,697

 

 

$

75,697

 

Bank credit facility (2)

 

$

580,000

 

 

$

580,000

 

 

$

415,000

 

 

$

415,000

 

6.75% senior notes due 2029 (3)

 

$

1,606,774

 

 

$

1,611,701

 

 

$

1,603,679

 

 

$

1,581,283

 

5.875% senior notes due 2030 (3)

 

$

965,000

 

 

$

921,575

 

 

$

965,000

 

 

$

899,863

 

 

(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 the floating rate debt on the Company's outstanding approximates fair value.
(3)
The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2025 and December 31, 2024, 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
September 30,

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

(In thousands)

 

Unvested restricted stock

 

 

1,968

 

 

 

2,091

 

 

 

2,208

 

 

 

2,219

 

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
September 30,

 

Nine Months Ended
September 30,

 

2025

 

2024

 

2025

 

2024

 

(In thousands, except per unit amounts)

Weighted average PSUs

 

1,604

 

1,291

 

1,436

 

1,266

Weighted average grant date fair value per unit

 

$19.46

 

$13.21

 

$19.46

 

$13.21

Schedule of Basic and Diluted Loss Per Share

Basic and diluted loss per share for the three months and nine months ended September 30, 2025 and 2024 were determined as follows:

 

 

Three Months Ended September 30,

 

 

2025

 

 

2024

 

 

Income

 

 

Shares

 

 

Per Share

 

 

Loss

 

 

Shares

 

 

Per Share

 

 

(In thousands, except per share amounts)

 

Net income (loss) attributable to common stock

 

$

118,099

 

 

 

 

 

 

 

 

$

(25,718

)

 

 

 

 

 

 

Income allocable to unvested restricted stock

 

 

(793

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) attributable to common stock

 

$

117,306

 

 

 

291,097

 

 

$

0.40

 

 

$

(25,718

)

 

 

290,170

 

 

$

(0.09

)

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock

 

 

793

 

 

 

901

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance stock units

 

 

 

 

 

1,954

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) attributable to common stock

 

$

118,099

 

 

 

293,952

 

 

$

0.40

 

 

$

(25,718

)

 

 

290,170

 

 

$

(0.09

)

 

 

Nine Months Ended September 30,

 

 

2025

 

 

2024

 

 

Income

 

 

Shares

 

 

Per Share

 

 

Loss

 

 

Shares

 

 

Per Share

 

 

(In thousands, except per share amounts)

 

Net income (loss) attributable to common stock

 

$

133,434

 

 

 

 

 

 

 

 

$

(163,441

)

 

 

 

 

 

 

Income allocable to unvested restricted shares

 

 

(1,006

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) attributable to common stock

 

$

132,428

 

 

 

290,671

 

 

$

0.46

 

 

$

(163,441

)

 

 

285,949

 

 

$

(0.57

)

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock

 

 

1,006

 

 

 

1,188

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance stock units

 

 

 

 

 

2,145

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted income (loss) attributable to common stock

 

$

133,434

 

 

 

294,004

 

 

$

0.45

 

 

$

(163,441

)

 

 

285,949

 

 

$

(0.57

)

Cash Payments Made for Interest and Income Taxes

Cash payments made for interest and income taxes and other non-cash investing activities for the nine months ended September 30, 2025 and 2024, respectively, were as follows:

 

 

Nine Months Ended
September 30,

 

 

2025

 

 

2024

 

 

(In thousands)

 

Cash payments for:

 

 

 

 

 

 

Interest payments

 

$

199,841

 

 

$

180,312

 

Income tax payments (refunds)

 

$

(31,000

)

 

$

37

 

Non-cash investing activities include:

 

 

 

 

 

 

Increase (decrease) in accrued capital expenditures

 

$

889

 

 

$

(19,507

)

Liabilities assumed in exchange for right-of-use lease assets

 

$

37,596

 

 

$

34,321