XML 22 R14.htm IDEA: XBRL DOCUMENT v3.26.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
6 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
Schedule of Other Current Assets

Other current assets at June 30, 2026 and December 31, 2025 consisted of the following:

 

 

As of

 

 

June 30,
2026

 

 

December 31,
2025

 

 

(In thousands)

 

Prepaid drilling costs

 

$

34,943

 

 

$

53,134

 

Prepaid expenses

 

 

19,461

 

 

 

5,684

 

Income tax receivable

 

 

3,024

 

 

 

3,024

 

Production tax refunds receivable

 

 

2,307

 

 

 

5,827

 

Other

 

 

69

 

 

 

7,588

 

 

$

59,804

 

 

$

75,257

 

Capitalized Exploratory Well Costs

The changes in capitalized exploratory well costs are as follows:

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

(In thousands)

 

Beginning capitalized exploratory well costs

 

$

232,390

 

 

$

168,330

 

 

$

210,127

 

 

$

68,223

 

Additions to exploratory well costs pending the determination of proved reserves

 

 

174,359

 

 

 

130,997

 

 

 

349,134

 

 

 

231,104

 

Determined to have found proved reserves

 

 

(137,198

)

 

 

(147,354

)

 

 

(289,710

)

 

 

(147,354

)

Ending capitalized exploratory well costs

 

$

269,551

 

 

$

151,973

 

 

$

269,551

 

 

$

151,973

 

Summary of Balances of Other Property and Equipment and Accumulated Depreciation

The following table presents the balance of other property and equipment and accumulated depreciation as of June 30, 2026 and December 31, 2025:

 

 

As of

 

 

 

June 30,
2026

 

 

December 31,
2025

 

 

 

(in thousands)

 

Midstream assets

 

$

454,482

 

 

$

363,855

 

Accumulated depreciation

 

 

(7,708

)

 

 

(4,914

)

Net midstream assets

 

 

446,774

 

 

 

358,941

 

 

 

 

 

 

 

 

Other property and equipment

 

 

22,913

 

 

 

22,801

 

Accumulated depreciation

 

 

(2,737

)

 

 

(1,982

)

Net other property and equipment

 

 

20,176

 

 

 

20,819

 

 

 

 

 

 

 

 

Total

 

$

466,950

 

 

$

379,760

 

Summary of Lease Cost Recognized

Lease costs recognized during the three months and six months ended June 30, 2026 and 2025 were as follows:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

(In thousands)

 

Operating lease cost included in general and administrative expense

 

$

426

 

 

$

426

 

 

$

845

 

 

$

851

 

Operating lease cost included in lease operating expense

 

 

574

 

 

 

527

 

 

 

1,179

 

 

 

1,043

 

Operating lease cost included in natural gas and oil properties

 

 

12,147

 

 

 

12,364

 

 

 

24,295

 

 

 

23,664

 

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

 

 

3,351

 

 

 

877

 

 

 

15,650

 

 

 

2,598

 

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

 

 

13,244

 

 

 

9,212

 

 

 

25,392

 

 

 

14,599

 

 

$

29,742

 

 

$

23,406

 

 

$

67,361

 

 

$

42,755

 

Summary of Liabilities Under Contracts That Contain Operating Leases

As of June 30, 2026, expected future payments related to contracts that contain operating leases were as follows:

 

(In thousands)

 

July 1 to December 31, 2026

 

$

25,078

 

2027

 

 

29,338

 

2028

 

 

14,641

 

2029

 

 

7,488

 

2030

 

 

4

 

Total lease payments

 

 

76,549

 

Imputed interest

 

 

(5,381

)

Total lease liability

 

$

71,168

 

Summary of Accrued Costs

Accrued costs at June 30, 2026 and December 31, 2025 consisted of the following:

 

As of

 

 

June 30,
2026

 

 

December 31,
2025

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued interest payable

 

$

63,404

 

 

$

64,042

 

Accrued drilling costs

 

 

52,326

 

 

 

36,148

 

Accrued transportation costs

 

 

31,155

 

 

 

28,304

 

Accrued ad valorem and other taxes

 

 

12,600

 

 

 

4,000

 

Accrued employee compensation

 

 

5,877

 

 

 

14,926

 

Accrued lease operating expenses

 

 

2,891

 

 

 

3,744

 

Other

 

 

2,934

 

 

 

2,084

 

 

$

171,187

 

 

$

153,248

 

 

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:

 

 

Six Months Ended
June 30,

 

 

2026

 

 

2025

 

 

(In thousands)

 

Reserve for future abandonment costs at beginning of period

 

$

20,787

 

 

$

33,996

 

New wells and facilities placed on production

 

 

83

 

 

 

51

 

Liabilities settled

 

 

(29

)

 

 

(34

)

Accretion expense

 

 

603

 

 

 

995

 

Reserve for future abandonment costs at end of period

 

$

21,444

 

 

$

35,008

 

Schedule of Natural Gas Price Derivative

The Company had the following natural gas price derivative financial instruments at June 30, 2026:

 

 

Future Production Period

 

Six Months Ending
December 31, 2026

 

Year Ending
December 31, 2027

 

Total

Natural Gas Price Swap Contracts:

 

 

 

 

 

 

Volume (MMBtu)

 

58,880,000

 

 

58,880,000

Average Price per MMBtu

 

$3.51

 

$—

 

$3.51

Natural Gas Price Collar Contracts:

 

 

 

 

 

 

Volume (MMBtu)

 

84,640,000

 

146,000,000

 

230,640,000

Average Price per MMBtu:

 

 

 

 

 

 

Average Ceiling

 

$4.35

 

$4.44

 

$4.41

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

 

June 30,
2026

 

 

December 31,
2025

 

 

 

 

(In thousands)

 

Asset Derivative Financial Instruments:

 

 

 

 

 

 

Natural gas price derivatives

 

Derivative Financial Instruments – current

 

$

53,156

 

 

$

19,206

 

Natural gas price derivatives

 

Derivative Financial Instruments – long-term

 

$

22,230

 

 

$

 

Liability Derivative Financial Instruments:

 

 

 

 

 

 

Natural gas price derivatives

 

Derivative Financial Instruments – current

 

$

 

 

$

27,636

 

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
June 30,

 

 

Six Months Ended
June 30,

 

Gain (loss) on Derivatives Recognized in Earnings

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

(In thousands)

 

Natural gas price derivatives

 

$

44,365

 

 

$

235,847

 

 

$

46,761

 

 

$

(94,492

)

 

$

44,365

 

 

$

235,847

 

 

$

46,761

 

 

$

(94,492

)

Consolidated Income Tax Benefit

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

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

(In thousands)

 

Current - Federal

 

$

 

 

$

(1,710

)

 

$

 

 

$

(1,710

)

Current - State

 

 

 

 

 

36

 

 

 

 

 

 

36

 

Deferred - Federal

 

 

(742

)

 

 

66,010

 

 

 

18,082

 

 

 

80

 

Deferred - State

 

 

(2,095

)

 

 

77,151

 

 

 

(8,929

)

 

 

(195

)

 

$

(2,837

)

 

$

141,487

 

 

$

9,153

 

 

$

(1,789

)

 

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
June 30,

 

 

Six Months Ended
June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Tax at statutory rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

Tax effect of:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development and other income tax credits

 

 

(20.8

)

 

 

(1.0

)

 

 

(5.9

)

 

 

(20.3

)

State income taxes, net of federal benefit

 

 

(23.8

)

 

 

28.4

 

 

 

(5.3

)

 

 

(1.2

)

Valuation allowance on deferred tax assets

 

 

 

 

 

 

 

 

(3.1

)

 

 

0.8

 

Noncontrolling interest

 

 

(9.1

)

 

 

10.4

 

 

 

(2.1

)

 

 

(3.4

)

Nondeductible stock-based compensation

 

 

9.3

 

 

 

(6.6

)

 

 

2.1

 

 

 

(7.0

)

Other

 

 

0.1

 

 

 

(0.2

)

 

 

 

 

 

(3.1

)

Effective tax rate

 

 

(23.3

)%

 

 

52.0

%

 

 

6.7

%

 

 

(13.2

)%

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 June 30, 2026 and December 31, 2025:

 

As of

 

 

June 30, 2026

 

 

December 31, 2025

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

 

 

(In thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity-based derivatives (1)

 

$

75,386

 

 

$

75,386

 

 

$

19,206

 

 

$

19,206

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity-based derivatives (1)

 

$

 

 

$

 

 

$

27,636

 

 

$

27,636

 

Bank credit facilities (2)

 

$

545,000

 

 

$

545,000

 

 

$

260,000

 

 

$

260,000

 

6.75% senior notes due 2029 (3)

 

$

1,610,099

 

 

$

1,592,962

 

 

$

1,607,880

 

 

$

1,603,582

 

5.875% senior notes due 2030 (3)

 

$

965,000

 

 

$

904,688

 

 

$

965,000

 

 

$

931,225

 

 

(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 Company's 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 June 30, 2026 and December 31, 2025, 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
June 30,

 

 

Six Months Ended
June 30,

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

 

(In thousands)

 

Unvested restricted stock

 

 

2,057

 

 

 

2,342

 

 

 

2,151

 

 

 

2,330

 

Common Stock and Convertible Stock Dilutive in Weighted average unearned PSUs outstanding

Weighted average unearned PSUs outstanding were as follows:

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2026

 

2025

 

2026

 

2025

 

(In thousands, except per unit amounts)

Weighted average PSUs

 

2,099

 

1,411

 

2,064

 

1,351

Weighted average grant date fair value per unit

 

$23.43

 

$19.46

 

$23.43

 

$19.46

Schedule of Basic and Diluted Income Per Share

Basic and diluted income per share for the three months and six months ended June 30, 2026 and 2025 were determined as follows:

 

 

Three Months Ended June 30,

 

 

2026

 

 

2025

 

 

Income

 

 

Shares

 

 

Per Share

 

 

Income

 

 

Shares

 

 

Per Share

 

 

(In thousands, except per share amounts)

 

Net income available to the Company

 

$

8,766

 

 

 

 

 

 

 

 

$

130,728

 

 

 

 

 

 

 

Income allocable to unvested restricted stock

 

 

(61

)

 

 

 

 

 

 

 

 

(1,045

)

 

 

 

 

 

 

Basic income available to the Company

 

$

8,705

 

 

 

291,612

 

 

$

0.03

 

 

$

129,683

 

 

 

290,604

 

 

$

0.45

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock

 

 

 

 

 

 

 

 

 

 

 

1,045

 

 

 

1,364

 

 

 

 

Performance stock units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,279

 

 

 

 

Diluted income available to the Company

 

$

8,705

 

 

 

291,612

 

 

$

0.03

 

 

$

130,728

 

 

 

294,247

 

 

$

0.44

 

 

 

Six Months Ended June 30,

 

 

2026

 

 

2025

 

 

Income

 

 

Shares

 

 

Per Share

 

 

Income

 

 

Shares

 

 

Per Share

 

 

(In thousands, except per share amounts)

 

Net income available to the Company

 

$

116,216

 

 

 

 

 

 

 

 

$

15,335

 

 

 

 

 

 

 

Income allocable to unvested restricted stock

 

 

(852

)

 

 

 

 

 

 

 

 

(122

)

 

 

 

 

 

 

Basic income available to the Company

 

$

115,364

 

 

 

291,465

 

 

$

0.40

 

 

$

15,213

 

 

 

290,455

 

 

$

0.05

 

Effect of Dilutive Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock

 

 

 

 

 

 

 

 

 

 

 

122

 

 

 

1,350

 

 

 

 

Performance stock units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,221

 

 

 

 

Diluted income available to the Company

 

$

115,364

 

 

 

291,465

 

 

$

0.40

 

 

$

15,335

 

 

 

294,026

 

 

$

0.05

 

Cash Payments Made for Interest and Income Taxes

Cash payments made for interest and income taxes and other non-cash investing activities for the six months ended June 30, 2026 and 2025, respectively, were as follows:

 

 

Six Months Ended
June 30,

 

 

2026

 

 

2025

 

 

(In thousands)

 

Cash payments for:

 

 

 

 

 

 

Interest payments

 

$

102,541

 

 

$

104,733

 

Income tax payments (refunds)

 

$

 

 

$

(31,000

)

Non-cash investing activities include:

 

 

 

 

 

 

Increase (decrease) in accrued capital expenditures

 

$

16,178

 

 

$

(2,575

)

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

 

$

453

 

 

$

36,244