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Comstock (CRK) Reports Narrower-than-Expected Loss in Q1
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Domestic energy explorer Comstock Resources Inc. (CRK - Free Report) reported first-quarter 2017 loss of $1.75 per share (excluding one-time items), narrower than the Zacks Consensus Estimate of a loss of $1.86. The better-than-expected results were driven by improved oil and gas prices, increased revenues and reduced operating expenses. In particular, oil and natural gas prices moved up 84% and 60%, respectively, compared to the year-ago quarter providing an impetus to the finances of the company. Further, Comstock’s quarterly loss significantly narrowed from the year-ago adjusted loss of $5.60 per share.
Quarterly revenues increased to $53.8 million from $37 million a year ago. The higher realized prices and the higher natural gas production resulted in improved oil and gas sales in the quarter. While natural gas sales jumped 62.8% to $40.9 million, oil sales increased 16.7% to $ 12.8 million. However, revenues were below the Zacks Consensus Estimate of $58 million owing to a decline in production.
Volume Analysis
Comstock’s quarterly volume was 15.6 billion cubic feet equivalent (Bcfe), compared with 16.3 Bcfe in the prior-year quarter. Natural gas output – constituting 90% of total production – increased 1.2% whereas oil output plunged 36.4% in the reported quarter. Growth in natural gas production is attributable to the company's successful Haynesville shale drilling program. However, the decline in oil production was due to the lack of drilling in the company's South Texas Eagle Ford shale properties.
Price Realizations
Average oil price realization (before hedging) was $48.6 per barrel, compared with $26.44 in the first quarter of 2016. Average natural gas realization was $2.92 per thousand cubic feet/Mcf compared with $1.82 per Mcf in the year-earlier quarter.
Costs & Expenses
Total operating expenses were down 45% from the first quarter of 2016 to $51.4 million.
Gathering and transportation costs were $4.1 million, down 5.4% from the year-ago quarter. Lease operating cost of $9.9 million witnessed 23.7% year-over-year decline. Depreciation charges were down by 23% to $29.9 million in the reported quarter. Further, total expenses in the quarter did not include impairment and exploration charges which were incurred in the year-ago quarter.
Cash Flow & EBITDAX
Comstock’s operating cash inflow from continuing operations were $15.9 million. This compared favorably with the operating cash outflow of about $14 million in the first quarter of 2016.
EBITDAX from continuing operations increased significantly. The metric surged 133% year over year to $34.2 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock’s capital expenditure amounted $38.3 million. The company spent $35.7 million on development drilling activities. This marks a 401% growth from $7.1 million spent a year ago.
As of Mar 31, 2017, the company had $30.4 million in cash and cash equivalents and $1,051.4 million in long-term debt.
Comstock Resources, Inc. Price, Consensus and EPS Surprise
Better-ranked players in the broader energy space include Bellatrix Exploration Ltd , McDermott International, Inc. and Penn Virginia Corporation . All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bellatrix reported positive earnings surprise of 58.54% in the trailing four quarters.
McDermott posted positive average earnings surprise of 387.5% in the preceding four quarters.
Penn Virginia posted positive average earnings surprise of 36.67% in the preceding four quarters.
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Comstock (CRK) Reports Narrower-than-Expected Loss in Q1
Domestic energy explorer Comstock Resources Inc. (CRK - Free Report) reported first-quarter 2017 loss of $1.75 per share (excluding one-time items), narrower than the Zacks Consensus Estimate of a loss of $1.86. The better-than-expected results were driven by improved oil and gas prices, increased revenues and reduced operating expenses. In particular, oil and natural gas prices moved up 84% and 60%, respectively, compared to the year-ago quarter providing an impetus to the finances of the company. Further, Comstock’s quarterly loss significantly narrowed from the year-ago adjusted loss of $5.60 per share.
Quarterly revenues increased to $53.8 million from $37 million a year ago. The higher realized prices and the higher natural gas production resulted in improved oil and gas sales in the quarter. While natural gas sales jumped 62.8% to $40.9 million, oil sales increased 16.7% to $ 12.8 million. However, revenues were below the Zacks Consensus Estimate of $58 million owing to a decline in production.
Volume Analysis
Comstock’s quarterly volume was 15.6 billion cubic feet equivalent (Bcfe), compared with 16.3 Bcfe in the prior-year quarter. Natural gas output – constituting 90% of total production – increased 1.2% whereas oil output plunged 36.4% in the reported quarter. Growth in natural gas production is attributable to the company's successful Haynesville shale drilling program. However, the decline in oil production was due to the lack of drilling in the company's South Texas Eagle Ford shale properties.
Price Realizations
Average oil price realization (before hedging) was $48.6 per barrel, compared with $26.44 in the first quarter of 2016. Average natural gas realization was $2.92 per thousand cubic feet/Mcf compared with $1.82 per Mcf in the year-earlier quarter.
Costs & Expenses
Total operating expenses were down 45% from the first quarter of 2016 to $51.4 million.
Gathering and transportation costs were $4.1 million, down 5.4% from the year-ago quarter. Lease operating cost of $9.9 million witnessed 23.7% year-over-year decline. Depreciation charges were down by 23% to $29.9 million in the reported quarter. Further, total expenses in the quarter did not include impairment and exploration charges which were incurred in the year-ago quarter.
Cash Flow & EBITDAX
Comstock’s operating cash inflow from continuing operations were $15.9 million. This compared favorably with the operating cash outflow of about $14 million in the first quarter of 2016.
EBITDAX from continuing operations increased significantly. The metric surged 133% year over year to $34.2 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock’s capital expenditure amounted $38.3 million. The company spent $35.7 million on development drilling activities. This marks a 401% growth from $7.1 million spent a year ago.
As of Mar 31, 2017, the company had $30.4 million in cash and cash equivalents and $1,051.4 million in long-term debt.
Comstock Resources, Inc. Price, Consensus and EPS Surprise
Comstock Resources, Inc. Price, Consensus and EPS Surprise | Comstock Resources, Inc. Quote
Zacks Rank & Key Picks
Comstock, operating under the Zacks categorized US Oil and Gas Production & Exploration industry, currently carries a Zacks Rank #3 (Hold).
Better-ranked players in the broader energy space include Bellatrix Exploration Ltd , McDermott International, Inc. and Penn Virginia Corporation . All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bellatrix reported positive earnings surprise of 58.54% in the trailing four quarters.
McDermott posted positive average earnings surprise of 387.5% in the preceding four quarters.
Penn Virginia posted positive average earnings surprise of 36.67% in the preceding four quarters.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>