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Comstock (CRK) Q2 Earnings Beat on Output Growth, Sales Miss
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Comstock Resources, Inc. (CRK - Free Report) recently reported second-quarter 2018 loss of 78 cents per share (excluding one-time items), narrower than the Zacks Consensus Estimate of 79 cents and the year-ago quarter’s loss of $1.07. The impressive results were driven by growth in natural gas production.
Quarterly revenues were $61.45 million, essentially unchanged from the year-ago quarter but lagged the Zacks Consensus Estimate of $62 million. The top line was primarily affected by lower average natural gas equivalent price realization.
Comstock Resources, Inc. Price, Consensus and EPS Surprise
Comstock’s quarterly volume was 22.3 billion cubic feet equivalent (Bcfe), 18.5% higher than 18.8 Bcfe in the prior-year quarter. Natural gas output increased 25.4%, constituting 97.6% of the total production, whereas oil output plunged 63% year over year in the reported quarter, due to the divestment of South Texas Eagle Ford shale assets. The company’s successful Haynesville shale drilling program led to growth in natural gas production.
Price Realizations
Average oil price realization was $57.56 per barrel compared with $45.34 in second-quarter 2017, reflecting an increase of 27%. Average natural gas realization was $2.59 per thousand cubic feet (Mcf) compared with $2.91 per Mcf in the year-earlier quarter, reflecting a decline of 11%. Average natural gas equivalent realization was $2.76 per thousand cubic feet (Mcfe) compared with $3.27 per Mcfe in the year-earlier quarter.
Costs & Expenses
Total operating expenses increased 6% from second-quarter 2017 to $54.1 million, primarily reflecting the loss on sale of oil and gas properties of $6.8 million, along with 24.1% increase in gathering and transportation costs ($4.4 million). General and administrative costs also rose to $7 million in the reported quarter from $6.6 million in the year-ago period.
These were partially offset by lease operating, production taxes and depreciation, as well as depletion and amortization expenses, all of which declined in the reported quarter.
Cash Flow & EBITDAX
Comstock’s net cash provided from continuing operations was $65.4 million. This compared favorably with net cash provided by operating activities of about $52.3 million in the second quarter of 2017.
EBITDAX from continuing operations increased marginally. The metric increased from $43.8 million in the year-ago period to $44 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock’s capital expenditure fell to $43.4 million from $48.3 million in the year-ago quarter. The company spent $38.1 million on development drilling activities.
As of Jun 30, 2018, the company had $158.4 million in cash and cash equivalents, and $1.2 billion in long-term debt. The company has plans to significantly lower its debt using the proceeds from a senior notes offering of $850 million, which was completed on Aug 3, and a credit facility that has a $700-million initial borrowing base.
Calgary, Canada-based Canadian Natural Resources is an upstream energy company. The company’s top line for 2018 is anticipated to improve 41.3% year over year, while its bottom line is expected to increase more than 200%.
Houston, TX-based ConocoPhillips is an integrated energy company. The company’s top line for 2018 is likely to improve 14.1% year over year. In the last four reported quarters, the company delivered an average positive earnings surprise of 27.6%.
Houston, TX-based Cheniere Energy mainly focuses on liquefied natural gas-related businesses. The company’s top line for 2018 is anticipated to improve 26% year over year, while its bottom line is expected to increase more than 225%.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Comstock (CRK) Q2 Earnings Beat on Output Growth, Sales Miss
Comstock Resources, Inc. (CRK - Free Report) recently reported second-quarter 2018 loss of 78 cents per share (excluding one-time items), narrower than the Zacks Consensus Estimate of 79 cents and the year-ago quarter’s loss of $1.07. The impressive results were driven by growth in natural gas production.
Quarterly revenues were $61.45 million, essentially unchanged from the year-ago quarter but lagged the Zacks Consensus Estimate of $62 million. The top line was primarily affected by lower average natural gas equivalent price realization.
Comstock Resources, Inc. Price, Consensus and EPS Surprise
Comstock Resources, Inc. Price, Consensus and EPS Surprise | Comstock Resources, Inc. Quote
Volume Analysis
Comstock’s quarterly volume was 22.3 billion cubic feet equivalent (Bcfe), 18.5% higher than 18.8 Bcfe in the prior-year quarter. Natural gas output increased 25.4%, constituting 97.6% of the total production, whereas oil output plunged 63% year over year in the reported quarter, due to the divestment of South Texas Eagle Ford shale assets. The company’s successful Haynesville shale drilling program led to growth in natural gas production.
Price Realizations
Average oil price realization was $57.56 per barrel compared with $45.34 in second-quarter 2017, reflecting an increase of 27%. Average natural gas realization was $2.59 per thousand cubic feet (Mcf) compared with $2.91 per Mcf in the year-earlier quarter, reflecting a decline of 11%. Average natural gas equivalent realization was $2.76 per thousand cubic feet (Mcfe) compared with $3.27 per Mcfe in the year-earlier quarter.
Costs & Expenses
Total operating expenses increased 6% from second-quarter 2017 to $54.1 million, primarily reflecting the loss on sale of oil and gas properties of $6.8 million, along with 24.1% increase in gathering and transportation costs ($4.4 million). General and administrative costs also rose to $7 million in the reported quarter from $6.6 million in the year-ago period.
These were partially offset by lease operating, production taxes and depreciation, as well as depletion and amortization expenses, all of which declined in the reported quarter.
Cash Flow & EBITDAX
Comstock’s net cash provided from continuing operations was $65.4 million. This compared favorably with net cash provided by operating activities of about $52.3 million in the second quarter of 2017.
EBITDAX from continuing operations increased marginally. The metric increased from $43.8 million in the year-ago period to $44 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock’s capital expenditure fell to $43.4 million from $48.3 million in the year-ago quarter. The company spent $38.1 million on development drilling activities.
As of Jun 30, 2018, the company had $158.4 million in cash and cash equivalents, and $1.2 billion in long-term debt. The company has plans to significantly lower its debt using the proceeds from a senior notes offering of $850 million, which was completed on Aug 3, and a credit facility that has a $700-million initial borrowing base.
Zacks Rank & Key Picks
Currently, Frisco, TX-based Comstock has a Zacks Rank #3 (Hold). Investors interested in the Energy sector can opt for some better-ranked stocks like Canadian Natural Resources Limited (CNQ - Free Report) , ConocoPhillips (COP - Free Report) and Cheniere Energy, Inc. (LNG - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Calgary, Canada-based Canadian Natural Resources is an upstream energy company. The company’s top line for 2018 is anticipated to improve 41.3% year over year, while its bottom line is expected to increase more than 200%.
Houston, TX-based ConocoPhillips is an integrated energy company. The company’s top line for 2018 is likely to improve 14.1% year over year. In the last four reported quarters, the company delivered an average positive earnings surprise of 27.6%.
Houston, TX-based Cheniere Energy mainly focuses on liquefied natural gas-related businesses. The company’s top line for 2018 is anticipated to improve 26% year over year, while its bottom line is expected to increase more than 225%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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