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Comstock Resources (CRK) Loss Wider-than-Expected in Q3
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Domestic energy explorer Comstock Resources Inc. (CRK - Free Report) reported third-quarter 2016 loss of $3.27 per share (excluding one-time items), substantially wider than the Zacks Consensus Estimate of a loss of $2.14. The underperformance can be attributed to weak oil prices.
However, Comstock’s quarterly loss narrowed from the year-ago adjusted loss of $5.30 per share. Increasing natural gas volumes and a significant decline in operating expenses supported the improvement.
Quarterly revenues plunged 18% year over year to $50 million but came in above the Zacks Consensus Estimate of $46 million.
Volume Analysis
Comstock’s quarterly volume decreased 7.5% year over year to 16 billion cubic feet equivalent (Bcfe), of which 87.5% was natural gas. Lower production from South Texas properties more than offset the increase in output from its East Texas/North Louisiana operations. Natural gas output inched up 3.7% but oil production plunged 49.6%.
While volume in the East Texas/North Louisiana operating region – accounting for 78.8% of the total production– increased to 12.6 Bcfe, output from South Texas properties came in at approximately 3.2 Bcfe.
Price Realizations
Average oil price realization (before hedging) was $42.07 per barrel compared with $43.63 per barrel in the third quarter of 2015. Average natural gas realization was $2.62 per thousand cubic feet/Mcf as against $2.50 per Mcf in the year-earlier quarter.
Costs & Expenses
Gathering and transportation costs came in at $3.8 million, up 2.7% from the year-ago quarter. Lease operating cost of $12.3 million saw a 26.3% year-over-year decline.
Total operating expense fell 77.3% from the third quarter of 2015 to $149.1 million.
Comstock’s operating cash flow from continuing operations increased 8.5% from the third quarter of 2015 to $4.9 million.
Earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other non-cash expenses (EBITDAX) from continuing operations also deteriorated significantly. The metric deteriorated by 17.5% year over year to $29.7 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock spent $2.7 million on development drilling activities. This marks a massive 89.4% decline from $25.4 million incurred a year ago. As of Sep 30, 2016, the company had $26.6 million in cash and cash equivalents and $1,025.5 million in long-term debt.
Zacks Rank
Currently, Comstock Resources holds a Zacks Rank #2 (Buy).
Other well-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , Ultra Petroleum Corp. and McDermott International Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.
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Comstock Resources (CRK) Loss Wider-than-Expected in Q3
Domestic energy explorer Comstock Resources Inc. (CRK - Free Report) reported third-quarter 2016 loss of $3.27 per share (excluding one-time items), substantially wider than the Zacks Consensus Estimate of a loss of $2.14. The underperformance can be attributed to weak oil prices.
However, Comstock’s quarterly loss narrowed from the year-ago adjusted loss of $5.30 per share. Increasing natural gas volumes and a significant decline in operating expenses supported the improvement.
Quarterly revenues plunged 18% year over year to $50 million but came in above the Zacks Consensus Estimate of $46 million.
Volume Analysis
Comstock’s quarterly volume decreased 7.5% year over year to 16 billion cubic feet equivalent (Bcfe), of which 87.5% was natural gas. Lower production from South Texas properties more than offset the increase in output from its East Texas/North Louisiana operations. Natural gas output inched up 3.7% but oil production plunged 49.6%.
While volume in the East Texas/North Louisiana operating region – accounting for 78.8% of the total production– increased to 12.6 Bcfe, output from South Texas properties came in at approximately 3.2 Bcfe.
Price Realizations
Average oil price realization (before hedging) was $42.07 per barrel compared with $43.63 per barrel in the third quarter of 2015. Average natural gas realization was $2.62 per thousand cubic feet/Mcf as against $2.50 per Mcf in the year-earlier quarter.
Costs & Expenses
Gathering and transportation costs came in at $3.8 million, up 2.7% from the year-ago quarter. Lease operating cost of $12.3 million saw a 26.3% year-over-year decline.
Total operating expense fell 77.3% from the third quarter of 2015 to $149.1 million.
Cash Flow & EBITDAX
COMSTOCK RESOUR Price, Consensus and EPS Surprise
COMSTOCK RESOUR Price, Consensus and EPS Surprise | COMSTOCK RESOUR Quote
Comstock’s operating cash flow from continuing operations increased 8.5% from the third quarter of 2015 to $4.9 million.
Earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other non-cash expenses (EBITDAX) from continuing operations also deteriorated significantly. The metric deteriorated by 17.5% year over year to $29.7 million.
Capital Expenditure & Balance Sheet
In the reported quarter, Comstock spent $2.7 million on development drilling activities. This marks a massive 89.4% decline from $25.4 million incurred a year ago. As of Sep 30, 2016, the company had $26.6 million in cash and cash equivalents and $1,025.5 million in long-term debt.
Zacks Rank
Currently, Comstock Resources holds a Zacks Rank #2 (Buy).
Other well-ranked players from the broader energy sector include Braskem S.A. (BAK - Free Report) , Ultra Petroleum Corp. and McDermott International Inc. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand.Click to see them now>>