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What changed in COMSTOCK RESOURCES INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of COMSTOCK RESOURCES INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+243 added−235 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-16)

Top changes in COMSTOCK RESOURCES INC's 2024 10-K

243 paragraphs added · 235 removed · 207 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

115 edited+21 added−20 removed118 unchanged
Biggest changeThe following table presents the changes in our estimated proved undeveloped natural gas and oil reserves for the years ended December 31, 2023, 2022 and 2021: Proved Undeveloped Reserves 2023 2022 2021 Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas (MMcf) Beginning Balance 69 4,166,108 — 3,872,423 — 3,595,588 Revisions — (1,634,178 ) (68 ) (1,545 ) — 34,111 Divestitures — — — — — (10,592 ) Acquisitions — — — — — 196,623 Extension and Discoveries — 407,629 137 920,825 — 725,120 Conversion from Undeveloped to Developed (69 ) (733,508 ) — (625,595 ) — (668,427 ) Total Change (69 ) (1,960,057 ) 69 293,685 — 276,835 Ending Balance — 2,206,051 69 4,166,108 — 3,872,423 The timing, by year, when our proved undeveloped reserve quantities are estimated to be converted to proved developed reserves is as follows: Proved Undeveloped Reserves 2023 2022 2021 Year ended December 31, Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas MMcf) Oil (MBbls) Natural Gas (MMcf) 2022 — — — — — 636,183 2023 — — 69 974,476 — 782,785 2024 — 273,487 — 868,692 — 852,342 2025 — 425,458 — 961,824 — 812,056 2026 — 656,609 — 881,972 — 789,057 2027 — 509,227 — 479,144 — — 2028 — 341,270 — — — — Total — 2,206,051 69 4,166,108 — 3,872,423 The following table presents the timing of our estimated future development capital costs to be incurred for the years ended December 31, 2023, 2022 and 2021: Future Development Costs Total Proved Undeveloped Reserves 2023 2022 2021 Year ended December 31, (in millions) 2022 $ — $ — $ 381.4 2023 — 810.0 540.9 2024 184.5 890.0 600.5 2025 427.2 957.0 594.3 2026 728.7 942.4 576.2 2027 522.4 497.8 — 2028 351.3 — — Total $ 2,214.1 $ 4,097.2 $ 2,693.3 10 COMSTOCK RESOURCES, INC.
Biggest changeThe following table presents the changes in our estimated proved undeveloped natural gas and oil reserves for the years ended December 31, 2024, 2023 and 2022: Proved Undeveloped Reserves 2024 2023 2022 Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas (MMcf) Beginning Balance — 2,206,051 69 4,166,108 — 3,872,423 Revisions — (996,816 ) — (1,634,178 ) (68 ) (1,545 ) Extension and Discoveries — 94,538 — 407,629 137 920,825 Conversion from Undeveloped to Developed — (273,487 ) (69 ) (733,508 ) — (625,595 ) Total Change — (1,175,765 ) (69 ) (1,960,057 ) 69 293,685 Ending Balance — 1,030,286 — 2,206,051 69 4,166,108 The timing, by year, when our proved undeveloped reserve quantities are estimated to be converted to proved developed reserves is as follows: Proved Undeveloped Reserves 2024 2023 2022 Year ended December 31, Oil (MBbls) Natural Gas (MMcf) Oil (MBbls) Natural Gas MMcf) Oil (MBbls) Natural Gas (MMcf) 2023 — — — — 69 974,476 2024 — — — 273,487 — 868,692 2025 — 162,370 — 425,458 — 961,824 2026 — 90,525 — 656,609 — 881,972 2027 — 70,859 — 509,227 — 479,144 2028 — 302,749 — 341,270 — — 2029 — 403,783 — — — — Total — 1,030,286 — 2,206,051 69 4,166,108 The following table presents the timing of our estimated future development capital costs to be incurred for the years ended December 31, 2024, 2023 and 2022: Future Development Costs Total Proved Undeveloped Reserves 2024 2023 2022 Year ended December 31, (in millions) 2023 $ — $ — $ 810.0 2024 — 184.5 890.0 2025 97.1 427.2 957.0 2026 65.7 728.7 942.4 2027 55.4 522.4 497.8 2028 279.1 351.3 — 2029 394.2 — — Total $ 891.5 $ 2,214.1 $ 4,097.2 10 COMSTOCK RESOURCES, INC.
Oil and NGLs are converted to natural gas equivalents by using a conversion factor of one barrel of oil or NGLs for six Mcf of natural gas based upon the approximate relative energy content of oil to natural gas, which is not indicative of natural gas and oil prices.
Oil and NGLs are converted to natural gas equivalents by using a conversion factor of one barrel of oil or NGLs for six Mcf of natural gas based upon the approximate relative energy content of oil to natural gas, which is not indicative of natural gas and oil prices.
(2) The PV 10 Value represents the discounted future net cash flows attributable to our proved natural gas and oil reserves before income tax, discounted at 10%.
(2) The PV 10 Value represents the discounted future net cash flows attributable to our proved natural gas and oil reserves before income tax, discounted at 10%.
Although it is a non-GAAP measure, we believe that the presentation of PV 10 Value is relevant and useful to our investors because it presents the discounted future net cash flows attributable to our proved reserves prior to taking into account corporate future income taxes and our current tax structure.
Although it is a non-GAAP measure, we believe that the presentation of PV 10 Value is relevant and useful to our investors because it presents the discounted future net cash flows attributable to our proved reserves prior to taking into account corporate future income taxes and our current tax structure.
When such differences do not exceed 10% in the aggregate, our reserve auditor is satisfied that the proved reserves and pretax present value of such reserves discounted at 10% are reasonable and will issue an unqualified opinion. Remaining differences are not resolved due to the limited cost benefit of continuing such analysis.
When such differences do not exceed 10% in the aggregate, our reserve auditor is satisfied that the proved reserves and pretax present value of such reserves discounted at 10% are reasonable and will issue an unqualified opinion. The remaining differences are not resolved due to the limited cost benefit of continuing such analysis.
Our operations are also subject to the Clean Air Act, or "CAA", and comparable state and local requirements. Amendments to the CAA were adopted in 1990 and contain provisions that may result in the gradual imposition of certain pollution control requirements with respect to air emissions from our operations.
Our operations are also subject to the Clean Air Act ("CAA"), and comparable state and local requirements. Amendments to the CAA were adopted in 1990 and contain provisions that may result in the gradual imposition of certain pollution control requirements with respect to air emissions from our operations.
Prior to her appointment as Provost, she was a professor of accounting in the Hankamer School of Business at Baylor University where she also served as associate dean for undergraduate programs and as acting chair for the Department of Accounting and Business Law.
Prior to her appointment as Provost, she was a professor of accounting at the Hankamer School of Business at Baylor University where she also served as associate dean for undergraduate programs and as acting chair for the Department of Accounting and Business Law.
Various aspects of our natural gas and oil operations are subject to extensive and continually changing regulation, as legislation affecting the natural gas and oil industry is under constant review for amendment or expansion.
Regulation General. Various aspects of our natural gas and oil operations are subject to extensive and continually changing regulation, as legislation affecting the natural gas and oil industry is under constant review for amendment or expansion.
The Federal Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, or "RCRA", regulates the generation, transportation, storage, treatment and disposal of hazardous wastes and can require cleanup of hazardous waste disposal sites.
The Federal Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 ("RCRA"), regulates the generation, transportation, storage, treatment and disposal of hazardous wastes and can require cleanup of hazardous waste disposal sites.
Different GHGs have different global warming potentials with CO2 having the lowest global warming potential, so emissions of GHGs are typically expressed in terms of CO2 equivalents, or CO2e.
Different GHGs have different global warming potentials with CO2 having the lowest global warming potential, so emissions of GHGs are typically expressed in terms of CO2 equivalents ("CO2e").
Proved reserve information in this report is based on estimates prepared by our petroleum engineering staff and is the responsibility of management. We retained an independent petroleum consultant to conduct an audit of our December 31, 2023 reserve estimates. Netherland, Sewell & Associates, Inc. ("NSAI") audited 100% of our total PV 10 Value as of December 31, 2023.
Proved reserve information in this report is based on estimates prepared by our petroleum engineering staff and is the responsibility of management. We retained an independent petroleum consultant to conduct an audit of our December 31, 2024 reserve estimates. Netherland, Sewell & Associates, Inc. ("NSAI") audited 100% of our total PV 10 Value as of December 31, 2024.
Prior thereto, Mr. Presley spent two and one-half years with B.D.O. Seidman, a public accounting firm. Mr. Presley received a Bachelor of Business Administration degree from Texas A & M University in 1983. LaRae L. Sanders has been our Vice President of Land since 2014. Ms. Sanders has been with us since 1995.
Presley spent two and one-half years with B.D.O. Seidman, a public accounting firm. Mr. Presley received a Bachelor of Business Administration degree from Texas A & M University in 1983. LaRae L. Sanders has been our Vice President of Land since 2014. Ms. Sanders has been with us since 1995.
Newell brings over 15 years of experience in commercial, marketing and operations experience in the midstream energy industry. Prior to joining us, Mr. Newell was responsible for producer relationships, business development, project management, scheduling and marketing as Commercial Vice President at Trace Midstream, Blue Mountain Midstream and Penntex Midstream.
Newell has over 15 years of experience in commercial, marketing and operations experience in the midstream energy industry. Prior to joining us, Mr. Newell was responsible for producer relationships, business development, project management, scheduling and marketing as Commercial Vice President at Trace Midstream, Blue Mountain Midstream and Penntex Midstream.
We intend to leverage our management and operating team's significant technical expertise and experience in the Haynesville shale to continue to pursue acquisition opportunities in our region and to successfully execute and integrate acreage acquisitions that will add to our drilling inventory.
We intend to leverage our management and operating team's significant technical expertise and experience in the Haynesville and Bossier shale plays to continue to pursue acquisition opportunities in that region and to successfully execute and integrate acreage acquisitions that will add to our drilling inventory.
Pinnacle Gas Services LLC ("Pinnacle") was formed by the contribution of a 145-mile high pressure pipeline and natural gas treating plant which we acquired in 2022. We had invested $30.0 million in these midstream assets including the initial acquisition costs. Quantum agreed to fund up to $300 million for the future build out of the gathering and gas treating system.
Pinnacle Gas Services LLC ("Pinnacle") was formed by the contribution of a high pressure pipeline and natural gas treating plant which we acquired in 2022. We invested $30.0 million in these midstream assets including the initial acquisition costs. Quantum agreed to fund up to $300 million for the future build out of the gathering and gas treating system.
We did not provide estimates of total proved natural gas and oil reserves during the three year period ended December 31, 2023 to any federal authority or agency, other than the SEC.
We did not provide estimates of total proved natural gas and oil reserves during the three-year period ended December 31, 2024 to any federal authority or agency, other than the SEC.
As of December 31, 2023, we did not own an interest in any wells containing multiple completions, which means that a well is producing from more than one completed zone. Acreage The following table summarizes our developed and undeveloped leasehold acreage at December 31, 2023, all of which is onshore in the continental United States.
As of December 31, 2024, we did not own an interest in any wells containing multiple completions, which means that a well is producing from more than one completed zone. Acreage The following table summarizes our developed and undeveloped leasehold acreage as of December 31, 2024, all of which is onshore in the continental United States.
Presley has been our Treasurer since 2013. Mr. Presley, who has been with us since 1989, also continues to serve as our Vice President of Accounting and Controller, positions he has had held since 1997 and 1991, respectively. Prior to joining us, Mr. Presley had six years of experience with several independent oil and gas companies including AmBrit Energy, Inc.
Mr. Presley, who has been with us since 1989, also continues to serve as our Vice President of Accounting and Controller, positions he has had held since 1997 and 1991, respectively. Prior to joining us, Mr. Presley had six years of experience with several independent oil and gas companies including AmBrit Energy, Inc. Prior thereto, Mr.
We seek to attract a qualified and diverse workforce and maintain strong non-discrimination and anti-harassment policies. The safety of our employees, contractors and the community is a core business value and in order to obtain our goals of operational excellence and an injury free workplace, we maintain a strong health and safety management system.
We seek to attract a qualified workforce and maintain strong non-discrimination and anti-harassment policies. The safety of our employees, contractors and the community is a core business value and in order to achieve our goals of operational excellence and an injury-free workplace, we maintain a strong health and safety management system.
Sanders is a Certified Professional Landman and became the nation's first Certified Professional Lease and Title Analyst in 1990. Brian C. Claunch became our Vice President of Financial Reporting in June 2021. Mr. Claunch joined the Company in June 2020 as Director of Financial Reporting. Prior to joining Comstock, Mr.
Sanders is a Certified Professional Landman and became the nation's first Certified Professional Lease and Title Analyst in 1990. Brian C. Claunch has been our Vice President of Financial Reporting since June 2021. Mr. Claunch joined the Company in June 2020 as Director of Financial Reporting. Prior to joining Comstock, Mr.
Our management and operating team have been instrumental in developing and optimizing some of the most effective completion techniques in the Haynesville and Bossier shales and such completion techniques have resulted in a substantial improvement in initial production rates and recoverable reserves, which has resulted in some of the highest single well rates of return when compared to results from other natural gas basins in North America. • Proximity to premium natural gas markets .
Our management and operating teams are instrumental in developing and optimizing some of the most effective completion techniques in the Haynesville and Bossier shales and such completion techniques have resulted in a substantial improvement in initial production rates and recoverable reserves, which has resulted in some of the highest single well rates of return when compared to results from other natural gas basins in North America. • Proximity to premium natural gas markets .
Bartlett holds a Bachelor of Science degree in Petroleum Engineering and Geoscience from the University of Texas at Austin and has eleven years of engineering experience in the oil and gas industry.
Bartlett holds a Bachelor of Science degree in Petroleum Engineering and Geoscience from the University of Texas at Austin and has 12 years of engineering experience in the oil and gas industry.
Prior to 2005, he worked in various petroleum engineering operations management positions for several independent oil and gas exploration and development companies. Mr. Harrison received a B.S. Degree in Petroleum Engineering from the Louisiana State University in 1985. Clifford D. Newell became our Vice President of Corporate Development and Chief Commercial Officer in December 2022. Mr.
Prior to 2005, he worked in various petroleum engineering operations management positions for several independent oil and gas exploration and development companies. Mr. Harrison received a B.S. Degree in Petroleum Engineering from the Louisiana State University in 1985. Clifford D. Newell has been our Chief Commercial Officer and Vice President of Corporate Development since December 2022. Mr.
Our natural gas production benefits from the strong regional Gulf Coast demand growth driven by a substantial increase in LNG exports, exports to Mexico and new or expanded petrochemical facilities. Producers, such as us, with access to the Gulf Coast natural gas markets are receiving higher net realized prices than most producers in other regions.
Our natural gas production benefits from the strong regional Gulf Coast demand growth driven by a substantial increase in LNG exports, exports to Mexico and new or expanded petrochemical facilities. Producers, such as us, with access to the Gulf Coast natural gas markets are receiving higher net realized prices than most 6 COMSTOCK RESOURCES, INC. producers in other regions.
NGLs are converted to natural gas equivalents by using a conversion factor of one barrel of NGLs for six Mcf of natural gas based upon the approximate relative energy content. 99% of our proved reserves are in the Haynesville and Bossier shales in North Louisiana and East Texas. These wells produce from depths of 10,500 to 18,000 feet.
NGLs are converted to natural gas equivalents by using a conversion factor of one barrel of NGLs for six Mcf of natural gas based upon the approximate relative energy content. All of our proved reserves are in the Haynesville and Bossier shales in North Louisiana and East Texas. These wells produce from depths of 10,500 to 19,000 feet.
State and federal regulatory agencies have studied possible connections between hydraulic fracturing related activities and the increased occurrence of seismic activity. When caused by human activity, such events are called induced seismicity. In a few instances, operators of injection wells in the vicinity of seismic events have been ordered to reduce injection volumes 17 COMSTOCK RESOURCES, INC. or suspend operations.
State and federal regulatory agencies have studied possible connections between hydraulic fracturing related activities and the increased occurrence of seismic activity. When caused by human activity, such events are called induced seismicity. In a few instances, operators of injection wells in the vicinity of seismic events have been ordered to reduce injection volumes or suspend operations.
All of our natural gas undeveloped reserves are associated with our Haynesville and Bossier shale (including Western Haynesville and Bossier) properties where our 2024 drilling program is focused.
All of our natural gas undeveloped reserves are associated with our Haynesville and Bossier shale (including Western Haynesville and Bossier) properties where our 2025 drilling program is focused.
This sensitivity analysis is only meant to demonstrate the impact that changing natural gas and oil prices may have on our proved natural gas and oil reserves and the related PV 10 Value and there is no assurance this outcome will be realized.
This sensitivity analysis is only meant to demonstrate the impact that changing natural gas and oil prices may have on our proved reserve estimates and the related PV 10 Value and there is no assurance this outcome will be realized.
We also own production offices and pipe yard facilities near Carthage, Franklin, Nacogdoches, Marshall, Marquez and Tennessee Colony in Texas and Bossier City, Grand Cane, Greenwood, Homer, Mansfield and Logansport in Louisiana. Human Capital As of December 31, 2023, we had 251 employees and utilized contract employees for certain of our drilling, completion and production operations.
We also own production offices and pipe yard facilities near Carthage, Franklin, Nacogdoches, Marshall, Marquez and Tennessee Colony in Texas and Bossier City, Grand Cane, Greenwood, Homer, Mansfield and Logansport in Louisiana. Human Capital As of December 31, 2024, we had 256 employees and utilized contract employees for certain of our drilling, completion and production operations.
We currently have agreements with certain natural gas midstream companies to provide us with firm transportation for an average of approximately 1.8 Bcf per day in 2024 on the long-haul pipelines. To the extent we are not able to deliver the contracted natural gas volumes, we may be responsible for the transportation costs.
We currently have agreements with certain natural gas midstream companies to provide us with firm transportation for an average of approximately 1.7 Bcf per day in 2025 on the long-haul pipelines. To the extent we are not able to deliver the contracted natural gas volumes, we may be responsible for the transportation costs.
Burns worked primarily in the firm's oil and gas audit practice. Mr. Burns received B.A. and M.A. degrees from the University of Mississippi in 1982 and is a Certified Public Accountant. Daniel S. Harrison became our Chief Operating Officer in July 2019 and served as Vice President of Operations since 2017. Mr.
Burns worked primarily in the firm's oil and gas audit practice. Mr. Burns received B.A. and M.A. degrees from the University of Mississippi in 1982 and is a Certified Public Accountant. Daniel S. Harrison has been our Chief Operating Officer since 2019 and served as Vice President of Operations since 2017. Mr.
All of our proved undeveloped reserves represent wells to be drilled in the next five years on our Haynesville and Bossier shale acreage. 8 COMSTOCK RESOURCES, INC. Proved reserves that are attributable to existing producing wells are primarily determined using decline curve analysis and rate transient analysis, which incorporates the principles of hydrocarbon flow.
All of our proved undeveloped reserves represent wells to be drilled in the next five years on our Haynesville and Bossier shale acreage. Proved reserves that are attributable to existing producing wells are primarily determined using decline curve analysis and rate transient analysis, which incorporates the principles of hydrocarbon flow.
We utilize cleaner burning natural gas rather than diesel fuel when possible to reduce emissions in our drilling and completion operations and design our wells to drill longer laterals and utilize multi-well pad locations to minimize our above-ground footprint. • Manage commodity price exposure.
We utilize cleaner burning natural gas rather than diesel fuel when possible to 7 COMSTOCK RESOURCES, INC. reduce emissions in our drilling and completion operations and design our wells to drill longer laterals and utilize multi-well pad locations to minimize our above-ground footprint. • Manage commodity price exposure.
Other 16 COMSTOCK RESOURCES, INC. wastes handled at exploration and production sites or used in the course of providing well services may not fall within this exclusion. Moreover, stricter standards for waste handling and disposal may be imposed on the natural gas and oil industry in the future.
Other wastes handled at exploration and production sites or used in the course of providing well services may not fall within this exclusion. Moreover, stricter standards for waste handling and disposal may be imposed on the natural gas and oil industry in the future.
Some state statutes limit the rate at which natural gas and oil can be produced from our properties. It is also possible that certain states may increase regulatory activity in response to changing federal regulations or policies. State regulation.
Some 19 COMSTOCK RESOURCES, INC. state statutes limit the rate at which natural gas and oil can be produced from our properties. It is also possible that certain states may increase regulatory activity in response to changing federal regulations or policies. State regulation.
We use this measure when assessing the potential return on investment related to our natural gas and oil properties. The standardized measure of discounted future net cash flows represents the present value of future cash flows attributable to our proved natural gas and oil reserves after income tax, discounted at 10%.
We use this measure when assessing the potential return on investment related to our natural gas and oil properties. The standardized measure of discounted future net cash flows represents the present value of future cash flows attributable to our proved natural gas and oil reserves after income tax, discounted at 10%. 8 COMSTOCK RESOURCES, INC.
If such legislation were enacted, it could have a significant impact on our operating costs, as well as the natural gas and oil industry in general. The impact of future revisions to environmental laws and regulations cannot be predicted.
If such legislation were enacted, it could have a significant 16 COMSTOCK RESOURCES, INC. impact on our operating costs, as well as the natural gas and oil industry in general. The impact of future revisions to environmental laws and regulations cannot be predicted.
Part 98, Subpart W), which requires certain onshore petroleum and natural gas facilities to collect data on their 18 COMSTOCK RESOURCES, INC. emissions of greenhouse gases ("GHG"). GHGs include gases such as methane, a primary component of natural gas, and carbon dioxide, a byproduct of burning natural gas.
Part 98, Subpart W), which requires certain onshore petroleum and natural gas facilities to collect data on their emissions of greenhouse gases ("GHG"). GHGs include gases such as methane, a primary component of natural gas, and carbon dioxide, a byproduct of burning natural gas.
In 1989, however, Congress enacted the Natural Gas Wellhead Decontrol Act, which removed all remaining price and nonprice controls affecting all "first sales" of natural gas, effective January 1, 1993, subject to the terms of any private contracts that may be in effect.
Gas Wellhead Decontrol Act, which removed all remaining price and nonprice controls affecting all "first sales" of natural gas, effective January 1, 1993, subject to the terms of any private contracts that may be in effect.
Future regulatory developments could adversely affect our operations by placing restrictions on the use of injection wells and hydraulic fracturing and/or causing us to incur increased operating expenses.
Future regulatory developments could adversely affect our 17 COMSTOCK RESOURCES, INC. operations by placing restrictions on the use of injection wells and hydraulic fracturing and/or causing us to incur increased operating expenses.
McGough became our Vice President of Operations in July 2019 following our acquisition of Covey Park Energy, LLC. He joined Covey Park in August 2018 as the Vice President of Operations, where he was responsible for drilling, completion, and production operations and engineering. Prior to his time at Covey Park, Mr.
McGough has been our Vice President of Operations since 2019 following our acquisition of Covey Park Energy, LLC. He joined Covey Park in August 2018 as the Vice President of Operations, where he was responsible for drilling, completion, and production operations and engineering. Prior to his time at Covey Park, Mr.
Numerous departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and 14 COMSTOCK RESOURCES, INC. regulations binding upon the natural gas and oil industry and its individual members.
Numerous departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and regulations binding upon the natural gas and oil industry and its individual members.
Davis is currently the President of Furman University. Dr. Davis was the Executive Vice President and Provost for Baylor University until July 2014, and served as Interim Provost from 2008 until 2010.
Davis has served as a director since 2014. Dr. Davis is currently the President of Furman University. Dr. Davis was the Executive Vice President and Provost for Baylor University until July 2014 and served as Interim Provost from 2008 until 2010.
The natural gas and oil prices used for reserves estimation were as follows: Year Natural Gas Price (per Mcf) Oil Price (per Bbl) 2023 $ 2.39 $ 72.63 2022 $ 6.03 $ 91.21 2021 $ 3.33 $ 62.38 Reserves may be classified as proved undeveloped if there is a high degree of confidence that the quantities will be recovered, and they are scheduled to be drilled within five years of their initial inclusion as proved reserves, unless specific circumstances justify a longer time.
The natural gas and oil prices used for reserves estimation were as follows: Year Natural Gas Price (per Mcf) Oil Price (per Bbl) 2024 $ 1.84 $ 71.07 2023 $ 2.39 $ 72.63 2022 $ 6.03 $ 91.21 Reserves may be classified as proved undeveloped if there is a high degree of confidence that the quantities will be recovered, and they are scheduled to be drilled within five years of their initial inclusion as proved reserves, unless specific circumstances justify a longer time.
Drilling Activity Summary During the three-year period ended December 31, 2023, we drilled development and exploratory wells as set forth in the table below: 2023 2022 2021 Gross Net Gross Net Gross Net Development: Oil — — — — — — Gas 63 47.6 116 58.6 100 54.1 Dry 1 1.0 — — — — 64 48.6 116 58.6 100 54.1 Exploratory: Oil — — — — — — Gas 7 6.9 2 2.0 — — Dry — — — — — — 7 6.9 2 2.0 — — Total 71 55.5 118 60.6 100 54.1 As of December 31, 2023, 2022 and 2021, we had 30 (26.9 net), 42 (29.0 net), and 28 (21.9 net), respectively, operated wells in the process of being drilled and completed.
Drilling Activity Summary During the three-year period ended December 31, 2024, we drilled development and exploratory wells as set forth in the table below: 2024 2023 2022 Gross Net Gross Net Gross Net Development: Oil — — — — — — Gas 39 31.9 63 47.6 116 58.6 Dry — — 1 1.0 — — 39 31.9 64 48.6 116 58.6 Exploratory: Oil — — — — — — Gas 11 11.0 7 6.9 2 2.0 Dry — — — — — — 11 11.0 7 6.9 2 2.0 Total 50 42.9 71 55.5 118 60.6 As of December 31, 2024, 2023 and 2022, we had 21 (17.3 net), 30 (26.9 net), and 42 (29.0 net), respectively, operated wells in the process of being drilled and completed.
Competitors include major oil companies, other independent energy companies and individual producers and operators, many of which have financial resources, personnel and facilities substantially greater than we do. We face intense competition for the acquisition of natural gas and oil properties and leases for natural gas and oil exploration. Regulation General.
Competition The natural gas and oil industry is highly competitive. Competitors include major oil companies, other independent energy companies and individual producers and operators, many of which have financial resources, personnel and facilities substantially greater than we do. We face intense competition for the acquisition of natural gas and oil properties and leases for natural gas and oil exploration.
The Federal Water Pollution Control Act of 1972, as amended, or the "Clean Water Act", imposes restrictions and controls on the discharge of produced waters and other wastes into navigable waters. Permits must be obtained to discharge pollutants into state and federal waters and to conduct construction activities in waters and wetlands.
The Federal Water Pollution Control Act of 1972, as amended (the "Clean Water Act"), imposes restrictions and controls on the discharge of produced waters and other wastes into navigable waters. Permits must be obtained to discharge pollutants into state and federal waters and to conduct construction activities in waters and wetlands. In January 2023, the EPA and the U.S.
We are investing a part of our annual capital budget to expand our acreage holdings and delineate the emerging Western Haynesville and Bossier shale play in East Texas. Our first seven exploratory wells turned to sales in 2022 and 2023 have been successful.
We are investing a substantial portion of our annual capital budget to expand our acreage holdings and delineate our emerging Western Haynesville and Bossier shale plays in East Texas. Our first seven exploratory wells turned to sales in 2022 and 2023 have been successful.
We also plan to continue to acquire prospective acreage with an active leasing program. • Maintain disciplined financial strategy. Given the current low natural gas prices, we intend to maintain a conservative operating plan in 2024 with the primary goal of protecting our balance sheet.
We also plan to continue to acquire prospective acreage with an active leasing program. • Maintain disciplined financial strategy. Given the current natural gas price outlook, we intend to maintain a conservative operating plan in 2025 with the primary goal of protecting our balance sheet.
In 2024, we currently intend to drill an additional ten Haynesville and Bossier shale wells in this play. • Evaluate and pursue strategic acquisition opportunities and conduct an active leasing program to grow our reserves, production, and drilling location inventory.
In 2024, we turned an additional eleven Haynesville and Bossier shale wells in this play to sales. In 2025, we currently intend to drill an additional 20 Haynesville and Bossier shale wells in this play. • Evaluate and pursue strategic acquisition opportunities and conduct an active leasing program to grow our reserves, production, and drilling location inventory.
Claunch served as Director of Financial Reporting at Guidon Energy and Controller at Pioneer Natural Resources Company. He received his Bachelor of Business Administration and Master of Science in Accounting degrees from the University of Texas at Arlington in 1999 and is a Certified Public Accountant. Outside Directors Elizabeth B. Davis has served as a director since 2014. Dr.
Claunch served as Director of Financial Reporting at Guidon Energy and Controller at Pioneer Natural Resources Company. He received his Bachelor of Business Administration and Master of Science in Accounting degrees from the University of Texas at Arlington in 1999 and is a Certified Public Accountant. 21 COMSTOCK RESOURCES, INC. Outside Directors Elizabeth B.
During 2023, 67 proved undeveloped locations included in our 2022 reserves were converted to proved developed reserves. As of December 31, 2022, our proved undeveloped reserves were comprised of 4.2 Tcf of natural gas, all of which were associated with our Haynesville and Bossier shale (including Western Haynesville and Bossier) properties.
During 2024, 21 proved undeveloped locations included in our 2023 reserves were converted to proved developed reserves. As of December 31, 2023, our proved undeveloped reserves were comprised of 2.2 Tcf of natural gas, all of which were associated with our Haynesville and Bossier shales (including Western Haynesville and Bossier) properties.
From 1988 to 2013, Mr. Allison served as our President. From 1981 to 1987, he was a practicing oil and gas attorney with the firm of Lynch, Chappell & Alsup in Midland, Texas. He received B.B.A., M.S. and J.D. degrees from Baylor University in 1978, 1980 and 1981, respectively. Roland O.
From 1981 to 1987, he was a practicing oil and gas attorney with the firm of Lynch, Chappell & Alsup in Midland, Texas. He received B.B.A., M.S. and J.D. degrees from Baylor University in 1978, 1980 and 1981, respectively. Roland O.
Our current plan is to fund our exploration and development activity with operating cash flow and borrowings under our bank credit facility as necessary. We believe our low operating cost structure combined with maximizing the capital efficiency of our drilling program and maintaining financial discipline will allow us to achieve this goal. • Focus on environmental stewardship.
Our current plan is to fund our exploration and development activity with operating cash flow that we generate. We believe our low operating cost structure combined with maximizing the capital efficiency of our drilling program and maintaining financial discipline will allow us to achieve this goal. • Focus on environmental stewardship.
As of December 31, 2023, our proved undeveloped reserves did not include any undrilled wells with a rate of return less than 10%. As of December 31, 2023, our proved undeveloped reserves were comprised of 2.2 Tcf of natural gas consisting of 160 undeveloped locations.
As of December 31, 2024, our proved undeveloped reserves did not include any undrilled wells with a rate of return less than 10%. As of December 31, 2024, our proved undeveloped reserves were comprised of 1.0 Tcf of natural gas consisting of 56 undeveloped locations.
Enterprise Products Operating and its subsidiaries, Southwest Energy L.P. and Venture Global LNG, Inc. accounted for 20%. 17% and 10%, respectively, of our total 2023 sales. The loss of any of these customers would not have a material adverse effect on us as there is an available market for our natural gas and oil production from other purchasers.
Enterprise Products Operating and its subsidiaries and Venture Global LNG, Inc. accounted for 21% and 12%, respectively, of our total 2024 sales. The loss of any of these customers would not have a material adverse effect on us as there is an available market for our natural gas and oil production from other purchasers.
Western Haynesville Midstream Venture To support the development of the Western Haynesville acreage, we entered into a partnership on October 31, 2023 with Quantum Capital Solutions ("Quantum") to finance the buildout of natural gas gathering and treating facilities required to handle the expected growth in our natural gas production from wells we drill on our acreage.
Western Haynesville Midstream Venture To support the continued development of the Western Haynesville and Bossier shale, we entered into a partnership with Quantum Capital Solutions ("Quantum") in 2023 to finance the buildout of natural gas gathering and treating facilities required to handle the expected growth in our natural gas production from wells we plan to drill in this area.
Prior to joining us, Mr. Mills was an Equity Member and Senior Analyst responsible for covering exploration and production companies at Johnson Rice & Company LLC. Mr. Mills joined Johnson Rice in August 1995. Mr. Mills received a Bachelor of Arts in Economics and Master of Business Administration from Tulane University in 1994 and 1995, respectively. Daniel K.
Mills was an Equity Member and Senior Analyst responsible for covering exploration and production companies at Johnson Rice & Company LLC. Mr. Mills joined Johnson Rice in August 1995. Mr. Mills received a Bachelor of Arts in Economics and Master of Business Administration from Tulane University in 1994 and 1995, respectively. Daniel K. Presley has been our Treasurer since 2013.
Our natural gas and oil proved undeveloped reserves decreased by 2.0 Tcf during 2023 due to low natural gas prices used to determine the proved reserves as 164 proved undeveloped reserve locations previously included in our proved reserves no longer generate an economic return using the prescribed SEC natural gas and oil prices.
Our natural gas and oil proved undeveloped reserves decreased by 1.2 Tcf during 2024 due to low natural gas prices used to determine the proved 9 COMSTOCK RESOURCES, INC. reserves as 83 proved undeveloped reserve locations previously included in our proved reserves no longer generate an economic return using the prescribed SEC natural gas and oil prices.
This decrease was attributable to the lower number of future proved undeveloped locations expected to generate an economic return as a result of lower natural gas prices.
These decreases were attributable to the lower number of future proved undeveloped locations expected to generate an economic return as a result of lower natural gas prices.
Our estimated future capital costs to develop proved undeveloped reserves as of December 31, 2022 of $4.1 billion increased by $1.4 billion from our estimated future capital costs of $2.7 billion as of December 31, 2021.
Our estimated future capital costs to develop proved undeveloped reserves as of December 31, 2023 of $2.2 billion decreased by $1.9 billion from our estimated future capital costs of $4.1 billion as of December 31, 2022.
In 2022, the Biden administration reopened federal lands for natural gas and oil leasing under a reformed program that significantly reduces the acreage available for lease.
In 2022, the Biden administration reopened federal lands for natural gas and oil leasing under a reformed program that significantly reduces the acreage available for lease and, in 2025, President Trump revoked the 2021 Executive Order.
The following table sets forth our year end reserves as of December 31 for each of the last three fiscal years: 2023 2022 2021 Oil (MBbls) Natural Gas (MMcf) (1) Oil (MBbls) Natural Gas (MMcf) (1) Oil (MBbls) Natural Gas (MMcf) (1) Proved Developed 548 2,734,175 480 2,531,462 627 2,245,660 Proved Undeveloped — 2,206,051 69 4,166,108 — 3,872,423 Total Proved Reserves 548 4,940,226 549 6,697,570 627 6,118,083 ______________ (1) Natural gas volumes include NGLs.
The following table sets forth our year end reserves as of December 31 for each of the last three fiscal years: 2024 2023 2022 Oil (MBbls) Natural Gas (MMcf) (1) Oil (MBbls) Natural Gas (MMcf) (1) Oil (MBbls) Natural Gas (MMcf) (1) Proved Developed 331 2,731,812 548 2,734,175 480 2,531,462 Proved Undeveloped — 1,030,286 — 2,206,051 69 4,166,108 Total Proved Reserves 331 3,762,098 548 4,940,226 549 6,697,570 ______________ (1) Natural gas volumes include NGLs.
We target selling approximately 80% of our natural gas on first of month index price, with the remaining 20% on daily spot market pricing.
We target selling approximately 70% to 75% of our natural gas on first of month index price, with the remaining volumes on daily spot market pricing.
Production, Price and Cost Summary Annual production, average prices that we realized from sales of natural gas and oil and the associated lifting costs for each of the last three fiscal years were as follows: Year Ended December 31, 2023 2022 2021 Net Production Volumes: Natural gas - Mcf 524,467 500,616 489,274 Oil - Bbl 70 82 1,210 Average Prices: Natural Gas - $/Mcf $ 2.40 $ 6.23 $ 3.63 Oil - $/Bbl $ 73.73 $ 92.65 $ 61.95 Lifting Costs - $/Mcfe: Lease operating $ 0.25 $ 0.22 $ 0.21 Gathering and transportation $ 0.35 $ 0.31 $ 0.26 Production and ad valorem taxes $ 0.18 $ 0.16 $ 0.10 12 COMSTOCK RESOURCES, INC.
Production, Price and Cost Summary Annual production, average prices that we realized from sales of natural gas and oil and the associated lifting costs for each of the last three fiscal years were as follows: Year Ended December 31, 2024 2023 2022 Net Production Volumes: Natural gas - MMcf 527,548 524,467 500,616 Oil - MBbls 50 70 82 Average Prices: Natural Gas - $/Mcf $ 1.98 $ 2.40 $ 6.23 Oil - $/Bbl $ 71.94 $ 73.73 $ 92.65 Lifting Costs - $/Mcfe: Lease operating $ 0.25 $ 0.25 $ 0.22 Gathering and transportation $ 0.37 $ 0.35 $ 0.31 Production and ad valorem taxes $ 0.11 $ 0.18 $ 0.16 12 COMSTOCK RESOURCES, INC.
These leases are also subject to certain regulations and orders promulgated by the Department of Interior's Bureau of Ocean Energy Management, Regulation & Enforcement ("BOEMRE"), through its Minerals Revenue Management Program, which is responsible for the management of revenues from both onshore and offshore leases.
These leases are also subject to certain regulations and orders promulgated by the Department of Interior's Bureau of Ocean Energy Management, Regulation & Enforcement, through its Minerals Revenue Management Program, which is responsible for the management of revenues from both onshore and offshore leases. Our operations located on federal natural gas and oil leases are insignificant to our total operations.
McGough held significant roles as a drilling, completion, and production engineer at Brammer Engineering. Mr. McGough received a Bachelor of Science in Chemical Engineering from Louisiana Tech University in 2003 and an MBA from Centenary College of Louisiana in 2010. 21 COMSTOCK RESOURCES, INC. Ronald E. Mills became our Vice President of Finance and Investor Relations in August 2019.
McGough held significant roles as a drilling, completion, and production engineer at Brammer Engineering. Mr. McGough received a Bachelor of Science in Chemical Engineering from Louisiana Tech University in 2003 and an MBA from Centenary College of Louisiana in 2010. Ronald E. Mills has been our Vice President of Finance and Investor Relations since 2019. Prior to joining us, Mr.
The following table presents the changes in our estimated future development costs for the years ended December 31, 2023 and December 31, 2022: (in millions) Total as of December 31, 2021 $ 2,693.3 Development Costs Incurred (635.9 ) Additions 1,119.3 Revisions 920.5 Total Changes 1,403.9 Total as of December 31, 2022 4,097.2 Development Costs Incurred (844.3 ) Additions 461.4 Revisions (1,500.2 ) Total Changes (1,883.1 ) Total as of December 31, 2023 $ 2,214.1 Our estimated future capital costs to develop proved undeveloped reserves as of December 31, 2023 of $2.2 billion decreased by $1.9 billion from our estimated future capital costs of $4.1 billion as of December 31, 2022.
The following table presents the changes in our estimated future development costs for the years ended December 31, 2024 and December 31, 2023: (in millions) Total as of December 31, 2022 $ 4,097.2 Development Costs Incurred (844.3 ) Additions 461.4 Revisions (1,500.2 ) Total Changes (1,883.1 ) Total as of December 31, 2023 2,214.1 Development Costs Incurred (422.6 ) Additions 96.2 Revisions (996.2 ) Total Changes (1,322.6 ) Total as of December 31, 2024 $ 891.5 Our estimated future capital costs to develop proved undeveloped reserves as of December 31, 2024 of $891.5 million decreased by $1.3 billion from our estimated future capital costs of $2.2 billion as of December 31, 2023.
(PPI-FG) plus 1.3 percent for the period July 1, 2006 through June 30, 2011. The mandatory five year review in 2012 revised the methodology for this index to be based on PPI-FG plus 2.65 percent for the period July 1, 2011 through June 30, 2016.
The mandatory five-year review in 2005 revised the methodology for this index to be based on Producer Price Index for Finished Goods (PPI-FG) plus 1.3 percent for the period July 1, 2006 through June 30, 2011.
ITEM 1. BUSINESS We are a leading independent natural gas producer operating primarily in the Haynesville shale, a premier natural gas basin located in North Louisiana and East Texas with superior economics given its geographical proximity to the Gulf Coast markets. As of December 31, 2023, 99% of our proved reserves were in the Haynesville and Bossier shale play.
ITEM 1. BUSINESS We are a leading independent natural gas producer operating primarily in the Haynesville shale, a premier natural gas basin located in North Louisiana and East Texas with superior economics given its geographical proximity to the Gulf Coast natural gas markets.
The rule has a number of provisions intended to reduce methane emissions from natural gas and oil operations. We believe our operations will not be materially adversely affected by the new requirements, and the requirements will not be any more burdensome to us than to other similarly situated companies involved in natural gas and oil exploration and production activities.
We believe our operations will not be materially adversely affected by the new requirements, and the requirements will not be any more burdensome to us than to other similarly situated companies involved in natural gas and oil exploration and production activities.
Available Information We file annual, quarterly and current reports, proxy statements and other documents with the SEC under the Securities Exchange Act of 1934. The SEC maintains a website that contains reports, proxy and information statements, and other 22 COMSTOCK RESOURCES, INC. information that is electronically filed with the SEC.
Available Information We file annual, quarterly and current reports, proxy statements and other documents with the SEC under the Securities Exchange Act of 1934. The SEC maintains a website that contains reports, proxy and information statements, and other information that is electronically filed with the SEC. The public can obtain any documents that we file with the SEC at www.sec.gov.
Beyond requiring measurement and reporting of GHGs as discussed above, the EPA issued an "Endangerment Finding" under section 202(a) of the Clean Air Act, concluding greenhouse gas pollution threatens the public health and welfare of current and future generations. The EPA has adopted regulations that would require permits for and reductions in greenhouse gas emissions for certain facilities.
Beyond requiring measurement and reporting of GHGs as discussed above, the EPA issued an "Endangerment Finding" under section 202(a) of the Clean Air Act, concluding greenhouse gas pollution threatens the public health and welfare of current and future generations.
The Federal Energy Regulatory Commission, or "FERC", regulates the transportation and sale for resale of natural gas in interstate commerce pursuant to the Natural Gas Act of 1938, or "NGA", and the Natural Gas Policy Act of 1978, or "NGPA".
The Federal Energy Regulatory Commission ("FERC") regulates the transportation and sale for resale of natural gas in interstate commerce pursuant to the Natural Gas Act of 1938 ("NGA") and the Natural Gas Policy Act of 1978. In 1989, however, Congress enacted the Natural 14 COMSTOCK RESOURCES, INC.
We utilize a third party contractor management service to ensure a consistent approach in aligning our expectations with all third parties involved in our operations. We hold our contractors accountable to the highest performance standards through our contractor onboarding and continuous auditing process. 20 COMSTOCK RESOURCES, INC.
We utilize a third-party contractor management service to ensure a consistent approach in aligning our expectations with all third parties involved in our operations. We hold our contractors accountable to the highest performance standards through our contractor onboarding and continuous auditing process. Directors and Executive Officers The following table sets forth certain information concerning our executive officers and directors.
Davis Director 61 Morris E. Foster Director 81 Jim L. Turner Director 78 A brief biography of each person who serves as an executive officer or director follows below. Executive Officers M. Jay Allison has been our Chief Executive Officer since 1988. Mr. Allison was elected Chairman of the Board in 1997 and has been a director since 1987.
A brief biography of each person who serves as an executive officer or director follows below. Executive Officers M. Jay Allison has been our Chief Executive Officer since 1988. Mr. Allison was elected Chairman of the Board in 1997 and has been a director since 1987. From 1988 to 2013, Mr. Allison served as our President.
We do not believe that the regulatory decisions or activities relating to interstate or intrastate crude oil, condensate or natural gas liquids pipelines will affect us in a way that materially differs from the way it affects other crude oil, condensate and natural gas liquids producers or marketers. Environmental regulations. We are subject to stringent federal, state and local laws.
Complaints or protests have been infrequent and are usually resolved informally. We do not believe that the regulatory decisions or activities relating to interstate or intrastate crude oil, condensate or natural gas liquids pipelines will affect us in a way that materially differs from the way it affects other crude oil, condensate and natural gas liquids producers or marketers.
Our sales of crude oil, condensate and natural gas liquids are not currently regulated and are made at market prices. In a number of instances, however, the ability to transport and sell such products is dependent on pipelines whose rates, terms and conditions of service are subject to FERC jurisdiction under the Interstate Commerce Act.
In a number of instances, however, the ability to transport and sell such products is dependent on pipelines whose rates, terms and conditions of service are subject to FERC jurisdiction under the Interstate Commerce Act.
As such, there can be no assurance that material cost and liabilities will not be incurred in the future. The Comprehensive Environmental Response, Compensation and Liability Act; or "CERCLA", imposes liability, without regard to fault, on certain classes of persons that are considered to be responsible for the release of a "hazardous substance" into the environment.
The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") imposes liability, without regard to fault, on certain classes of persons that are considered to be responsible for the release of a "hazardous substance" into the environment.
Our Haynesville and Bossier shale positions are located in one of the premier North American natural gas basins and have access to the growing Gulf Coast market demand related to LNG exports and the petrochemical industry due to its geographic proximity. We believe we are well positioned for future growth due to the following: • Premier natural gas resource .
Our Haynesville and Bossier shale acreage is located in one of the premier North American natural gas basins and has access to the growing natural gas demand in the Gulf Coast markets related to LNG exports and the petrochemical industry due to its geographic proximity.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

19 edited+7 added−1 removed74 unchanged
Biggest changeCompanies that do not adapt to or comply with investor or other ‎stakeholder expectations ‎and standards, which are evolving, or that are perceived to have not ‎responded appropriately to the growing concern for ESG issues, ‎regardless of whether there is a ‎legal requirement to do so, may suffer from reputational damage and the business, financial ‎‎condition, and/or stock price of such a company could be materially and adversely affected.‎ We face pressures from our stockholders, who are increasingly focused on climate change, to ‎prioritize sustainable energy ‎practices, reduce our carbon footprint and promote sustainability. ‎Our stockholders may require us to implement new ESG procedures or ‎standards in order to continue ‎engaging with us, to remain invested in us or before they may make further investments in us. ‎‎Additionally, we may face reputational challenges in the event our ESG procedures or standards ‎do not meet the standards set by certain constituencies.
Biggest changeWe face pressures from our stockholders, who are increasingly focused on climate change, to ‎prioritize sustainable energy ‎practices, reduce our carbon footprint and promote sustainability. ‎Our stockholders may require us to implement new ESG procedures or ‎standards in order to continue ‎engaging with us, to remain invested in us or before they may make further investments in us. ‎‎Additionally, we may face reputational challenges in the event our ESG procedures or standards ‎do not meet the standards set by certain constituencies.
The prices we receive for our natural gas production depend on numerous factors beyond our control, including the following: • the domestic and foreign supply of natural gas; • weather conditions; • the price and quantity of exports of natural gas; • political conditions and events in other natural gas-producing countries, including embargoes and other sustained military campaigns, and acts of terrorism or sabotage; • domestic government regulation, legislation and policies; • the level of global natural gas inventories; • technological advances affecting energy consumption; • the price and availability of alternative fuels; and • overall U.S. and global economic and political conditions, including inflationary pressures, further increases in interest rates, a general economic slowdown or recession, political tensions and war (including future developments in the ongoing Russia-Ukraine and Israel-Hamas conflicts).
The prices we receive for our natural gas production depend on numerous factors beyond our control, including the following: 22 COMSTOCK RESOURCES, INC. • the domestic and foreign supply of natural gas; • weather conditions; • the price and quantity of exports of natural gas; • political conditions and events in other natural gas-producing countries, including embargoes and other sustained military campaigns, and acts of terrorism or sabotage; • domestic government regulation, legislation and policies; • the level of global natural gas inventories; • technological advances affecting energy consumption; • the price and availability of alternative fuels; and • overall U.S. and global economic and political conditions, including inflationary pressures, further increases in interest rates, a general economic slowdown or recession, political tensions and war (including future developments in the ongoing Russia-Ukraine and Israel-Hamas conflicts).
To the extent that the natural gas prices remain at current levels or declines further, we will not be able to hedge future production at the same level as our current hedges, and our results of operations and financial condition would be negatively impacted.
To the extent that natural gas prices remain at current levels or decline further, we will not be able to hedge future production at the same level as our current hedges, and our results of operations and financial condition would be negatively impacted.
We cannot assure you that any of these actions could be effected on a timely basis or on satisfactory terms or that these actions would enable us to continue to satisfy our capital requirements. Our debt agreements contain a number of significant covenants.
We cannot assure you that any of these actions could be affected on a timely basis or on satisfactory terms or that these actions would enable us to continue to satisfy our capital requirements. Our debt agreements contain a number of significant covenants.
Our business involves a variety of operating risks, including: • unusual or unexpected geological formations; • fires; • explosions; • blow-outs and surface cratering; • uncontrollable flows of natural gas and formation water; • natural disasters, such as hurricanes, tropical storms and other adverse weather conditions; • pipe, cement, or pipeline failures; • casing collapses; • mechanical difficulties, such as lost or stuck oil field drilling and service tools; • abnormally pressured formations; and • environmental hazards, such as natural gas leaks, oil spills, pipeline ruptures and discharges of toxic gases.
Our business involves a variety of operating risks, including: • unusual or unexpected geological formations; • fires; • explosions; • blow-outs and surface cratering; • uncontrollable flows of natural gas and formation water; • natural disasters, such as hurricanes, tropical storms and other adverse weather conditions; • pipe, cement, or pipeline failures; • casing collapses; • mechanical difficulties, such as lost or stuck oil field drilling and service tools; 26 COMSTOCK RESOURCES, INC. • abnormally pressured formations; and • environmental hazards, such as natural gas leaks, oil spills, pipeline ruptures and discharges of toxic gases.
Our ability to market our production depends in a substantial part on the availability and capacity of gathering systems, pipelines and processing facilities, which, in some cases, may be owned and operated by third parties. Our failure to obtain such services on acceptable terms could materially harm our business.
Our ability to market our production depends in a substantial part on the availability and capacity of gathering systems, pipelines and processing facilities, which, in some cases, may be owned and operated by third parties. Our failure to obtain such services on acceptable terms, if at all, could materially harm our business.
These climate-related changes could damage our physical assets, especially operations ‎located in low-lying ‎areas near coasts and river banks, and facilities situated in hurricane-prone ‎and rain-susceptible regions. To the extent the frequency of extreme weather events increases, ‎this could increase our cost of ‎producing products.
These climate-related changes could damage our physical assets, especially operations ‎located in low-lying ‎areas near coasts and riverbanks, and facilities situated in hurricane-prone ‎and rain-susceptible regions. To the extent the frequency of extreme weather events increases, ‎this could increase our cost of ‎producing products.
Furthermore, our bank credit facility is subject to various interest rates that are tied to adjusted SOFR or an alternate base rate, at our option. Any increase in these interest rates would have an adverse impact on our results of operations and cash flow.
Furthermore, our bank credit facility is subject to various interest rates that are tied to adjusted Secured Overnight Financing Rate ("SOFR") or an alternate base rate, at our option. Any increase in these interest rates would have an adverse impact on our results of operations and cash flow.
If our actual future production is lower than the nominal amount that is subject to our derivative financial instruments, we might be forced to satisfy all or a portion of our derivative transactions without the benefit of the cash flow from our sale or purchase of the underlying physical commodity, resulting in a substantial diminution in our profitability and liquidity.
If our actual future production is lower than the nominal amount that is subject to our derivative financial 28 COMSTOCK RESOURCES, INC. instruments, we might be forced to satisfy all or a portion of our derivative transactions without the benefit of the cash flow from our sale or purchase of the underlying physical commodity, resulting in a substantial diminution in our profitability and liquidity.
If any of these programs or systems were to fail or create erroneous information in our hardware or software network infrastructure, possible consequences include loss of our communication links, our inability to find, produce, process and sell natural gas and oil and the inability to automatically 27 COMSTOCK RESOURCES, INC. process commercial transactions or engage in similar automated or computerized business activities.
If any of these programs or systems were to fail or create erroneous information in our hardware or software network infrastructure, possible consequences include loss of our communication links, our inability to find, produce, process and sell natural gas and oil and the inability to automatically process commercial transactions or engage in similar automated or computerized business activities.
If any of these events were to materialize, either to the Company or a third party upon which we rely, they could lead to: • Loss of or damage to our data, intellectual property, or other proprietary or confidential information; • Interruption or degradation of our operations, services, or systems availability; • Compromise or corruption of our data or systems integrity; • Reputational harm or loss of customer trust or confidence; • Legal liability, regulatory fines, penalties, or sanctions; • Remediation or mitigation costs, such as increased security expenditures, investigation expenses, or litigation fees; • Increased insurance premiums or difficulty in obtaining adequate insurance coverage; or • Other negative consequences.
If any of these events were to materialize, either to the Company or a third party upon which we rely, they could lead to, without limitation, any of the following: • Loss of or damage to our data, intellectual property, or other proprietary or confidential information; 27 COMSTOCK RESOURCES, INC. • Interruption or degradation of our operations, services, or systems availability; • Compromise or corruption of our data or systems integrity; • Reputational harm or loss of customer trust or confidence; • Legal liability, regulatory fines, penalties, or sanctions; • Remediation or mitigation costs, such as increased security expenditures, investigation expenses, or litigation fees; • Increased insurance premiums or difficulty in obtaining adequate insurance coverage; or • Other negative consequences.
We may be required to shut in wells due to a lack of market demand or because of the inadequacy or unavailability of pipelines or gathering system capacity. If that were to occur, then we would be unable to realize revenue from those wells until arrangements were made to deliver our production to market.
We may be required to shut in wells due to a lack of market demand or because of the inadequacy or unavailability of pipelines or gathering system capacity. If that were to occur, then we would be unable to realize revenue from those wells until arrangements were made to deliver our production to market. 25 COMSTOCK RESOURCES, INC.
We may be subject to physical and financial risks associated with climate change. Changing climate may create physical and financial risks to our business. ‎Energy needs vary with weather ‎conditions. To the extent weather conditions may be affected ‎by climate change, energy use could increase or decrease depending on ‎the 24 COMSTOCK RESOURCES, INC. duration and ‎magnitude of any changes.
We may be subject to physical and financial risks associated with climate change. Changing climate may create physical and financial risks to our business. ‎Energy needs vary with weather ‎conditions. To the extent weather conditions may be affected ‎by climate change, energy use could increase or decrease depending on ‎the duration and ‎magnitude of any changes.
Furthermore, while our revenues may increase if prevailing natural gas and oil prices increase significantly, our finding costs for additional reserves could also increase. 23 COMSTOCK RESOURCES, INC. Substantial exploration and development activities could require significant outside capital, which could dilute the value of our common shares and restrict our activities.
Furthermore, while our revenues may increase if prevailing natural gas and oil prices increase significantly, our finding costs for additional reserves could also increase. Substantial exploration and development activities could require significant outside capital, which could dilute the value of our common shares and restrict our activities.
These covenants limit our ability to, among other things: • borrow additional money; • merge, consolidate or dispose of assets; • make certain types of investments; • enter into transactions with our affiliates; and • pay dividends. 26 COMSTOCK RESOURCES, INC.
These covenants limit our ability to, among other things: • borrow additional money; • merge, consolidate or dispose of assets; • make certain types of investments; • enter into transactions with our affiliates; and • pay dividends.
Prospects that we decide to drill may not yield natural gas in commercially viable quantities or quantities sufficient to meet our targeted rate of return and firm transportation commitments.
Prospects that we decide to drill may not yield natural gas in commercially viable quantities or quantities sufficient to meet our targeted rate of return and firm transportation commitments. 23 COMSTOCK RESOURCES, INC.
Further, we cannot assure you that future acquisitions by us will be integrated successfully into our operations or will increase our profits. 25 COMSTOCK RESOURCES, INC.
Further, we cannot assure you that future acquisitions by us will be integrated successfully into our operations or will increase our profits.
Our debt service requirements could adversely affect our operations and limit our growth. We had $2.7 billion principal amount of debt as of December 31, 2023.
Our debt service requirements could adversely affect our operations and limit our growth. We had $3.0 billion principal amount of debt as of December 31, 2024.
As such, there can be no assurance that material cost and liabilities will not be incurred in the future. 28 COMSTOCK RESOURCES, INC. Our hedging transactions could result in financial losses or could reduce our income.
There are also costs associated with responding to changing regulations and policies, whether such regulations are more or less stringent. As such, there can be no assurance that material cost and liabilities will not be incurred in the future. Our hedging transactions could result in financial losses or could reduce our income.
Removed
In addition, the Biden administration has made, and is expected to make additional changes to applicable regulations, and in each case we expect changes to be more stringent than those of the prior administration. There are also costs associated with responding to changing regulations and policies, whether such regulations are more or less stringent.
Added
Companies that do not adapt to or comply with investor or other ‎stakeholder expectations ‎and standards, which are evolving, or that are perceived to have not ‎responded appropriately to the growing concern for ESG issues, ‎regardless of whether there is a ‎legal requirement to do so, may suffer from reputational damage and the business, financial ‎‎condition, and/or stock price of such a company could be materially and adversely affected.‎ 24 COMSTOCK RESOURCES, INC.
Added
We rely on information technology and operational technology systems to process, transmit, and store information, to manage and support a variety of business processes and activities, and to comply with regulatory, legal and tax requirements.
Added
Our information technology and operational technology systems, some of which are dependent on third-party business partners, may be vulnerable to damage, interruption or shutdown due to any number of causes outside of our control such as catastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures and employee error or malfeasance.
Added
We seek to prevent, detect and investigate cybersecurity incidents, but in some cases, we might be unaware of an incident or its magnitude and effects.
Added
Further, we rely on third-party service providers and technologies on a limited basis to operate business systems to process sensitive information in a variety of contexts, including, without limitation, cloud-based infrastructure, encryption and authentication technology and other similar functions.
Added
Our ability to monitor these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place, or they may suffer unexpected power losses or computer system or data network failures that negatively impact the systems or solutions on which we rely.
Added
If our third-party service providers experience a security incident or other type of interruption or if an unexpected flaw or failed software update related to third-party software used in our information systems occurs, even if inadvertent, our information systems may become disabled or inaccessible and access to our data and other business information may be limited, which could materially disrupt our operations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+1 added−2 removed3 unchanged
Biggest changeOur processes for assessing and identifying cybersecurity risks include regular network security assessments, vulnerability scans, penetration tests, and audits of our information systems, as well as monitoring and analysis of network activity and threat intelligence. We engage third-party service providers to assist us with some of these activities.
Biggest changeOur processes for assessing and identifying cybersecurity risks include, but are not limited to, the following elements: • regular network security assessments and vulnerability scans performed by third parties; • third-party audits of our information systems, • third-party systems for monitoring and analysis of network activity and threat intelligence; • systems for protecting our information technology, such as firewalls and anti-virus software; • cybersecurity awareness training for our employees and contractors, including senior management; • and processes to oversee and identify cybersecurity risks associated with our use of third-party service providers, such as conducting due diligence, reviewing contracts, and verifying compliance with security standards and best practices.
We identify our enterprise risks through each member of our management team, along with counsel from our internal auditors and attorneys and we present an assessment of our enterprise risks to our board of directors on an annual basis.
We identify our enterprise risks through each member of our management team, along with counsel from our internal auditors and attorneys and we present an assessment of our enterprise risks to our board of directors on an annual basis. Our information technology management plays an integral part in the identification and communication of cybersecurity risks to our management team.
We do not believe that these attempts, if successful, would have resulted in a material adverse effect on our business, financial condition, or results of operations. We continue to be diligent in preventing, detecting, and responding to a cyber incident.
We do not believe that these attempts, if successful, would have resulted in a material adverse effect on our business, financial condition, or results of operations. We continue to be diligent in preventing, detecting, and responding to cyber incidents. However, we cannot guarantee that we will not suffer cybersecurity incidents in the future. See Item 1A.
They also provide periodic awareness notifications to our employees and contractors on cybersecurity best practices and their roles and responsibilities. In addition, we have established an incident response plan to coordinate our response to and recovery from any cybersecurity incidents. Our Director of Information Technology has over 20 years of experience in managing organizations in the energy and telecom industries.
They also provide periodic awareness notifications to our employees and contractors on 29 COMSTOCK RESOURCES, INC. cybersecurity best practices and their roles and responsibilities. In addition, we have established an incident response plan to coordinate our response to and recovery from any cybersecurity incidents.
We also have a Certified Information Systems Security Professional, who has eight years of experience in cyber and information security.
Our Director of Information Technology has over 20 years of experience in managing organizations in the energy and telecom industries. We also have a Certified Information Systems Security Professional, who has eight years of experience in cyber and information security.
ITEM 1C. CYBERSECURITY We face various cybersecurity threats that could adversely affect our business, financial condition, and results of operations. We have implemented processes and procedures to assess, identify, and manage these risks, as well as to respond to and mitigate the impact of any potential or actual cybersecurity incidents to our information systems and the information residing therein.
We have implemented processes and procedures and engaged third-party service providers to assess, identify, and manage these risks , as well as to respond to and mitigate the impact of any potential or actual cybersecurity incidents to our information systems and the information residing therein.
We also have processes to oversee and identify cybersecurity risks associated with our use of third-party service providers, such as conducting due diligence, reviewing contracts, and verifying compliance with security standards and best practices. Our cybersecurity risk management processes have been integrated into our enterprise risk framework, which identifies, aggregates, and evaluates risks across the enterprise.
Risk Management and Strategy Our cybersecurity risk management processes have been integrated into our enterprise risk framework, which identifies, aggregates, and evaluates risks across the enterprise.
Any of these outcomes could have a material adverse effect on our business, financial condition, or results of operations. The Audit Committee of our Board of Directors provides oversight over our cybersecurity risk management and strategy.
Risk Factors " Our business could be negatively impacted by security threats, including cybersecurity threats and other disruptions. " Governance The Audit Committee of our Board of Directors provides oversight over our cybersecurity risk management and strategy.
Removed
Our information technology management plays an integral part in the identification and communication of cybersecurity risks to our management team. 29 COMSTOCK RESOURCES, INC.
Added
ITEM 1C. CYBERSECURITY We face various cybersecurity threats that could adversely affect our business, financial condition, and results of operations.
Removed
However, we cannot guarantee that we will not suffer cybersecurity incidents in the future, which could result in: • Loss of or damage to our data, intellectual property, or other proprietary or confidential information; • Interruption or degradation of our operations, services, or systems availability; • Compromise or corruption of our data or systems integrity; • Reputational harm or loss of customer trust or confidence; • Legal liability, regulatory fines, penalties, or sanctions; • Remediation or mitigation costs, such as increased security expenditures, investigation expenses, or litigation fees; • Increased insurance premiums or difficulty in obtaining adequate insurance coverage; or • Other negative consequences.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN (1) Among Comstock, the NYSE Composite Index and the S&P Oil & Gas Exploration and Production ETF Index As of December 31, Total Return Analysis 2018 2019 2020 2021 2022 2023 Comstock $ 100.00 $ 181.68 $ 96.47 $ 178.59 $ 304.71 $ 206.02 NYSE Composite $ 100.00 $ 125.51 $ 134.28 $ 162.04 $ 146.89 $ 167.12 SPDR S&P Oil and Gas Exploration and Production ETF $ 100.00 $ 90.56 $ 57.59 $ 96.03 $ 139.60 $ 144.57 _______________ (1) The data contained in the above graph is deemed to be furnished and not filed pursuant to Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN (1) Among Comstock, the NYSE Composite Index and the S&P Oil & Gas Exploration and Production ETF Index As of December 31, Total Return Analysis 2019 2020 2021 2022 2023 2024 Comstock $ 100.00 $ 53.10 $ 98.30 $ 167.72 $ 113.40 $ 233.45 NYSE Composite $ 100.00 $ 106.99 $ 129.11 $ 117.04 $ 133.16 $ 154.19 SPDR S&P Oil and Gas Exploration and Production ETF $ 100.00 $ 63.60 $ 106.04 $ 154.15 $ 159.64 $ 158.04 _______________ (1) The data contained in the above graph is deemed to be furnished and not filed pursuant to Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
Stockholder Return Performance The following graph compares the yearly percentage change in the cumulative total stockholder return on our common stock during the five years ended December 31, 2023 with the cumulative returns during the same period for the New York Stock Exchange Index and the SPDR Standard & Poor's ("S&P") Oil and Gas Exploration and Production ETF.
Stockholder Return Performance The following graph compares the yearly percentage change in the cumulative total stockholder return on our common stock during the five years ended December 31, 2024 with the cumulative returns during the same period for the New York Stock Exchange Index and the SPDR Standard & Poor's ("S&P") Oil and Gas Exploration and Production ETF.
The graph assumes that $100.00 was invested on the last trading day of 2018, and that dividends, if any, were reinvested.
The graph assumes that $100.00 was invested on the last trading day of 2019, and that dividends, if any, were reinvested.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed for trading on the New York Stock Exchange under the symbol "CRK". As of February 16, 2024, we had 278,429,463 shares of common stock outstanding, which were held by 161 holders of record.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed for trading on the New York Stock Exchange under the symbol "CRK". As of February 20, 2025, we had 292,919,009 shares of common stock outstanding, which were held by 163 holders of record.
During 2023, we paid quarterly cash dividends on our common stock of 12.5¢ per share. The declaration and payment of future dividends will be at the discretion of the board of directors and will depend upon the results of our operations, capital requirements, our financial condition and such other factors as our board of directors may deem relevant.
We have not paid a dividend on our common stock since 2023. The declaration and payment of future dividends will be at the discretion of the board of directors and will depend upon the results of our operations, capital requirements, our financial condition and such other factors as our board of directors may deem relevant.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCash Flows, Liquidity and Capital Resources Cash Flows The following table summarizes sources and uses of cash and cash equivalents: Year Ended December 31, 2023 2022 (in thousands) Sources of cash and cash equivalents: Operating activities $ 1,016,846 $ 1,698,388 Borrowings on bank credit facility, net of repayments 480,000 — Proceeds from asset sales 41,295 4,186 Contributions from noncontrolling interest 24,000 — Total $ 1,562,141 $ 1,702,574 Uses of cash and cash equivalents: Capital expenditures $ 1,459,096 $ 1,101,869 Retirement of senior notes — 273,920 Repayments on bank credit facility, net of borrowings — 235,000 Common stock dividends 138,985 34,688 Preferred stock dividends — 16,014 Debt issuance costs 144 10,839 Other 1,899 6,255 Total $ 1,600,124 $ 1,678,585 Cash flows from operating activities.
Biggest changeCash Flows, Liquidity and Capital Resources Cash Flows The following table summarizes sources and uses of cash and cash equivalents: Year Ended December 31, 2024 2023 (in thousands) Sources of cash and cash equivalents: Operating activities $ 620,337 $ 1,016,846 Issuance of 6.75% senior notes 372,000 — Issuance of common stock 100,450 — Contributions from noncontrolling interest 60,500 24,000 Borrowings on bank credit facility, net of repayments — 480,000 Proceeds from asset sales 1,214 41,295 Total $ 1,154,501 $ 1,562,141 Uses of cash and cash equivalents: Capital expenditures $ 1,085,490 $ 1,459,096 Repayments on bank credit facility, net of borrowings 65,000 — Common stock dividends — 138,985 Debt and stock issuance costs 6,855 144 Distributions to noncontrolling interest 3,653 — Other 3,373 1,899 Total $ 1,164,371 $ 1,600,124 Cash flows from operating activities.
We generally sell our natural gas and oil at current market prices at the point our wells connect to third party purchaser pipelines or terminals. We have entered into certain transportation and treating agreements with midstream and pipeline companies to transport a substantial portion of our natural gas production to long-haul gas pipelines.
We generally sell our natural gas and oil at current market prices at the point where our wells connect to third party purchaser pipelines or terminals. We have entered into certain transportation and treating agreements with midstream and pipeline companies to transport a substantial portion of our natural gas production to long-haul gas pipelines.
We market our products several different ways depending upon a number of factors, including the availability of purchasers for the product, the availability and cost of pipelines near our wells, market prices, pipeline constraints and operational flexibility. Accordingly, our revenues are heavily dependent upon the prices of, and demand for, natural gas.
We market our products in several different ways depending upon a number of factors, including the availability of purchasers for the product, the availability and cost of pipelines near our wells, market prices, pipeline constraints and operational flexibility. Accordingly, our revenues are heavily dependent upon the prices of and demand for natural gas.
If we are unable to offset production declines with the new wells we plan to drill in 2024 and future periods, our production volumes and cash flows from our operating activities may not be sufficient to fund our capital expenditures, and thus, we may need to either curtail drilling activity or seek additional borrowings, which would result in an increase in our interest expense in 2024 and future periods.
If we are unable to offset production declines with the new wells we plan to drill in 2025 and future periods, our production volumes and cash flows from our operating activities may not be sufficient to fund our capital expenditures, and thus, we may need to either curtail drilling activity or seek additional borrowings, which would result in an increase in our interest expense in 2025 and future periods.
If oil or natural gas prices decrease, drilling efforts are unsuccessful or our market capitalization declines, it is reasonably possible that impairments would need to be recognized. We performed a quantitative assessment of goodwill as of October 1, 2023 and determined there was no goodwill impairment. Income Taxes.
If oil or natural gas prices decrease, drilling efforts are unsuccessful or our market capitalization declines, it is reasonably possible that impairments would need to be recognized. We performed a quantitative assessment of goodwill as of October 1, 2024 and determined there was no goodwill impairment. Income Taxes.
These activities commenced in 2022 with the acquisition of a pipeline and natural gas treating plant and the opportunity to utilize our excess transport capacity in North Louisiana. Gas services revenues decreased in 2023 due primarily to lower natural gas prices on sales of natural gas purchased to utilize our excess transport capacity. 33 COMSTOCK RESOURCES, INC.
These activities commenced in 2022 with the acquisition of a pipeline and natural gas treating plant and the opportunity to utilize our excess transport capacity in North Louisiana. Gas services revenues decreased in 2024 due primarily to lower natural gas prices on sales of natural gas purchased to utilize our excess transport capacity. 33 COMSTOCK RESOURCES, INC.
We may need to recognize impairments of our natural gas and oil properties if natural gas and oil prices decline, and as a result, the expected future cash flows from these properties becomes insufficient to recover their carrying value. 32 COMSTOCK RESOURCES, INC.
We may need to recognize impairments of our natural gas and oil properties if natural gas and oil prices decline, and as a result, the expected future cash flows from these properties become insufficient to recover their carrying value. 32 COMSTOCK RESOURCES, INC.
As a result of these changes, there may be impairments in the carrying values of our proved and unproved natural gas and oil properties in the future. Goodwill. We have goodwill of $335.9 million as of December 31, 2023 that was recorded in 2018.
As a result of these changes, there may be impairments in the carrying values of our proved and unproved natural gas and oil properties in the future. Goodwill. We have goodwill of $335.9 million as of December 31, 2024 that was recorded in 2018.
Our effective tax rate of 14% in 2023 and 19% in 2022 differed from the federal income tax rate of 21% primarily due to changes in our valuation allowance on our federal and state net operating loss carryforwards and state income taxes. Net income.
Our effective tax rate of 14% in 2023 differed from the federal income tax rate of 21% primarily due to changes in our valuation allowance on our federal and state net operating loss carryforwards and state income taxes. Net income.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Discussions of 2022 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on February 17, 2023. 34 COMSTOCK RESOURCES, INC.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 16, 2024. 34 COMSTOCK RESOURCES, INC.
Our federal income tax returns for the years subsequent to December 31, 2019 remain subject to examination. Our income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2020.
Our federal income tax returns for the years subsequent to December 31, 2020 remain subject to examination. Our income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2021.
Borrowings under the bank credit facility are secured by substantially all of our assets and those of our restricted subsidiaries and bear interest at our option, at either adjusted SOFR plus 1.75% to 2.75% or an alternate base rate plus 0.75% to 1.75%, in each case depending on the utilization of the borrowing base.
Borrowings under the bank credit facility are secured by substantially all of our assets and those of our restricted subsidiaries and bear interest at our option, at either adjusted SOFR plus 2.25% to 3.25% or an alternate base rate plus 1.25% to 2.25%, in each case depending on the utilization of the borrowing base.
We account for income taxes using the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis, as well as the future tax consequences attributable to the future utilization of existing tax net operating loss and other types of carryforwards.
We account for income taxes using the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis, as well as the future tax consequences attributable to the future utilization of existing tax NOLs and other types of carryforwards.
The availability and attractiveness of debt or equity financing will depend upon a number of factors, some of which will relate to our financial condition and performance and some of which will be beyond our control, such as prevailing interest rates, natural gas and oil prices and other market conditions.
The availability and attractiveness of debt or equity financing will depend upon a number of factors, some of 36 COMSTOCK RESOURCES, INC. which will relate to our financial condition and performance and some of which will be beyond our control, such as prevailing interest rates, natural gas and oil prices and other market conditions.
Any future downward revisions could adversely affect our financial condition, our future prospects and the value of our common stock. Impairment of natural gas and oil properties. We evaluate our proved properties for potential impairment when circumstances indicate that the carrying value of an asset may not be recoverable.
Any future downward revisions could adversely affect our financial condition, our future prospects and the value of our common stock. 37 COMSTOCK RESOURCES, INC. Impairment of natural gas and oil properties. We evaluate our proved properties for potential impairment when circumstances indicate that the carrying value of an asset may not be recoverable.
Because all reserve estimates are to some degree imprecise, the quantities and timing of natural gas and oil that are ultimately recovered, production and operating costs, the amount and timing of future development expenditures and future natural gas and oil prices may all differ materially from 37 COMSTOCK RESOURCES, INC. those assumed in these estimates.
Because all reserve estimates are to some degree imprecise, the quantities and timing of natural gas and oil that are ultimately recovered, production and operating costs, the amount and timing of future development expenditures and future natural gas and oil prices may all differ materially from those assumed in these estimates.
As a result, we established valuation allowances for our deferred tax assets and U.S. federal and state net operating loss carryforwards that are not expected to be utilized due to the uncertainty of generating taxable income prior to the expiration of the carryforward periods.
As a result, we established valuation allowances for our deferred tax assets and U.S. federal and state NOL carryforwards that are not expected to be utilized due to the uncertainty of generating taxable income prior to the expiration of the carryforward periods.
We are required to select among alternative acceptable accounting policies. There are two generally acceptable methods for accounting for natural gas and oil producing activities. The full cost method allows the capitalization of all costs associated with finding natural gas and oil reserves, including certain general and administrative expenses.
We are required to select among alternative acceptable accounting policies. There are two generally acceptable methods for accounting for natural gas and oil producing activities. The full cost method allows the capitalization of all costs associated with finding natural gas and oil reserves.
The ultimate realization of deferred income tax assets is dependent 38 COMSTOCK RESOURCES, INC. upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible.
The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible.
Our assets are concentrated in the Haynesville and Bossier shale located in North Louisiana and East Texas, a premier natural gas basin with superior economics due to the geographic proximity to Gulf Coast natural gas markets. We own interests in 2,478 producing natural gas and oil wells (1,516.7 net to us) and we operate 1,703 of these wells.
Our assets are concentrated in the Haynesville and Bossier shale located in North Louisiana and East Texas, a premier natural gas basin with superior economics due to the geographic proximity to Gulf Coast natural gas markets. We own interests in 2,427 producing natural gas and oil wells (1,542.6 net to us) and we operate 1,747 of these wells.
The present value of the estimated future costs to plug and abandon our natural gas and oil wells and to dismantle and remove our production facilities is included in our reserve for future abandonment costs, which was $30.8 million as of December 31, 2023.
The present value of the estimated future costs to plug and abandon our natural gas and oil wells and to dismantle and remove our production facilities is included in our reserve for future abandonment costs, which was $34.0 million as of December 31, 2024.
We will continue to assess the valuation allowances against deferred tax assets considering all available information obtained in future reporting periods.
We will continue to assess the valuation allowances against deferred tax assets considering all available information obtained in future reporting periods. 38 COMSTOCK RESOURCES, INC.
We use derivative financial instruments as part of our price risk management program to protect the cash flow we generate from our operating activities. We had net gains on derivative financial instruments of $187.6 million for 2023 as compared to net losses on derivative financial instruments of $662.5 million for 2022.
We use derivative financial instruments as part of our price risk management program to protect the cash flow we generate from our operating activities. We had net gains on derivative financial instruments of $10.2 million for 2024 as compared to net gains on derivative financial instruments of $187.6 million for 2023.
Federal and State Taxation At December 31, 2023, we had $754.1 million in U.S. federal net operating loss carryforwards and $1.7 billion in certain state net operating loss carryforwards. As a result of a change of control in August 2018, our ability to use U.S. federal net operating losses ("NOLs") to reduce taxable income is limited.
Federal and State Taxation On December 31, 2024, we had $743.0 million in U.S. federal net operating loss carryforwards and $1.8 billion in certain state net operating loss carryforwards. As a result of a change of control in August 2018, our ability to use U.S. federal net operating losses ("NOLs") to reduce taxable income is limited.
Natural gas and oil sales of $1.3 billion in 2023 decreased by $1.9 billion, or 60%, as compared to $3.1 billion in 2022. The decrease was primarily due to lower prices received for our natural gas production.
Natural gas and oil sales of $1.0 billion in 2024 decreased by $0.2 billion, or 17%, as compared to $1.3 billion in 2023. The decrease was primarily due to lower prices received for our natural gas production.
The following table presents our natural gas prices before and after the effect of cash settlements of our derivative financial instruments: Year Ended December 31, 2023 2022 Average Realized Natural Gas Price: Natural gas, per Mcf $ 2.40 $ 6.23 Cash settlements on derivative financial instruments, per Mcf 0.15 (1.73 ) Price per Mcf, including cash settlements on derivative financial instruments $ 2.55 $ 4.50 Gas services revenues.
The following table presents our natural gas prices before and after the effect of cash settlements of our derivative financial instruments: Year Ended December 31, 2024 2023 Average Realized Natural Gas Price: Natural gas, per Mcf $ 1.98 $ 2.40 Cash settlements on derivative financial instruments, per Mcf 0.39 0.15 Price per Mcf, including cash settlements on derivative financial instruments $ 2.37 $ 2.55 Gas services revenues.
Realized net gains from our natural gas price risk management program were $80.3 million in 2023 as compared to $862.7 million of realized net losses in 2022. We recognized unrealized gains on derivative financial instruments of $107.3 million and $200.2 million in 2023 and 2022, respectively. Interest expense.
Realized net gains from our natural gas price risk management program were $207.8 million in 2024 as compared to $80.3 million of realized net gains in 2023. We recognized unrealized losses on derivative financial instruments of $197.6 million and unrealized gains of $107.3 million in 2024 and 2023, respectively. Interest expense.
Interest expense was $169.0 million for 2023 as compared to $171.1 million for 2022. Included in interest expense was amortization of the premiums or discounts on our senior notes and the debt issuance cost amortization associated with our outstanding debt. The non-cash interest expense for 2023 totaled $8.0 million compared with $10.3 million for 2022.
Interest expense was $210.6 million for 2024 as compared to $169.0 million for 2023. Included in interest expense was amortization of the premiums or discounts on our senior notes and the debt issuance cost amortization associated with our outstanding debt. The non-cash interest expense for 2024 totaled $11.5 million compared with $8.0 million for 2023.
Our 2023 natural gas production increased 5% to 524.5 Bcf (1.4 Bcf per day), and was sold at an average price of $2.40 per Mcf as compared to 500.6 Bcf (1.4 Bcf per day) sold at an average price of $6.23 in 2022.
Our 2024 natural gas production increased 1% to 527.5 Bcf (1.4 Bcf per day), which was sold at an average price of $1.98 per Mcf as compared to 524.5 Bcf (1.4 Bcf per day) sold at an average price of $2.40 in 2023.
Gas services expenses of $282.1 million in 2023 were $183.0 million (39%) lower than gas services expenses in 2022 of $465.0 million. The decrease was due primarily to lower natural gas prices for purchases of third party natural gas for resale. Depreciation, depletion and amortization expense ("DD&A").
Gas services expenses of $205.4 million in 2024 were $76.6 million (27%) lower than gas services expenses in 2023 of $282.1 million. The decrease was due primarily to lower natural gas prices for purchases of third-party natural gas for resale. Depreciation, depletion and amortization expense ("DD&A").
General and administrative expenses, which are reported net of overhead reimbursements, decreased to $38.0 million in 2023 from $39.4 million in 2022 due primarily to lower personnel costs. Stock-based compensation included in general and administrative expenses was $9.9 million and $6.6 million in 2023 and 2022, respectively. Derivative financial instruments.
General and administrative expenses, which are reported net of overhead reimbursements, increased to $39.4 million in 2024 from $38.0 million in 2023 due primarily to higher stock-based compensation. Stock-based compensation included in general and administrative expenses was $15.3 million and $9.9 million in 2024 and 2023, respectively. Derivative financial instruments.
The only financial covenants are the maintenance of a leverage ratio of less than 3.5 to 1.0 and an adjusted current ratio of at least 1.0 to 1.0. We were in compliance with the covenants as of December 31, 2023.
The only financial covenants are the maintenance of a leverage ratio of less than 4.0 to 1.0, which reduces to 3.75 to 1.0 on June 30, 2025 and to 3.5 to 1.0 on September 30, 2025 and an adjusted current ratio of at least 1.0 to 1.0. We were in compliance with the covenants as of December 31, 2024.
Gas services revenues of $300.5 million in 2023 decreased $202.9 million (40%) from $503.4 million in 2022. Gas services activities include sales of natural gas purchased from unaffiliated third parties for resale and fees received from unaffiliated third parties for natural gas gathering and treating services.
Gas services revenues of $206.1 million in 2024 decreased $94.4 million (31%) from $300.5 million in 2023. Gas services activities include sales of natural gas purchased from unaffiliated third parties for resale and fees received from unaffiliated third parties for natural gas gathering and treating services.
Gathering and transportation costs increased $29.2 million (19%) to $184.9 million in 2023 as compared to $155.7 million in 2022. This increase was due to production growth in areas with higher average gathering and transportation rates. Lease operating expenses.
Gathering and transportation costs increased $10.0 million (5%) to $194.9 million in 2024 as compared to $184.9 million in 2023. This increase was due to production growth in areas with higher average gathering and transportation rates. Lease operating expenses.
We expect to fund future acquisitions, depending on the size and timing, with future operating cash flow, borrowings under our bank credit facility, or other debt or equity financings, to the extent available.
If our plans or assumptions change or prove to be inaccurate, we may be required to seek additional capital, including debt or equity financing. We expect to fund future acquisitions, depending on the size and timing, with future operating cash flow, borrowings under our bank credit facility, or other debt or equity financings, to the extent available.
DD&A expense increased $118.5 million (24%) to $607.9 million in 2023 from $489.5 million in 2022 and our DD&A expense per equivalent Mcf produced was $1.16 per Mcfe in 2023 as compared to $0.98 per Mcfe in 2022.
DD&A expense increased $187.5 million (31%) to $795.4 million in 2024 from $607.9 million in 2023 and our DD&A expense per equivalent Mcf produced was $1.51 per Mcfe in 2024 as compared to $1.16 per Mcfe in 2023.
Our lease operating expense of $132.2 million ($0.25 per Mcfe) in 2023 was $21.1 million, or 19%, higher than lease operating expenses in 2022 of $111.1 million ($0.22 per Mcfe). The increase in lease operating expense was due to higher production and increased water disposal costs and other production costs. Gas services expenses.
Our lease operating expense of $130.5 million ($0.25 per Mcfe) in 2024 was $1.7 million, or 1% lower than lease operating expenses in 2023 of $132.2 million ($0.25 per Mcfe). The decrease in lease operating expense was due to lower water disposal costs and other production costs as compared to 2023. Gas services expenses.
Our capital expenditures are summarized in the following table: Year Ended December 31, 2023 2022 (in thousands) Acquisitions: Proved property $ — $ 500 Unproved property 98,553 54,120 Exploration and development: Developmental leasehold costs 27,905 13,727 Exploratory drilling and completion costs 244,129 63,520 Development drilling and completion costs 974,664 901,026 Other development costs 25,130 53,693 Asset retirement obligations (19 ) 686 Total exploration and development 1,370,362 1,087,272 Midstream property 35,694 17,972 Other property 491 803 Total capital expenditures $ 1,406,547 $ 1,106,047 Change in accrued capital expenditures and other 18,562 (37,561 ) Prepaid drilling costs 34,010 34,069 Asset retirement obligations (23 ) (686 ) Total cash capital expenditures $ 1,459,096 $ 1,101,869 We currently expect to spend approximately $750 million to $850 million in 2024 on our development and exploration projects primarily focused on the continued development of our Haynesville/Bossier shale properties including the exploration and development of our Western Haynesville acreage.
Our capital expenditures are summarized in the following table: Year Ended December 31, 2024 2023 (in thousands) Acquisitions: Unproved property $ 106,386 $ 98,553 Exploration and development: Developmental leasehold costs 13,461 27,905 Exploratory drilling and completion costs 354,557 244,129 Development drilling and completion costs 503,550 974,664 Other development costs 30,500 25,130 Asset retirement obligations 1,594 (19 ) Total exploration and development 1,010,048 1,370,362 Midstream 85,377 35,694 Other property 2,264 491 Total capital expenditures $ 1,097,689 $ 1,406,547 Change in accrued capital expenditures and other 1,383 18,562 Prepaid drilling costs (11,988 ) 34,010 Asset retirement obligations (1,594 ) (23 ) Total cash capital expenditures $ 1,085,490 $ 1,459,096 We currently expect to spend approximately $1.0 billion to $1.1 billion in 2025 on our development and exploration projects primarily focused on the continued development of our Haynesville/Bossier shale properties including the exploration and development of our Western Haynesville acreage.
The increase in capital expenditures of $357.2 million is primarily due to higher drilling, completion and acquisition activities in 2023. 35 COMSTOCK RESOURCES, INC.
The decrease in capital expenditures of $373.6 million is primarily due to lower drilling and completion activities in 2024. 35 COMSTOCK RESOURCES, INC.
Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Our operating data for the year ended December 31, 2023 and 2022 are summarized below: Year Ended December 31, 2023 2022 (In thousands except per unit amounts) Net Production Data: Natural gas (MMcf) 524,467 500,616 Oil (MBbls) 70 82 Natural gas equivalent (MMcfe) 524,890 501,107 Revenues: Natural gas sales $ 1,259,450 $ 3,117,094 Oil sales 5,161 7,597 Total natural gas and oil sales $ 1,264,611 $ 3,124,691 Expenses: Production and ad valorem taxes $ 91,803 $ 77,917 Gathering and transportation $ 184,906 $ 155,679 Lease operating $ 132,203 $ 111,134 Exploration $ 1,775 $ 8,287 Average Sales Price: Natural gas (per Mcf) $ 2.40 $ 6.23 Oil (per Bbl) $ 73.73 $ 92.65 Average equivalent (Mcfe) $ 2.41 $ 6.24 Expenses ($ per Mcfe): Production and ad valorem taxes $ 0.18 $ 0.16 Gathering and transportation $ 0.35 $ 0.31 Lease operating $ 0.25 $ 0.22 Gas Services: Gas services revenue $ 300,498 $ 503,366 Gas services expense $ 282,050 $ 465,044 Natural gas and oil sales.
Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Our operating data for the year ended December 31, 2024 and 2023 are summarized below: Year Ended December 31, 2024 2023 (In thousands except per unit amounts) Net Production Data: Natural gas (MMcf) 527,548 524,467 Oil (MBbls) 50 70 Natural gas equivalent (MMcfe) 527,847 524,890 Revenues: Natural gas sales $ 1,043,886 $ 1,259,450 Oil sales 3,597 5,161 Total natural gas and oil sales $ 1,047,483 $ 1,264,611 Expenses: Production and ad valorem taxes $ 57,437 $ 91,803 Gathering and transportation $ 194,890 $ 184,906 Lease operating $ 130,504 $ 132,203 Exploration $ — $ 1,775 Average Sales Price: Natural gas (per Mcf) $ 1.98 $ 2.40 Oil (per Bbl) $ 71.94 $ 73.73 Average equivalent (Mcfe) $ 1.98 $ 2.41 Expenses ($ per Mcfe): Production and ad valorem taxes $ 0.11 $ 0.18 Gathering and transportation $ 0.37 $ 0.35 Lease operating $ 0.25 $ 0.25 Gas Services: Gas services revenue $ 206,097 $ 300,498 Gas services expense $ 205,407 $ 282,050 Natural gas and oil sales.
Our natural gas transportation and gathering contracts extend to 2031 and commitments under these contracts are $97.8 million for 2024, $89.6 million for 2025, $63.9 million for 2026, $62.7 million for 2027, $56.3 million for 2028 and $96.4 million for commitments thereafter.
Our natural gas transportation and gathering contracts extend to 2031 and commitments under these contracts are $84.4 million for 2025, $91.6 million for 2026, $90.0 million for 2027, $82.9 million for 2028, $73.8 million for 2029 and $98.0 million for commitments thereafter.
The increase in DD&A rate was primarily due to higher drilling and completion costs incurred for wells turned to sales in 2023 combined with lower estimated proved reserves resulting from the low natural gas price used in the determination of proved reserves at December 31, 2023. General and administrative expenses.
The increase in DD&A rate was primarily due to lower estimated proved undeveloped reserves used in determining the DD&A rate, which resulted from the low natural gas price used in the estimation of proved reserves at December 31, 2024. General and administrative expenses.
Interest payments under our senior notes and bank credit facility are $175.1 million for 2024 through 2026, $170.6 million for 2027, $139.3 million for 2028 and $72.8 million for all periods thereafter.
Interest payments under our senior notes and bank credit facility are $196.6 million for 2025 and 2026, $192.8 million for 2027, $166.3 million for 2028, $75.0 million for 2029 and $2.4 million for all periods thereafter.
The determination of depreciation, depletion and amortization expense is highly dependent on the estimates of the proved natural gas and oil reserves attributable to our properties. The determination of whether impairments should be recognized on our oil and gas properties is also dependent on these estimates, as well as estimates of probable reserves.
The determination of whether impairments should be recognized on our oil and gas properties is also dependent on these estimates, as well as estimates of probable reserves. Reserve engineering is a subjective process of estimating underground accumulations of natural gas and oil that cannot be precisely measured.
Reserve engineering is a subjective process of estimating underground accumulations of natural gas and oil that cannot be precisely measured. The accuracy of any reserve estimate depends on the quality of available data, production history and engineering and geological interpretation and judgment.
The accuracy of any reserve estimate depends on the quality of available data, production history and engineering and geological interpretation and judgment.
In 2022, we entered into a new five-year bank credit facility and we incurred $10.8 million of issuance costs associated with the new bank credit facility Liquidity and Capital Resources As of December 31, 2023, we had $480.0 million outstanding under a bank credit facility. Aggregate commitments under the credit facility are $1.5 billion, which matures on November 15, 2027.
In 2023, we paid a quarterly cash dividend of 12.5¢ per share of common stock. We did not pay a dividend in 2024. Liquidity and Capital Resources As of December 31, 2024, we had $415.0 million outstanding under a bank credit facility. Aggregate commitments under the credit facility are $1.5 billion, which matures on November 15, 2027.
We reported net income available to common stockholders of $211.9 million or $0.76 per diluted share in 2023 and a net income available to common stockholders of $1.1 billion or $4.11 per diluted share in 2022. The decrease in net income in 2023 is primarily due to the impact of lower natural gas prices in 2023.
We reported a net loss available to common stockholders of $218.8 million or $(0.76) per diluted share in 2024 and net income available to common stockholders of $211.9 million or $0.76 per diluted share in 2023.
Net cash provided by our operating activities decreased $681.5 million (40%) to $1.0 billion in 2023 from $1.7 billion in 2022. The decrease was primarily due to the lower realized natural gas prices we had in 2023. Proceeds from asset sales. In 2023, we sold certain non-operated properties for net proceeds of $41.3 million.
Net cash provided by our operating activities decreased $396.5 million (39%) to $620.3 million in 2024 from $1.0 billion in 2023. The decrease was primarily due to the lower natural gas prices we realized in 2024. Issuance of 6.75% senior notes and debt issuance costs.
We also expect to spend $125.0 million to $150.0 million in our Western Haynesville midstream partnership. Under our 2024 operating plan, we currently expect to run five operated drilling rigs and to drill 46 operated horizontal wells (35.9 net) and to turn 44 operated wells (38.2 net) to sales in 2024. Retirement of senior notes.
We also expect to spend $130 million to $150 million in our Western Haynesville midstream partnership. Under our 2025 operating plan, we currently expect to drill 46 operated horizontal wells (40.3 net) and to turn 46 operated wells (39.7 net) to sales in 2025. Common stock dividends.
Production and ad valorem taxes. Our production and ad valorem taxes increased $13.9 million (18%) to $91.8 million in 2023 from $77.9 million in 2022. This increase was primarily related to increases in the Louisiana production tax rate and higher ad valorem taxes. Gathering and transportation.
Production and ad valorem taxes. Our production and ad valorem taxes decreased $34.4 million (37%) to $57.4 million in 2024 from $91.8 million in 2023. This decrease was primarily related to a statutory decrease to the Louisiana production tax rate and lower Texas production taxes and ad valorem taxes related to lower natural gas prices in 2024. Gathering and transportation.
As of December 31, 2023, we had $1.0 billion of liquidity, comprised of $1.0 billion of unused borrowing capacity under our bank credit facility and $16.7 million of cash and cash equivalents on hand.
As of December 31, 2024, we had $1.1 billion of liquidity, comprised of $1.1 billion of unused borrowing capacity under our bank credit facility and $6.8 million of cash and cash equivalents on hand. Our short and long-term capital requirements consist primarily of funding our development and exploration activities, acquisitions, payments of contractual obligations, and debt service.
We have elected to use the successful efforts method to account for our oil and gas activities and we do not capitalize any of our general and administrative expenses. Natural gas and oil reserve quantities.
We have elected to use the successful efforts method to account for our oil and gas activities. Natural gas and oil reserve quantities. The determination of depreciation, depletion and amortization expense is highly dependent on the estimates of the proved natural gas and oil reserves attributable to our properties.
In 2022, we sold certain non-operated properties for net proceeds of $4.2 million. Contributions from noncontrolling interest. During the fourth quarter of 2023, we formed a midstream partnership to fund the future build-out of our Western Haynesville midstream system over the next several years. During 2023, the noncontrolling interest contributed $24.0 million to the midstream partnership. Capital expenditures.
During 2024 and 2023, our noncontrolling partner contributed $60.5 million and $24.0 million, respectively, to the midstream partnership. Proceeds from asset sales. In 2024, we sold certain non-operated properties for net proceeds of $1.2 million. In 2023, we sold certain non-operated properties for net proceeds of $41.3 million. Capital expenditures.
Our short and long-term capital 36 COMSTOCK RESOURCES, INC. requirements consist primarily of funding our development and exploration activities, acquisitions, payments of contractual obligations, and debt service. We expect to fund our future development and exploration activities with future operating cash flow. The timing of most of our capital expenditures is mostly discretionary.
We expect to fund our future development and exploration activities with future operating cash flow. The timing of most of our capital expenditures is mostly discretionary. We have a significant degree of flexibility to adjust the level of our capital expenditures as circumstances warrant.
The decrease in interest expense in 2023 was due primarily to the retirement of our 7.5% senior notes in 2022. Loss on early retirement of debt. During 2022, we retired $244.4 million principal amount of our 7.5% senior notes and $26.1 million principal amount of our 6.75% senior notes.
The increase in interest expense in 2024 was due primarily to the issuance of our 6.75% senior notes in 2024. Income taxes. Our income tax benefit was $149.1 million in 2024 as compared to a provision of $35.1 million in 2023.
Removed
As a result of premiums paid over face value and costs associated with the retirements, we recognized a loss on early retirement of debt of $46.8 million during 2022. Income taxes. Our income tax provision was $35.1 million and $261.1 million in 2023 and 2022, respectively.
Added
Our effective tax rate of 41% in 2024 differed from the federal income tax rate of 21% due primarily to research and development and other tax credits claimed in 2024, changes in our valuation allowance on our federal and state net operating loss carryforwards and state income taxes, including a reduction in the Louisiana state corporate tax rates.
Removed
Income from operations in 2023 decreased to $226.6 million as compared to $2.3 billion in 2022.
Added
The net loss in 2024 is primarily due to the impact of lower natural gas prices in 2024 and the unrealized loss on our derivative financial instruments of $197.6 million. Loss from operations in 2024 was $168.6 million as compared to income from operations of $226.6 million in 2023.
Removed
In 2022, we retired all of our outstanding 7.5% senior notes due in 2025 for $248.9 million, which included premiums paid over face value of $4.5 million, and we retired $26.1 million principal amount of our 6.75% senior notes for $24.9 million. Common stock and preferred stock dividends.
Added
In April 2024, we issued $400.0 million principal amount of 6.75% senior notes due 2029 in a private placement and received net proceeds after deducting the initial purchasers' discounts of $365.2 million, which were used to pay down outstanding borrowings on our bank credit facility. We incurred $6.8 million of debt issuance costs associated with the senior note issuance.
Removed
In 2023, we paid a quarterly cash dividend of 12.5¢ per share of common stock. On December 15, 2022, we paid a cash dividend of 12.5¢ per share of common stock. On November 30, 2022, all of the outstanding shares of our Series B Redeemable Convertible Preferred Stock were converted into 43,750,000 shares of common stock. Debt issuance costs.
Added
Issuance of common stock and stock issuance costs. In 2024, we issued 12,500,000 shares of common stock to two entities controlled by our majority stockholder in a private placement, receiving total proceeds of $100.5 million. Contributions from noncontrolling interest. In 2023, we formed a midstream partnership to fund the future build-out of our Western Haynesville midstream system.
Removed
We have a significant degree of flexibility to adjust the level of our capital expenditures as circumstances warrant. If our plans or assumptions change or prove to be inaccurate, we may be required to seek additional capital, including debt or equity financing.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+3 added−0 removed6 unchanged
Biggest changeAs of December 31, 2023, we had natural gas price swap agreements to hedge approximately 146.4 Bcf of our 2024 production at an average price of $3.55 per MMBtu. None of our derivative contracts have margin requirements or collateral provisions that could require funding prior to the scheduled cash settlement date.
Biggest changeWe have also entered into natural gas collars to hedge approximately 175.2 Bcf of natural gas with an average floor price of $3.50 per MMBtu and an average ceiling price of $3.99 per MMBtu. None of our derivative contracts have margin requirements or collateral provisions that could require funding prior to the scheduled cash settlement date.
At December 31, 2023, we had $480.0 million of outstanding borrowings under our bank credit facility, which is subject to variable rates of interest that are tied to adjusted SOFR or an alternate base rate, at our option. Any increase in these interest rates would have an adverse impact to our results of operations and cash flow.
At December 31, 2024, we had $415.0 million of outstanding borrowings under our bank credit facility, which is subject to variable rates of interest that are tied to adjusted SOFR or an alternate base rate, at our option. Any increase in these interest rates would have an adverse impact to our results of operations and cash flow.
Interest Rates At December 31, 2023, we had approximately $2.7 billion principal amount of long-term debt outstanding. $965.0 million of our long-term debt bear interest at a fixed rate of 5.875% and $1.2 billion of our long-term debt bear interest at a fixed rate of 6.75%.
Interest Rates At December 31, 2024, we had approximately $3.0 billion principal amount of long-term debt outstanding. $965.0 million of our long-term debt bear interest at a fixed rate of 5.875% and $1.6 billion of our long-term debt bear interest at a fixed rate of 6.75%.
The fair market value of the senior notes due 2030 and senior notes due 2029 as of December 31, 2023 were $849.2 million and $1.1 billion, respectively, based on the market price of approximately 88% and 93% of the face amount of such debt.
The fair market value of the senior notes due 2030 and senior notes due 2029 as of December 31, 2024 were $899.9 million and $1.6 billion, respectively, based on the market price of approximately 93% and 97% of the face amount of such debt.
A change of 10% in the market price of natural gas on December 31, 2023 would change the fair value of our natural gas swaps by approximately $38.2 million.
A decrease of 10% in the market price of natural gas on December 31, 2024 would increase the fair value of our natural gas price swaps and collars by approximately $132.9 million.
Added
As of December 31, 2024, we had natural gas price swap agreements to hedge approximately 315.7 Bcf of our 2025 and 2026 production at an average price of $3.49 per MMBtu.
Added
An increase of 10% in the market price of natural gas on December 31, 2024 would decrease the fair value of our natural gas swaps and collars by approximately $131.9 million.
Added
Since December 31, 2024, we entered into natural gas collar contracts to hedge 47.5 Bcf of natural gas production during 2026 at an average ceiling price of $5.05 per MMBtu and an average floor price of $3.50 per MMBtu.

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