What caused the Hutto Rodell well to underperform, and what changes will be made for future wells?

Dan Harrison explained the Hutto Rodell well, drilled "uphill" with a significant TVD difference, made a lot of water during flowback, which negatively impacted its IP rate. He noted that other "uphill" wells in deeper pay zones also experienced high water volumes. The company is still triangulating whether it's geometry, geology, or a combination, and is fracking a Bossier well nearby to gather more data. “The main reason we didn't get a good IP on this well is this well made a lot of water during flowback... when you make a lot of water during flowback, it's hard to get IPs.”

Clarify Comstock's specific roles (surface owner, gas supplier, etc.) and the status of commercial terms for gas sales.

Jay Allison clarified Comstock does not own the surface but will provide the natural gas supply for the facility, potentially reaching almost 1 Bcf/d by 2031. Roland Burns added that NextEra confirmed Comstock as the gas supplier in their earnings call, but commercial negotiations involving multiple parties are ongoing, and specific pricing details are not disclosable yet. “We don't own the surface. All we do as far as dollars spent, Charles, is we provide the gas... Whatever the big packages under the Christmas tree for the benefits, which will be the profits, whatever they are, you just wait and open those up when everybody else has discussed what the terms will be.”

What cost benefits could be realized if these new drilling developments are successful?

Dan Harrison stated that rotary steerable technology is showing "fantastic runs" in Legacy Haynesville and will be deployed in Western Haynesville after further refinement. The "big hole" well design (8.5-inch bit) on the Dolly Jones well resulted in drilling costs "lower than any of these bars you see on Slide 20 on our cost per foot," making it cheaper than expected and more predictable. He anticipates needing only 11,000-12,000 feet of lateral for cost competitiveness, rather than the initially thought 14,000-15,000 feet. “Our drill cost on that well was basically lower than any of these bars you see on Slide 20 on our cost per foot, slightly lower... We maybe only need to drill 11,000 or 12,000 foot for it to be cost competitive with the slim hole.”

CRK

Comstock Resources (CRK) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Energy· May 6, 2026

Source: earnings call transcript

Executive summary

Comstock Resources Q1 FY26 — Western Haynesville Development and Power Generation Hub

Comstock Resources navigated a challenging quarter marked by weather-related production impacts and increased costs, yet delivered strong drilling results in both its Legacy and Western Haynesville plays. The company highlighted the strategic importance of its Western Haynesville acreage, particularly with the selection of its site for a 5.2 GW power generation hub, underscoring its long-term value proposition. Management emphasized a deliberate, patient approach to developing its vast Western Haynesville inventory to avoid past mistakes and maximize value, despite acknowledging investor concerns about near-term cash burn.

Highlights

Strong drilling results with 6 new Western Haynesville wells averaging 29 MMcf/d IP and 10 Legacy Haynesville wells averaging 31 MMcf/d IP.
Selection of Western Haynesville site for a new 5.2 GW natural gas-fired power generation hub by the US Department of Commerce, with Comstock providing gas supply.
Significant liquidity of almost $1.3 billion at quarter-end.
Horseshoe well design achieved 35% savings in drilling cost for 10k wells compared to two 5,000-foot laterals.
Adjusted net income of $44 million or $0.15 per share.

Concerns

Lower production of 1.1 Bcfe/day, partially due to significant winter weather impacts.
Operating cost per Mcfe increased to $0.93, up $0.16 from Q4 FY25, due to lower production and higher gathering costs.
Realized gas price reduced to $3.45/Mcf after hedging, reflecting a $0.69 basis differential to NYMEX.
Drilling costs in Legacy Haynesville increased to $700/foot (up 3% QoQ) and in Western Haynesville to $1,534/foot (up 3% QoQ).
Discussion around investor patience due to cash burn and slow pace of resource delineation.

Guidance & targets

Category	Target	Timeline	Confidence
Production growth	13%-15% increase high materiality	Q2 · FY26	High
Production growth	Really great growth high materiality	H2 FY26	High
Frac fleet count	4 frac fleets medium materiality	Through end of FY26	High
Pinnacle Gas Services equity partner	Resolution of equity partner process medium materiality	Q2 · FY26	Medium
Western Haynesville acreage HBP	All acreage HBP high materiality	Mid-2028 · FY28	High

CRK operating KPIs by quarter

CRK operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Wells drilled to total depth Legacy Haynesville	12 In the first quarter, we drilled 12 wells to total depth in our legacy Haynesville area, and these wells had an average lateral length of 10,872 feet. Source: earnings call transcript	13 In the second quarter, we drilled 13 wells to total depth in the legacy Hainesville area. Source: earnings call transcript	+8.3%
Average lateral length drilled to total depth Legacy Haynesville	10.872K feet In the first quarter, we drilled 12 wells to total depth in our legacy Haynesville area, and these wells had an average lateral length of 10,872 feet. Source: earnings call transcript	11.457K feet Those had an average lateral length of 11,457 feet. Source: earnings call transcript	+5.4%
Average lateral length drilled to total depth Western Haynesville	10.356K feet In the first quarter, we also drilled 5 wells to total depth in the Western Haynesville and these wells had an average lateral length of 10,356 feet. Source: earnings call transcript	10.281K feet In the second quarter, we also drilled four wells to total depth in the western Hainesville with an average length of 10,281 feet. Source: earnings call transcript	-0.7%
Average days to total depth Legacy Haynesville	26 days In the first quarter, we drilled 12 of our benchmark long lateral wells to total depth in the legacy Haynesville area, and we averaged 26 days to TD. Source: earnings call transcript	24 days In the second quarter, we drilled 13 of these mid-smart long lateral wells to total depth in the legacy Hainesville area and averaged 24 days to total depth. Source: earnings call transcript	-7.7%
Footage drilled per day Legacy Haynesville	921 feet In the first quarter, we averaged 921 feet drilled per day in our legacy Haynesville acreage, which represents a 3% increase versus the fourth quarter of 2025. Source: earnings call transcript	1,017 feet Correspondingly, we averaged 1,017 feet drilled per day in our legacy Hainesville area, which represents a 10% increase versus the first quarter of 2026. Source: earnings call transcript	+10.4%
Average days to total depth Western Haynesville	57 days We averaged 57 days for the 5 wells drilled to total depth during the first quarter. Source: earnings call transcript	59 days We averaged 59 drilling days for the four wells drilled to total depth during the quarter. Source: earnings call transcript	+3.5%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

NextEra Energy Resources, US Department of Commerce, Japan Development and operation of a 5.2 GW natural gas-fired power generation hub

Site selected in Anderson County, Texas. Part of Japan's $550 billion investment commitment in the US. NextEra is advancing site development, procurement, permitting, and commercial structuring.

Quantum Redemption of preferred equity units in Pinnacle Gas Services

Pinnacle Gas Services is seeking a new common equity partner to replace Quantum, which was a preferred equity partner.

Capital programs

Western Haynesville Power Generation Hub actively developing

Funding: US and Japan governments

Benefit:5.2 GW natural gas-fired generation

Selected by US Department of Commerce. NextEra Energy Resources to develop, build, and operate. Comstock to provide natural gas supply, potentially reaching almost 1 Bcf/d by 2031.

Pinnacle Gas Services Midstream Build-out underway

Funding: separate credit facility + equity partner

Start: 2023

Benefit:Increased treating capacity (second frame operational this summer)

Formed to gather and treat natural gas in Western Haynesville. Seeking equity partner to redeem preferred units and fund growth. Capital expenditure expected to be lower going forward after initial heavy upfront spend.

Risks & headwinds

Lower production due to winter weather Q1 FY26

1.1 Bcfe/day average production

Mitigation:Production expected to increase 13-15% in Q2 FY26; increased frac fleet activity.

Increased operating costs Q1 FY26

Operating cost per Mcfe up $0.16 to $0.93

Mitigation:Implementing new performance initiatives, D&C optimization, rotary steerable drilling, big hole design, rig upgrades.

Basis differentials and realized gas prices Q1 FY26

$0.69 basis differential to NYMEX; $3.45/Mcf realized price after hedging

Mitigation:Expectation for more normal gas market; marketing strategy of 75% first-month basis and 25% spot.

Investor patience with cash burn and slow resource delineation Near-term

Acknowledged by CEO as a 'hard bridge to cross'

Mitigation:Deliberate, patient development of Western Haynesville to maximize long-term value; production growth expected in Q2 and H2 FY26.

Variability in Western Haynesville well performance Ongoing

Hutto Rodell well underperformed due to high water volumes during flowback; variability in drilling performance due to geology, depth, temperature.

Mitigation:Experimentation with drilling geometry, completion design (bigger fracs), and conservative drawdown protocols; new well designs (big hole) and rig upgrades.

What to watch in Q2 FY26

Production growth

Q2 FY26

Current 1.1 Bcfe/day (Q1 FY26)

Target 13%-15% increase

Why it matters

Verifies management's claim of 'turning the corner' on production after Q1 weather impacts and supports full-year growth expectations.

Our production should be up 13%, 14%, 15% for the second quarter.

Find out whether CRK delivers this. Inve re-checks your case every morning.

Q&A highlights

How patient should investors be given current cash burn and production/capital misalignment, despite the long-term value?

Jay Allison acknowledged the "cash burn and slow pace of resource delineation" but framed it as a positive, deliberate strategy to protect equity value and avoid past mistakes. He stated that production is expected to increase significantly in Q2 and H2 FY26, indicating they have "turned the corner" after laying down rigs in the prior year.

“I think, Carlos, we have turned the corner. And the corner is hard... But I think we've turned that curve on that. So production should go up. We should have really great growth in the rest of this year, particularly in the third and fourth quarter.”

asked by Carlos Andres E. Escalante · answered by Miles Allison

2 min read 6 chapters

Detailed narrative

Western Haynesville Strategic Development

Comstock continues its strategic, patient development of the Western Haynesville, aiming to avoid past mistakes of over-drilling seen in the legacy Haynesville. The company has acquired drilling rights on 728,000 gross acres over five years, identifying 2,546 net locations. This deliberate approach, focusing on cost efficiency and resource delineation, is intended to maximize long-term value despite potential near-term investor impatience regarding cash burn.

Power Generation Hub

The US Department of Commerce selected Comstock's Western Haynesville site in Anderson County, Texas, to host a new 5.2 gigawatt natural gas-fired power generation hub. This project, part of a US-Japanese trade deal, will be developed and operated by NextEra Energy Resources.

Comstock will be the natural gas supplier, potentially providing up to 1 billion cubic feet per day by 2031, positioning the company as a key player in supplying gas to AI hyperscalers and data centers.

Drilling and Completion Optimization

Comstock is actively implementing new performance initiatives to reduce D&C costs and improve efficiency in both Legacy and Western Haynesville. This includes continued field testing of rotary steerable drilling systems, upgrading a Western Haynesville rig to a 10,000 PSI rating by late summer, and testing new higher-temperature rated drilling motors.

A new "big hole" well design, which uses an 8.5-inch bit size in the lateral, has shown promising results in reducing drilling costs and improving predictability.

Horseshoe Well Program

The company's new horseshoe well design, which combines two shorter laterals into a single longer one, has demonstrated significant capital efficiency, achieving 35% savings in drilling costs for 10,000-foot wells compared to two 5,000-foot laterals. Comstock plans to drill a total of 16 horseshoe wells in 2026, with three of its five Legacy Haynesville rigs currently deployed on these wells.

Midstream Strategy (Pinnacle Gas Services)

Comstock formed Pinnacle Gas Services (PGS) in 2023 to gather and treat natural gas in the Western Haynesville, supporting its drilling program and enabling opportunities like the Power Generation Hub. PGS is pursuing a separate credit facility and is actively seeking an equity partner to fund its continued growth, aiming to redeem preferred units and bring in a long-term common equity investor.

This strategy allows Comstock to control its midstream infrastructure, keep producing costs low, and capture future value.

Balance Sheet and Liquidity

The company maintains a strong financial position, ending the quarter with almost $1.3 billion of liquidity. This was supported by $445 million in asset divestitures in 2025 and a robust hedging program. The upstream credit facility has $350 million outstanding against a $2 billion borrowing base, with an elected commitment of $1.5 billion.

The midstream credit facility for Pinnacle Gas Services had $47 million outstanding at quarter-end.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.