Beyond drilling efficiency, what is the potential impact of the big hole design on well productivity and completion costs, particularly regarding frac efficiency and longer laterals?

The big hole design allows for longer laterals and improves frac efficiency by reducing pipe friction, leading to lower pumping pressure and faster pump times. While the biggest impact is on drilling cost, it also enhances productivity. The first big hole well exceeded expectations, and repeatability is being tested. “Well, I think it's going to let us get, you know, on average, these big hole wells, we're probably going to be looking at longer laterals, which, you know, the longer the lateral gets, it gets, you know, just the toe stages are just a little further out, takes a little more horsepower. So running that bigger pipe, you know, in general, conceptually, right, it takes a little more horsepower. It creates a little bit lower reading pressure with the bigger pipe, less pipe friction, get a little more rate, get a little bit better frac efficiency. pump a little faster, shorter pump time.”

Why are horseshoe wells in Legacy Haynesville achieving high IPs, and is it due to stranded acreage in good areas or specific frac recipes?

The high IPs are primarily due to the location of these stranded wells in good type curve areas. The company uses the same frac design as other wells but benefits from flawless execution and rotary steerable drilling technology, which improves efficiency in drilling the curve. Three horseshoe wells have been drilled in Texas, with the first on flowback. “But on performance, it really is mostly, I think, where a lot of those wells are. A lot of the horseshoe wells we've drilled are in good type curve areas because they were stranded. Like you said, we weren't going to drill them as 5,000 foot laterals. and just due to the efficiency. And so, you know, they haven't disappointed for sure. They look really good.”

Given current gas prices, will the company potentially hold back on 2027 activity until demand materializes, and what is the outlook for activity?

The company will evaluate 2027 activity later in the year, considering gas prices. Stronger prices, especially those that can be hedged, would be needed to support increased activity. The goal is to de-risk the Western Haynesville and be ready to respond quickly when demand from LNG and data centers arrives. “Yes, we've definitely been disappointed with the gas prices as we've kind of gotten to the summer, you know, and going to continue to watch that. So, you know, we really will look at our 27 activity as we get late in the year. and kind of look at the view at that point, you know, so, um, Yes, so I think that's really to be determined, what we would view, and we definitely would want to see probably a stream stronger prices, especially stronger prices that we could hedge into, you know, to support that activity into next year?”

CRK

Comstock Resources (CRK) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Jul 30, 2026

Source: earnings call transcript

Executive summary

Comstock Resources Q2 FY26 — Production Growth Returns, Strategic Midstream Divestment

Comstock Resources saw a return to production growth in Q2 FY26, driven by strong well performance in both Legacy and Western Haynesville. The company executed a significant midstream equity placement, validating its Western Haynesville acreage and strengthening its balance sheet. Management continues to focus on optimizing drilling and completion efficiencies in the Western Haynesville, with new technologies being tested to drive down costs and enhance well productivity, while also preparing for future natural gas demand from LNG and data centers.

Highlights

Production increased 16% quarter-over-quarter to 1.2 BCFE per day.
Strategic divestment of a 27% non-controlling equity interest in Pinnacle Gas Service for $600 million, strengthening the balance sheet.
Pinnacle Gas Service is now debt-free, saving $40 million in fixed charges annually.
Strong financial liquidity of almost $1.2 billion at quarter-end.
EBITDAX reached $245 million for the quarter, with an improved EBITDAX margin of 74%.

Concerns

Lower natural gas prices drove lower financial results, with realized gas price averaging $2.54 per MCF.
Western Hainesville drilling costs increased 13% quarter-over-quarter to $1,738 per foot due to steering difficulties.
Western Hainesville completion costs increased 5% quarter-over-quarter to $1,609 per foot due to higher proppant loading and single well pads.

Guidance & targets

Category	Target	Timeline	Confidence
Production cadence	Return to peak levels experienced in early 2024 high materiality	Q4 · FY26	High
Sequential production growth	Similar sequential growth medium materiality	Q3 FY26 and Q4 FY26	High
Western Hainesville wells drilled	22 wells medium materiality	FY26	High
Western Hainesville wells turned to sales	21 wells medium materiality	FY26	High
Legacy Hainesville wells drilled	48 wells medium materiality	FY26	High
Legacy Hainesville wells turned to sales	48 wells medium materiality	FY26	High
Horseshoe wells drilled	16 wells low materiality	FY26	High
Horseshoe wells turned to sales	17 wells low materiality	FY26	High
20,000 pound frac fleet deployment	2027 event medium materiality	CY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Legacy Hainesville The Legacy Hainesville area continues to be a key contributor, with 5 rigs running and significant drilling inventory. Efficiency improvements are noted in drilling speed, and horseshoe wells are performing well, contributing to strong IPs. Gross operated locations: 926Net locations: 717Average working interest: 77%Locations with lateral surpassing 10,000 feet: 449 (nearly 50%)Average lateral length in inventory: 10,153 feetInventory split: 51% Hainesville, 49% BossierHorseshoe locations: 113 grossRigs running: 5Wells drilled to TD in Q2: 13Average lateral length drilled in Q2: 11,457 feetWells turned to sales in 2026 YTD: 22Average lateral length for wells turned to sales: 12,052 feetAverage IP for wells turned to sales: 31 MMcf/dayDrilling days to TD for long lateral wells in Q2: 24 daysFeet drilled per day for long lateral wells in Q2: 1,017 feetDrilling cost per foot in Q2: $710Completion cost per foot in Q2: $680	—	—	—	—
Western Hainesville The Western Hainesville is a strategic growth area with substantial net acreage and drilling inventory. The company is actively delineating the play with 4 rigs, focusing on optimizing D&C costs and productivity, including testing 'big hole' laterals. Net acres: 545,000Gross operated locations: 3,277Net locations: 2,528Average working interest: 77%Locations with lateral surpassing 10,000 feet: 1,321 (40%)Locations with lateral surpassing 8,500 feet: 61%Average lateral length in inventory: 8,875 feetInventory split: 2/3 Bossier, 1/3 HainesvilleRigs running: 4Wells currently producing: 41Wells in various stages of development: 13Wells drilled to TD in Q2: 4Average lateral length drilled in Q2: 10,281 feetWells drilled to TD total: 50Wells turned to sales in 2026 YTD: 11Average lateral length for wells turned to sales: 10,331 feetAverage IP for wells turned to sales: 31 MMcf/dayDrilling days for wells drilled to TD in Q2: 59 daysFeet drilled per day in Q2: 469 feetDrilling cost per foot in Q2: $1,738Completion cost per foot in Q2: $1,609	—	—	—	—

CRK operating KPIs by quarter

CRK operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	This call 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

Sixth Street Sale of minority equity interest in midstream subsidiary Pinnacle Gas Service $600M

Sixth Street invested $600 million in Pinnacle Gas Service to acquire a 27% non-controlling common equity interest. Transaction completed on June 15, 2026. Comstock maintains operational control and key decision-making.

Risks & headwinds

Lower natural gas prices Q2 FY26, ongoing

Realized gas price averaged $2.54/MCF in Q2 FY26, leading to lower financial results.

Mitigation:63% hedged in Q2 FY26, increasing realized price to $2.93/MCF; monitoring 2027 activity based on price outlook and hedging opportunities.

Western Hainesville drilling cost increases Q2 FY26

Drilling costs increased 13% QoQ to $1,738/ft in Q2 FY26.

Mitigation:Attributed to steering difficulties; mitigated by successful 'big hole' lateral trial at $1,306/ft, deployment of 10,000 PSI rig, and testing higher temp rated drilling motors.

Western Hainesville completion cost increases Q2 FY26

Completion costs increased 5% QoQ to $1,609/ft in Q2 FY26.

Mitigation:Attributed to higher proppant loading, lower average lateral length, and higher percentage of single well pads; company is focused on optimizing completion design for higher EURs.

What to watch in Q3 FY26

Western Hainesville 'big hole' lateral repeatability

next quarter

Current First well (Dolly Jones) drilled at $1,306/ft, 25% lower than Q2 average.

Target Confirmation of repeatable cost savings and performance on second and third wells.

Why it matters

Successful repeatability of the 'big hole' design is crucial for driving down D&C costs and improving efficiency in the Western Hainesville, impacting overall project economics.

But the first well, the Dolly Jones, I mean, at $1,306 a foot, that's a good bit cheaper than any other well we've drilled at a similar TVD. Obviously, the deeper TVDs, that well had about a $16,400. foot TDD average and it's by far the cheapest well of anything, any well we have that's 16,000 foot or deeper. So we didn't even really have the motors that we use on the first well were not the exact. or the motors we wanted, we kind of used some stuff that was more off the shelf because obviously, We hadn't done any big hole work in the western high school, so they didn't have anything really fitted for us exactly for that first well we drilled. So, you know, we're hoping we'll have a little better performance there, because we've had time now to kind of dial in and get something fitted a little bit better for these second, third wells that we're drawing.

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Q&A highlights

What are the expected well cost per foot trends with the implementation of big hole design, higher spec rigs, higher temp rated drilling motors, and higher PSI frac spreads in the Western Hainesville?

Drilling costs are expected to decrease significantly due to the big hole lateral design, with the first well achieving $1,306/ft. Completion costs will increase due to larger fracs, but overall D&C costs are expected to remain similar or slightly cheaper due to drilling cost reductions. The big hole design also offers intangible benefits like better steering and predictability.

“So, completion side you know we're pretty darn efficient really on the completion side just You know, we had a couple of wells. Last quarter, we left a couple of motors in the hole, but we've gone to drilling out all of our wells. Basically, we've quit running motors on our drill outs. We basically just, you know, we do everything with stick pipe in the western Hainesville, 7 units of stick pipe, And now we don't run motors anymore. We just basically put a bit on the end of the pipe and we go to the bottom, and that eliminates a ton of risk.”

asked by Derek Whitfield · answered by Daniel Harrison

2 min read 5 chapters

Detailed narrative

Western Hainesville Development and Strategic Partnership

Comstock continues to prioritize the advancement of its Western Hainesville acreage, which has grown to over 545,000 net acres. The company completed a significant transaction by selling a 27% non-controlling equity interest in its midstream subsidiary, Pinnacle Gas Service, to Sixth Street for $600 million.

This deal validated the value of the Western Hainesville, strengthened the balance sheet by retiring Pinnacle's debt, and positioned the asset to service growing natural gas demand along the Gulf Coast and the Texas Power Generation Hub.

Drilling and Completion Optimization Efforts

The company is actively pursuing drilling and completion optimization in the Western Hainesville. This includes the successful trial of a 'big hole' lateral design, which achieved a drilling cost of $1,306 per lateral foot for one well, significantly lower than the quarter's average.

Management is also deploying new technologies such as higher temperature-rated drilling motors and a 10,000 PSI rig to improve drilling speeds and reduce costs. On the completion side, the company has increased proppant loading by 25-50% on Q2 wells, expecting higher Estimated Ultimate Recoveries (EURs).

Production Growth and Operational Efficiency

Comstock reported a 16% sequential increase in production to 1.2 BCFE per day in Q2 FY26. This growth was supported by 22 Legacy Hainesville wells and 11 Western Hainesville wells turned to sales, each with an average initial production rate of 31 MMcf/day.

Unit operating costs improved to 77 cents per MCFE, a 16-cent reduction from Q1, driven by higher production levels and lower lifting, G&A, and gathering costs, contributing to a 74% EBITDAX margin.

Capital Structure and Liquidity

The Pinnacle Gas Service transaction significantly improved Comstock's capital structure, making Pinnacle debt-free and saving $40 million in annual fixed charges. Comstock retains a 73% controlling interest in Pinnacle, with potential to increase to 80.5%. The company ended the quarter with a last twelve months leverage ratio of 3.0x and robust liquidity of nearly $1.2 billion, providing financial flexibility for ongoing development activities.

Future Outlook and Market Demand

Comstock anticipates continued production growth, with Q4 FY26 expected to return to early 2024 peak levels. The company plans to drill 22 wells and turn 21 to sales in the Western Hainesville, and 48 wells turned to sales in the Legacy Hainesville for the full year 2026.

Management is closely monitoring natural gas prices for 2027 activity planning, emphasizing the long-term demand drivers from LNG exports and the emerging hyperscaler data center market, particularly in the Texas Power Generation Hub.

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