Comstock Resources, Inc.

Good day and thank you for standing by. Welcome to the Comstock Resources second quarter 2025 earnings call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Jay Allison, Chairman and CEO. Please go ahead.

Thank you. Welcome to the Comstock Resources second quarter 2025 financial and operating results conference call. You can view a slide presentation during or after this call by going to our website at www.comstockresources.com and downloading the quarterly results presentation. There you'll find a presentation entitled second quarter 2025 results. I have Jay Allison, Chief Executive Officer of Comstock, and with me is Roland Burns, our President and Chief Financial Officer, Dan Harrison, our Chief Operating Officer, and Ron Mills, our VP of Finance and Investor Relations. Please refer to slide two in our presentations and note that our discussions today will include forward-looking statements within the meaning of securities laws. While we believe the expectations in such statements to be reasonable, there can be no assurance that such expectations will prove to be correct. Five years ago, we made the decision to lease acreage and to drill an exploratory well in what we now call the Western Hainesville. Today, our Western Hainesville footprint has grown to nearly 525,000 net acres, and we have now drilled 29 wells with 24 of those currently producing. 10 are producing from the Hainesville Shill and 14 from the Bossier Shill. The Western Hainesville Wells vertical depths range from 14,000 feet to 19,200 feet with completed lateral lengths of 6,700 feet to 12,763 feet. Since we have put the first well online in 2022, we have made many changes to our drilling and completion design for this area. Both the Hainesville and Bossier shells in this area are rich in organic content, very thick, and have high pressure. This year we have drilled two pilot holes, taking logs and whole cores to increase our knowledge about the best ways to complete the wells in the future to maximize the EURs of the wells. As we develop our vast acreage position in the Western Hainesville, we're also building out our own midstream to support it. To that end, we just put our new gas treating plant in operations, which increased our treating capacity by 400 million cubic feet per day. In the second quarter, we turned five new Western Hainesville wells to cells. These wells include the Elijah I to the north and the Bellmire to the south, which is 30 miles away. Both of these wells appear to be some of the best we have ever, ever drilled. The second quarter wells were drilled and completed at an all-in cost of $2,647 for completed lateral foot, which is substantially less than the wells we completed in the last three years. Over the last three years, we have decided not to engage in the M&A market to build drilling inventory for the future. Instead, we have put resources into amassing the western Hainesville land position and de-risking this new place. The path we've chosen is not an easy one in a public company setting as future operating results are hard to predict, and many of our actions are aimed at creating long-term value versus creating immediate short-term results that benefit the next quarter. In order to protect our balance sheet, we pulled back from drilling wells in our legacy Hainesville area, which still accounts for over 80% of our production. We now have four rigs working in our legacy Hainesville area, which will allow us to stabilize production there as we grow the Western Hainesville. So far this year, we have turned 21 wells to cells with an average lateral length of 11,803 feet and a per well initial production rate of 25 million cubic feet per day. As Dan will go over in a few minutes, we're excited about the horseshoe wells that we're adding to our drilling program that the added rig will focus on. As Roland will cover in a few minutes, the second quarter financial results benefited from the improved natural gas price we're seeing this year versus 2024. Our natural gas and oil sales grew to $344 million and we generated 210 million of operating cash flow or 71 cents per diluted share. Our adjusted net income for the quarter was $40 million for 13 cents per share. We're also excited to announce that we're working with NextEra Energy, who leads the nation in the development of power generation, to explore the development of gas-fired power generation assets near our growing Western Hainesville area that can power potential data center customers. We believe our location, which is 100 miles from the Dallas Metroplex, is an ideal site with natural gas, water, and electrical grid infrastructure resources that could support data center development. I will now turn it over to Roland to discuss the financial results we reported yesterday. Roland?

Yeah, thanks, Jay. On slide four, we covered the second quarter financial results. Our production in the second quarter averaged 1.23 PCFE per day, which is 14% lower than the second quarter of 2025. reflecting our decision to drop rigs in early 2024 and our deferral of completion activity last year into this year. With the improvement in natural gas prices, our oil and gas sales in the quarter increased 24% to $344 million in the second quarter of this year, despite the lower production. EBITDAX for the quarter was $260 million, and we generated $210 million of cash flow in the quarter. As Jay said, we reported adjusted net income of $40 million for the second quarter, or 13 cents per diluted share, compared to a loss in the second quarter of 2024. Slide five is the financial results for the first half of this year. Production averaged 1.26 BCFE per day in the first six months of the year, 15% lower than the same period in 2024. And our oil and gas sales in the first six months of this year increased 22% to $749 million. EBITDAX in the first six months was $553 million, and we generated $449 million of cash flow. For the first half of this year, our adjusted net income is $94 million, or 32 cents per diluted share, as compared to loss in the same period of 2024. Slide six breaks down our natural gas price realizations for the year and the quarter. Our quarterly NYMEX settlement price for the second quarter averaged $3.44. However, the average Henry Hub spot price in the second quarter averaged a much lower $3.16. So 32% of our gas is sold in the spot market. So the appropriate NYMEX kind of reference price for our for our activity was about $3.35 for the second quarter. Our realized gas price for the same quarter was $3.02, reflecting a 42-cent basis differential compared to the NYMEX settlement price and a 33-cent differential compared to the reference price. We were 56% hedged in the second quarter, so that improved our realized price to $3.06. and we earned a $4.4 million profit from third-party marketing activity, which improved our realized price to $3.10. Slide seven, we detail our operating costs per MCFE and our EBITDAX margin. Our operating costs per MCFE averaged 80 cents in the second quarter, three cents lower than the first quarter rate, and four cents lower than the second quarter of 2024. Our EBITDAX margin was 74, percent in the second quarter compared to 76 percent in the first quarter production and ad valorem taxes were down one cent from the first quarter rate due to lower natural gas prices and our lifting costs improved by two cents in the quarter gathering and gna costs remained unchanged in the second quarter compared to the first quarter slide eight we recap our spending on drilling and other development activity we spent 268 million dollars development activity in the second quarter. And for the first six months this year, we've now drilled 16 wells or 14.5 net wells. And those are in it that target the Hainesville Shale. And then we've also drilled another three gross wells or three net wells that target the Bossier Shale for a total of 19 wells drilled so far this year. We turned 24 or 25 0.3 net operated wells to sales, which had an average IP rate of 27 million cubic feet per day. On slide nine, we recap what our balance sheet looks like at the end of the second quarter. We ended the quarter with $475 million of borrowings outstanding under our credit facility, having paid down $35 million during the second quarter. Our borrowing base is $2 billion under the credit facility, And the elected commitment still is $1.5 billion. Our last 12-month leverage ratio has improved just to three times and will continue to improve as we get away from the 2024 results, which are weighed down by low natural gas prices. At the end of the second quarter, we had approximately $1.1 billion of liquidity. And I'll turn it over to Dan to discuss the drilling and operating results. Okay. Thanks, Roland.