Comstock Resources, Inc.

Good day and thank you for standing by. Welcome to the Q3 2025 Comstock resources conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Jay Allison, Chairman and the CEO. Please go ahead.

All right. Again, I want to thank you for the introduction and thank those that are on the call. It's been a really good morning. You know, welcome to the ComTalk Resources third 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 Third Quarter 2025 Results. I'm Jay Allison, Chief Executive Officer of Comstock. With me is Roland Burns, our President and CFO. Dan Harrison, our COO. and Ron Mills, our VP of Finance and Investment Relations. Please refer to slide two in our presentations and note that our discussions today will include forward-looking statements within the meeting of securities laws. While we believe the expectations of such statements to be reasonable, there could be no assurance that such expectations will prove to be correct. If you'll flip over to slide three. You know, as we start today, we are really excited to update our stakeholders on the company's progress so far this year. Comstock and our bold move to create the western extension of the Hainesville Shell have been the subject of several news stories recently, as the interest in natural gas has never been greater. I don't believe we have ever seen a broader future for natural gas. Natural gas has become the go-to energy source in the United States, driven by the growth in LNG exports and the push to generate power for AI and data center development. I noticed yesterday that LNG exports reached a record high of 18.7 BCF, and the journal is full of articles on the impact of AI and data centers on future power demand. The Hainesville Shell is on the front line to deliver the gas supply to meet the growing demand. As one of the early pioneers in the Hainesville, we have focused our efforts over the last five years on being a leader in expanding the resource in the basin to be able to meet the new demand. The Western Hainesville story is more about utilizing advancements in technology than geologic prospecting as the existence of the Hainesville and Bossier shell in the area has been well known. Today we're giving you a preview of the future by providing our estimates of the vast inventory of drilling locations and our emerging play in the Western Hainesville. We also announced the divestiture of some of our legacy Hainesville assets, which we will not need in the future as we shift more of our resources to the Western Hainesville. The cell allows us to improve our balance sheet as all of the proceeds will retire long-term debt. This was also a very efficient quarter in our legacy Hainesville drilling program, fueled by the additional drilling rig we added at the beginning of the quarter. Our drilling and completion cost in our legacy Hainesville area averaged $1,229 per lateral foot. That is an industry-leading number in the basin. The activity we added last quarter will drive production growth next year into a growing demand market. On slide three, we summarized the highlights of the third quarter. Higher natural gas prices in the third quarter drove the improved financial results in the quarter compared to the third quarter of 2024. Our natural gas and oil sales grew to $335 million. We generated $190 million of operating cash flow, or 65 cents per diluted share. Adjusted EBITDA for the quarter was $249 million. And we reported adjusted net income of $28 million, or 9 cents per diluted share. During the third quarter, we put three new Western Hainesville wells online, increasing the number of wells turned to cells in 2025 in the Western Hainesville to eight wells. Those three wells had an average lateral length of 8,566 feet and an average per well initial production rate of 32 million cubic feet per day. And our legacy Hainesville, we've now turned 28 wells to sales to date in 2025 with an average lateral length of 11,919 feet and a per well initial production rate of 25 million cubic feet per day. In September, we divested it. of our non-strategic cotton valley wells in East Texas and North Louisiana for net proceeds of $15.2 million. We also recently entered into agreement to divest of our Shelby trough assets in East Texas for $430 million in cash, and that sale is expected to close in December. On the next slide, I will cover the divestitures in more detail. Slide four, visually you can see this. It summarizes our recent divestitures. In September, we sold our legacy Cotton Valley wells in East Texas, North Louisiana for net proceeds of $15.2 million. Our Cotton Valley properties, which we sold, included 880 or 770.9 net wells producing 7.9 million cubic feet per day, net to our interest, and another 46 for 27.3 net inactive wells. On October the 10th, we entered into an agreement to sell our Shelby Trough properties in Nacogdoches and Augustine and Sabine County is for $430 million. These assets include 36,000 net acres with 155 or 74.5 net wells producing 9.3 million cubic feet per day net to our interest. The Shelby Trossdale is expected to close in December. I'll now turn it over to Roland to discuss financial results for report today. Roland?

All right. Thanks, Jay. Slide five, we cover our third quarter financial results. Production in the third quarter averaged 1.22 BCFE a day, and our oil and gas sales in the quarter increased 10% from the third quarter of last year to $335 million. EBITDAX in the quarter was 249 million, and we generated 190 million of cash flow during the quarter. We reported adjusted net income of $28 million for the third quarter, or nine cents per diluted share, compared to a loss in the same period in 2024. Slide six is the year-to-date results. Our production for the first nine months have averaged 1.24 bcfe per day and with improved natural gas prices our oil and gas sales in the first nine months have increased 18 percent to 1.1 billion dollars. EBITDAX for the first nine months of 2025 was 802 million dollars and we generated $639 million of cash flow. We reported net income of $122 million for the first nine months of 2025, or 41 cents per diluted year, as compared to net loss for the same period last year. On slide seven, we break down our natural gas price realizations. The quarterly NYMEX settlement gas price averaged $3.07 in the third quarter. And the average Henry Hub spot price averaged $3.03, which is slightly below that settlement price. 28% of our gas was sold in the spot market, and the balance was sold in the index market. So the appropriate reference price for our gas was $3.06. Our realized gas price during the third quarter averaged $2.75, reflecting a 32-cent basis differential compared to the NYMEX settlement price. and a 31 cent differential compared to that reference price. In the third quarter, we were 57% hedge, which increased our realized gas price to $2.99. We broke even from our third-party gas marketing in the third quarter. On slide eight, we detail our operating costs per MCFE and our EBITDAX margin. Our operating costs per MCFE averaged 77 cents in the third quarter, 3 cents lower than last quarter. Our EBITDAX margin was 74% in the third quarter, which is unchanged from last quarter. Lifting costs improved by 2 cents in the quarter. Production and ad valorem taxes were up by 1 cent, and gathering and cash G&A costs improved by 1 cent in the third quarter. On slide nine, we recap our spending on drilling and other development activity. We spent a total of $267 million on development activities in the third quarter and $785 million for the first nine months of this year. In the first nine months of this year, we've drilled 25 or 21.8 net horizontal Haneskill wells and 11 or 10 net Bossier wells for a total of 36 wells. We also turned 36 wells or 30.9 net operated wells to sales, which had an average initial production rate of 27 million cubic feet per day. Slide 10 recaps our capitalization at the end of the third quarter. We ended the quarter with $580 million of borrowings outstanding under our credit facility. Our borrowing base is at $2 billion under the credit facility, and the elected commitment is 1.5 billion. Our last 12 months leverage ratio has improved 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 third quarter, we had $239 million of liquidity. The sale of our Shelby trough assets that's expected to close in December will improve the leverage ratio and enhance our liquidity since the cash flow that's associated with the properties being sold was minimal. I'll now turn it over to Dan to discuss the drilling results.