Comstock Q2: Output Rises 16% as Gas Prices Cut Profit
Comstock Resources grew production 16% sequentially in Q2 2026 while natural gas at $2.89 per MMBtu left $390 million in development spending generating just $8 million in adjusted net income. The com
Comstock Q2: Output Rises 16% as Gas Prices Cut Profit
NEW YORK, August 20 —
Comstock Resources, Inc. (CRK) grew production 16% sequentially in the second quarter while its upstream economics could not fund the capital program driving that growth. Natural gas settled at $2.89 per MMBtu on NYMEX, leaving $390 million in quarterly development spending to produce just $8 million in adjusted net income.
- Q2 adjusted net income: $8 million, or $0.03 per share, on $332 million in natural gas and oil sales.
- Trailing free cash flow negative $869 million; total debt $3.17 billion; short sellers hold 31.7% of the float.
- Pinnacle Gas Services: 27% stake sold to Sixth Street for $600 million, saving roughly $40 million annually in fixed charges.
The Wells Work; The Price Doesn't
Comstock's Haynesville and Bossier shale acreage in North Louisiana and East Texas spans 809,244 net acres, with Western Haynesville wells averaging 30 million cubic feet per day at initial production. Nine rigs through the first half of 2026 and 29 gross wells turned to sales delivered 1.2 billion cubic feet equivalent per day. Per-unit operating costs fell to $0.77 per Mcfe as higher volumes compressed the denominator. First-half development spending of $734 million ran nearly two-to-one against $380 million in operating cash flow, with leverage at three times; model the price sensitivity in the DCF calculator.
Pinnacle Is Now the Margin of Safety
Comstock completed the sale of a 27% stake in Pinnacle Gas Services to Sixth Street for $600 million on June 15, 2026, implying a $2.2 billion enterprise value for the midstream infrastructure supporting Western Haynesville development. Per the June 8-K, proceeds cleared Pinnacle's preferred equity and all outstanding debt, saving roughly $40 million in annual fixed charges. Comstock retained a 73% controlling interest with an implied $1.6 billion midstream value. Against $3.17 billion in total upstream debt, the Pinnacle position is a significant offset and a potential liquidity lever if upstream cash flows stay tight.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| CRK | $4.0B | 15.6x | -13.3% |
| RRC | $9.4B | 10.1x | +21.5% |
| SM | $8.9B | 5.0x | +39.4% |
| AR | $11.5B | 8.6x | +20.7% |
| MTDR | $7.2B | 6.9x | +25.2% |
| EQT | $33.2B | 13.5x | +3.1% |
One Variable, All the Risk
The investment case for CRK reduces to a single variable: NYMEX natural gas prices. The Q2 earnings filing shows $545 million drawn against a $1.5 billion elected commitment, with nearly $1.2 billion in liquidity as runway. A sustained NYMEX move above $3.25 per MMBtu would narrow the gap between hedged realized prices of $2.93 per Mcf and a $390 million quarterly capital program. Short sellers at 31.7% of float are betting on continued weakness; CEO Jay Allison's June share disposal was a tax-withholding event, not a market signal. Run the free Comstock Resources, Inc. deep-dive →
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Frequently Asked Questions
What were Comstock Resources Q2 2026 earnings results?
Comstock reported adjusted net income of $8 million, or $0.03 per share, on $332 million in natural gas and oil sales. The company grew production 16% sequentially while spending $390 million on development during the quarter. Natural gas settled at $2.89 per MMBtu on NYMEX, constraining hedged realized prices to $2.93 per Mcf.
What is the Pinnacle Gas Services deal?
Comstock sold a 27% stake in Pinnacle Gas Services to Sixth Street for $600 million on June 15, 2026, implying a $2.2 billion enterprise value for the midstream infrastructure. Proceeds cleared Pinnacle's preferred equity and all outstanding debt, saving roughly $40 million in annual fixed charges. Comstock retained a 73% controlling interest with an implied midstream value of $1.6 billion.
How much debt does Comstock Resources carry?
Comstock carries $3.17 billion in total upstream debt, with $545 million drawn against a $1.5 billion elected commitment and nearly $1.2 billion in liquidity as runway. The retained 73% Pinnacle stake carries an implied $1.6 billion midstream value, which represents a significant offset against that debt load.
What gas price does Comstock need to turn a profit?
At $2.89 per MMBtu on NYMEX in Q2, Comstock's $390 million quarterly capital program produced just $8 million in adjusted net income. A sustained move above $3.25 per MMBtu would narrow the gap between hedged realized prices of $2.93 per Mcf and the cost of that capital program.
Why is Comstock Resources short interest so high?
Short sellers hold 31.7% of the float, betting on continued natural gas price weakness. The investment case for CRK reduces to a single variable: NYMEX natural gas prices. CEO Jay Allison's June share disposal was a tax-withholding event, not a market signal.
Comstock Resources posted a 16% sequential production increase in the second quarter but generated only $8 million in adjusted net income as natural gas settled at $2.89 per MMBtu on NYMEX—well below the level that covers its $390 million quarterly capital program. With Morgan Stanley now cutting its price target and short sellers holding 31.7% of the float, the question is whether the company's operational momentum can survive a prolonged low-price environment.