Comstock Resources, Inc. (CRK) | The Buildout — AI Infrastructure
The Verdict
Comstock Resources is a pure-play independent natural gas producer focused on the Haynesville and Bossier shales of North Louisiana and East Texas. Its role in the AI buildout is as a prospective gas supplier: Western Haynesville acreage sits near Gulf Coast LNG and Texas data-center power demand, and Pinnacle Gas Services moves that gas toward premium markets. It does not generate power or operate data centers; the AI link runs entirely through natural gas molecules.
| Market Cap | — |
| Revenue (TTM) | $1.9B |
| Revenue Growth | +14.2% |
| EBITDA Margin (TTM) | 52.4% |
| Net Debt | $3.1B |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- U.S. Department of Commerce selected the Western Haynesville site for a 5.2 GW natural gas-fired power hub in March 2026.
- The hub could require gas supply of up to ~1 Bcf/d by 2031, roughly comparable to today's entire corporate output of about 1.2 Bcfe/d.
- Pinnacle Gas Services controls 246 miles of high-pressure pipelines and two treating plants; management says total treating capacity should exceed 1 Bcf/d after Train 2.
- Proved reserves are 7.0 Tcfe, 41% developed, with about 16 years reserve life.
- The customer base ties directly to Gulf Coast midstream and LNG via Enterprise, Venture Global, and Shell.
What We’re Watching
- No definitive gas-sales agreement for the Anderson hub has been signed; timing could slip beyond latter part 2027-2028.
- The big-hole lateral is one well; Q2 Western Haynesville drilling cost rose 13% quarter over quarter to $1,070 per foot.
- Q2 realized gas price before hedging fell to $2.54/Mcf, down from $4.27/Mcf in Q1.
- 2027 activity level is undecided until late 2026, contingent on stronger hedgeable gas prices.
The thesis is strengthening operationally but remains unproven on the strategic demand anchor. Management delivered the Q2 production beat and closed the Pinnacle equity placement, but the company is still spending above cash flow and the hub contract is unsigned. The open question is whether big-hole lateral repeatability and a 2027 activity commitment emerge before gas prices force a cut.
Earnings Beat
The latest quarter recorded $353.3 million in revenue, a reported gross margin of 100.0%, and $190.0 million in EBITDA. Management reported Q2 2026 production of 1.2 Bcfe/d, up 16% sequentially and 1% year over year, above the 13-15% guide.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $353M | $587M | $470M | −24.9% |
| Gross margin | 100.0% | 93.4% | 21.6% | +7840bps |
| EBITDA | $190M | $316M | $248M | −23.3% |
| EPS | $0.03 | $0.47 | $0.42 | −92.9% |
| Adjusted EBITDAX | $245M | $251M | n/a | — |
You are actually seeing the birth of a major natural gas field every 90 days.— Jay Allison, CEO, July 30, 2026
Management tone: Management's tone shifted from transparent but emotionally raw in Q1 to more confident and vindicated in Q2, after delivering on production growth and the Pinnacle equity placement. It still acknowledged lease-holding constraints, summer gas-price disappointment, and conditional 2027 activity.
Management Guidance
Management issued no formal full-year 2026 production guide. On the Q2 call it said Q3 and Q4 should both grow by a similar amount sequentially, with Q4 returning to first-half 2024 levels. The Q1 10-Q stated the company expected to spend an additional $1.1 billion to $1.2 billion in the remaining nine months of 2026; 2027 activity is not guided and would be decided late in 2026 based on prices and hedging.
Trajectory
Revenue fell from $587.4 million in Q1 2026 to $353.3 million in Q2 2026, down 39.9% sequentially. The driver was price, not volume: Q2 production rose 16% to 1.2 Bcfe/d, while realized gas before hedging dropped to $2.54/Mcf from $4.27/Mcf in Q1. Unit costs improved from $0.93 to $0.77 per Mcfe, helping hold the reported EBITDA margin roughly flat at 53.8%.
The Model
The model projects FY+1 revenue of $2,446 million and EBITDA of $1,416 million, a 57.9% margin. It projects FY+2 revenue of $2,953 million and EBITDA of $1,813 million, a 61.4% margin. The near-term is anchored by the 2026 drilling program and cost improvements; the FY+2 step-up depends on Western Haynesville delineation and the Anderson hub timeline.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $1.9B | $2.4B | $3.0B |
| YoY Growth | — | +26.7% | +20.7% |
| EBITDA | $1.0B | $1.4B | $1.8B |
| EBITDA Margin | 53.0% | 57.9% | 61.4% |
Projections are the median of 5 independent model runs. The model’s revenue sits 19.3% above analyst consensus.
Management issued no formal full-year 2026 production guide. On the Q2 call it said Q3 and Q4 should both grow by a similar amount sequentially, with Q4 returning to first-half 2024 levels. The Q1 10-Q stated the company expected to spend an additional $1.1 billion to $1.2 billion in the remaining nine months of 2026; 2027 activity is not guided and would be decided late in 2026 based on prices and hedging.
What Could Go Right — and Wrong
- A signed Anderson hub gas-sales agreement with defined volumes and pricing would convert the selected site into contracted demand.
- Repeatable big-hole lateral results at or below the ~$1,310-$1,360 per foot reported for Dolly Jones would improve Western Haynesville economics.
- Stronger, hedgeable gas prices in late 2026 could allow the 2027 drilling program to maintain or grow the nine-rig pace.
- Pinnacle meeting return hurdles could allow Comstock to raise its ownership to 80.5%.
- Marquet Train 2 starting in summer 2026 lifts treating capacity above 1 Bcf/d.
- If the Anderson hub definitive agreements stall or the schedule slips, the largest demand anchor remains un-contracted.
- If big-hole lateral benefits do not repeat, Q2 Western Haynesville drilling cost was up 13% quarter over quarter to $1,070 per foot.
- Sustained weak gas prices could force an activity cut in late 2026, slowing Western Haynesville delineation.
- Customer concentration is material: the top three customers represented 39% of FY2025 sales.
- Outspend continues: H1 2026 development spending was $734 million against $380 million in operating cash flow.
Looking Ahead
The next 12 months revolve around production cadence, big-hole repeatability, and the 2027 capital decision. Management expects Q3 and Q4 to grow by a similar amount sequentially, with Q4 returning to first-half 2024 levels; the 10,000-psi rig is expected in October 2026. The Anderson hub remains the largest strategic item, with definitive agreements not yet signed.
- Q3 2026 earningsQ3 production and big-hole results — Tests durability of Q2 growth and repeatability of Dolly Jones cost.
- Summer 2026Marquet Train 2 startup — Expected to lift Pinnacle treating capacity above 1 Bcf/d.
- October 202610,000-psi rig deployment — Management expects first upgraded rig around October; tests faster drilling.
- Late 20262027 activity and capital decision — Management decides based on gas prices and hedge availability.
- 2027-2028Anderson hub construction start — First power generation expected; definitive agreements still pending.
- 2031Anderson hub ~1 Bcf/d gas supply — Potential gas supply ramp up to ~1 Bcf/d by 2031.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $1.3B | $1.9B | $1.9B | +54.0% |
| Gross Margin | -12.3% | 47.5% | 66.8% | +5,978bps |
| EBITDA | $627M | $1.0B | $8.6B | +63.4% |
| EBITDA Margin | 50.0% | 53.0% | 52.4% | +305bps |
| Net Income | −$219M | $396M | $537M | +280.8% |
| Free Cash Flow | −$477M | −$450M | −$1.1B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)66.8%
- EBITDA Margin (TTM)52.4%
- Net Margin (TTM)28.4%
- ROIC5.1%
- FCF Conversion-88.9%
- SBC / Revenue1.1%
The Company
Comstock Resources is a pure-play independent natural gas producer focused on the Haynesville and Bossier shales of North Louisiana and East Texas. Its 10-K describes a focus on developing a substantial inventory of drilling opportunities in the Haynesville and Bossier shales and exploring the Western Haynesville play. The company's relevance to the AI buildout is as a gas supplier: management positions the Haynesville as the most important basin to supply Gulf Coast LNG and the data centers being built in Texas and Louisiana.
Operations sit in one reportable segment. The legacy Haynesville/Bossier area holds about 264,000 net acres; the Western Haynesville holds about 545,000 net acres. The company operates 9 rigs—5 legacy and 4 Western—and runs four frac fleets. Its controlled midstream subsidiary, Pinnacle Gas Services, gathers, treats, and transports Western Haynesville gas through two treating plants and 246 miles of high-pressure pipelines.
Business Segments
Competitive Landscape
Comstock describes a large, delineation-stage Western Haynesville resource anchored by controlled Pinnacle midstream. Management says three other companies are now drilling the play, which it treats as validation but which also increases competition for services, acreage, and the play's narrative. The source material notes that if CRK cannot deliver, the AI buildout would not slow because substitute gas suppliers exist, though the specific 5.2 GW project might face delays if a new dedicated supplier and midstream arrangement must be found.
- Aethon EnergyListed in supply-chain wiring as a Western Haynesville competitor; not discussed by CRK transcripts.
- EXEListed in supply-chain wiring as a Western Haynesville competitor; not discussed by CRK transcripts.
- MTDRListed in supply-chain wiring as a Western Haynesville competitor; not discussed by CRK transcripts.
Supply Chain
Comstock is an upstream producer that moves its gas through Pinnacle midstream toward Gulf Coast LNG and power demand. NextEra independently confirmed Comstock as a gas partner for the Anderson project.
More on CRK: Earnings recap