Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 5 of last 7 quarters
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Comstock's Western Haynesville is positioned to supply the Anderson County power generation hub (5.2 GW) and growing Gulf Coast LNG demand, with the Sixth Street investment validating the midstream value. The company's drilling efficiency gains and large undeveloped resource base support the long-term thesis that natural gas will be a key feedstock for AI-driven power demand. The company's ability to deliver ~1 Bcf/d to the power hub by 2031 could make it a critical supplier to the AI infrastructure buildout.
Comstock reported Q2 2026 production of 1.2 Bcfe/d, up 16% sequentially, with oil and gas sales after hedging of $332 million and adjusted EBITDAX of $245 million. The company generated $189 million of operating cash flow and reported adjusted net income of $8 million ($0.03 per share). Drilling results were strong: 11 Western Haynesville wells turned to sales with an average IP of 31 MMcf/d, and 22 legacy Haynesville wells with the same average IP, including 8 Horseshoe wells. On June 15, Comstock sold a 27% stake in Pinnacle Gas Services to Sixth Street for $600 million, using proceeds to retire Pinnacle's preferred equity and all its debt, leaving Pinnacle debt-free and saving $40 million in annual fixed charges. The company ended the quarter with $545 million drawn on its upstream credit facility and ~$1.2 billion of liquidity.
Management reiterated its 2026 plan to drill 22 wells and turn 21 wells to sales in the Western Haynesville, and 48 wells and 48 wells to sales in the legacy Haynesville. They expect continued drilling efficiency gains from the big-hole lateral design, higher-temperature motors, and a 10,000-psi rig deployment in the fall, which should lower drilling costs per foot while completion costs rise with larger fracs, keeping overall D&C costs roughly flat. They are also exploring a 20,000-horsepower frac spread for 2027. On production cadence, they reaffirmed that Q4 2026 should return to early-2024 peak levels, with both Q3 and Q4 growing sequentially. Regarding 2027 activity, management said it is 'to be determined' and will depend on gas prices and the ability to hedge at stronger levels. The tone was confident on the Western Haynesville's long-term value, underscored by the Sixth Street investment and the Anderson County power hub, but cautious on near-term gas prices.
“The transaction with Sixth Street represents an important milestone for Comstock and a strong validation of the value we have created in the Western Haynesville.”
on Pinnacle minority sale
“We are actually seeing the birth of a major natural gas field every 90 days.”
on Western Haynesville development
“We have gotta continue to watch that. So, you know, we really, will look at our 2027 activity kind of as we get late in the year. And look at the view at that point.”
on 2027 activity and gas prices
Where do you see well cost per foot trending with the big-hole design and higher-spec rigs, and what about with more leading-edge technologies like higher-temperature motors and higher-psi frac spreads?
Daniel Harrison said drilling costs should decline with the big-hole design, citing the Dolly Jones well at $1,360 per foot, the cheapest well at similar TVD. He expects most future wells to use the bigger lateral, improving steering and predictability. Completion costs will rise with larger proppant loads, so overall D&C costs should be similar or slightly cheaper. He also noted the 10,000-psi rig and higher-temperature motors will further reduce drilling days.
What might the big-hole design mean for well productivity and completion costs?
Daniel Harrison explained that the larger pipe reduces treating pressure and pipe friction, improving frac efficiency and pump rates. The biggest benefit is on the drilling side, where the first big-hole well beat expectations, and they are now drilling second and third wells to confirm repeatability. Jay Allison added that the technology is driving down costs and enhancing productivity, and that the Western Haynesville is being derisked every quarter.
Is the exit rate for 2026 still on track to reach early-2024 peak levels, and what is the production cadence?
Ron Mills confirmed that Q4 2026 should get back to first-half-2024 levels, with both Q3 and Q4 growing by similar amounts sequentially. He said they are still on track to that level.