Comstock Resources, Inc. · NYSE:CRK
Comstock Resources — Investor Presentation (July 2018)
20 slides from Comstock Resources's investor presentation, Jul 16, 2018
Slide 1: July 2018
July 2018 NYSE:CRK
Slide 2: Disclaimer
Disclaimer Thispresentationincludes“forward-lookingstatements”withinthemeaningofSection27Aof theSecuritiesActof1933andSection21EoftheSecuritiesExchangeActof1934.Forward-looking statementsgiveourcurrentexpectationsorforecastsoffutureevents.Thesestatementsinclude estimatesoffuturenaturalgasandoilreser
Slide 3: The New Comstock
TheNewComstock • Comstock’sHaynesvilleandBossierShaleassetsprovideconsistent,high-return andlow-riskdrillingopportunity Comstockhasdrilled~230horizontalwellsintheplaysince2007 • Enhancedcompletiondesignandregionalpriceadvantagehavetransformedthe HaynesvilleintooneofNorthAmerica’shighestreturnnatural
Slide 4: New Consolidated Asset Base
NewConsolidatedAssetBase Bakken Shale NORTH DAKOTA EastTexas/NorthLouisiana BakkenShale ProvedReserves–2.0Tcfe ProvedReserves–31MMBoe Q1’18NetProduction– 234.8MMcfe/d Q1’18NetProduction– 13,170Boe/d Haynesville/ Bossier Shale OtherAssets ProvedReserves–3.9Bcfe TEXAS Q1’18NetProduction–3.4MMcfe/d LOU
Slide 5: Comstock Acreage in the Core of the Haynesville
ComstockAcreageintheCoreofthe Haynesville Haynesville/Bossier Shale NetAcres: 68,700 AverageNRI: 80.5% Average WI: 78.0% GrossDrillingLocations: 864 ResourcePotential: 8.4Tcf Source: 1Derrickandpubliccompanydisclosure. 4
Slide 6: Gen2 Haynesville Completion
Gen2 HaynesvilleCompletion • Newcompletiondesignincreasesthetotalstagesfora7,500 lateralfrom30at250feetapartto50at150feetapart • Totalclustersincreasefrom150to250 • Sandloadingincreasesfrom2,800poundsperfootto3,800 poundsperfoot • Totalsandperwellincreasesfrom21millionpoundsto28.5 millionpounds 3Sta
Slide 7: Comstock Completion Design Continues to Deliver Results
ComstockCompletionDesignContinues toDeliverResults Holmes29-20 Gamble4-33 Headrick 14-11#1 24MMcf/d 24MMcf/d 33MMcf/d Harrison30-19 Gen1 24MMcf/d 14-11#2 MMcf/d Holmes29-32 28MMcf/d Headrick 1 Derrick21#3 26 30MMcf/d Harrison30-31 Gen2 24MMcf/d Derrick21#2 30MMcf/d Headrick 14-23#2 21MMcf/d 35MMcf/d
Slide 8: Best-In-Class Well Performance
Best-InClassWellPerformance NewHaynesville/BossierWellResultsExceedingExpectations day per MMcf TypeCurve Daysonproduction 7
Slide 9: Bakken Assets Provide Substantial Cash Flow
BakkenAssetsProvideSubstantial CashFlow BakkenShale Properties BakkenPlay Gross/NetProducing 348/55.1 Wells: Gross/NetDUCs: 85/11.8 Gross/NetPUDs: 7/2.6 WillistonBasin Net1PReserves (ByOperator) • 348(55.1net)producingoilwells,85(11.8net)drilled uncompletedwellsand7(2.6net)undrilledlocations 20% • I
Slide 10: Eagle Ford Shale Joint Venture
EagleFordShaleJointVenture • FollowingthesaleofitsEagle Fordshaleproperties,Comstock retainedallundeveloped acreageof~8,400netacres prospectivefortheEagleFord shaleinAtascosa,Karnes,La SalleandMcMullenCountiesin SouthTexas • ComstockandUSGareforminga jointdevelopmentventureon ~23,000combinedacres •
Slide 11: Over 10 Years of Drilling Inventory
Over10YearsofDrillingInventory Haynesville/Bossier Haynesville/Bossier Haynesville/Bossier Total EagleFordJV Total <5,000’(1) >5,000’-<8,500’(1) >8,500’(1) Haynesville/Bossier ResourcePlay ComstockisContinuouslyGrowingandHigh-gradingItsInventory ThroughAcreageSwaps,LeasingandAcquisitions Note: Exclu
Slide 12: Premium Oil and Gas Markets
PremiumOilandGasMarkets Bakken(1) ($2.99) Marcellus(2) ($0.59) WTI Cushing Haynesville(3) Permian(4) ($0.11) ($14.75) $5.01 Henry EagleFord(5) Hub (Discount)/PremiumtoWTI($/Bbl) (Discount)/PremiumtoHenryHub($/Mcf) ExportstoMexico LNGExports +3.5Bcf/dby2020 +6.3Bcf/dby2020 GulfCoastIndustrial Demand
Slide 13: Pro Forma Reserve Base
ProFormaReserveBase Oil Gas Total MBbls Bcf Bcfe ProvedReserves asof4/1/2018: Producing 16.8 442.4 543.5 Non-Producing/Behind Pipe 4.0 58.2 82.2 Total Developed 20.8 500.7 625.7 Undeveloped 17.3 1,580.5 1,684.5 TotalProvedReserves 38.2 2,081.1 2,310.3 SECPV10Value(000s)(1) $1,318.5 Reservesby Reserv
Slide 14: Haynesville Well Economics
HaynesvilleWellEconomics Gen 2 Completion Design- Refrac 4,500’L 7,500’L 10,000’L EstimatedWellCosts($millions) $4.5 $6.8 $10.3 $12.7 24Hr.IP(Mmcf perday) 12 17 22 26 DeclineBFactor 0.99 0.99 0.99 0.99 InitialDecline(%) 72 72 65 61 Proppant(Pounds perlateralft.) 3,800 3,800 3,800 3,800 EUR(Bcf) 7.8
Slide 15: 2018 Drilling Program
2018DrillingProgram ($inmillions) Capital 2018 $GrossWells WINetWells Haynesville/BossierShale: DrillingandCompletion $126.8 36 15.6 Completionof2017Wells 22.0 ReFracs(7) 31.8 OtherNon-operated 0.5 5 0.1 EagleFordShale 4.8 4 1.1 TotalLegacyComstock $185.9 45 16.8 BakkenProperties 51.5 33(1) 7.2(1) T
Slide 16: Haynesville Production Growth
HaynesvilleProductionGrowth Avg.Haynesville - 1 0/2 3 4/5 5 OperatedRigs: (Jan-15)* (Jun/Sep-16)* (Apr-17)* (Sep/Dec-18)* Avg.Haynesville Operated 38% 29% 59% >35% >50% YoYGrowth: . Avg Net Haynesville (MMcf/d) Production Haynesvilleproductiongrowthwilloffsetaverageyear-over-yearexpecteddecline inth
Slide 17: Low Cost Structure
LowCostStructure (Per Mcfe) OPERATINGCOSTS DD&A 79¢ProFormafor EagleFord Saleand BakkenAcquisition $1.47 Pro Formafor EagleFordSaleand BakkenAcquisition 16
Slide 18: Oil and Gas Hedging Program
OilandGasHedgingProgram NaturalgashedgepositionstosupportHaynesvilledrillingprogram Collarsfor Collarsfor Swapsat Total $2.50to $2.50to $3.00 (a) (a) (a) Hedged $3.30 $3.50 Mcfperday 2018–Q3 60,000 30,000 30,000 120,000 2018–Q4 60,000 30,000 30,000 120,000 2019–Q1 47,000 30,000 30,000 107,000 2019–Q
Slide 19: Commitment to Conservative Financial Strategy
Commitmentto ConservativeFinancialStrategy • Funddrillingprogramsubstantiallyoutofoperatingcashflow • CashflowfromBakkenpropertiestofundadrillingprogram • ContributionofBakkenpropertiesstrengthensthebalance sheet,withcommitmenttoimprovefurther • ProFormaNetDebt/LQAEBITDAXis2.9x • Goalofnetleverage<2
Slide 20: Summary
Summary • HighqualityacreagepositionsintheHaynesville,Bossierand EagleFordshales • Leveragedtooil prices and strongcashflowsthroughthecontributedBakkenproperties • Proformanetleverageof2.9x,withgoaltoreducenetleverage <2.0x • Intenttomaintainliquidityofover$400million • Strategyofdisciplinedgrowthby
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