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| Statement |
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| And I think this environment is favorable for us to slow that down |
| Number seven, we're bullish on the long term outlook for natural gas and are growing our resource base in the advantage proximity to the Gulf Coast market |
| We generated about $4.4 million of profits in the fourth quarter and that improved our gas price realization by another $0.03 in the quarter |
| I mean, we've been there for a long time and got everything pretty streamlined, but down to the two frac crews, same vendor, we see some kind of some savings there, just really good solid performance |
| Those wells look very promising |
| The underlying denominator of everything is stellar drilling performance and stellar inventory in our core area, and in that area we operate |
| And so far, the results have been really good |
| We continue to have very strong results from our drilling program |
| And so we've had great success in that regard also, that helped us out with these wells |
| So we've had pretty good costs there, not cost fluctuation, I mean, consistent on the cost, also on the completion side |
| They've been stellar for the acreage that we have |
| I'd say, we're definitely gaining ground and going up the curve still faster on our Western Haynesville wells |
| And lastly, we'll continue to maintain our very strong financial liquidity, which totaled around $1 billion at the end of the fourth quarter |
| We believe that we are building a great asset in Western Hansville that will be well-positioned to benefit from the substantial growth in demand for natural gas in our region that is on the horizon, driven by the growth in LNG exports that begins to show up in the second half of next year |
| Only really one well has a pretty significant track record of performance, which is the first one, the Circle M, and it was upwardly revised with -- it's kind of outperformed that |
| Being a pure-play natural gas company in a sub $2 natural gas market, calls for decisive actions to weather the volatility, and at the same time, continue positioning Comstock to benefit from the longer term growth in natural gas demand in the foreseeable future |
| Our corporate team of 255 strong, I want to thank you for joining the call this morning and we wish you a Happy Valentine's Day |
| In the fourth quarter, we were 16% hedged and that improved our realized gas price for the quarter to $2.51 |
| Number eight, lastly, our Western Haynesville "box of chocolate" on its Valentine's Day, allows us to materially grow our drilling inventory organically versus through the M&A market |
| We recently turned our eighth well to sales |
| Our production in the fourth quarter of 1.5 Bcfe per day increased 6% for the fourth quarter of 2022 and grew 8% from the third quarter |
| Our goal is to look back on this point in time in the future years and say, we handled it well and continued to create corporate value in a weak period for natural gas |
| And if you just look at the TVDs of the wells, and of course, with that comes temperature, and we've just really done a really good job at managing the temperature |
| We've got a lot of acreage we've derisked there, so it looks good |
| Like Roland said, I mean, the EURs look solid |
| So I think we're going to have some better performance there just kind of overall |
| And obviously difficult times, we -- I think everybody gets pretty streamlined and pretty efficient and the costs come down, but obviously, we'd like to see maybe prices be a lot higher and be battling some of those things, but yes, that's where we're at |
| Our production averaged 1.4 Bcfe per day, which was a 5% increase from the prior year |
| Our EBITDAX margin after hedging came in at 68% in the fourth quarter, up from the 65% level we had in the previous quarter |
| We've seen our penetration rates pick up top also |
| Statement |
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| Low natural gas prices resulted in our oil and gas sales in the quarter coming in at $354 million, declining 37% from 2022's fourth quarter despite the higher production level |
| Oil and gas sales in 2023 totaled $1.3 billion and were 41% lower than our sales in 2022 due to the lower gas prices we realized |
| The financial results continue to be heavily impacted by the continued weak natural gas prices |
| But we also had 1.8 Tcfe of negative revisions due to the lower proved undeveloped reserves caused by our reduction in drilling activity and the low natural gas price that was used to determine which undrilled locations we would drill In addition to the total 4.9 Tcfe of SEC proved reserves that we had at the end of the year, we have another half a Tcfe approved undeveloped reserves that aren't included as they are not expected to be drilled within the five-year required -- time period required by the SEC rules |
| Daniel Harrison Well, that level is set so much far lower than our forecast and even our production level now |
| Daniel Harrison The process definitely has not become more competitive with the weak gas price environment |
| The Hamilton Verhalen B number 2 well located in East Texas, which had a 9 million a day IP rate, suffered mechanical casing failure during completion, which resulted in this well producing from only half of the completed lateral |
| So that's why -- the first half of the year, production should remain relatively flat, and you start to see a little bit of a decline in the third quarter and a little bit larger decline in the fourth quarter as you start to feel the full brunt of running five rigs |
| Number three, we suspended our quarterly dividend until natural gas prices improve |
| Our SEC-approved reserves decreased 26% in 2023 to 4.9 Tcfe due to the low gas price used in the determination |
| The lower drilling cost reflects a slight downward trend on pricing we've experienced throughout 2023 and also our drilling costs in the third quarter was abnormally higher due to some drilling issues we had in that quarter |
| That would obviously make it a lot more difficult |
| We're probably down 10% or so this year since the beginning of last year |
| They had all kinds of problems, had very inferior completions put on them, but still with that, they still had a decent amount of gas, so we knew the gas was there |
| So, I think we will, and of course, we're seeing the cost savings come down with the activity levels |
| Our operating cost per Mcfe averaged $0.81 in the fourth quarter, 4% lower than the third quarter |
| I mean, if you just segregate it and you look at the Western Haynesville, like Dan said, these wells will be slower to reach production, so even though we didn't add a third rig, I mean, as Ronald mentioned, we're not going to have any issues with our mid-stream quantities |
| The lower spending versus last year is related to the announced release of two drilling rigs in our press release last night in response to low gas prices |
| They are trending down a little bit as far as the -- some deflationary actions kind of happening on that side |
| We are going to suspend our quarterly dividend until natural gas prices improve |
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