CRK - Comstock Resources: Dropping Rigs And Suspending Dividend To Reduce Cash Burn
2024-02-14 12:59:05 ET
Summary
- Comstock Resources, Inc. has suspended its dividend and is going from seven rigs to five rigs.
- This helps reduce its projected 2024 cash burn, but it still may end up with close to $200 million in cash burn at current strip prices.
- Comstock appears to be able to manage through weak 2024 natural gas prices, but will want significantly improved 2025 natural gas prices.
- At longer-term (after 2024) $3.75 NYMEX gas, Comstock has an upside to around $10.50 per share.
Comstock Resources, Inc. ( CRK ) reported Q4 2023 earnings and gave its guidance for 2024. Comstock reported negative $119 million in Q4 2023 free cash flow, including the effect of $22 million in acquisition spending. It suspended its dividend due to poor natural gas prices, but it is still projected to have close to $200 million in 2024 cash burn despite dropping a couple of rigs and suspending its dividend....
Comstock Resources: Dropping Rigs And Suspending Dividend To Reduce Cash Burn