SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Other Current Assets

Other current assets at September 30, 2023 and December 31, 2022 consisted of the following:

	As of
	September 30, 2023		December 31, 2022
	(In thousands)
Pipe and well equipment inventory	$	50,708	$	34,819
Production tax refunds receivable		14,988		11,156
Prepaid expenses		2,876		2,455
Prepaid drilling costs		—		4,265
Accrued proceeds from sale of natural gas and oil properties		—		3,118
Other		—		511
	$	68,572	$	56,324

Capitalized Exploratory Well Costs

The changes in capitalized exploratory well costs are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022
	(In thousands)
Beginning capitalized exploratory well costs	$	34,196		$	9,771	$	867		$	6,966
Additions to exploratory well costs pending the determination of proved reserves		74,737			20,144		179,049			50,541
Determined to have found proved reserves		(71,838	)		—		(142,821	)		(27,592	)
Ending capitalized exploratory well costs	$	37,095		$	29,915	$	37,095		$	29,915

Summary of Lease Cost Recognized

Lease costs recognized during the three months and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Operating lease cost included in general and administrative expense	$	445	$	436	$	1,334	$	1,307
Operating lease cost included in lease operating expense		523		370		1,533		970
Operating lease cost included in natural gas and oil properties		18,659		9,450		41,339		15,750
Variable lease cost (completion costs included in natural gas and oil properties)		25,970		11,730		31,032		22,857
Short-term lease cost (drilling rig costs included in natural gas and oil properties)		20,098		16,102		73,986		44,242
	$	65,695	$	38,088	$	149,224	$	85,126

Summary of Liabilities Under Contracts That Contain Operating Leases

As of September 30, 2023, expected future payments related to contracts that contain operating leases were as follows:

	(In thousands)
October 1 to December 31, 2023	$	15,291
2024		61,302
2025		58,919
2026		27,374
2027		17
Total lease payments		162,903
Imputed interest		(14,775	)
Total lease liability	$	148,128

Summary of Accrued Costs

Accrued costs at September 30, 2023 and December 31, 2022 consisted of the following:

	As of
	September 30, 2023		December 31, 2022
	(In thousands)
Accrued transportation costs	$	32,731	$	28,357
Accrued drilling costs		21,997		54,438
Accrued interest payable		19,730		54,867
Accrued income and other taxes		18,212		31,256
Accrued employee compensation		7,350		11,308
Accrued lease operating expenses		2,949		2,412
Other		697		473
	$	103,666	$	183,111

Summary of Changes in Total Estimated Asset Retirement Obligation Liability

The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented:

	Nine Months Ended September 30,
	2023			2022
	(In thousands)
Reserve for future abandonment costs at beginning of period	$	29,114		$	25,673
New wells placed on production		114			1,251
Acquisitions		—			1,211
Liabilities settled and assets disposed of		(42	)		(29	)
Accretion expense		1,248			1,129
Reserve for future abandonment costs at end of period	$	30,434		$	29,235

Schedule of Natural Gas Price Derivative

The Company had the following natural gas price derivative financial instruments at September 30, 2023:

	Future Production Period
	Three Months Ending December 31, 2023		Year Ending December 31, 2024		Total
Natural Gas Price Swap Contracts:
Volume (MMBtu)		—		91,500,000		91,500,000
Average Price per MMBtu			$	3.55	$	3.55
Natural Gas Price Collar Contracts:
Volume (MMBtu)		23,000,000				23,000,000
Average Price per MMBtu:
Average Ceiling	$	10.28			$	10.28
Average Floor	$	3.00			$	3.00

Schedule of Derivative Instruments

The classification of derivative financial instruments of assets or liabilities, consists of the following:

		As of
Type	Consolidated Balance Sheet Location	September 30, 2023		December 31, 2022
		(In thousands)
Asset Derivative Financial Instruments:
Natural gas price derivatives	Derivative Financial Instruments – current	$	23,973	$	23,884
		$	23,973	$	23,884
Liability Derivative Financial Instruments:
Natural gas price derivatives	Derivative Financial Instruments – current	$	—	$	4,420
		$	—	$	4,420
Natural gas price derivatives	Derivative Financial Instruments – long-term	$	4,540	$	—
		$	4,540	$	—

Schedule of Gains and Losses from Derivative Contracts

Gains and losses related to cash settlements and changes in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
Gain (Loss) on Derivatives Recognized in Earnings	2023		2022			2023		2022
	(In thousands)
Natural gas price derivatives	$	14,276	$	(271,335	)	$	76,190	$	(781,654	)
	$	14,276	$	(271,335	)	$	76,190	$	(781,654	)

Consolidated Income Tax Benefit (Provision)

The following is an analysis of the consolidated income tax provision (benefit):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023		2022
	(In thousands)
Current - Federal	$	—		$	10,001	$	—	$	11,400
Current - State		—			14,749		—		19,821
Deferred - Federal		3,999			66,732		28,350		124,600
Deferred - State		(391	)		11,328		528		23,789
	$	3,608		$	102,810	$	28,878	$	179,610

Difference Between Federal Statutory Rate and Effective Tax Rate

The difference between the federal statutory rate of 21% and the effective tax rate is due to the following:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Tax at statutory rate		21.0	%		21.0	%		21.0	%		21.0	%
Tax effect of:
Valuation allowance on deferred tax assets		5.5			(4.1	)		1.7			(4.0	)
State income taxes, net of federal benefit		(8.2	)		5.8			(1.6	)		5.6
Nondeductible stock-based compensation		1.7			(0.2	)		0.8			(0.1	)
Other		(0.3	)		(0.1	)		(0.1	)		—
Effective tax rate		19.7	%		22.4	%		21.8	%		22.5	%

Summary of Carrying Amounts and Fair Values of Financial Instruments

The following presents the carrying amounts and the fair values of the Company's financial instruments as of September 30, 2023 and December 31, 2022:

	As of
	September 30, 2023				December 31, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In thousands)
Assets:
Commodity-based derivatives (1)	$	23,973	$	23,973	$	23,884	$	23,884
Liabilities:
Commodity-based derivatives (1)	$	4,540	$	4,540	$	4,420	$	4,420
Bank credit facility (2)	$	345,000	$	345,000	$	—	$	—
6.75% senior notes due 2029 (3)	$	1,229,230	$	1,116,791	$	1,229,836	$	1,129,029
5.875% senior notes due 2030 (3)	$	965,000	$	829,900	$	965,000	$	846,788

(1)The Company's commodity-based derivatives are classified as Level 2 and measured at fair value using third party pricing services and other active markets or broker quotes that are readily available in the public markets.

(2)The carrying value of our floating rate debt outstanding approximates fair value.

(3)The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2023 and December 31, 2022, respectively, a Level 1 measurement.

Weighted Average Shares of Unvested Restricted Stock

Weighted average shares of unvested restricted stock outstanding were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands)
Unvested restricted stock		1,469		890		1,186		914

Common Stock and Convertible Stock Dilutive in Weighted average unearned PSUs outstanding

The treasury stock method is used to measure the dilutive effect of PSUs.

Weighted average unearned PSUs outstanding were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per unit amounts)
Weighted average PSUs		744		942		631		1,024
Weighted average grant date fair value per unit	$	15.92	$	14.52	$	15.92	$	14.52

Schedule of Basic and Diluted Income (Loss) Per Share

Basic and diluted income (loss) per share for the three months and nine months ended September 30, 2023 and 2022 were determined as follows:

	Three Months Ended September 30,
	2023						2022
	Income		Shares		Per Share		Loss			Shares		Per Share
	(In thousands, except per share amounts)
Net income attributable to common stock	$	14,720					$	351,185
Income allocable to unvested restricted shares		—						(1,339	)
Basic income attributable to common stock		14,720		276,999	$	0.05		349,846			232,482	$	1.50
Effect of Dilutive Securities:
Restricted stock		—		—				1,339			392
Performance stock units		—		—				—			1,091
Convertible preferred stock		—		—				4,411			43,750
Diluted income attributable to common stock	$	14,720		276,999	$	0.05	$	355,596			277,715	$	1.28

	Nine Months Ended September 30,
	2023						2022
	Income		Shares		Per Share		Loss			Shares		Per Share
	(In thousands, except per share amounts)
Net income attributable to common stock	$	103,517					$	607,974
Income allocable to unvested restricted shares		—						(2,384	)
Basic income attributable to common stock		103,517		276,741	$	0.37		605,590			232,170	$	2.61
Effect of Dilutive Securities:
Restricted stock		—		—				2,384			541
Performance stock units		—		—				—			1,144
Convertible preferred stock		—		—				13,089			43,750
Diluted income attributable to common stock	$	103,517		276,741	$	0.37	$	621,063			277,605	$	2.24

Cash Payments Made for Interest and Income Taxes

Cash payments made for interest and income taxes and other non-cash investing activities for the nine months ended September 30, 2023 and 2022, respectively, were as follows:

	Nine Months Ended September 30,
	2023			2022
	(In thousands)
Cash payments for:
Interest payments	$	150,239		$	164,106
Income tax payments	$	29,796		$	719
Non-cash investing activities include:
Increase (decrease) in accrued capital expenditures	$	(32,441	)	$	16,202
Liabilities assumed in exchange for right-of-use lease assets	$	157,789		$	109,546