Q1 2025 Comstock Resources Inc Earnings Call
Okay.
Good day, and thank you for standing by.
Welcome to the Q1 2020, Fob Comstock resources earnings Conference call.
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Jay Allison: I'd now like to hand, the conference over to your first speaker today, Jay Allison Chair.
Chairman and CEO. Please go ahead.
Jay Allison: Alright, Thank you for the introduction.
Jay Allison: Welcome to the Comstock resources first quarter 2025.
Jay Allison: Financial and operating results conference call you can view a slide presentation during or after this call by going to our website at www, Comstock Resources' dotcom and downloading the quarterly results presentations.
Jay Allison: You will find a presentation entitled first quarter 2025 results.
Jay Allison: I am Jay Allison Chief Executive Officer of Comstock, and with me is Roland Burns, our President and Chief Financial Officer, Dan Harrison, Our Chief operating Officer, and Ron Mills, our VP of finance and Investor Relations.
Please refer to slide two in our presentation and note that our discussions today will include forward looking statements within the meaning of securities laws, while we believe the expectations of such statements to be reasonable there can be no assurance that such expectations will prove to be correct.
Jay Allison: On slide three we're going to summarize the highlights of the first quarter, but before we start in the financial results.
Jay Allison: I can make a few opening comments.
Jay Allison: First of all most if not all of you know Jerry Jones and his family owned 71% of Comstock and yes, he loves football as Dallas Cowboys.
Speaker Change: You need to know now that he has rediscovered his great love for basketball, especially players named a larger one.
Jay Allison: Now as he reviews, the first quarter 2025 results today.
Speaker Change: I would like you to focus.
And what should be the Holy Grail.
Speaker Change: Every E&P company is seeking to create long term shareholder value.
Speaker Change: Drilling inventory is.
Speaker Change: Holy Grail.
Speaker Change: For the past five years, we have chosen to pursue exploration.
Speaker Change: Find our Holy Grail.
Speaker Change: Growing demand for natural gas for power generation.
Speaker Change: And for feedstock for LNG has created a need for our emerging natural gas play in the Western Haynesville today, we will talk about our latest successful well the larger one which is our first well drilled in <unk> County.
Speaker Change: Now the larger one think about this is 24.4 miles away from the closest producing western haynesville, well and almost 50 miles away from our brothers, producing well to the south and Robertson County.
Speaker Change: Larger one is further confirmation of our geologic work.
Speaker Change: Involving study hundreds of well logs and three D seismic to outline our new play.
Speaker Change: We're getting there have invested over $1 billion to build and develop the 520000 net acres comprising our western Haynesville play.
Speaker Change: The return realize you'll want to sales about a week ago with initial production rate of 41 million cubic feet per day.
Speaker Change: This major step out represents another milestone achievement and.
Speaker Change: Our efforts to delineate the western Haynesville, our acreage has potential to have thousands of future drilling locations and multiple breaches and haynesville and Bossier shales geologic success has been matched by our drilling group a figured out how to drill and complete some of the deepest.
Speaker Change: And highest pressure horizontal shale wells in the world.
Speaker Change: They have also materially reduced the cost of the wells have continued to adjust our drilling and completion design to maximize performance and well returns.
Speaker Change: We also are capturing more of the value chain by developing our own midstream for the western Haynesville assets now moving on to the financial results for the first quarter higher natural gas prices in the first quarter drove much improved financial results in the quarter, our natural gas and <unk>.
Speaker Change: Oil sales grew to $405 million, we generated 239 negative operating cash flow or <unk> 81 per diluted share.
Speaker Change: Our adjusted EBITDAX for the quarter was $293 million and we reported adjusted net income of $53 8 million or 18 cents per diluted share. We resumed completion activities in late 2024, allowing us to return 14 or about 11 three net operated.
Speaker Change: Wells to sales since our last update with an average per well initial production rate of about 25 million cubic feet per day now I'll turn it over to relative to discuss financial results, we reported yesterday rolling alright.
Alright, Thanks, Jay on slide four recover our first quarter financial results.
Speaker Change: Our production in the first quarter averaged 128 Bcf per day, which is 17% lower than the first quarter of 2024, reflecting our decision last year to drop two rigs early.
Speaker Change: And our deferral of completions activity last year into this year.
Speaker Change: All of the wells turned to sales in the first quarter were located in our legacy Haynesville area.
Speaker Change: In April the Liza one well was turned to sales in the western Haynesville.
Speaker Change: With the substantial improvement in natural gas prices, our oil and gas sales in the quarter increased 21% $405 billion.
EBITDAX for the quarter was $293 million and we generated 239 made our cash flow in the first quarter.
Speaker Change: Reported adjusted net income of $54 million for the quarter or <unk> 18 per share as compared to a loss in the first quarter of 2024.
Speaker Change: Slide five we break down our natural gas price realizations in the quarter.
The quarterly Nymex settlement price averaged $3.65 in the first quarter and the average Henry hub spot price averaged $4 27.
Speaker Change: 37% of our gas was sold in the spot market in the quarter. So the appropriate Nymex reference price was $3 88 for our production.
Speaker Change: Our realized gas price for the first quarter was $3 58, reflecting a 7% differential from the Nymex price and about 30% that differential from the reference price for the quarter.
Speaker Change: The high spot prices, we had in the quarter were really only for a limited at a very limited number of days that we had in the quarter and there was a lot of volatility around basis in the first quarter, but the high spot.
Speaker Change: Spot prices.
Speaker Change: In the first quarter, we were also a 54% hedged which lowered our gas realized price to $3 52 for the first quarter.
Speaker Change: Given this high volatility in gas prices. We ended the quarter, we did lay a $16 billion on third party gas marketing, which is mainly gas spot to fill our transport obligations.
Speaker Change: On slide six we detail our operating cost per Mcf fee at our EBITDAX margin.
Speaker Change: Our operating cost per Mcf averaged 83 cents in the first quarter 11 cents higher than the fourth quarter rate.
Speaker Change: Our EBITDAX margin improved to 60% to 76% in the first quarter as compared to 73% in the fourth quarter of last year.
Speaker Change: Production and AD valorem taxes were up about <unk> <unk> from our fourth quarter rate.
Driven by the much improved natural gas prices, our lifting costs were up five six for the quarter, mainly due to the lower production level, we had in the quarter and much of our base lifting cost or fixed cost versus variable.
Speaker Change: And then our gathering costs were up one seven in the quarter and G&A costs were up one seven in the quarter.
Speaker Change: On slide seven we recap our spending on our drilling that other development activity and we spent a total of $250 million on development activities in the first quarter.
Speaker Change: We drilled four of $3 nine.
Speaker Change: Net horizontal haynesville wells and three or three net Bossier wells, we turned to 11 or eight three net operated wells to sales in the quarter, which had average initial production rate of $23 million.
Speaker Change: Cubic feet per day.
Speaker Change: On slide eight we recap our.
Speaker Change: Our balance sheet look like at the end of the first quarter, we ended the quarter with $510 million.
Speaker Change: <unk> outstanding under our credit facility, giving us $3 $1 billion in total debt, including our outstanding senior notes.
Speaker Change: The increase in borrowings from year end is mainly due to working capital changes as our drilling and completion activities were covered by operating cash flow in the quarter.
Speaker Change: When natural gas prices increase a lot.
Speaker Change: Our actual collection of that is really is out a couple of months from when we accrued a sale. So we will see those working capital changes kind of turnaround as the year progresses.
Speaker Change: We did just complete our spring borrowing base Redetermination and our borrowing base was reaffirmed on April 29 at $2 billion and our elected commitment under the credit facility remains at one 5 billion.
Speaker Change: With the improved natural gas prices that we're seeing for.
Speaker Change: For 2025 and.
Speaker Change: And our strong hedge position, we do expect our leverage ratio to continue to improve significantly as we report.
Speaker Change: The 2025 financial results.
Speaker Change: At the end of the quarter, we had about $1 billion of liquidity.
Speaker Change: Now I'll turn it over to Dan to discuss our drilling results in more detail.
Dan: Okay. Thanks Roland.
Dan: If you look over on slide nine this is an overview of our acreage footprint position.
Dan: In the Haynesville Bossier shale in East, Texas and.
Dan: In North Louisiana.
Dan: We have now 1.1 million gross and 822000 net acres that are perspective for commercial development of the Haynesville and Bossier shales.
Dan: If you look over on the left this is our emerging bluster in Haynesville.
Dan: Acreage and on the right is our legacy Haynesville area.
Dan: Since we began our leasing program in the Western Haynesville in 2020, we've grown our acreage to acreage position to 520000 net acres.
Dan: We still have around 300 net locations to drill on our 302000 net acres in the legacy Haynesville, which currently has.
Dan: 904, net producing wells.
Dan: Our legacy Haynesville acreage is 48% developed for the Haynesville and 9% developed for the measure.
Dan: In comparison, our western Haynesville has only 19 net producing wells and is virtually undeveloped compared to our legacy haynesville.
Dan: Given the higher pay thickness and the pressures we encountered in the western Haynesville, we expect the western haynesville to yield significantly more resource potential per section than our legacy Haynesville well.
Dan: On slide 10 is our updated drilling inventory.
Dan: End of the first quarter.
Dan: The total operated inventory now stands at 1527 gross locations and 1197 net locations.
Dan: This equates to a 78% average working interest.
Dan: And then our non operated inventory we have 1114 gross locations and 138 net locations.
Dan: <unk> represents a 12% average working interest.
Dan: The drilling inventory is split between the Haynesville and Bossier and then our four categories.
Dan: We now have gross operated inventory, we have 49 short laterals.
Dan: 331 medium laterals to 569 long laterals and 578 extra long laterals.
Dan: This gives us 75% of our laterals are now greater than 8500 feet long.
Dan: And the inventory split.
Dan: Even though 50 50 between the Haynesville and the Bossier.
Dan: The drilling inventory also includes our 113 horseshoe locations that we've identified and these are also split 50 50 between the Haynesville and the Bossier.
Dan: The average lateral length now stands at 9601 feet with basically unchanged from the end of last year.
Dan: This inventory provides us over 30 years of future drilling locations based on our current activity levels.
Dan: On Slide 11 is a chart that outlines our average lateral link.
Dan: We drill based on the wells that we have drilled and have reached total depth.
Dan: The average lateral lengths are shown separately for both our legacy Haynesville and our western Haynesville acreage areas.
Dan: And then in the first quarter, we drilled three wells to total depth in the legacy Haynesville and these wells had an average lateral length of 12930 feet.
Dan: The individual lengths ranged from 9673 up to 15023 feet.
Dan: The record longest lateral on our legacy Haynesville acreage stands at 17409 feet.
Dan: Also in the first quarter, we drilled four wells the total depth in the Western Haynesville and these wells had an average lateral length of 10728 feet.
Dan: The individually selling those wells range from 9100 feet up to 12045 feet.
Dan: Our longest lateral drilled to date in the on the Western Haynesville acreage has a lateral length of 12763 feet.
Dan: Just kind of summarize in one the long lateral activity, we now drilled 117 wells.
Dan: With laterals longer than 10000 feet and we have 44 wells.
Dan: Laterals over 14000 feet.
Dan: On slide 12 outlines the wells that have been turned to sales on our legacy Haynesville acreage since we last reported our earnings.
Dan: So far this year, we've turned 13 wells to sales on our legacy Haynesville acreage.
Dan: The individual IP rates range from 16 million a day up to 37 million a day.
Dan: With an average IP rate of $24 million a day.
Dan: The average lateral length was 12367 feet.
Dan: And the individual laterals range from $92 52 up to 17409.
Dan: During the first quarter the wells, we turned to sales we're more focused in the legacy haynesville area compared to the fourth quarter.
Dan: Where our completions were focused in the western Haynesville. After we resumed our completion activity that followed the third quarter Frac holiday.
Dan: We do have three of our seven rigs currently drilling on our legacy Haynesville acreage.
Dan: Slide 13 outlines the one well that we've turned to sales in our western Haynesville acreage since we last reported earnings in February.
Dan: <unk> number one well was turned to sales early last month.
Dan: This represents our first step out tests to the northeast up into Freestone County.
Dan: This well is located 24 miles away from our nearest producing well.
Dan: The <unk>, one well was completed with a 10306 foot lateral and the well was tested with an IP rate of 41.
Dan: Cubic feet per day.
Dan: And so four of our seven rigs are currently running on the western Haynesville acreage.
Dan: Slide 14 highlights the average drilling days and the average footage drilled per day, and our legacy Haynesville area.
Dan: In the first quarter, we drilled three wells the total depth in the legacy Haynesville and we averaged 26 days to total depth.
This is an increase of three days compared to the fourth quarter.
Dan: It is unchanged from the 2020 for full year full year average.
Dan: 26 drilling days.
Dan: The additional drilling days, we experienced in the first quarter compared to the fourth quarter was.
David: David mainly to the longer lateral lengths.
David: We drilled in the first quarter compared to the fourth quarter I think the average lateral 2000 feet longer in Q1.
David: In the first quarter.
David: And in 2007 feet drilled per day.
David: This represents a one 5% improvement over the fourth quarter and a 12% improvement over the 2020 for full year average of 920 feet per day.
David: Since 2017, our footage drilled per day has increased by 51%.
David: The best well drilled to date on our legacy Haynesville acreage was.
David: Average <unk> hundred 61 feet per day, and we drilled it to TD in 2014 days.
David: Slide 15 highlights the ongoing progress we've achieved in our drilling times in the Western Haynesville.
David: During the first quarter, we drilled four wells to total depth in the western Haynesville to give us a total of 25 wells.
David: Drilled to total depth through the end of the first quarter.
David: Since we split our initial well in the fourth quarter of 'twenty. One we are seeing significant and continuous improvement in our drilling times.
David: Our first three wells were drilled in 2022, and we averaged 95 days to reach TD.
David: This average dropped to 70 days in 2023 and dropping in to 59 days.
David: For the 2020 for full year average.
David: We averaged 55 drilling days for the four wells drilled to TD in the first quarter.
David: This this is a decrease of four days compared to the 2020 for full year average of 59.
David: That reflects an increase of six days compared to the fourth quarter.
David: Most of the increase compared to the fourth quarter can be attributed to the lower efficiency.
David: Mostly single wells, we drilled in the first quarter compared to the two well pads, we drilled in the fourth quarter.
David: Also during the first quarter, we drilled our fastest well to date in the western Haynesville at 37 drilling days.
David: And this record well was drilled with a 12045 foot lateral.
David: So this represents.
David: A 50% reduction compared to our first well that was drilled to TD and 74 days.
David: This progress is also reflected in the average footage drilled per day.
David: Our first three wells in 'twenty, two averaged 281 feet per day.
David: Which has improved to the current average 524 feet per day in the first quarter.
David: Our record fastest well drilled.
David: Drilled at 741 feet per day.
David: And just some of the primary factors behind the improved drilling performance.
David: So the shift to drilling two well pads.
David: Our improvement in our casing designs the utilization of insulated drill pipe.
David: And we've just had better downhole performance storm or bottom hole assemblies, as we continue to drill more wells.
David: On slide 16 is a summary of our D&C costs through the first quarter four four our benchmark long lateral wells located on our legacy acreage.
David: These represent all of our wells that have laterals over 8500 feet long.
David: Our drilling cost are based on when the wells reached TD this better aligns with within the drilling dollars are being spent in our completion cost per foot continues to use the turned to sales date.
David: During the first quarter, we drilled three wells to total depth.
David: First quarter drilling cost averaged $523 a foot.
David: This is a 21% decrease compared to the fourth quarter.
David: Most of this can be attributed to drilling longer laterals in the first quarter.
David: As two of these three wells were drilled to TD.
David: As two of the three wells were 15000 foot laterals.
David: Also during the first quarter.
David: We turned 11 wells to sales on our legacy Haynesville acreage.
David: The first quarter completion costs came in at $855 a foot.
David: This is just a 1% decrease compared to the fourth quarter.
David: As we look ahead, we're anticipating our D&C cost on the legacy Haynesville acreage will stay flat to slightly lower.
David: Certainly mid year.
David: Our pipe prices also started coming down late last year, and we expect the to maintain these lower cost levels.
David: Through mid year and into the third quarter.
David: Our cost expectations in the back half of the year further out are a little more uncertain at this with the potential for the uptick in activity.
David: Coming from the higher gas prices and still some lingering potential impacts from the ongoing tariffs.
David: Tariffs.
David: We currently have three rigs.
David: And again on our legacy Haynesville acreage.
David: On slide 17 is the summary of our D&C costs through the first quarter for all the wells drilled in the Western Haynesville.
David: For the Western Haynesville drilling costs are also based on when the wells reached TD.
David: And then our completion costs are based on when the wells are turned to sales.
David: So during the first quarter, we will able to carry forward the really great progress and the results we achieved during the fourth quarter of last year.
David: During the first quarter, we drilled four wells to total depth in the western Haynesville.
David: The drilling cost averaged $1374 a foot.
David: This represents a 2% decrease compared to the fourth quarter.
David: Contributing to this performance was drilling our record fastest well in the first quarter that we drilled to TD and 37 days.
David: Since drilling our first wells in 2022, our drilling cost has now decreased by 34% and then into the first quarter.
David: We do not have any wells in the western Haynesville that returned to sales in the first quarter.
David: We continue to have superb execution from our frac crews in the two well pads that have allowed us to be much more efficient with the crews.
David: We've also started implementing the use of natural gas and natural gas diesel.
David: Blend to fuel our Frac fleets, which has also led to additional cost savings and less emissions.
Okay.
David: All of the exploratory capital we spent during the early timeframe of our programs definitely allowed us to significantly expand our knowledge base of this area.
David: Zeroed in on a <unk> well design.
David: We continue to improve upon our job executions.
David: And again, we've got four rigs running in the western Haynesville of our seven rigs.
David: On slide 18.
David: Highlight our continued improvement related to greenhouse gas and methane emissions.
David: For 2024, we reported a greenhouse gas intensity of 2.5, the scalar grams of Cotwo equivalent per Boe of production.
David: This is a 28% improvement versus 2023 and 28% over the past two years.
David: We reported a methane emission intensity rate 0.039%.
Speaker Change: This is a two 5% improvement versus 2023, and a 14% improvement over the last two years.
Speaker Change: We achieved those emissions despite our increased focus on the higher intensity western Haynesville.
Speaker Change: On an absolute basis, our <unk> emissions decreased to 174000 metric tons in 2024.
Speaker Change: This is down 44% from the 2023 levels and 39% over the last two years.
Speaker Change: In addition, our methane emissions and decrease to 5499 metric tons in 2024.
Speaker Change: This is down 3% from 2023 and down 11% over the last few years.
Speaker Change: We have deployed optical gas imaging and aircraft leak monitoring technology at 100% of our production sites.
Speaker Change: Which has earned us the ability to certify our gas as responsibly sourced.
Speaker Change: Our natural gas and dual fuel powered frac fleets.
Speaker Change: Eliminated 1 million gallons of diesel.
Speaker Change: By utilizing natural gas, which offset the approximately 2000 metric tons of steel to equivalent.
Speaker Change: Our dual fuel drilling rigs eliminated 250000 gallons of diesel.
Speaker Change: Utilizing natural gas and this offset approximately 790 metric tons of Cotwo Evelyn.
Speaker Change: We've installed instrument error on 100% of our newly constructed production facilities mitigating.
Speaker Change: Mitigating approximately 6500 metric tons of steel to equivalent.
Speaker Change: And lastly, we announced yesterday a partnership with <unk> Corporation to study the potential.
Speaker Change: To develop carbon capture projects at our vessel in Marseille.
Speaker Change: Natural gas treating facilities in the western Haynesville.
Speaker Change: And these projects have the potential to significantly reduce our greenhouse gas emissions in the future.
Jay Allison: I'll now turn the call back over to Jay.
Jay Allison: Alright. Thank you Dan. Thank you Roland if everyone. Please refer to slide 19, where we will summarize.
Jay Allison: Outlook for 2025 and 2025, we are primarily focused on building our great asset in western Haynesville that will position us to benefit from the longer term growth in natural gas demand. We currently have four operated rigs in western Haynesville to continued to delineate the new plate Ware.
Jay Allison: Expect to drill 20 wells and turned 15 wells to sales in Western Haynesville. This year will continue to build out our western Haynesville midstream assets to keep up with the growing production from the area midstream expenditures are expected to be between $130 $150 million that will all be funded by our midstream part.
Jay Allison: <unk>.
Jay Allison: And the legacy Haynesville. We're currently running three rigs as Dan said to mill production back up by the end of the year, we expect to drill 25, or 20, net wells and turned 31 or 24, one net wells to sales in our legacy Haynesville. This year we.
Jay Allison: We anticipate funding our drilling program out of operating cash flow, depending upon natural gas prices and use.
We continue to have the industry's lowest producing cost structure and expect drilling efficiencies to continue to drive down drilling and completion costs in 2025 in both the western and legacy Haynesville areas.
Jay Allison: Instead, we have strong financial liquidity totaling almost $1 billion.
Jay Allison: We have several slides that provide some specific guidance for the rest of the year. So.
Jay Allison: If you wanted to discuss that please reach out to Ron mills to discuss.
Jay Allison: I'll now turn the call back over to the operator to answer questions from analysts who follow the company.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Jay Allison: One moment, while we compile the Q&A roster.
Speaker Change: Our first question come from Derrick Whitfield from Texas Capital. Please go ahead.
Derrick Whitfield: Good morning, all and thanks for your time.
Speaker Change: Good morning, Thank you.
Speaker Change: I have two questions in there first related to the western Haynesville as you've noted in your prepared remarks, the larger line well.
A material step out for you guys.
Maybe perhaps for Dan could you just directionally speak to reservoir quality there versus the wells you drilled to the South and then quantitatively speak to the amount of your position you have now delineated. Following this well result.
Speaker Change: Yes.
Speaker Change: The wells 24 miles away from the nearest well we have probably all the way down to the other end of where we've drilled our wells you can probably double that probably almost I'd say 45.
Speaker Change: Myles.
Speaker Change: Down into Robertson County, so as far as the reservoir quality the reservoir quality in the larger one looks.
Speaker Change: I would say every bit as good as the ones, we drilled down in the core area looks really good it is our haynesville well.
Speaker Change: Not a bossier, we got good good thickness of there and we did of course, we drilled the allows you want in that area for a reason because we had we had some.
Speaker Change: Nearby well logs that had drilled through that.
Speaker Change: Such in years ago that we're able to look at and we could see the we.
Speaker Change: We could see the reservoir quality, so we werent drilling totally blind up there but.
Speaker Change: The logs looked really good that's why we targeted the haynesville.
Speaker Change: And of course, the well results have supported what our expectations were it looks really good.
As far as the area up there I mean thats.
Speaker Change: Up on the northeast and of our footprint and so I mean I.
Speaker Change: I think that kind of that.
Speaker Change: And really figure as a percentage of the acreage I think maybe is what youre asking derik, but.
Speaker Change: A substantial chunk of our acreage up on the northeast and yes, Alex I would say is definitely puts it and puts it in play and greatly derisked that entire area at behr.
Speaker Change: One other comment.
Speaker Change: We were initially looking to drill at Bossier well.
Speaker Change: The thickness of the Bossier would be a little thicker than what we drill but we've deepened the well the G. Geological group that we're still headed in and deepen that well since we were.
Speaker Change: $24 four miles away and we did deepen it in.
Speaker Change: Just like Dan said, the rock quality was exemplary.
Speaker Change: And we do that we have we have additional wells, obviously that are on the drill schedule plan to further roll up in that area.
Speaker Change: And again not to put a firm number but I mean, it looks like eyeballing, it's like 40% to 50% of your position.
Speaker Change: Arguably some of the riskier part as it relates to being deeper that you've delineated now across your position I mean is that a good kind.
Speaker Change: Kind of spit ball, if you will.
Speaker Change: Yes.
Speaker Change: Yes, somewhat agree with that.
Speaker Change: The depth of the oil was probably maybe about a 1000 foot.
Speaker Change: This was about a 17500 foot TVD well.
Speaker Change: Up here with this wells located compared to the deepest ones with.
Speaker Change: We've drilled.
Speaker Change: 18, five between 18, 5% to 19 at the very very high end or <unk>. However, you want to look at it.
Speaker Change: So.
Speaker Change: This looks looks really stout I mean, we couldn't be happier with it.
Speaker Change: Look on a map.
Speaker Change: Kind of the east and West.
Speaker Change: And you look where the large one well as we probably have control most of the acres for about 30 miles.
Speaker Change: So if you look on the map I mean, thats the broader part of our acreage position.
Speaker Change: That's great and then as my follow up let me see if you guys could speak to the structure of the <unk> partnership and the value you see in this arrangement and from our view of the market appears to value lower carbon intensity power solutions based on the recent Chevron and Exxon Mobil announcements.
Speaker Change: While you guys arent in the power business I suppose there is a scenario where you could.
Speaker Change: <unk> on site and offer a lower Ci power solution to a data center industrial client is that really the aim here.
Speaker Change: Ed.
Speaker Change: Eric This is robin yeah that ethane and Thats why the reasons why we're excited about.
Speaker Change: Yes, the partnership with Dk Weil, who had already.
Speaker Change: <unk> has a proven track record here. It has a very successful project in the Barnett shale with their Barnett zero projects. So we were impressed with that impressed with their capabilities.
Speaker Change: And wanted to partner for them to be.
Speaker Change: The lead there in developing a carbon capture and sequestration project for US there for our two plants. So we think that makes that.
Speaker Change: Our location about 100 miles from Dallas higher bias from Houston.
Speaker Change: The location next to gas storage.
Speaker Change: Yes.
Speaker Change: The vast gas resource we have in the western Haynesville.
Speaker Change: Then add.
Speaker Change: Our low carbon footprint to that just makes it an ideal.
Speaker Change: Area, we think for potential power generation facilities to support a data center.
Speaker Change: In that area. So that's all part of what we'd like to see and so it's.
Speaker Change: Another app.
Speaker Change: The piece in the puzzle that we're hoping to put together and develop that but still a lot of work to do there.
Speaker Change: We had looked at that.
Speaker Change: Chris and his group at <unk>, we've been watching them before they want.
Speaker Change: And afterwards.
Speaker Change: We actually toured their injection wells in the Barnett.
Speaker Change: And that whole group is tier one and.
Speaker Change: And we said.
Speaker Change: Our western Haynesville is similar in size to what Theyre doing at the Barnett I've already got a proven model.
Speaker Change: For people that are really great people. So we are mutually said, let's go forward and.
Speaker Change: Zero emissions.
Speaker Change: And <unk> can do the carbon capture then I think one day, one and two we win.
Derrick Whitfield: And just like Derrick your question I think will be more attractive.
Speaker Change: For exporting gas.
Derrick Whitfield: Overseas.
Derrick Whitfield: Zero emissions.
Derrick Whitfield: The next step.
Speaker Change: That's great. Thanks, I'll turn it back to the operator.
Derrick Whitfield: Thank you.
Speaker Change: Our next question comes from Kelly <unk> from Bank of America. Please go ahead.
Speaker Change: Hey, good morning, guys J Rowan, Dan look I like basketball team and the Rockies, they're still alive. So I also got one on the <unk> step out here I think.
Speaker Change: I have to imagine that given the success that you've seen at the larger one that youre anxious to test other parts and physician when do you think we should expect any results in this area and then when you do look at the map, where do you plan to step out to next.
Speaker Change: So good question we have.
Speaker Change: The next well, we're going to spud up in this area is it going to be in Q4.
Speaker Change: And part part of that how fast we can actually step out up in this areas. We have it just getting the midstream built out and getting ahead of where the locations are being able to get them into the gathering system.
Speaker Change: Obviously, a lot of the midstream dollars, we've spent and had been down where we've drilled all of the wells to date. So you have to be ahead of these things on that side. So.
Speaker Change: You can't just get out here and start getting after it right off the bat because you have to wait on that part to get done, but we do like I say at Q4, we're going to drill a two well pad up here.
Speaker Change: Actually pretty close to the <unk> pretty nearby close to the infrastructure again like the larger one was in the next year.
Speaker Change: We got more wells that are actually be fanning out much wider across that footprint up there.
Speaker Change: We've got eight wells.
Speaker Change: Somewhere on the order of eight wells planned for up in that area.
Speaker Change: In 2026.
Speaker Change: Got it I appreciate that next I'd like to pick up on the comment that you made about picking up a spot rig later this year.
Speaker Change: I imagine that are at a five rig pace you had some white space in the Frac calendar, but added seven break days.
Speaker Change: <unk> are probably fully booked so the contribution from the two new rigs I think would be ready by sometime before the end of the year. So the question is if you do pick up that spot that spot crew does that suggest that.
Speaker Change: Get the upper half full year production guidance is still in play.
Speaker Change: Yeah, we did recently add that 700 rig.
Speaker Change: KLA with and.
Speaker Change: And that just went to work here at test here in April.
Speaker Change: And so yes.
Speaker Change: We didn't have that rigs just on.
Speaker Change: Well to well type.
Speaker Change: Short term basis.
Speaker Change: We are.
Speaker Change: So I think thats kind of.
Speaker Change: <unk> that are most of the production from adding rigs that rig and any rigs that we get you can add at this point in the air it's not going to come on until next year.
Speaker Change: There is a fairly long cycle, because we never got to drill.
Speaker Change: Drill multi well pads, we're going to just put it in the completion queue.
Speaker Change: There is really.
Speaker Change: That activity level that we could add at this point in the year.
Speaker Change: Impact this year's production, but yes, we look at it 2026.
Speaker Change: You'll see a lot of it increasing demand and so we think that makes sense to add that rig here in a product.
Speaker Change: Talked about the last call.
Speaker Change: And we are still we still have two frac crews pretty much running full time throughout the year.
Speaker Change: There may be a spot maybe.
Speaker Change: Very infrequent, though that we have to pick up a spot third frac crew, but we pretty much keep cover most of that still with the rig count we've got with two frac crews.
Speaker Change: Which I'll just say our frac crews that we got a really good very efficient so while we're able to do that.
Speaker Change: Got it thanks guys.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Charles Meade from Johnson Rice. Please go ahead.
Speaker Change: Good morning, Jay Roland Dan.
Speaker Change: I would like to own as well.
Speaker Change: I wanted to ask one more question about the <unk>.
Dan: And Dan I think you mentioned in your prepared comments that one of the reasons that that you guys were.
Joseph: Joseph's Okay sure. We're more confident in is that you had some.
Joseph: Some deep vertical well control there.
Speaker Change: I am curious I know that there was a lot of.
Joseph: There was a historical vertical development in this area, but.
Speaker Change: <unk>.
Speaker Change: How many other places.
Speaker Change: Having offset vertical well control will that be the kind of the dominant.
Speaker Change: Variable.
Speaker Change: On picking our locations when you step out or is that was that just kind of a onetime thing with that large one well.
Speaker Change: So we did.
Speaker Change: When you do your first step out obviously, you want to have as much control as possible.
Speaker Change: If you don't if you get away from the areas, where we have well control, that's where we have to drill a pilot hole and.
Speaker Change: Log it and get that see what that section looks like so.
Speaker Change: We did kind of generally where we wanted to drill up here, but with the vertical well control. We did have we were able but we wanted to get something fairly close to.
Speaker Change: Got to know for sure what the low quality was.
Speaker Change: And that is how we pick the first one but all the future wells, obviously, we will be well spread out and in some places we will be drilling we will need to drill some pilot holes as we get further away from those control points.
Speaker Change: Just to control your risk you need to you need to drill those pilot holes and get some logs across them.
Charles: Charles got it back to.
Speaker Change: Just to circle him.
Charles: That area, we have the most will control first of all we drilled it.
Charles: We drilled it in your remarks that 23 miles up to the north northeast.
Charles: To the lay on well the dealer <unk> wells and then to answer your question. We had we thought we had better well control you are the larger ones. So it's kind of a mirror image of the circle him.
Charles: We had three D. We hit well control, we didn't see a lot of static.
Charles: And the <unk> lines et cetera. So.
Charles: You have to give back and is almost asked the question of why did you drill it.
Charles: It was.
Charles: $24 four miles it even at the time, we decided we wanted to drill it.
Charles: <unk> 30 miles away from our closest producer.
Charles: The goal and we keep telling you in the world as we do trust our Geological Department, We trust the operations Department and we really want to Derisk. This 520000 net acre footprint as quickly as prudently as possible and we did take a <unk>.
Charles: Handset the larger.
Charles: <unk> would be great.
Charles: Great well, we didn't know that.
Charles: But I do think that the results for transformational.
Charles: We're glad we can reported the other thing I think Charles is that even if you go back in February we didn't really talk about the larger one and we did some road shows we didn't tout something yet.
Charles: We said, we're drilling a well you almost have to go find that well and once we could report it then.
Charles: I would tell you the truth about it.
Charles: Good bad or ugly and this happened to be great. So that's how we go about it and when we decided to do a lot of oil and gas is probably a $1 90.
Charles: This was many many many many many months ago.
Charles: Go ahead drilled as well.
Derrick Whitfield: Okay that is that's a helpful elaboration, Jay and then perhaps up following up on that idea of de risking more of that position.
Derrick Whitfield: It looks to me I'm not looking at any kind of contours or anything but it looks to me that if you look at the wells you've drilled.
Derrick Whitfield: And.
Derrick Whitfield: And the permits that you have it's mostly along that what looks like that kind of southwest and northeast strike axis and so I'm wondering is that is that is that in fact, the case and if it is when.
Derrick Whitfield: Or what's the right time.
Derrick Whitfield: To push it.
Derrick Whitfield: Push the de risking kind of a northwesterly uptick direction.
Derrick Whitfield: We started five years ago, you have a blank sheet of paper luckier and kindergarten, you've got a sheet of paper there's nothing on it.
Derrick Whitfield: And then all sudden we look and say well why we should drill this circle him well now all of that acreage that you see that we present, we didn't own any of that.
Derrick Whitfield: And we said, okay, let's drill the circle as well as you progress, it's almost quarter by quarter year by year, we're able to buy the big position.
Derrick Whitfield: From from legacy Reserve, which had pinnacle, who didnt know the pinnacle plant.
Derrick Whitfield: And the 145 mile high pressure pipeline, whether it was located at the right spot, but we did note that the larger we had showed that.
Derrick Whitfield: The there was a boundary kind of on the east side.
Derrick Whitfield: We did with our hundreds of land men.
Derrick Whitfield: We did find out that that was unleashed.
Derrick Whitfield: So you go when you youre aggressively yet prudently grab what has unleashed and then if you can add.
Derrick Whitfield: Pete acreage, which most of that is to the west.
Derrick Whitfield: So 80 plus percent of our acreages HP paper, we didn't add that HCP acreage.
Derrick Whitfield: It was March of last year, we added 185000 net acres there was probably first quarter, we add another 62000 net acres. So the acreage that you're seeing.
Derrick Whitfield: West most of this HP. So we've said over and over we've got to drill about 70 wells to hold acreage that we released.
Derrick Whitfield: And as 520000 net acre play so we have focused our most part of drilling to hold acreage.
Derrick Whitfield: And then we'll deviate over and drill from the HP to acreage now.
Derrick Whitfield: We will we've had one pilot well core and we've got a second one.
Derrick Whitfield: We're working on right now so as we go through 2000 22026.
Speaker Change: We would like to have a core of our own on all four corners of the footprint and a few in the middle and then we will tell you answered the question that Derik asked.
Derrick Whitfield: What is the rock quality.
Derrick Whitfield: We're going to know that with the cores.
Jay Allison: That is helpful detail. Thank you Jay.
Derrick Whitfield: Thank you.
Derrick Whitfield: Thank you.
Speaker Change: Our next question comes from Jacob Roberts from TP, <unk> Cowen and company. Please go ahead.
Jacob Roberts: Good morning.
Derrick Whitfield: Good morning.
Derrick Whitfield: Maybe a bit of a macro question, but if we see gas prices cooperate to the end of the decade, how many rigs do you envision the western haynesville being able to support over that timeframe and maybe as a sidecar to that is there an internal view here to take a more metal.
Derrick Whitfield: More metro optical approach to growth and target high single digits or low double digits at the end of the decade.
Derrick Whitfield: I think if you have.
Derrick Whitfield: All of this success like 6000 acres is in dedicated so I think you have to look at that and say well, we're going to we're going to profit connect 15 or 20, new wells to sales.
Derrick Whitfield: And then as Dan mentioned earlier, when Derek or or maybe Kelly asked the question is how many more wells you can drill around a large one fortunately we have an incredible partner.
Derrick Whitfield: And pinnacle with quantum so we do control of budget for our gathering.
Derrick Whitfield: And then the other question was asked about half.
Derrick Whitfield: Lots of data centers et cetera.
Derrick Whitfield: I think it will be able to control it.
Derrick Whitfield: We will never have to drill a well that we shouldnt be drilling wells.
Derrick Whitfield: I'll never oversupply the market because folks you have to drill wells I think you will see us very prudently develop this and de risked all four corners in the middle of it.
Derrick Whitfield: With the Pinnacle gas services, which makes our wells far more economic and I think that'll serve data centers I think youre going to see.
Derrick Whitfield: 100 miles away from Dallas 100 miles away from Houston.
Derrick Whitfield: You should have a data center.
Derrick Whitfield: I think with <unk> and the carbon capture we're going to be far more attractive.
Derrick Whitfield: For companies that we will look to approach us and we are already.
Derrick Whitfield: Discussions with them to.
Derrick Whitfield: To create the data center, which goes back to this power demand.
Derrick Whitfield: We're going to be able to fulfill our share of the power demand.
Derrick Whitfield: And you look and you say well is it real.
Speaker Change: Please say Where's Waldo is it is this real do you really need this gas.
Speaker Change: And we looked in the world's largest electric utility. This week said that U S power demand will.
Speaker Change: Grow by 450, Gigawatts had 71 Bcf of gas, which is what <unk>.
75, Gigawatts with gas fired Thats 12 Bcf of new gas Thats needed woods.
Speaker Change: Woodside has announced safety, perhaps two bcf by 2029 to 30 current permitted LNG projects are about 17 base. So this is a great question, where you're going to get that gas.
Speaker Change: And we think the Appalachia is constrained youll get a b or so I think the Permian you don't drill there for gas. This is this core area, while we work really hard and fault org to Derisk this stuff to deliver it to you.
Speaker Change: When we when we need to so that's.
Speaker Change: We're always going to protect our balance sheet.
Speaker Change: But we're going to Derisk this thing would take risk.
Speaker Change: To de risk it just like the larger one.
Speaker Change: Great I appreciate the answer my second question kind of circling back to freestone and.
Speaker Change: Some of the comments you made about.
Speaker Change: Timing it perhaps that the midstream build out as we progress into Q4 into 2026 is there anything we should be thinking about on the Liza one.
Speaker Change: In terms of pro rate versus the IP rate or if that dynamic will apply to any other wells planned for this year.
Speaker Change: Well so the flow rate only allows one is I know you were flowing at basically the same.
Speaker Change: The same type curves that we've got set up for all the wells, but.
Speaker Change: So the core I don't think anything on the midstream side is going to constrain us own the ability to flow on how we how we want to flow.
Speaker Change: We just need to be able to get the midstream in place to be able to drill days, which is while we don't so while we're not spreading another well until.
Speaker Change: Until the end of this year.
Speaker Change: Really mostly into next year.
Speaker Change: So no no.
Speaker Change: Well, we will extend it looks looks as good as everything else we have.
Speaker Change: We're going to flow at the same as the other wells, we have and we don't have any constraints on the midstream side.
Speaker Change: Excellent I appreciate the time.
Speaker Change: Thank you great questions.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Carlos <unk> from Wolfe Research. Please go ahead.
Speaker Change: Hey, good morning, gentlemen, thank you for taking my question.
Speaker Change: Good morning.
Speaker Change: Good morning.
Speaker Change: So considering that 2025.
Speaker Change: <unk> and <unk> driven program.
Speaker Change: So to speak.
Speaker Change: If I jump forward to 2026, what is yours underlying assumption.
Speaker Change: Or that year's program in terms of capital allocation and between H BP exclusive wells versus delineate or slash appraisal wells.
Speaker Change: I think that I guess to conclude the question it would be tremendously helpful to understand and parse out the general geography of where these <unk> are and their underlying impact to the perception of those well results as we move through the next 24 months.
Yes, I mean, we still want to focus on that when we drill a well in the western haynesville into holding acreage and remember we have that 70.
Speaker Change: Wells or so to hold this acreage that we've leased versus the acreage we acquired that's held by the shallow production.
Speaker Change: So that will always be a big priority.
Speaker Change: Over anything else here.
Speaker Change: To that end.
Speaker Change: The proximity and availability of midstream and acreage are for the next.
Speaker Change: 25, 26 above the similar dose will be that that main drivers were that drove these wells.
Roland: Yes. Thank you Roland maybe I should have clarified that I was.
Speaker Change: Asking specifically about the western Haynesville.
Roland: Are they better haynesville the western alright.
Speaker Change: I would say legacy Haynesville.
Roland: We have done.
Roland: Don't have any acreage to drill to hold but so thats very price driven.
Roland: And takeaway is there are areas that takeaway is more difficult than the legacy Inc.
Roland: Haynesville theyre different cost of transport and our legacy Haynesville. So we take that into account, but generally we feel and legacy haynesville.
Roland: Locations and since we haven't been that active there.
Roland: We're actually able to go back into some of our higher performing areas with our.
Roland: With the rig we just added in trail and our legacy Haynesville around that since we've created a lot of space.
Roland: But the production kind of fall in that area.
Roland: Yes. Thank you Rob appreciate it.
Speaker Change: Second question is turning to the macro real quick.
Roland: Perhaps.
Roland: No.
Roland: Yes.
Roland: Using one of your questions as a segue.
Roland: Are you would you be concerned at all.
Roland: Pardon me.
Roland: Meeting.
Speaker Change: The Permian, even though you rightly pointed out J those wells are drilled.
Speaker Change: For the oil, but unfortunately, hasso plattner of associated gas.
Speaker Change: Simply they don't have the necessary takeaway capacity tune necessary demand centers would you all be concerned or what what do you view that Permian gas, if there wasn't that way or that guys.
Speaker Change: From from additional permitting.
Speaker Change: Government level that would take.
Speaker Change: Of that molecule towards the Gulf coast or the general demand area is that something that youre thinking about or concerned about at all.
Speaker Change: I think that's how I would expected as far as that I mean, obviously, the Permian gas supply has to grow in order to feel that big demand for that.
Speaker Change: Coming from LNG and other power generation.
Speaker Change: Yes, that's going to be a big contributor so yes.
Speaker Change: Yes, we do think that that the weak oil prices today kind of stall out of that interest in drilling those wells since they are mainly for oil prices.
Speaker Change: Yes, we do expect that growth.
Speaker Change: Yeah.
Speaker Change: Thank you gentlemen.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Phillips Phillips Johnston from capital one. Please go ahead.
Speaker Change: Hey, Thanks and congrats.
Speaker Change: Wanted to ask you about the quarterly shape your tales and just assess your confidence.
Speaker Change: Confidence in achieving the large ramp up in production in the second half of the year.
Speaker Change: Midpoint of the guidance implies it looks like you brought on.
Speaker Change: <unk> sales in Q1 in our planning.
Speaker Change: 2014, or so in the second quarter. So combined for the first half it's about half the 46 wells or so.
Speaker Change: The year, so the til cadence seems fairly ratable by quarter I'm just trying to.
Speaker Change: Reconcile that with a fairly flat production level in the first half and then sort of the large ramp up in the second half is that is that mainly a function of the timing of windows.
Speaker Change: 12 to 14 tells occur here in the second quarter or is it sort.
Speaker Change: Sort of a larger mix of western Haynesville sales in the second half or some sort of a combination of those factors. It's a combination of both.
Speaker Change: The problem that till related production models.
Speaker Change: Have is is there is no way to.
Speaker Change: For people to outside to know the timing of when those are brought on and so.
Speaker Change: The details on the second quarter to be more second half weighted that's why the production is really starting to see that.
Speaker Change: <unk> the sequential production growth returned in the both the third and the fourth quarter.
And then if you it's just a function of the types of wells that we're drilling and that we are completing at which time, the third and fourth quarters.
Speaker Change: Like like you said it.
Speaker Change: It will be a similar amount of total tells us as the first half, but the profile would look pretty similar to the first and second we're the third will be a lower number of sales in the fourth will be a higher number of pills.
Speaker Change: Okay. Thanks.
Ron Mills: Thanks, Ron.
Speaker Change: They come on during the quarter.
Speaker Change: Yes, okay.
Speaker Change: Appreciate that and then obviously, it's pretty early days regarding the PK of the agreement I'm sure a lot of details need to be hammered out.
Speaker Change: There is no tax credits to consider and whatnot, but looking at it in the future would you guys expect any incremental costs incurred by comstock or any sort of net capital outlays funded by Comstock.
Speaker Change: No I believe our partnership with basically they will they will get the tax credits and they will make the capital outlays and then we'll participate.
Speaker Change: Receiving.
Speaker Change: Yes.
Speaker Change: Some.
Speaker Change: Purchased the CIO to from us that will be a reduction in our operating cost net net.
Speaker Change: So yes, we don't we don't see any big capital investment by Comstock.
Speaker Change: Excellent Thanks, Ron.
Bill: Thanks Bill.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Gritter drift from Goldman Sachs. Please go ahead.
Speaker Change: Good morning, and thank you for taking my questions. My first one is on your lateral lengths you seemed pretty consistently continued improvement across operations, particularly in the legacy Haynesville how much further upside do you see the laterals on a sustainable basis and how would you characterize the applicability of these lateral lengths you realized in <unk> 25 going forward this year.
Speaker Change: Next.
Speaker Change: So in the legacy Haynesville, yes, we're we've gotten actually pretty long.
Speaker Change: We are at today.
Speaker Change: So you're getting a whole lot longer than this on average I mean, we were we were at.
What just under 13000 fleet for Q1.
We're our longest 117000, we still have several 15 14 15000 footers in our inventory but.
Speaker Change: When you just look at the mix of what we're going to be drilling as we go forward on the schedule.
Speaker Change: Yes.
Speaker Change: Getting pretty flat up there around at 12 to 13000 foot average lateral length. So I don't think youre going to see us continually lot keep calm and higher than that.
Speaker Change: The positive is that we will not.
Speaker Change: I would have to drill a lot of the that very short laterals.
Speaker Change: Reasons because of that.
Speaker Change: If you turn and Horseshoe wells are now kind of replacing those so where we had those scattered in the drilling programs and even last year in the first part of the year, we had short laterals.
Speaker Change: Our average it should be a little bit better because we won't have the really short ones to weigh it down right.
Speaker Change: And most of the Horseshoe wells will be drilled on they're going to be 9500 foot and we got.
Speaker Change: A few of them going to be a little bit longer than that.
Speaker Change: As far as just the average I think is what you were asking about doing in the future I think.
Speaker Change: Probably getting close to a plateau point.
Speaker Change: Got it I appreciate the color there and then my second question is just on D&C costs do you think that there could be some meaningful pricing concessions on rigs or crews as we head towards 2026, just given the broader more macro uncertainty, especially potentially also the implications from the oil macro Martin Houston critically.
Speaker Change: Yes, I think Thats, a really good question and I think the answer is.
Speaker Change: Yes compared to.
Speaker Change: If we if you would ask that question on the last call. Obviously, we're up more optimistic we will see some price concessions just with what we're seeing with the <unk>.
Speaker Change: <unk>.
Speaker Change: Where the activity may be headed in the Permian and I think we will see that across the board on all services.
Speaker Change: Rigs Frac crews and obviously, we've got some of our rigs are are termed up but.
Speaker Change: Yes.
Speaker Change: I think we will see it on a lot of those smaller services beyond duration Frac crews, I think where you'll probably get a more meaningful percentage drop.
Speaker Change: And vendor cost there and also hopefully on our pipe prices.
Speaker Change: What happens with the tariffs.
Speaker Change: Got it I appreciate it thank you.
Speaker Change: Thank you. Thank you.
Speaker Change: Our next question comes from Noel Parks from Tuohy Brothers.
Speaker Change: Estimate research. Please go ahead.
Noel Parks: Hi, Good morning, just have a couple.
Speaker Change: It looks like a.
Speaker Change: Pretty exciting quarter.
Speaker Change: In terms of the larger one well and and everything going on.
Speaker Change: I guess.
Speaker Change: I didn't.
Speaker Change: Wanted to ask about.
Speaker Change: Sure.
Speaker Change: May.
Speaker Change: Just overall.
Speaker Change: It used to be that for the shale era rock that was too tight.
Speaker Change: Off the table and I'm just wondering do you see there being placed now were formerly the thinking was well, it's too deep and too hot.
Speaker Change: That now could be available.
Speaker Change: To make a second wave in shale given what you've demonstrated you have been able to do in an area instead of lot of.
Speaker Change: Pretty much everyone dismissed is just not workable.
Speaker Change: Yes, I think.
Speaker Change: We've obviously I think made some big inroads and I think a lot of people are looking at what we're done and what we've been able to achieve with the depths and the temperatures I don't think there would've been a lot of.
Speaker Change: Takers on trying to have a commercial development with these conditions, just not too long ago.
Speaker Change: And I think was the price environment, where it's headed over the next two years and the LNG demand.
Speaker Change: I can certainly see some.
Speaker Change: People look in a little bit deeper than what they would have just a year ago.
Speaker Change: Right right and.
Speaker Change: You were talking about also the great improvement you hadn't and just the drilling time on the western Haynesville and.
Speaker Change: You listed.
Speaker Change: Using more pads.
Speaker Change: Sure.
Speaker Change: The drill pipe and but you also mentioned specifically casing design improvements and.
Speaker Change: Use of bottom hole assemblies.
Speaker Change: So I just wonder if you could just talk a little bit more about.
Speaker Change: Some details on the influence of those.
Speaker Change: Well we.
Speaker Change: So one thing I always kind of just for each around here is obviously consistency we've had some great results.
Speaker Change: Obviously keep.
Speaker Change: We just want to be very repeatable and predictable to be able to deliver that and.
Speaker Change: Some of that.
Speaker Change: It comes with time and practice practice as you keep your own wells you keep getting better.
Speaker Change: <unk> was basically shave days off of drilling the lateral I mean, obviously, we're we're date and got a lot of.
Speaker Change: High temperatures.
Speaker Change: Promoters.
Speaker Change: W details on bottom, obviously things don't perform well when you've got a lot of heat on them. So.
Speaker Change: Related Europa tools, those temperatures down a little bit it makes our motors and our tools just last longer.
Speaker Change: You don't have as make as many trips when youre drilling the lateral so thats, how you shave off days there.
Speaker Change: Casing designs, we've just basically been able to streamed streamlined downsized our size is a little bit and just got a lot better at taking where our casing points are.
Speaker Change: So.
Speaker Change: Bottom hole assemblies, just as we drill more wells and got more data on how the motors are performing which motors perform better.
Speaker Change: Basically how to tweak the designs on the motors for the temperature.
Speaker Change: <unk> delivered better ron's with that.
Speaker Change: Thank you.
Speaker Change: We looked at the geology 30 years ago and said we thought the rocks are there.
Speaker Change: And then when the Jonathan just came in and he said you know I'd like to I'd like to drill this circle them well said, okay. So you had to progress progress progress day to day to day.
Speaker Change: Like our relationship with you and you have to you have to handicap people inside TUI does this contract does it et cetera et cetera, and then you have to perform.
Speaker Change: To performance you have to get in the game and then once you get into game you got to say well is SaaS, but real or those logged real core real can you really how do you Frac These wells and look at the performance.
Speaker Change: In House Reservoir group they have to look at how hard do you draw these wells down.
Speaker Change: It is a this is a team.
Speaker Change: Fort Hood Comstock.
Speaker Change: You got to have a big backer, saying I want to I want to own something big.
Speaker Change: And you got to have some breaks where you get this HP to acreage <unk> got.
Speaker Change: How much you have to spend in order to hold all that acreage like Roland said, we're going to drill our 70 Wells then you got to have some people joined the team from financing on quantum.
Speaker Change: Did you have to get the gathering and then you've got all of this stuff and then the new.
Speaker Change: Once you get a little bit comfortable in one area you got to jump out 24 miles somewhere else.
Speaker Change: Because it is a very hard road.
Speaker Change: I don't think anybody when gas was at a 30 year lowered defer COVID-19, who is eager to jump in and drill the wells that we're drilling which are some of the hardest in the world.
Speaker Change: We drilled them last year no Bonnie.
Speaker Change: We push the reset button on how to add inventory we pursued exploration.
Speaker Change: That's what we did.
Speaker Change: Great. Thanks, a lot.
Speaker Change: Yeah.
Speaker Change: Thank you.
Jay Allison: This concludes the question and answer session I will now turn it back over to Jay Allison for final remarks.
Speaker Change: Alright again.
Speaker Change: Thank all of you that are still here listening.
Speaker Change: With respect your time I want you to know that all 250 people here at Comstock.
Speaker Change: Relishing, we're thankful for the incredible opportunity to unlock it.
Speaker Change: What we see is just tremendous well we love the chance.
Speaker Change: Everybody has given us.
Speaker Change: It was almost seven five years ago, when Jerry Jones, and his family shortage supporting and investing in the company and ultimately they own 71% of the company, but they asked three questions at that time. This is seven five years ago and what is your drilling inventory looked like if you drill a well you turn into sales immediately and <unk>.
Speaker Change: <unk> really materializes can you use that natural gas as feedstock gas.
Speaker Change: While those same three questions is what we ask ourself today over and over and over for this whole conference call. So we were really really come a long way in the seven five years, but we want to thank you.
Speaker Change: Our equity owners financial backers and all the service companies, we depend upon to create this value chain. Thank you.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
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Speaker Change: <unk>.
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Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].