Company: CRK
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000950170-25-024783
Chunk: 56

Company: COMSTOCK RESOURCES INC
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1
Chunk 56
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 the lease, by payment of delay rentals or by the exercise of contractual extension rights.

Markets and Customers

The market for our production of natural gas and oil depends on factors beyond our control, including the extent of domestic production and imports of natural gas and oil, the proximity and capacity of natural gas pipelines and other transportation facilities, demand for natural gas and oil, the marketing of competitive fuels and the effects of state and federal regulation. The natural gas and oil industry also competes with other industries in supplying the energy and fuel requirements of industrial, residential and commercial consumers along with electric generator customers.

Our natural gas production is primarily sold under contracts with various terms and priced on first of the month index prices or on daily spot market prices or fixed prices. We target selling approximately 70% to 75% of our natural gas on first of month index price, with the remaining volumes on daily spot market pricing. The percentage of natural gas sold on spot market pricing can be impacted when new wells commence production as such production is typically sold on daily spot market pricing during the month the well is first brought on line. Enterprise Products Operating and its subsidiaries and Venture Global LNG, Inc. accounted for 21% and 12%, respectively, of our total 2024 sales. The loss of any of these customers would not have a material adverse effect on us as there is an available market for our natural gas and oil production from other purchasers.

We have entered into longer-term transportation arrangements to ensure that we have adequate transportation to deliver our natural gas production in North Louisiana and East Texas to various markets. As an alternative to constructing our own gathering and treating facilities, we have entered into a variety of gathering and treating agreements with midstream companies to transport our natural gas to a central point or other long-haul natural gas pipelines. We currently have agreements with certain natural gas midstream companies to provide us with firm transportation for an average of approximately 1.7 Bcf per day in 2025 on the long-haul pipelines. To the extent we are not able to deliver the contracted natural gas volumes, we may be responsible for the transportation costs.

Competition

The natural gas and oil industry is highly competitive. Competitors include major oil companies, other independent energy companies and individual producers and operators, many of which have financial resources, personnel and facilities substantially greater than we do. We face intense competition for the acquisition of natural gas and oil properties and leases for natural gas and oil exploration.

Regulation

General.  Various aspects of our natural gas and oil operations are