04-16-2021, 06:45 AM
Comstock Resources - Ticker CRK - Catalyst May 4th, 2021 - Company Q1 2021 EPS maybe
<!-- SC_OFF --><div class="md"><p>This senate video just started floating around for Comstock Resources; information below is from the CFO's mouth. Go to hour 9 minute 30 for his spiel as all the information is pulled from his testimony. Ticker is CRK .</p> <p>Source: <a href="https://tlcsenate.granicus.com/MediaPlayer.php?view_id=49&clip_id=15395">https://tlcsenate.granicus.com/MediaPlayer.php?view_id=49&clip_id=15395</a></p> <p>Facts:</p> <p>500 Million Cubic Feet of Natty Gas a day for five days at $55 on average spot during the storm.</p> <p>500MCF = 500,000 BTU.</p> <p>500,000 BTU *55 * 5 = $137,500,000 in revenue in five days.</p> <p>The 500MCF amount checks out as that's about a third of their daily production which is what would be available to take advantage of the spot prices as about 60-66% of their production is contracted out at a given time.</p> <p>Giving their working interest is about 82%... the well royalties would be about 18% so they should get 82% of 137.5M or 112.75M. Now the cost of getting the gas to Texas during the storm were higher but I am willing to say they were not more than 1M a day... so thinking they walked away with about 107.75M in 5 days. Given they would have normally sold at around $3 per BTU at the time the extra NI is likely at least 107.75M - (500,000 *3*5) = 100.25M.</p> <p>Now the company has already started to leverage the storm windfall to refinance its debt at a cheaper interest rate and at a longer maturity and the extra cash inflow from this quarter will serve to strengthen their position. Their slide deck says savings of 45M in interest expense already. Bankers already started giving them cheaper debt immediately after the storm. So its likely the company will only continue to cut down its interest expense with this additional cash flow... which further supports the share price.</p> <p>Fully Diluted Share Count ~215,000,000 so 45M in savings in annual interest they already have disclosed = further 21 cents per share in earnings (just from less interest on same amount of debt aka refinancing).</p> <p>Street still has earnings at 12 cents per share for Q1 2021. They are asleep at the wheel and likely never sat through 9.5 hours of senate hearings on the 26th of February. Thinking the real numbers, all else equal, will be north of 50 cents for Q1 2021 alone. This is high for a company that is only trading at $5.00 a share. If it gets 50 cents Q1 and what the street lazily thinks of 15 cents on average for the next three quarters... 2021 is going to end up with 95 cents per share... on a $5 share price if we add the locked in interest savings that is 1.16 cents per share. This gives the company an estimated P/E of 4.3x... This is multibagger territory and the company already has most of its production hedged over 2.50 so the risk of shortfall in Q2/Q3/Q4 is mitigated if Nat Gas revisits the covid panic.</p> <p>Going to buy options around Q1 earnings date (May 4th, 2021). May the Fourth be with us research monkeys!
</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/AGeekforMoney"> /u/AGeekforMoney </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/mrq6w6/comstock_resources_ticker_crk_catalyst_may_4th/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/mrq6w6/comstock_resources_ticker_crk_catalyst_may_4th/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>This senate video just started floating around for Comstock Resources; information below is from the CFO's mouth. Go to hour 9 minute 30 for his spiel as all the information is pulled from his testimony. Ticker is CRK .</p> <p>Source: <a href="https://tlcsenate.granicus.com/MediaPlayer.php?view_id=49&clip_id=15395">https://tlcsenate.granicus.com/MediaPlayer.php?view_id=49&clip_id=15395</a></p> <p>Facts:</p> <p>500 Million Cubic Feet of Natty Gas a day for five days at $55 on average spot during the storm.</p> <p>500MCF = 500,000 BTU.</p> <p>500,000 BTU *55 * 5 = $137,500,000 in revenue in five days.</p> <p>The 500MCF amount checks out as that's about a third of their daily production which is what would be available to take advantage of the spot prices as about 60-66% of their production is contracted out at a given time.</p> <p>Giving their working interest is about 82%... the well royalties would be about 18% so they should get 82% of 137.5M or 112.75M. Now the cost of getting the gas to Texas during the storm were higher but I am willing to say they were not more than 1M a day... so thinking they walked away with about 107.75M in 5 days. Given they would have normally sold at around $3 per BTU at the time the extra NI is likely at least 107.75M - (500,000 *3*5) = 100.25M.</p> <p>Now the company has already started to leverage the storm windfall to refinance its debt at a cheaper interest rate and at a longer maturity and the extra cash inflow from this quarter will serve to strengthen their position. Their slide deck says savings of 45M in interest expense already. Bankers already started giving them cheaper debt immediately after the storm. So its likely the company will only continue to cut down its interest expense with this additional cash flow... which further supports the share price.</p> <p>Fully Diluted Share Count ~215,000,000 so 45M in savings in annual interest they already have disclosed = further 21 cents per share in earnings (just from less interest on same amount of debt aka refinancing).</p> <p>Street still has earnings at 12 cents per share for Q1 2021. They are asleep at the wheel and likely never sat through 9.5 hours of senate hearings on the 26th of February. Thinking the real numbers, all else equal, will be north of 50 cents for Q1 2021 alone. This is high for a company that is only trading at $5.00 a share. If it gets 50 cents Q1 and what the street lazily thinks of 15 cents on average for the next three quarters... 2021 is going to end up with 95 cents per share... on a $5 share price if we add the locked in interest savings that is 1.16 cents per share. This gives the company an estimated P/E of 4.3x... This is multibagger territory and the company already has most of its production hedged over 2.50 so the risk of shortfall in Q2/Q3/Q4 is mitigated if Nat Gas revisits the covid panic.</p> <p>Going to buy options around Q1 earnings date (May 4th, 2021). May the Fourth be with us research monkeys!
</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/AGeekforMoney"> /u/AGeekforMoney </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/mrq6w6/comstock_resources_ticker_crk_catalyst_may_4th/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/mrq6w6/comstock_resources_ticker_crk_catalyst_may_4th/">[comments]</a></span>Kind Regards R