10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter EndedSeptember 30, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-03262

COMSTOCK RESOURCES, INC.

(Exact name of registrant as specified in its charter)

NEVADA	94-1667468
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

5300 Town and Country Blvd., Suite 500, Frisco, Texas 75034

(Address of principal executive offices)

Telephone No.: (972) 668-8800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ☐	Accelerated filer  ☒	Non-accelerated filer ☐	Smaller reporting  company  ☐
Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes☐    No☒

The number of shares outstanding of the registrant's common stock, par value $0.50, as ofNovember 8, 2018 was 105,871,064.

COMSTOCK RESOURCES, INC.

QUARTERLY REPORT

For the Quarter Ended September 30, 2018

INDEX

	Page
PART I. Financial Information
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets as of September 30, 2018 (Successor) and December 31, 2017 (Predecessor)	4
Consolidated Statements of Operations – For the period from August 14, 2018 through September 30, 2018 (Successor), and for the periods from July 1, 2018 through August 13, 2018 (Predecessor) and January 1, 2018 through August 13, 2018 (Predecessor) and for the three and nine months ended September 30, 2017 (Predecessor)	5
Consolidated Statement of Stockholders' Equity (Deficit) – For the period from August 14, 2018 through September 30, 2018 (Successor) and for the period from January 1, 2018 through August 13, 2018 (Predecessor)	6
Consolidated Statements of Cash Flows – For the period from August 14, 2018 through September 30, 2018 (Successor) and for the period from January 1, 2018 through August 13, 2018 (Predecessor) and for the nine months ended September 30, 2017 (Predecessor)	7
Notes to Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosure About Market Risk	25
Item 4. Controls and Procedures	25
PART II. Other Information
Item 6. Exhibits	26
EX-31.1 Section 302 Certification of the Chief Executive Officer.
EX-31.2 Section 302 Certification of the Chief Financial Officer.
EX-32.1 Certification for the Chief Executive Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
EX-32.2 Certification for the Chief Financial Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
EX-101 Instance Document
EX-101 Schema Document
EX-101 Calculation Linkbase Document
EX-101 Labels Linkbase Document
EX-101 Presentation Linkbase Document
EX-101 Definition Linkbase Document

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

3

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	Successor			Predecessor
ASSETS	September 30, 2018			December 31, 2017
	(In thousands)
Cash and Cash Equivalents	$	31,780		$	61,255
Accounts Receivable:
Oil and gas sales		61,003			26,700
Joint interest operations		19,619			11,872
Derivative Financial Instruments		—			1,318
Assets Held For Sale		—			198,615
Other Current Assets		19,070			2,745
Total current assets		131,472			302,505
Property and Equipment:
Oil and gas properties, successful efforts method
Proved		1,568,504			2,631,750
Unproved		195,178			—
Other		4,440			18,918
Accumulated depreciation, depletion and amortization		(174,520	)		(2,042,739	)
Net property and equipment		1,593,602			607,929
Goodwill		349,667			—
Income Taxes Receivable		19,086			19,086
Other Assets		549			899
	$	2,094,376		$	930,419
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts Payable	$	124,008		$	126,034
Accrued Expenses		53,261			42,455
Derivative Financial Instruments		2,849			—
Total current liabilities		180,118			168,489
Long-term Debt		1,242,844			1,110,529
Deferred Income Taxes		145,565			10,266
Reserve for Future Abandonment Costs		4,738			10,407
Total liabilities		1,573,265			1,299,691
Commitments and Contingencies
Stockholders' Equity (Deficit):
Common stock — $0.50 par, 155,000,000 shares authorized, 105,879,064 shares issued and outstanding at September 30, 2018, 75,000,000 authorized, 15,427,561 shares issued and outstanding as of December 31, 2017		52,940			7,714
Common stock warrants		—			3,557
Additional paid-in capital		454,348			546,696
Accumulated earnings (deficit)		13,823			(927,239	)
Total stockholders' equity (deficit)		521,111			(369,272	)
	$	2,094,376		$	930,419

The accompanying notes are an integral part of these statements.

4

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended September 30,										Nine Months Ended September 30,
	Transition Period										Transition Period
	Successor			Predecessor				Predecessor			Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			2017
							(In thousands, except per share amounts)
Revenues:
Natural gas sales	$	36,393		$	32,089			$	56,164		$	36,393		$	147,897		$	147,541
Oil sales		33,730			499				10,647			33,730			18,733			34,542
Total oil and gas sales		70,123			32,588				66,811			70,123			166,630			182,083
Operating expenses:
Production taxes		4,051			707				1,490			4,051			3,659			3,730
Gathering and transportation		3,450			3,109				4,755			3,450			11,841			12,428
Lease operating		7,016			3,418				9,359			7,016			21,139			28,681
Depreciation, depletion and amortization		17,820			14,082				32,783			17,820			68,032			93,009
General and administrative		3,303			3,044				6,174			3,303			15,699			19,134
Loss (gain) on sale of oil and gas properties		(98	)		—				1,060			(98	)		35,438			1,060
Total operating expenses		35,542			24,360				55,621			35,542			155,808			158,042
Operating income		34,581			8,228				11,190			34,581			10,822			24,041
Other income (expenses):
Gain (loss) from derivative financial instruments		(2,015	)		(83	)			1,430			(2,015	)		881			14,585
Other income		42			284				170			42			677			398
Interest expense		(14,845	)		(22,140	)			(37,595	)		(14,845	)		(101,203	)		(107,250	)
Transaction costs		—			(2,549	)			—			—			(2,866	)		—
Total other income (expenses)		(16,818	)		(24,488	)			(35,995	)		(16,818	)		(102,511	)		(92,267	)
Income (loss) before income taxes		17,763			(16,260	)			(24,805	)		17,763			(91,689	)		(68,226	)
Benefit from (provision for) income taxes		(3,940	)		(605	)			69			(3,940	)		(1,065	)		(883	)
Net income (loss)	$	13,823		$	(16,865	)		$	(24,736	)	$	13,823		$	(92,754	)	$	(69,109	)
Net income (loss) per share – basic and diluted	$	0.13		$	(1.09	)		$	(1.67	)	$	0.13		$	(6.08	)	$	(4.74	)
Weighted average shares outstanding –
Basic		105,448			15,468				14,796			105,448			15,262			14,591
Diluted		105,463			15,468				14,796			105,463			15,262			14,591

The accompanying notes are an integral part of these statements.

5

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

		Common Stock (Shares)		Common Stock – Par Value			Common Stock Warrants			Additional Paid-in Capital			Accumulated Earnings (Deficit)			Total
	(In thousands)
Predecessor Company:
Balance at January 1, 2018		15,428		$	7,714		$	3,557		$	546,696		$	(927,239	)	$	(369,272	)
Stock-based compensation		623			311			—			3,601			—			3,912
Income tax withholdings related to equity awards		(53	)		(26	)		—			(343	)		—			(369	)
Common stock warrants exercised		379			189			(3,247	)		3,058			—			—
Common stock issued for debt conversions		2			1			—			28			—			29
Net loss		—			—			—			—			(92,754	)		(92,754	)
Balance at August 13, 2018		16,379		$	8,189		$	310		$	553,040		$	(1,019,993	)	$	(458,454	)
Successor Company:
Successor common stock		16,379		$	8,189		$	310		$	132,032		$	—		$	140,531
Vesting of equity awards		1,029			514			—			8,312			—			8,826
Income tax withholdings related to equity awards		(547	)		(272	)		—			(4,423	)		—			(4,695)
Jones contribution		88,571			44,286			—			318,406			—			362,692
Stock-based compensation		423			211			—			118			—			329
Stock issuance costs		—			—			—			(395	)		—			(395	)
Common stock warrants exercised and expired		24			12			(310	)		298			—			—
Net income		—			—			—			—			13,823			13,823
Balance at September 30, 2018		105,879		$	52,940		$	—		$	454,348		$	13,823		$	521,111

The accompanying notes are an integral part of these statements.

6

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Transition Period
	Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
				(In thousands)
Cash Flows from Operating Activities:
Net income (loss)	$	13,823		$	(92,754	)	$	(69,109	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes		3,883			1,052			768
Loss (gain) on sale of oil and gas properties		(98	)		35,438			1,060
Depreciation, depletion and amortization		17,820			68,032			93,009
(Gain) loss on derivative financial instruments		2,015			(881	)		(14,585	)
Cash settlements of derivative financial instruments		191			2,842			5,352
Amortization of debt discount, premium and issuance costs		822			29,457			24,914
Interest paid in-kind		—			25,004			28,194
Stock-based compensation		329			3,912			4,455
Decrease (increase) in accounts receivable		(44,884	)		2,834			(11,952	)
Decrease (increase) in other current assets		(1,326	)		337			(670	)
Increase in accounts payable and accrued expenses		11,034			10,462			29,327
Net cash provided by operating activities		3,609			85,735			90,763
Cash Flows From Investing Activities:
Acquisitions and capital expenditures		(59,017	)		(150,106	)		(132,493	)
Prepaid drilling costs		(4,768	)		(3,692	)		—
Proceeds from sale of oil and gas properties		13,739			103,593			1,528
Net cash used for investing activities		(50,046	)		(50,205	)		(130,965	)
Cash Flows from Financing Activities:
Borrowings		450,000			865,577			—
Retirement of long-term debt		(1,291,352	)		(49,679	)		—
Jones contribution		36,365			—			—
Common stock warrants exercised		—			—			2
Debt and stock issuance costs		(6,288	)		(18,127	)		—
Income taxes related to equity awards		(4,695	)		(369	)		(312	)
Net cash provided by (used for) financing activities		(815,970	)		797,402			(310	)
Net increase (decrease) in cash and cash equivalents		(862,407	)		832,932			(40,512	)
Cash and cash equivalents, beginning of period		894,187			61,255			65,904
Cash and cash equivalents, end of period	$	31,780		$	894,187		$	25,392

The accompanying notes are an integral part of these statements.

7

COMSTOCK RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2018

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –

Basis of Presentation

These unaudited consolidated financial statements include the accounts of Comstock and its wholly-owned subsidiaries. In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Comstock Resources, Inc. and its subsidiaries (collectively, "Comstock" or the "Company") as of September 30, 2018, and the related results of operations and cash flows for the Predecessor and Successor periods being presented.  Net loss and comprehensive loss are the same in all periods presented.  All adjustments are of a normal recurring nature unless otherwise disclosed.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock's Annual Report on Form 10-K for the year ended December 31, 2017.

The results of operations for the Predecessor and Successor periods up to and through September 30, 2018 are not necessarily an indication of the results expected for the full year.

On August 14, 2018, Arkoma Drilling, L.P. and Williston Drilling, L.P. (collectively, the "Jones Partnerships") contributed certain oil and gas properties in North Dakota and Montana (the "Bakken Shale Properties") in exchange for common stock representing 84% of the Company's outstanding common stock (the "Jones Contribution"). The Jones Partnerships are wholly owned and controlled by Dallas businessman Jerry Jones and his children (collectively, the "Jones Group").  The Jones Partnerships received 88,571,429 newly issued shares of common stock based on an agreed upon share price of $7.00 per share.   

The Company assessed the Bakken Shale Properties to determine whether they meet the definition of a business under US generally accepted accounting principles, determining that they do not meet the definition of a business. As a result, the Jones Contribution is not being accounted for as a business combination. Upon the issuance of the shares of Comstock common stock, the Jones Group obtained control over Comstock through their ownership of the Jones Partnerships. Through the Jones Partnerships, the Jones Group owns a majority of the voting common stock as well as the ability to control the composition of the majority of the board of directors of Comstock. As a result of the change of control that occurred upon the issuance of the common stock, the Jones Group controls Comstock and, thereby, continues to control the Bakken Shale Properties.

Accordingly, the basis of the Bakken Shale Properties recognized by Comstock is the historical basis of the Jones Group. The historical cost basis of the Bakken Shale properties contributed was $397.6 million, which was comprised of $554.3 million of capitalized costs less $156.7 million of accumulated depletion, depreciation and amortization.  The change in control of Comstock results in a new basis for Comstock as the company has elected to apply pushdown accounting pursuant to ASC 805, Business Combinations. The new basis is pushed down to Comstock for financial reporting purposes, resulting in Comstock's assets, liabilities and equity accounts being recognized at fair value upon the closing of the Jones Transactions.

References to "Successor" or "Successor Company" relate to the financial position and results of operations of the Company subsequent to August 13, 2018.  Reference to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company on or prior to August 13, 2018. The Company's consolidated financial statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented after August 13, 2018 and dates prior thereto.

8

The estimated fair value of Comstock's assets and liabilities and the resulting goodwill at the date of the transaction were as follows:

	(In thousands)
Fair Value of Comstock's common stock	$	149,357
Fair Value of Liabilities Assumed —
Current Liabilities		180,452
Long-Term Debt		2,059,560
Deferred Income Taxes		63,708
Reserve for Future Abandonment Costs		4,440
Net Liabilities Assumed		2,308,160
Fair Value of Assets Acquired —
Current Assets		936,026
Oil and Gas Properties		1,147,749
Other Property & Equipment		4,440
Income Taxes Receivable		19,086
Other Assets		549
Total Assets		2,107,850
Goodwill	$	349,667

Thetable above represents the preliminary allocation of fair value related to the assets acquired and the liabilities assumed based on the fair value of Comstock. Certain data necessary to complete the fair value allocation is not yet available or is in the process of being finalized, and includes, but is not limited to, final income tax returns. We expect to complete the purchase price allocation during the twelve month period following the Jones Contribution date, during which time the value of the assets and liabilities, including goodwill, may be revised as appropriate.

Goodwill recognized is primarily attributable to the excess of the fair value of Comstock's common stock over the identifiable assets acquired net of liabilities assumed, measured in accordance with generally accepted accounting principles in the United States. The fair value of oil and gas properties, a Level 3 measurement, was determined using discounted cash flow valuation methodology.  Key inputs to the valuation included average oil prices of $79.72 per barrel, average natural gas prices of $3.87 per thousand cubic feet and discount factors of 10% - 25%. The combination of the Bakken Shale Properties with Comstock's Haynesville shale properties results in a Company with adequate resources and liquidity to fully exploit its Haynesville/Bossier shale asset base and to continue to expand its opportunity set with future acquisitions and leasing activity in the basin.

Transaction-related costs (i.e., advisory, legal, accounting, valuation, other professional or consulting fees) totaling approximately $2.6 million are not included as a component of consideration transferred but are accounted for as expenses in the predecessor periods in which the costs are incurred and the services received.  Costs incurred associated with the issuance of common stock have been accounted for as a reduction of additional paid-in capital.

The successful closing of the Jones Contribution triggered payment of an aggregate of $8.1 million including success fees to financial advisors and certain other fees under our licenses for technical data.  These costs were contingent on the consummation of the transactions, all of which were interdependent and all of which had to close in order to meet the legal requirements of the contribution agreement.  None of these fees would have been incurred otherwise.  The Jones Contribution also caused a change in control, upon which restricted shares granted to employees and directors vested, and performance share units granted to executive officers vested at the maximum number of shares granted.  The Company had previously recognized stock-based compensation expense of $7.2 million related to these restricted shares and performance share units. The Company did not recognize an expense for the remaining $11.9 million of unrecognized stock-based compensation expense.  The Company's accounting policy for any cost triggered by the consummation of the Jones Contribution was to recognize the cost when the Jones Contribution was consummated.  Accordingly, unrecognized stock-based compensation expense has not been recorded in the Consolidated Statement of Operations for the Predecessor period since that statement depicts the results of operations just prior to consummation of the transaction.  In addition, since the Successor period reflects the effects of push-down accounting, these costs have also not been recorded as an expense in the Successor period.  These costs are being considered in the purchase accounting adjustments in arriving at the fair value of the liabilities assumed since they were incurred only in the event the transactions successfully closed, and they are not clearly identifiable to operations either prior to or subsequent to the Jones Contribution.

Under the terms of the Jones Contribution, April 1, 2018 was the effective date for allocation of revenues and expenses related to net cash of the Bakken Shale Properties, and Comstock will receive $43.2 million related to net cash flow from April 1, 2018 to August 13, 2018 from the Jones Partnerships which has been accounted as part of the Jones Contribution.

9

These financial statements are presented on the basis of the Bakken Shale Properties being contributed to Comstock in exchange for common stock of Comstock. Comstock is a corporation, which is treated as a taxable C corporation and thus is subject to federal and state income taxes. A deferred tax liability of approximately $77.9 million has been recognized related to the tax basis of the Bakken Shale Properties long-lived assets being less than the book basis in those assets. The recording of this deferred tax liability has been treated as an adjustment to additional paid-in capital in these financial statements.The change in control of Comstock results in a new basis for Comstock as the company is applying pushdown accounting pursuant to ASC 805, Business Combinations. The new basis is pushed down to Comstock for financial reporting purposes, resulting in Comstock's assets, liabilities and equity accounts being recognized at fair value upon the closing of the Jones Contribution. A deferred tax liability, net of valuation allowance, of $52.4 million has been recognized related to the change in the basis for financial reporting purposes as compared to the tax basis of the historical Comstock assets.

The unaudited pro forma financial information presented below sets forth the Company's historical statements of operations for the periods indicated and gives effect to the Jones Contribution and the Company's debt refinancing transactions as if "push down" accounting had been applied as of January 1, 2017.  Such information is presented for comparative purposes to the Consolidated Statements of Operations only and does not purport to represent what the Company's results of operations would actually have been had these transactions occurred on the date indicated or to project its results of operations for any future period or date.

	Pro Forma
	Nine Months Ended
	September 30,
	2018 (1)			2017
Revenues:
Natural gas sales	$	196,049		$	158,679
Oil sales		194,328			159,812
Total oil and gas sales		390,377			318,491
Operating expenses:
Production taxes		22,168			16,722
Gathering and transportation		15,291			12,428
Lease operating		44,103			43,309
Depreciation, depletion and amortization		132,234			148,100
General and administrative		19,319			19,134
Loss on sale of oil and gas properties		35,340			1,060
Total operating expenses		268,455			240,753
Operating income		121,922			77,738
Other income (expenses):
Gain (loss) from derivative financial instruments		(1,134	)		14,585
Other income		719			398
Interest expense		(80,437	)		(89,063	)
Total other income (expenses)		(80,852	)		(74,080	)
Income before income taxes		41,070			3,658
Benefit from (provision for) income taxes		(10,818	)		(2,211	)
Net Income	$	30,252		$	1,447
Net income per share – basic and diluted	$	0.29		$	0.01
Weighted average shares outstanding –
Basic		105,448			105,095
Diluted		105,463			105,574
(1)Excludes $2.6 million of transaction costs associated with the Jones Contribution.

Property and Equipment

The Company follows the successful efforts method of accounting for its oil and gas properties. Costs incurred to acquire oil and gas leasehold are capitalized.

On April 27, 2018, Comstock completed the sale of its producing Eagle Ford shale oil and gas properties in McMullen, LaSalle,

10

Frio, Atascosa, Wilson, and Karnes counties, Texas for $125.0 million.  The sale was effective November 1, 2017 and the estimated net cash flow from the properties from November 2017 to April 2018 was paid to the buyer at closing.  After the sale, the Company had approximately 8,400 net undeveloped acres that are prospective for Eagle Ford shale development.  During the predecessor period January 1, 2018 through August 13, 2018, the Company recognized a loss on sale of oil and gas properties of$32.7 million to reduce the carrying value of its assets held for sale to their fair value less costs to sell andto adjust the carrying value of the undeveloped acreage retained to theirthen fair value of $55.0 million which has been included in proved oil and gas properties. The fair value of the oil and gas properties retained, a Level 3 measurement, was determined using the discounted cash flow valuation methodology applied by Comstock in assessing oil and gas properties for impairment.  Key inputs to the valuation included average oil prices of $72.03 per barrel, average natural gas prices of $4.31 per thousand cubic feet and discount factors of 20% -25%. The Company sold part of the Eagle Ford shale undeveloped acreage in September 2018 for $13.7 million.  Also included in the loss on sale for thePredecessor period January 1, 2018through August 13, 2018 is a loss of $2.7 million resulting from a final settlement for a property sale completed in 2012.

Results of operations for properties that were sold were as follows:

	Predecessor			Predecessor			Predecessor
	Three Months Ended September 30, 2017			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
Total oil and gas sales	$	11,079		$	17,747		$	36,495
Total operating expenses(1)		(11,664	)		(6,134	)		(38,262	)
Operating income (loss)	$	(585	)	$	11,613		$	(1,767	)

(1)Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense.  No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale.

On July 31, 2018, the Company acquired oil and gas properties in North Louisiana and Texas for $39.3 million.  These properties consist of approximately 23,000 gross acres (12,000 net) and include 120 (26.2 net) producing natural gas wells, 49 (14.7 net) which produce from the Haynesville shale. All of the acreage acquired is held by production. Comstock has identified 112 (31.0 net) potential drilling locations on this acreage of which 21 (17.9 net) would be operated by Comstock.      

On August 14, 2018, in connection with the Jones Contribution, the strategic drilling venture previously entered into by the Company and Arkoma Drilling, LP was terminated and Comstock re-acquired working interests in wells drilled under the joint venture for $17.9 million representing the costs paid by Arkoma Drilling, LP.

The Company assesses the need for an impairment of the capitalized costs for its proved oil and gas properties on a property basis.  No impairments were recognized to adjust the carrying value of the Company's proved oil and gas properties during any of the periods presented. Unproved oil and gas properties are also periodically assessed and any impairment in value is charged to expense. The costs of unproved properties are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis as wells are drilled on these properties.

The Company determines the fair values of its oil and gas properties using a discounted cash flow model and proved and risk-adjusted probable oil and natural gas reserves.  Undrilled acreage can also be valued based on sales transactions in comparable areas.  Significant Level 3 assumptions associated with the calculation of discounted future cash flows included in the cash flow model include management's outlook for oil and natural gas prices, production costs, capital expenditures, and future production as well as estimated proved oil and gas reserves and risk-adjusted probable oil and natural gas reserves.  Management's oil and natural gas price outlook is developed based on third-party longer-term price forecasts as of each measurement date.  The expected future net cash flows are discounted using an appropriate discount rate in determining a property's fair value.

It is reasonably possible that the Company's estimates of undiscounted future net cash flows attributable to its oil and gas properties may change in the future.  The primary factors that may affect estimates of future cash flows include future adjustments, both positive and negative, to proved and appropriate risk-adjusted probable oil and gas reserves, results of future drilling activities, future prices for oil and natural gas, and increases or decreases in production and capital costs.  As a result of these changes, there may be future impairments in the carrying values of these or other properties.

11

Goodwill

Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets related to the Jones Transactions. The Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct an annual review of goodwill for impairment.  The Company will perform its first annual review of goodwill impairment starting on October 1, 2019.  The Company has goodwill of $349.7 million as of September 30, 2018 that was recorded in connection with the Jones Contribution.

Accrued Expenses

Accrued expenses at September 30, 2018 and December 31, 2017 consist of the following:

	Successor		Predecessor
	As of September 30, 2018		As of December 31, 2017
	(In thousands)
Accrued drilling costs	$	18,811	$	5,874
Accrued interest payable		14,328		21,277
Accrued transportation costs		5,022		3,269
Accrued employee compensation		3,841		6,449
Accrued ad valorem taxes		5,021		—
Accrued lease operating expenses		3,311		68
Asset retirement obligation – assets held for sale		—		4,557
Other		2,927		961
	$	53,261	$	42,455

Reserve for Future Abandonment Costs

Comstock's asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented:

	Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
			(In thousands)
Future abandonment costs — beginning of period	$	4,683		$	10,407		$	15,804
Accretion expense		45			346			645
New wells placed on production		10			17			5
Liabilities settled and assets disposed of		—			(87	)		(356	)
Future abandonment costs — end of period	$	4,738		$	10,683		$	16,098

Derivative Financial Instruments and Hedging Activities

All of the Company's derivative financial instruments are used for risk management purposes and, by policy, none are held for trading or speculative purposes.  Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company's derivative financial instruments involve payment or receipt of premiums.  The Company classifies the fair value amounts of derivative financial instruments as net current or noncurrent assets or liabilities, whichever the case may be, by commodity and counterparty.

12

All of Comstock's natural gas derivative financial instruments are tied to the Henry Hub-NYMEX price index and all of its crude oil derivative financial instruments are tied to the WTI-NYMEX index price. The Company had the following outstanding derivative financial instruments for natural gas price risk management at September 30, 2018:

	Future Production Period
	Three Months Ending December 31, 2018		Year Ending December 31, 2019		Total
Natural Gas Swap contracts:
Volume (MMbtu)		5,400,000		4,200,000		9,600,000
Average Price per MMbtu		$3.00		$3.00		$3.00
Natural Gas Collar contracts:
Volume (MMbtu)		6,300,000		13,200,000		19,500,000
Price per MMbtu
Average Ceiling		$3.40		$3.40		$3.40
Average Floor		$2.50		$2.50		$2.50
Crude Oil Collar contracts:
Volume (Barrels)		315,000		855,000		1,170,000
Price per Barrel
Average Ceiling		$77.85		$77.98		$77.94
Average Floor		$55.00		$55.00		$55.00

None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following:

Type	Consolidated Balance Sheet Location	Fair Value			Gross Amounts Offset in the Consolidated Balance Sheet					Net Fair Value Presented in the Consolidated Balance Sheet
				(in thousands)
Successor Fair Value of Derivative Instruments as of September 30, 2018
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments  – current		$18	$		(18		)	$		—
Liability Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$854	$		(18		)			836
Crude oil price derivatives	Derivative Financial Instruments – current		$2,013	$			—					2,013
										$		2,849
Predecessor Fair Value of Derivative Instruments as of December 31, 2017
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$1,318	$		—			$		1,318

The Company recognized cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). Gains and lossesrelated to the change in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:

	Successor			Predecessor				Predecessor		Successor			Predecessor		Predecessor
Location of Gain/(Loss) Recognized in Earnings on Derivatives	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				Three Months Ended September 30, 2017		For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
							(In thousands)
Gain (loss) from derivative financial instruments	$	(2,015	)	$	(83	)		$	1,430	$	(2,015	)	$	881	$	14,585

13

Stock-Based Compensation

Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period. The Company recognized $0.3 million of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and performance stock units ("PSUs") to its employees and directors during the Successor period August 14, 2018 through September 30, 2018 and $0.8 million during the predecessor period July 1 through August 13, 2018. For the predecessor periods of the three and nine months ended September 30, 2017, the Company recognized $1.7 million and $4.5 million, respectively, of stock-based compensation expense.  

During the period July 1, 2018 through August 13, 2018, the Predecessor Company granted 100,226 shares of restricted stock with a grant date fair value of $0.9 million, or $8.73 per share, to its independent directors. The change of control that occurred due to the Jones Contribution resulting in the vesting of all then outstanding restricted stock grants of 904,181 shares.  

During the successor period August 14, 2018 through September 30, 2018, the Company granted 422,545 shares of restricted stock with a grant date fair value of $3.7 million, or $8.70 per share, to its employees. The fair value of each restricted share on the date of grant was equal to its market price. Total unrecognized compensation cost related to unvested restricted stock grants of $3.5 million as of September 30, 2018 is expected to be recognized over a period of 2.9 years.

The change of control that occurred due to the Jones Contribution also resulted in the vesting of all then outstanding performance share units at the maximum amount that could be earned, and a total of 1,028,672 shares of common stock were issued to employees.

During the successor period August 14, 2018 through September 30, 2018, the Company granted 335,545 PSUs with a grant date fair value of $4.3 million, or $12.93 per unit, to its employees, all of which were outstanding as of September 30, 2018. The number of shares of common stock to be issued related to the PSUs is based on the Company's stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 671,090 shares of common stock. Total unrecognized compensation cost related to these grants of $4.2 million as of September 30, 2018 is expected to be recognized over a period of 2.9 years.  

Revenue Recognition

On January 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09").  Comstock adopted this standard using the modified retrospective method of adoption, and it applied the ASU only to contracts that were not completed as of January 1, 2018. Upon adoption, there were no adjustments to the opening balance of equity.

Comstock produces oil and natural gas and reports revenues separately for each of these two primary products in its statements of operations.  Revenues are recognized upon the transfer of produced volumes to the Company's customers, who take control of the volumes and receive all the benefits of ownership upon delivery at designated sales points.   Payment is reasonably assured upon delivery of production.  All sales are subject to contracts that have commercial substance, contain specific pricing terms, and define the enforceable rights and obligations of both parties.  These contracts typically provide for cash settlement within 25 days following each production month and are cancellable upon 30 days' notice by either party.  Prices for sales of oil and natural gas are generally based upon terms that are common in the oil and gas industry, including index or spot prices, location and quality differentials, as well as market supply and demand conditions.  As a result, prices for oil and natural gas routinely fluctuate based on changes in these factors.  Each unit of production (barrel of crude oil and thousand cubic feet of natural gas) represents a separate performance obligation under the Company's contracts since each unit has economic benefit on its own and each is priced separately according to the terms of the contracts.

Comstock has elected to exclude all taxes from the measurement of transaction prices, and its revenues are reported net of royalties and exclude revenue interests owned by others because the Company acts as an agent when selling crude oil and natural gas, on behalf of royalty owners and working interest owners.  Revenue is recorded in the month of production based on an estimate of the Company's share of volumes produced and prices realized.  The Company recognizes any differences between estimates and actual amounts received in the month when payment is received.  Historically, differences between estimated revenues and actual revenue received have not been significant.  The amount of oil or natural gas sold may differ from the amount to which the Company is entitled based on its revenue interests in the properties. The Company did not have any significant imbalance positions at December 31, 2017 or September 30, 2018. Sales of oil and natural gas generally occur at or near the wellhead. When sales of oil and gas occur at locations other than the wellhead, the Company accounts for costs incurred to transport the production to the delivery point as gathering and transportation expenses.  The Company has recognized accounts receivable of $61.0 million as of September 30, 2018 from customers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists.

14

Income Taxes

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. In recording deferred income tax assets, the Company considers whether it is more likely than not that some portion or all of its deferred income tax assets will be realized in the future.  The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible.  The Company believes that, after considering all the available objective evidence, historical and prospective, with greater weight given to historical evidence, management is not able to determine that it is more likely than not that all of its deferred tax assets will be realized.  As a result, the Company established valuation allowances for its deferred tax assets and U.S. federal and state net operating loss carryforwards that are not expected to be utilized due to the uncertainty of generating taxable income prior to the expiration of the carryforward periods.   

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

	Three Months ended September 30,									Nine Months ended September 30,
	Transition Period									Transition Period
	Successor		Predecessor				Predecessor			Successor		Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018			2017
						(In thousands)
Current - State	$	57	$	(22	)		$	18		$	57	$	13		$	115
- Federal		—		—				—			—		—			—
Deferred  - State		20		(309	)			(87	)		20		(1,360	)		768
- Federal		3,863		936				—			3,863		2,412			—
	$	3,940	$	605			$	(69	)	$	3,940	$	1,065		$	883

The difference between the Company's effective tax rate and the 21% federal statutory rate in effect in 2018 and the 35% rate in effect in 2017 is caused by valuation allowances on deferred taxes and state taxes. The impact of these items varies based upon the Company's projected full year loss and the jurisdictions that are expected to generate the projected losses.

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

	Three Months ended September 30,										Nine Months ended September 30,
	Transition Period										Transition Period
	Successor			Predecessor				Predecessor			Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			2017
							(In thousands)
Tax at statutory rate		21.0	%		21.0	%			35.0	%		21.0%			21.0	%		35.0	%
Tax effect of:
State income taxes, net of federal benefit		2.0			4.5				3.8			2.0			3.9			4.1
Valuation allowance on deferred tax assets		(0.6	)		(21.1	)			(37.8	)		(0.6	)		(24.1	)		(39.2	)
Nondeductible stock-based compensation		(0.2	)		(0.7	)			(0.7	)		(0.2	)		(0.7	)		(1.1	)
Other		—			(7.4	)			—			—			(1.3	)		(0.1	)
Effective tax rate		22.2	%		(3.7	)%			0.3	%		22.2	%		(1.2	)%		(1.3	)%

15

The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. Among the other significant tax law changes that potentially affect the Company are the elimination of the corporate alternative minimum tax ("AMT"), changes that require operating losses incurred in 2018 and beyond be carried forward indefinitely with no carryback up to 80% of taxable income in a given year, and limitations on the deduction for interest expense incurred in 2018 or later for amounts in excess of 30% of its adjusted taxable income (defined as taxable income before interest and net operating losses).  For tax years beginning before January 1, 2022, the adjusted taxable income for these purposes is also adjusted to exclude the impact of depreciation, depletion and amortization.  The Tax Cuts and Jobs Act preserved deductibility of intangible drilling costs for federal income tax purposes, which allows the Company to deduct a portion of drilling costs in the year incurred and minimizes current taxes payable in periods of taxable income.  At September30, 2018, the Company has not completed its accounting for the tax effects of enactment of the Tax Cuts and Jobs Act; however, it has made reasonable estimates of the effects on its existing deferred tax balances.  The Company has remeasured certain deferred federal tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.  The provisional amount recognized at December 31, 2017 related to the remeasurement of its deferred federal tax balance was $140.4 million, which was subject to a valuation allowance. The Tax Cuts and Jobs Act also repealed the AMT for tax years beginning on or after January 1, 2018 and provides that existing AMT credit carryforwards can be utilized to offset federal taxes for any taxable year.  In addition, 50% of any unused AMT credit carryforwards can be refunded during tax years 2018 through 2020.  The Company reclassified $19.1 million to a non-current receivable at December 31, 2017 representing the amount of AMT that isnow refundable through 2021.  The Company is still analyzing certain aspects of the Tax Cuts and Jobs Act, and refining its calculations, which could potentially affect the measurement of those balances or potentially give rise to new deferred tax amounts.  Comstock's estimates may also be affected in the future as the Company gains a more thorough understanding of the Tax Cuts and Jobs Act, and how the individual states are implementing this new law.

The shares of common stock issued as a result of the Jones Transaction triggered an ownership change under Section 382 of the Internal Revenue Code. As a result, Comstock's ability to use net operating losses ("NOLs") to reduce taxable income is generally limited to an annual amount based on the fair market value of its stock immediately prior to the ownership change multiplied by the long-term tax-exempt interest rate. The Company's NOLs are estimated to be limited to $3.3 million a year as a result of this limitation.  In addition to this limitation, IRC Section 382 provides that a corporation with a net unrealized built-in gain immediately before an ownership change may increase its limitation by the amount of recognized built-in gain recognized during a recognition period, which is generally the five-year period immediately following an ownership change. Based on the fair market value of the Company's common stock immediately prior to the ownership change, Comstock believes that it has a net unrealized built-in gain which will increase the Section 382 limitation during the five-year recognition period.  

NOLs that exceed the Section 382 limitation in any year continue to be allowed as carry forwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. NOLs incurred prior to 2018 generally have a 20-year life until they expire.  NOLs generated in 2018 and after would be carried forward indefinitely.  Comstock's use of new NOLs arising after the date of an ownership change would not be affected by the 382 limitation. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carry forward periods, then it will lose the ability to apply those NOLs as offsets to future taxable income.

The Company's federal income tax returns for the years subsequent to December 31, 2014 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2012. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.

Fair Value Measurements

The Company holds or has held certain financial assets and liabilities that are required to be measured at fair value.  These include cash and cash equivalents held in bank accounts and derivative financial instruments in the form of oil and natural gas price swap agreements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements:

16

Level 1 — Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2 — Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3 — Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions.

The Company's cash and cash equivalents valuation is based on Level 1 measurements.  The Company's oil and natural gas price swap agreements and its natural gas price collars were not traded on a public exchange, and their value is determined utilizing a discounted cash flow model based on inputs that are readily available in public markets and, accordingly, the valuation of these swap agreements, is categorized as a Level 2 measurement.  There are no financial assets or liabilities accounted for at fair value as of September 30, 2018 that are a Level 3 measurement.

At September 30, 2018, the Company had a liability of $2.8 million recorded for the fair value of its oil and natural gas swaps and collars.  At December 31, 2017, the Company had assets recorded for the fair value of its natural gas price swap agreements of $1.3 million.  There were no offsetting swap positions in 2018 or 2017. The change in fair value of these natural gas swaps and collars was recognized as a gain or loss and included as a component of other income (expense).

As of September 30, 2018, the Company's fixed rate debt had a carrying value of $816.3 million and a fair value of $850.0 million.  The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2018, a Level 2 measurement.  The fair value of the floating rate debt outstanding approximated its carrying value, a Level 2 measurement.

Earnings Per Share

Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participating securities and included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company's common stock that may range from zero to up to two times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. The shares that would have been issuable upon exercise of the conversion rights contains in the Predecessor Company's convertible debt for each period are based on the if-converted method for computing potentially dilutive shares of common stock that could be issued upon conversion. None of the Company's participating securities participate in losses and as such are excluded from the computation of basic earnings per share during periods of net losses.  

Basic and diluted income (loss) per share were determined as follows:

	Successor
	For the Period from August 14, 2018 through September 30, 2018
	Income			Shares		Per Share
	(In thousands, except per share amounts)
Net income attributable to common stock	$	13,823
Income allocable to unvested restricted shares		(51	)
Basic income attributable to common stock		13,772			105,448	$	0.13
Effect of Dilutive Securities:
Income allocable to unvested restricted shares		—			15
Diluted income attributable to common stock		13,772			105,463	$	0.13

17

	Predecessor
	For the Period from July 1, 2018 through August 13, 2018								Three Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(16,865	)		15,468	$	(1.09	)	$	(24,736	)		14,796	$	(1.67	)

	Predecessor
	For the Period from January 1, 2018 through August 13, 2018								Nine Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(92,754	)		15,262	$	(6.08	)	$	(69,109	)		14,591	$	(4.74	)

Basic and diluted per share amounts are the same for the predecessor periods due to the net loss in those periods.

At September 30, 2018 and December 31, 2017, 422,545 and 619,867 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a nonforfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company's stockholders.

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

Three Months ended September 30,

Nine Months ended September 30,

Successor

Predecessor

Predecessor

Successor

Predecessor

Predecessor

For the Period from August 14, 2018 through September 30, 2018

For the Period from July 1, 2018 through August 13, 2018

2017

For the Period from August 14, 2018 through September 30, 2018

For the Period from January 1, 2018 through August 13, 2018

2017

(In thousands)

Unvested restricted stock

396

813

666

396

839

612

All unvested PSUs, warrants exercisable into common stock and contingently issuable shares related to the convertible debt that would be dilutive in the computation of earnings per share were as follows:

	Three Months ended September 30,							Nine Months ended September 30,
	Successor		Predecessor			Predecessor		Successor		Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018			2017		For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018		2017
					(In thousands except per share/unit data)
Weighted average warrants for common stock		15		42			415		15		142		479
Weighted average exercise price per share	$	0.01	$	0.01		$	0.01	$	0.01	$	0.01	$	0.01
Weighted average PSUs		315		514			303		315		476		281
Weighted average grant date fair value per unit	$	12.93	$	13.83		$	17.12	$	12.93	$	13.83	$	17.12
Weighted average contingently convertible shares		—		40,631			37,624		—		39,819		36,676
Weighted average conversion price per share	$	—	$	12.32		$	12.32	$	—	$	12.32	$	12.32

All restricted shares, warrants, PSUs and potentially dilutive shares from conversion of senior notes in the Predecessor periods presented were anti-dilutive and excluded from the computation of loss per share.

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

18

Cash payments made for interest and income taxes for the nine months endedSeptember 30, 2018 and 2017, respectively, were as follows:

	Successor			Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
			(In thousands)
Interest payments	$	1,999		$	36,187	$	72,913
Income tax payments	$	—		$	2	$	3

Interest paid in-kind related to the Predecessor Company's convertible notes was $25.0 million during the period January 1, 2018 through August 13, 2018 and $28.2 million during the nine months ended September 30, 2017.

Recent Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company has initially recognized goodwill in its financial statements for the quarter ended September 30, 2018 and it will assess the impact of ASU 2017-04 on its financial statements when it performs its initial annual impairment assessment.

On January 1, 2018, the Company adopted ASU 2014-09, which supersedes nearly all existing revenue recognition guidance under existing generally accepted accounting principles.  This new standard is based upon the principal that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  Comstock adopted this standard using the modified retrospective method of adoption and it applied the ASU only to contracts that were not completed as of January 1, 2018.  Upon adoption, there were no adjustments to the opening balance of equity and the Company does not expect the standard to have a significant effect on its results of operations, liquidity or financial position.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02").  ASU 2016-02 requires lessees to include most leases on their balance sheets, but recognize lease costs in their financial statements in a manner similar to accounting for leases prior to ASC 2016-02.  ASU 2016-02 is effective for annual periods ending after December 15, 2018 and interim periods thereafter.  Early adoption is permitted.  The Company has analyzed its major contracts for indications that they contain a lease, and has identified some leases that will need to be reflected as an asset and a liability in its consolidated balance sheet.  The Company presently intends to use the modified retrospective method of adoption for this new standard and is evaluating the applicability of the available transition practical expedients as it finalizes its plans for adoption of ASC 2016-02.

(2) LONG-TERM DEBT –

At September 30, 2018, long-term debt was comprised of the following:

	(In thousands)
9¾% Senior Notes due 2026:
Principal	$	850,000
Discount, net of amortization		(33,650	)
Bank Credit Facility
Principal		450,000
Debt issuance costs, net of amortization		(23,506	)
	$	1,242,844

In connection with the Jones Contribution, the Company completed a series of refinancing transactions in which it completed a private placement of $850.0 million of new unsecured 9¾% Senior Notes due 2026 and entered into a new bank credit facility with an initial borrowing base of $700.0 million.  The Company utilized the net proceeds from the notes offering, $450.0 million of borrowings under the new bank credit agreement and cash on hand to retire all of its other then-outstanding senior secured and unsecured notes.

19

The senior notes placement closed on August 3, 2018.  Interest on the notes is payable at an annual rate of 9¾% on February 15 and August 15 and the notes mature on August 15, 2026.  

On August 14, 2018, the Company entered into a new bank credit facility with Bank of Montreal, as administrative agent, and the participating banks. The bank credit facility is subject to a borrowing base, which is initially $700.0 million and is re-determined on a semi-annual basis and upon the occurrence of certain other events, and will mature on August 14, 2023.  As of September 30, 2018, there were $450.0 million of borrowings outstanding under the revolving credit facility. Borrowings under the bank credit facility are secured by substantially all of the assets of the Company and its subsidiaries. and bear interest at the Company's option, at either LIBOR plus 2.0% to 3.0% or a base rate plus 1.0% to 2.0%, in each case depending on the utilization of the borrowing base. The Company also pays a commitment fee of 0.375% to 0.5% on the unused borrowing base. The bank credit facility places certain restrictions upon the Company's, and its restricted subsidiaries', ability to, among other things, incur additional indebtedness, pay cash dividends, repurchase common stock, make certain loans, investments and divestitures and redeem the new senior notes. The only financial covenants are the maintenance of a leverage ratio of less than 4.0 to 1.0 and a current ratio of at least 1.0 to 1.0 beginning with the three months ended December 31, 2018.

(3) STOCKHOLDERS' EQUITY –

At the annual meeting of stockholders held August 10, 2018 the stockholders approved an increase in the authorized capital for the Company to a total of 160,000,000 shares, of which 155,000,000 shares are common stock, par value $0.50, and 5,000,000 shares, are preferred stock, par value $10.00.  Upon the closing of the Jones Contribution, the Company issued 88,571,429 shares of common stock to the Jones Partnerships.

As of September 30, 2018, all of the previously outstanding warrants to purchase shares of common stock at an exercise price of $0.01 per share were exercised or expired.  Warrants for 402,708 and 246,793 shares of common stock were exercised during the nine months ended September 30, 2018 and 2017, respectively.  The remaining 11,955 warrants expired without being exercised on September 7, 2018.

(4) Commitments and Contingencies –

From time to time, Comstock is involved in certain litigation that arises in the normal course of its operations. The Company records a loss contingency for these matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not believe the resolution of any of these matters will have a material effect on the Company's financial position or results of operations.

The Company has entered into natural gas transportation and treating agreements through July 2019. Maximum commitments under these transportation agreements as of September 30, 2018 totaled $1.0 million.  As of September 30, 2018, the Company had commitments for contracted drilling services through September 2019 of $16.5 million.

20

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report contains forward-looking statements that involve risks and uncertainties that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those anticipated in our forward-looking statements due to many factors. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto included in this report and in our annual report filed on Form 10-K for the year ended December 31, 2017.

We are presenting Successor Company's and Predecessor Company's results in Management's Discussion and Analysis of Results of Operations due to the business combination that we consummated on August 14, 2018 wherein we received certain oil and gas properties in the Bakken Shale in exchange for a controlling interest of our common stock to the Jerry Jones and certain of his family members.  The results of the Successor and the Predecessor are not comparable, and our discussion of operating results accordingly does not focus on comparisons to prior periods.

Results of Operations

	Three Months ended September 30,							Nine Months ended September 30,
	Transition Period							Transition Period
	Successor		Predecessor			Predecessor		Successor		Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018			2017		For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018		2017
					(In thousands except per unit amounts)
Net Production Data:
Natural gas (Mmcf)		14,098		11,876			19,987		14,098		55,240		51,307
Oil (Mbbls)		542		7			229		542		287		737
Natural gas equivalent (Mmcfe)		17,351		11,919			21,362		17,351		56,963		55,730
Revenues:
Natural gas sales	$	36,393	$	32,089		$	56,164	$	36,393	$	147,897	$	147,541
Oil sales		33,730		499			10,647		33,730		18,733		34,542
Total oil and gas sales	$	70,123	$	32,588		$	66,811	$	70,123	$	166,630	$	182,083
Expenses:
Production taxes	$	4,051	$	707		$	1,490	$	4,051	$	3,659	$	3,730
Gathering and transportation	$	3,450	$	3,109		$	4,755	$	3,450	$	11,841	$	12,428
Lease operating(1)	$	7,016	$	3,418		$	9,359	$	7,016	$	21,139	$	28,681
Depreciation, depletion and amortization	$	17,820	$	14,082		$	32,783	$	17,820	$	68,032	$	93,009
Average Sales Price:
Natural gas (per Mcf)	$	2.58	$	2.70		$	2.81	$	2.58	$	2.68	$	2.88
Oil (per Bbl)	$	66.21	$	69.42		$	46.45	$	66.21	$	65.23	$	46.86
Average equivalent (Mcfe)	$	4.04	$	2.73		$	3.13	$	4.04	$	2.93	$	3.27
Expenses ($ per Mcfe):
Production taxes	$	0.23	$	0.06		$	0.07	$	0.23	$	0.06	$	0.07
Gathering and transportation	$	0.20	$	0.26		$	0.22	$	0.20	$	0.21	$	0.22
Lease operating(1)	$	0.41	$	0.29		$	0.44	$	0.41	$	0.37	$	0.51
Depreciation, depletion and amortization(2)	$	1.02	$	1.17		$	1.52	$	1.02	$	1.18	$	1.65

(1) Includes ad valorem taxes.

(2) Represents depreciation, depletion and amortization of oil and gas properties only.

Revenues –

During the successor period comprising 48 days from August 14, 2018 to September 30, 2018, we had $70.1 million in total oil and gas sales.  Natural gas production of 14.1 Bcf (294 MMcf per day) was sold at an average price of $2.58 per Mcf.  Oil production of 542,200 barrels (11,300 barrels per day) was sold at an average price of $66.21 per barrel.  During the predecessor period comprising 42 days from July 1, 2018 to August 13, 2018, we had $32.6 million in total oil and gas sales.  Natural gas production of 11.9 Bcf (270 MMcf per day) was sold at an average price of $2.70 per Mcf.  

21

We utilize crude oil collars and natural gas price swaps and collars to manage our exposure to oil and natural gas prices and protect returns on investment from our drilling activities.  We had a loss related to our natural gas derivative financial instruments of $2.0 million during the period August 14, 2018 through September 30, 2018.  The following table presents our natural gas prices before and after the effect of cash settlements of our derivative financial instruments:

	Three Months ended September 30,						Nine Months ended September 30,
	Transition Period						Transition Period
	Successor		Predecessor		Predecessor		Successor		Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018		2017		For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018		2017
Average Realized Natural Gas Price:
Natural gas, per Mcf	$	2.58	$	2.70	$	2.81	$	2.58	$	2.68	$	2.88
Cash settlements of derivative financial instruments, per Mcf		0.01		0.03		0.17		0.01		0.05		0.10
Price per Mcf, including cash settlements of derivative financial instruments	$	2.59	$	2.73	$	2.98	$	2.59	$	2.73	$	2.98

Costs and Expenses –

Our production taxes of $4.1 million during the period August 14, 2018 through September 30, 2018 were mainly comprised of $3.2 million on our Bakken shale production and $0.9 million on our other production.  Our production taxes of $0.7 million during the period July 1, 2018 through August 13, 2018 primarily relate to our natural gas production.  

Gathering and transportation costs of $3.5 million and $3.1 million for the period August 14, 2018 through September 30, 2018 and the period July 1, 2018 through August 13, 2018, respectively, mainly reflect the transportation costs for our Haynesville/Bossier shale production to transport and treat that gas from the wellhead to a delivery point into a natural gas sales delivery point.

For the period August 14, 2018 through September 30, 2018, our lease operating expenses of $7.0 million primarily include $3.3 million related to our Bakken shale properties and $3.7 million related to our other properties.  Our lease operating expense of $0.41 per Mcfe produced during this period reflects the average lifting cost of $4.32 per barrel for our Bakken shale properties and $0.29 per Mcfe for our natural gas properties.  During the period July 1, 2018 through August 13, 2018, our lease operating expenses of $3.4 million primarily relate to our natural gas production from the Haynesville shale.  Our lease operating cost during this period was $0.29 per Mcfe.

Depreciation, depletion and amortization ("DD&A") of  $17.8 million ($1.02 per Mcfe) during the period August 14, 2018 through September 30, 2018 reflects the combined rate for the Bakken Shale properties and for the value of our Haynesville/Bossier shale properties that was adjusted to fair value as part of our accounting for the Jones Transactions.  During the period July 1, 2018 through August 13, 2018, DD&A was $14.1 million or $1.17 per Mcfe.  

General and administrative expenses, which are reported net of overhead reimbursements, were $3.3 million and $3.0 million for the period August 14, 2018 through September 30, 2018 and the period July 1, 2018 through August 13, 2018, respectively.  Included in general and administrative expense is stock-based compensation of $0.3 million and $0.8 million, respectively in these same periods.

Interest expense of $14.8 million for the period August 14, 2018 through September 30, 2018 includes interest on our newly issued 9¾% senior secured notes and our new bank credit facility.  All of the Company's other previously outstanding debt was retired on August 14, 2018.  Interest expense for the period July 1, 2018 through August 13, 2018 of $22.1 million reflects the higher interest rates and debt discount and debt cost amortization associated with our then outstanding debt.

Income taxes for the periods August 14, 2018 through September 30, 2018 and July 1, 2018 through August 13, 2018 were provisions of $3.9 million and $0.6 million, respectively.  The provision for income taxes for the period August 14, 2018 through September 30, 2018 reflects an effective tax rate of 22.2%.  The successor tax rate reflects a more normal effective tax rate following the recognition of the purchase price adjustments associated with the book-tax differences for the Comstock and Bakken Shale oil and natural gas properties.  Income taxes for the period July 1, 2018 through August 13, 2018 primarily reflect the effect of valuation allowances on our deferred tax assets.

We reported net income of $13.8 million, or $0.13 per diluted share, for the period August 14, 2018 through September 30, 2018.  Our net income during this period includes income from operations of $34.6 million, which was offset mainly by interest expense and the provision for income taxes.  We reported a net loss of $16.9 million or $1.09 per share during the period July 1, 2018 through August 13, 2018.  The loss during this period included operating income of $8.2 million which was offset by our interest expense and provision for income taxes.

22

Liquidity and Capital Resources

Funding for our activities has historically been provided by our operating cash flow, debt or equity financings or proceeds from asset sales.  For the period August 14, 2018 through September 30, 2018, our primary source of funds was operating cash flow and cash on hand.  Cash provided by operating activities during this period was $3.6 million.  Cash provided by operations for the period January 1, 2018 through August 13, 2018 was $85.7 million.

Our primary needs for capital, in addition to funding our ongoing operations, relate to the acquisition, development and exploration of our oil and gas properties and the repayment of our debt. In the period August 14, 2018 through September 30, 2018, we incurred capital expenditures of $75.2 million to fund our development and exploration activities.

The following table summarizes our capital expenditure activity:

	Successor		Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
	(In thousands)
Exploration and development:
Acquisitions	$	17,905	$	39,323	$	—
Development leasehold		475		2,848		1,947
Development drilling		49,019		90,840		121,561
Other development		7,810		13,871		6,302
Total capital expenditures	$	75,209	$	146,882	$	129,810

During the successor period we drilled four (1.1 net) wells and completed six (2.4 net) wells.  During the predecessor period January 1, 2018 through August 13, 2018, we drilled twenty-three (8.8 net) wells and completed thirty-one (9.4 net) horizontal Haynesville and Bossier shale wells.  We expect to spend an additional $90.0 million in the fourth quarter of 2018 to drill twelve (6.3 net) Haynesville shale wells, to complete seven (3.5 net) Haynesville shale wells and to complete 30 (4.4 net) Bakken shale wells. We expect to fund our future development and exploration activities with future operating cash flow and from cash on hand.  The timing of most of our future capital expenditures is discretionary because we have no material long-term capital expenditure commitments. Consequently, we have a significant degree of flexibility to adjust the level of our capital expenditures as circumstances warrant.  As of September 30, 2018, we have four drilling rigs under contract through September 2019 at a cost of $16.5 million and commitments of $1.0 million to transport and treat natural gas through July 2019. We also have obligations to incur future payments for dismantlement, abandonment and restoration costs of oil and gas properties which are currently estimated to be incurred primarily after 2023.

On July 31, 2018, we acquired oil and gas properties in North Louisiana and Texas for $39.3 million.  These properties consist of approximately 23,000 gross acres (12,000 net) and include 120 (26.2 net) producing natural gas wells, 49 (14.7 net) of which produce from the Haynesville shale. All of the acreage acquired is held by production. We have identified 112 (31.0 net) potential drilling locations on this acreage of which 21 (17.9 net) would be operated by us.  

On August 14, 2018, we closed the contribution with Arkoma and Williston wherein they contributed to us certain oil and gas properties in North Dakota and Montana in exchange for approximately 88.6 million newly issued shares of our common stock.  The effective date of the acquisition of the properties was April 1, 2018.  We also terminated the strategic drilling venture with Arkoma Drilling, LP and paid $17.9 million to reacquire interests in six (2.4 net) wells.

In connection with the Jones Contribution, we completed a series of refinancing transactions in which we completed a private placement of $850.0 million of new unsecured 9¾% Senior Notes due 2026 and entered into a new bank credit agreement with an initial borrowing base of $700.0 million.  We utilized the net proceeds from the new senior notes offering, $450.0 million of borrowings under our new bank credit facility and cash on hand to retire all of our other then-outstanding senior secured and unsecured notes.  

Interest on the 9¾% Senior Notes due 2026 is payable on February 15 and August 15 at an annual rate of 9¾% and the notes mature on August 15, 2026.  

On August 14, 2018, we entered into a bank credit facility with Bank of Montreal, as administrative agent, and the other

23

participating banks.  The bank credit facility is subject to a borrowing base, which is initially $700.0 million and is re-determined on a semi-annual basis and upon the occurrence of certain other events, and will mature on August 14, 2023.  As of September 30, 2018, there were $450.0 million of borrowings outstanding under the revolving credit facility. Borrowings under the bank credit facility are secured by substantially all of our and our subsidiaries assets and bear interest at our option, at either LIBOR plus 2.0% to 3.0% or a base rate plus 1.0% to 2.0%, in each case depending on the utilization of the borrowing base. We also pay a commitment fee of 0.375% to 0.5% on the unused borrowing base. The bank credit facility places certain restrictions upon us, and our restricted subsidiaries' ability to, among other things, incur additional indebtedness, pay cash dividends, repurchase common stock, make certain loans, investments and divestitures and redeem the new senior notes. The only financial covenants are the maintenance of a leverage ratio of less than 4.0 to 1.0 and a current ratio of at least 1.0 to 1.0 beginning with the three months ended December 31, 2018.    

Federal Taxation

The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. Among the other significant tax law changes that affect us are the elimination of the corporate alternative minimum tax ("AMT"), changes that require operating losses incurred in 2018 and beyond be carried forward indefinitely with no carryback up to 80% of taxable income in a given year, and limitations on the deduction for interest expense incurred in 2018 and later for amounts in excess of 30% of its adjusted taxable income (defined as taxable income before interest and net operating losses.  For tax years beginning before January 1, 2022, the adjusted taxable income for these purposes is also adjusted to exclude the impact of depreciation, depletion and amortization.  The Tax Cuts and Jobs Act preserved deductibility of intangible drilling costs for federal income tax purposes, which allows us to deduct a portion of drilling costs in the year incurred and minimizes current taxes payable in periods of taxable income.  At September 30, 2018, we have not completed our accounting for the tax effects of enactment of the Tax Cuts and Jobs Act; however, we have made reasonable estimates of the effects on our existing deferred tax balances.  We have remeasured certain deferred federal tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.  The provisional amount recognized related to the remeasurement of our deferred federal tax balance was $140.4 million, which was subject to a valuation allowance. The Tax Cuts and Jobs Act also repealed the AMT for tax years beginning on or after January 1, 2018 and provides that existing AMT credit carryforwards can be utilized to offset federal taxes for any taxable year.  In addition, 50% of any unused AMT credit carryforwards can be refunded during tax years 2018 through 2020 with any remaining AMT credit carryforward being fully refunded in 2021.  We reclassified $19.1 million to a non-current receivable at December 31, 2017 representing the amount of AMT that is now refundable through 2021.  We are still analyzing certain aspects of the Tax Cuts and Jobs Act, and refining our calculations, which could potentially affect the measurement of those balances or potentially give rise to new deferred tax amounts.  Our estimates may also be affected in the future as we gain a more thorough understanding of the Tax Cuts and Jobs Act, and how the individual states are implementing this new law.  

The shares of common stock issued as a result of the Jones Transaction triggered an ownership change under Section 382 of the Internal Revenue Code. As a result, our ability to use net operating losses ("NOLs") to reduce taxable income is generally limited to an annual amount based on the fair market value of our stock immediately prior to the ownership change multiplied by the long-term tax-exempt interest rate. Our NOLs are estimated to be limited to $3.3 million a year as a result of this limitation.  In addition to this limitation, IRC Section 382 provides that a corporation with a net unrealized built-in gain immediately before an ownership change may increase its limitation by the amount of recognized built-in gain recognized during a recognition period, which is generally the five-year period immediately following an ownership change. Based on the fair market value of our common stock immediately prior to the ownership change, we believe that we have a net unrealized built-in gain which will increase the Section 382 limitation during the five-year recognition period.  

NOLs that exceed the Section 382 limitation in any year continue to be allowed as carry forwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. NOLs incurred prior to 2018 generally have a 20-year life until they expire.  NOLs generated in 2018 and after would be carried forward indefinitely.  Our use of new NOLs arising after the date of an ownership change would not be affected by the 382 limitation. If we do not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carry forward periods, then we will lose the ability to apply those NOLs as offsets to future taxable income.

24

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Oil and Natural Gas Prices

Our financial condition, results of operations and capital resources are highly dependent upon the prevailing market prices of natural gas and oil. These commodity prices are subject to wide fluctuations and market uncertainties due to a variety of factors, some of which are beyond our control. Factors influencing oil and natural gas prices include the level of global demand for crude oil, the foreign supply of oil and natural gas, the establishment of and compliance with production quotas by oil exporting countries, weather conditions that determine the demand for natural gas, the price and availability of alternative fuels and overall economic conditions. It is impossible to predict future oil and natural gas prices with any degree of certainty. Sustained weakness in natural gas and oil prices may adversely affect our financial condition and results of operations, and may also reduce the amount of oil and natural gas reserves that we can produce economically. Any reduction in our natural gas and oil reserves, including reductions due to price fluctuations, can have an adverse effect on our ability to obtain capital for our exploration and development activities. Similarly, any improvements in natural gas and oil prices can have a favorable impact on our financial condition, results of operations and capital resources.

As of September 30, 2018, we have entered into natural gas price swap agreements to hedge approximately 9.6 billion cubic feet of our 2018 and 2019 production at an average price of $3.00 per Mcf.  We have also entered into natural gas collars to hedge approximately 19.5 Bcf of natural gas with an average floor price of $2.50 per Mcf and an average ceiling price of $3.40 per Mcf. We also have oil collars to hedge 1,170,000 barrels with an average floor price of $55.00 per barrel and an average ceiling price of $77.94 per barrel. None of our derivative contracts have margin requirements or collateral provisions that could require funding prior to the scheduled cash settlement date.The change in the fair value of our natural gas swaps that would result from a 10% change in commodities prices at September 30, 2018 would be $2.3 million.  Such a change in fair value could be a gain or a loss depending on whether prices increase or decrease.  

Based on our oil and natural gas production for the period August 14 through September 30, 2018 and our outstanding natural gas price swap agreements, a $0.10 change in the price per Mcf of natural gas would have changed our cash flow by approximately $1.1 million and a $1.00 change in the price per barrel of oil would have resulted in a change in our cash flow for such period by approximately $0.5 million.  Our natural gas collars which cover the period October 1, 2018 through August 31, 2019 will result in natural gas prices on 19.5 Bcf of our future production to be subject to a floor price of $2.50 per MMbtu and an average ceiling price of $3.40 per MMbtu. Our crude oil price collars which cover the period October 1, 2018 through September 30, 2019 will result in oil prices on 1,170,000 barrels of our future oil production to be subject to a floor price of $55.00 per barrel and an average ceiling price of $77.94 per barrel. These collars may increase or decrease our cash flow depending upon whether future prices are below the floor or above the ceiling prices.

Interest Rates

At September 30, 2018, we had approximately $1.3 billion principal amount of long-term debt outstanding.  $850.0 million of this amount bears interest at a fixed rate of 9¾%. The fair market value of our fixed rate debt as of September 30, 2018 was $850.0 million based on the market price of approximately 100% of the face amount of such debt.At September 30, 2018, we had $450.0 million outstanding under our bank credit facility, which is subject to variable rates of interest that are tied to LIBOR or the corporate base rate, at our option. Any increase in these interest rates would have an adverse impact on our results of operations and cash flow. Based on borrowings outstanding at September 30, 2018, a 100 basis point change in interest rates would change our successor period interest expense on our variable rate debt by approximately $0.6 million.

ITEM 4: CONTROLS AND PROCEDURES

As of September 30, 2018, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2018 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and to provide reasonable assurance that information required to be disclosed by us is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. There were no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the quarter ended September 30, 2018, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

25

PART II — OTHER INFORMATION

ITEM 6: EXHIBITS

Exhibit No.	Description
2.1	Contribution Agreement dated May 9, 2018, by and among Arkoma Drilling, L.P., Williston Drilling, L.P. and the Company (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K dated May 9, 2018).
2.2	Amendment No. 1 to the Contribution Agreement, dated August 14, 2018, by and among Arkoma Drilling, L.P., Williston Drilling, L.P. and the Company (incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K dated August 13, 2018).
3.1	Second Amended and Restated Articles of Incorporation of the Company, dated August 13, 2018 (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated August 13, 2018).
3.2	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated August 21, 2014).
3.3	First Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K dated August 17, 2018).
4.1	Indenture, dated as of August 3, 2018, by and between Comstock Escrow Corporation, as issuer, and American Stock Transfer & Trust Company LLC, as trustee (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated August 3, 2018).
4.2	First Supplemental Indenture dated August 14, 2018 among the Company, the Guarantors and American Stock Transfer & Trust Company, LLC, Trustee for the 9 3⁄4% Senior Notes due 2026 (incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K dated August 13, 2018).
10.1	Registration Rights Agreement, dated as of August 3, 2018, by and between Comstock Escrow Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated August 3, 2018).
10.2	Credit Agreement dated August 14, 2018, among the Company, Bank of Montreal as Administrative Agent, BMO Capital Markets Corp., Capital One, National Association and Fifth Third Bank as Joint Lead Arrangers, Capital One, National Association and Fifth Third Bank as Co-Syndication Agents, Bank of America, N.A., Natixis and Regions Bank as Co-Documentation Agents and BMO Capital Markets Corp. as sole Bookrunner (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated August 3, 2018).
10.3	Joinder Agreement to the Registration Rights Agreement dated August 14, 2018 of the Company, Comstock Oil & Gas, LP, Comstock Oil  & Gas – Louisiana, LLC, Comstock Oil and Gas GP, LLC, Comstock Oil & Gas Investments, LLC, and Comstock Oil & Gas Holdings, Inc. (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated August 3, 2018).
10.4#	Employment Agreement dated September 7, 2018 by and between the Company and M. Jay Allison (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K dated September 7, 2018).
10.5#	Employment Agreement dated September 7, 2018 by and between the Company and Roland O. Burns (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated September 7, 2018).
31.1*	Section 302 Certification of the Chief Executive Officer.
31.2*	Section 302 Certification of the Chief Financial Officer.
32.1†	Certification for the Chief Executive Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†	Certification for the Chief Financial Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document

26

Exhibit No.	Description
101.CAL*	XBRL Calculation Linkbase Document
101.LAB*	XBRL Labels Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document

* Filed herewith.

†Furnished herewith.

#Management contract.

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	COMSTOCK RESOURCES, INC.
Date:  November 9, 2018	/s/ M. JAY ALLISON
	M. Jay Allison, Chairman, Chief
	Executive Officer (Principal Executive Officer)
Date:  November 9, 2018	/s/ ROLAND O. BURNS
	Roland O. Burns, President, Chief Financial
	Officer and Secretary (Principal Financial and Accounting Officer)

28

EX-31.1

Exhibit 31.1

Section 302 Certification

I, M. Jay Allison, certify that:

1. I have reviewed this September 30, 2018 Form 10-Q of Comstock Resources, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018

/s/ M. JAY ALLISON

Chief Executive Officer

EX-31.2

Exhibit 31.2

Section 302 Certification

I, Roland O. Burns, certify that:

1. I have reviewed this September 30, 2018 Form 10-Q of Comstock Resources, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018

/s/ ROLAND O. BURNS

President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Comstock Resources, Inc. (the “Company”) on Form 10-Q for the three months ending September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, M. Jay Allison, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ M. JAY ALLISON

M. Jay Allison

Chief Executive Officer

November 9, 2018

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Comstock Resources, Inc. (the “Company”) on Form 10-Q for the three months ending September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Roland O. Burns, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ ROLAND O. BURNS

Roland O. Burns

Chief Financial Officer

November 9, 2018

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 08, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	CRK
Entity Registrant Name	COMSTOCK RESOURCES INC
Entity Central Index Key	0000023194
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		105,871,064

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
ASSETS
Cash and Cash Equivalents	$ 31,780
Accounts Receivable:
Oil and gas sales	61,003
Joint interest operations	19,619
Other Current Assets	19,070
Total current assets	131,472
Oil and gas properties, successful efforts method
Proved	1,568,504
Unproved	195,178
Other	4,440
Accumulated depreciation, depletion and amortization	(174,520)
Net property and equipment	1,593,602
Goodwill	349,667
Income Taxes Receivable	19,086
Other Assets	549
Total Assets	2,094,376
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts Payable	124,008
Accrued Expenses	53,261
Derivative Financial Instruments	2,849
Total current liabilities	180,118
Long-term Debt	1,242,844
Deferred Income Taxes	145,565
Reserve for Future Abandonment Costs	4,738
Total liabilities	1,573,265
Commitments and Contingencies
Stockholders' Equity (Deficit):
Common stock — $0.50 par, 155,000,000 shares authorized, 105,879,064 shares issued and outstanding at September 30, 2018, 75,000,000 authorized, 15,427,561 shares issued and outstanding as of December 31, 2017	52,940
Additional paid-in capital	454,348
Accumulated earnings (deficit)	13,823
Total stockholders' equity (deficit)	521,111
Total liabilities and stockholders' equity (deficit)	$ 2,094,376
Predecessor
ASSETS
Cash and Cash Equivalents		$ 61,255
Accounts Receivable:
Oil and gas sales		26,700
Joint interest operations		11,872
Derivative Financial Instruments		1,318
Assets Held For Sale		198,615
Other Current Assets		2,745
Total current assets		302,505
Oil and gas properties, successful efforts method
Proved		2,631,750
Other		18,918
Accumulated depreciation, depletion and amortization		(2,042,739)
Net property and equipment		607,929
Income Taxes Receivable		19,086
Other Assets		899
Total Assets		930,419
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts Payable		126,034
Accrued Expenses		42,455
Total current liabilities		168,489
Long-term Debt		1,110,529
Deferred Income Taxes		10,266
Reserve for Future Abandonment Costs		10,407
Total liabilities		1,299,691
Commitments and Contingencies
Stockholders' Equity (Deficit):
Common stock — $0.50 par, 155,000,000 shares authorized, 105,879,064 shares issued and outstanding at September 30, 2018, 75,000,000 authorized, 15,427,561 shares issued and outstanding as of December 31, 2017		7,714
Common stock warrants		3,557
Additional paid-in capital		546,696
Accumulated earnings (deficit)		(927,239)
Total stockholders' equity (deficit)		(369,272)
Total liabilities and stockholders' equity (deficit)		$ 930,419

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Common stock, par value	$ 0.50
Common stock, shares authorized	155,000,000
Common stock, shares issued	105,879,064
Common stock, shares outstanding	105,879,064
Predecessor
Common stock, par value		$ 0.50
Common stock, shares authorized		75,000,000
Common stock, shares issued		15,427,561
Common stock, shares outstanding		15,427,561

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	1 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2017
Other income (expenses):
Net income (loss) per share – basic and diluted	$ (1.09)	$ (1.67)
Predecessor
Revenues:
Total oil and gas sales	$ 32,588	$ 66,811	$ 166,630	$ 182,083
Operating expenses:
Production taxes	707	1,490	3,659	3,730
Gathering and transportation	3,109	4,755	11,841	12,428
Lease operating	3,418	9,359	21,139	28,681
Depreciation, depletion and amortization	14,082	32,783	68,032	93,009
General and administrative	3,044	6,174	15,699	19,134
Loss (gain) on sale of oil and gas properties		1,060	35,438	1,060
Total operating expenses	24,360	55,621	155,808	158,042
Operating income	8,228	11,190	10,822	24,041
Other income (expenses):
Gain (loss) from derivative financial instruments	(83)	1,430	881	14,585
Other income	284	170	677	398
Interest expense	(22,140)	(37,595)	(101,203)	(107,250)
Transaction costs	(2,549)		(2,866)
Total other income (expenses)	(24,488)	(35,995)	(102,511)	(92,267)
Income (loss) before income taxes	(16,260)	(24,805)	(91,689)	(68,226)
Benefit from (provision for) income taxes	(605)	69	(1,065)	(883)
Net income (loss)	$ (16,865)	$ (24,736)	$ (92,754)	$ (69,109)
Net income (loss) per share – basic and diluted	$ (1.09)	$ (1.67)	$ (6.08)	$ (4.74)
Weighted average shares outstanding –
Basic	15,468	14,796	15,262	14,591
Diluted	15,468	14,796	15,262	14,591
Natural Gas Sales | Predecessor
Revenues:
Total oil and gas sales	$ 32,089	$ 56,164	$ 147,897	$ 147,541
Oil Sales | Predecessor
Revenues:
Total oil and gas sales	$ 499	$ 10,647	$ 18,733	$ 34,542

XML

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Common Stock Warrants	Additional Paid-in Capital	Accumulated Earnings (Deficit)
Beginning Balance (Predecessor) at Dec. 31, 2017	$ (369,272)	$ 7,714	$ 3,557	$ 546,696	$ (927,239)
Beginning Balance, Shares (Predecessor) at Dec. 31, 2017		15,428,000
Stock-based compensation | Predecessor	3,912	$ 311		3,601
Stock-based compensation, Shares | Predecessor		623,000
Income tax withholdings related to equity awards | Predecessor	(369)	$ (26)		(343)
Income tax withholdings related to equity awards, Shares | Predecessor		(53,000)
Common stock warrants exercised | Predecessor		$ 189	(3,247)	3,058
Common stock warrants exercised, Shares | Predecessor		379,000
Common stock issued for debt conversions | Predecessor	29	$ 1		28
Common stock issued for debt conversions, Shares | Predecessor		2,000
Net income (loss) | Predecessor	(92,754)				(92,754)
Ending Balance (Predecessor) at Aug. 13, 2018	(458,454)	$ 8,189	310	553,040	(1,019,993)
Ending Balance, shares (Predecessor) at Aug. 13, 2018		16,379,000
Beginning Balance (Predecessor) at Dec. 31, 2017	$ (369,272)	$ 7,714	3,557	546,696	(927,239)
Beginning Balance, Shares (Predecessor) at Dec. 31, 2017		15,428,000
Common stock warrants exercised, Shares	402,708
Ending Balance at Sep. 30, 2018	$ 521,111	$ 52,940		454,348	13,823
Ending Balance, shares at Sep. 30, 2018		105,879,000
Successor common stock, Value	140,531	$ 8,189	310	132,032
Successor common stock, Shares		16,379,000
Vesting of equity awards	8,826	$ 514		8,312
Vesting of equity awards, Shares		1,029,000
Jones contribution	362,692	$ 44,286		318,406
Jones contribution, Shares		88,571,000
Beginning Balance (Predecessor) at Aug. 13, 2018	(458,454)	$ 8,189	310	553,040	(1,019,993)
Beginning Balance, Shares (Predecessor) at Aug. 13, 2018		16,379,000
Stock-based compensation	329	$ 211		118
Stock-based compensation, Shares		423,000
Income tax withholdings related to equity awards	(4,695)	$ (272)		(4,423)
Income tax withholdings related to equity awards, Shares		(547,000)
Stock issuance costs	(395)			(395)
Common stock warrants exercised and expired		$ 12	$ (310)	298
Common stock warrants exercised and expired, Shares		24,000
Net income (loss)	13,823				13,823
Ending Balance at Sep. 30, 2018	$ 521,111	$ 52,940		$ 454,348	$ 13,823
Ending Balance, shares at Sep. 30, 2018		105,879,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	4 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 13, 2018	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$ 13,823
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes		3,883
Loss (gain) on sale of oil and gas properties		(98)
Depreciation, depletion and amortization		17,820
(Gain) loss on derivative financial instruments		2,015
Cash settlements of derivative financial instruments		191
Amortization of debt discount, premium and issuance costs		822
Stock-based compensation		329
Decrease (increase) in accounts receivable		(44,884)
Decrease (increase) in other current assets		(1,326)
Increase in accounts payable and accrued expenses		11,034
Net cash provided by operating activities		3,609
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions and capital expenditures		(59,017)
Prepaid drilling costs		(4,768)
Proceeds from sale of oil and gas properties		13,739
Net cash used for investing activities		(50,046)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings		450,000
Retirement of long-term debt		(1,291,352)
Jones contribution		36,365		$ 43,200
Debt and stock issuance costs		(6,288)
Income taxes related to equity awards		(4,695)
Net cash provided by (used for) financing activities		(815,970)
Net increase (decrease) in cash and cash equivalents		(862,407)
Cash and cash equivalents, beginning of period		894,187
Cash and cash equivalents, end of period	$ 894,187	31,780		894,187	$ 894,187	$ 31,780
Predecessor
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)					(92,754)		$ (69,109)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes					1,052		768
Loss (gain) on sale of oil and gas properties					35,438		1,060
Depreciation, depletion and amortization	14,082		$ 32,783		68,032		93,009
(Gain) loss on derivative financial instruments					(881)		(14,585)
Cash settlements of derivative financial instruments					2,842		5,352
Amortization of debt discount, premium and issuance costs					29,457		24,914
Interest paid in-kind					25,004		28,194
Stock-based compensation					3,912		4,455
Decrease (increase) in accounts receivable					2,834		(11,952)
Decrease (increase) in other current assets					337		(670)
Increase in accounts payable and accrued expenses					10,462		29,327
Net cash provided by operating activities					85,735		90,763
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions and capital expenditures					(150,106)		(132,493)
Prepaid drilling costs					(3,692)
Proceeds from sale of oil and gas properties					103,593		1,528
Net cash used for investing activities					(50,205)		(130,965)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings					865,577
Retirement of long-term debt					(49,679)
Common stock warrants exercised							2
Debt and stock issuance costs					(18,127)
Income taxes related to equity awards					(369)		(312)
Net cash provided by (used for) financing activities					797,402		(310)
Net increase (decrease) in cash and cash equivalents					832,932		(40,512)
Cash and cash equivalents, beginning of period		$ 894,187			61,255	$ 61,255	65,904
Cash and cash equivalents, end of period	$ 894,187		$ 25,392	$ 894,187	$ 894,187		$ 25,392

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –

Basis of Presentation

These unaudited consolidated financial statements include the accounts of Comstock and its wholly-owned subsidiaries. In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Comstock Resources, Inc. and its subsidiaries (collectively, "Comstock" or the "Company") as of September 30, 2018, and the related results of operations and cash flows for the Predecessor and Successor periods being presented.  Net loss and comprehensive loss are the same in all periods presented.  All adjustments are of a normal recurring nature unless otherwise disclosed.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock's Annual Report on Form 10-K for the year ended December 31, 2017.

The results of operations for the Predecessor and Successor periods up to and through September 30, 2018 are not necessarily an indication of the results expected for the full year.

On August 14, 2018, Arkoma Drilling, L.P. and Williston Drilling, L.P. (collectively, the "Jones Partnerships") contributed certain oil and gas properties in North Dakota and Montana (the "Bakken Shale Properties") in exchange for common stock representing 84% of the Company's outstanding common stock (the "Jones Contribution"). The Jones Partnerships are wholly owned and controlled by Dallas businessman Jerry Jones and his children (collectively, the "Jones Group").  The Jones Partnerships received 88,571,429 newly issued shares of common stock based on an agreed upon share price of $7.00 per share.   

The Company assessed the Bakken Shale Properties to determine whether they meet the definition of a business under US generally accepted accounting principles, determining that they do not meet the definition of a business. As a result, the Jones Contribution is not being accounted for as a business combination. Upon the issuance of the shares of Comstock common stock, the Jones Group obtained control over Comstock through their ownership of the Jones Partnerships. Through the Jones Partnerships, the Jones Group owns a majority of the voting common stock as well as the ability to control the composition of the majority of the board of directors of Comstock. As a result of the change of control that occurred upon the issuance of the common stock, the Jones Group controls Comstock and, thereby, continues to control the Bakken Shale Properties.

Accordingly, the basis of the Bakken Shale Properties recognized by Comstock is the historical basis of the Jones Group. The historical cost basis of the Bakken Shale properties contributed was $397.6 million, which was comprised of $554.3 million of capitalized costs less $156.7 million of accumulated depletion, depreciation and amortization.  The change in control of Comstock results in a new basis for Comstock as the company has elected to apply pushdown accounting pursuant to ASC 805, Business Combinations. The new basis is pushed down to Comstock for financial reporting purposes, resulting in Comstock's assets, liabilities and equity accounts being recognized at fair value upon the closing of the Jones Transactions.

References to "Successor" or "Successor Company" relate to the financial position and results of operations of the Company subsequent to August 13, 2018.  Reference to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company on or prior to August 13, 2018. The Company's consolidated financial statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented after August 13, 2018 and dates prior thereto.

The estimated fair value of Comstock's assets and liabilities and the resulting goodwill at the date of the transaction were as follows:

	(In thousands)
Fair Value of Comstock's common stock	$	149,357
Fair Value of Liabilities Assumed —
Current Liabilities		180,452
Long-Term Debt		2,059,560
Deferred Income Taxes		63,708
Reserve for Future Abandonment Costs		4,440
Net Liabilities Assumed		2,308,160
Fair Value of Assets Acquired —
Current Assets		936,026
Oil and Gas Properties		1,147,749
Other Property & Equipment		4,440
Income Taxes Receivable		19,086
Other Assets		549
Total Assets		2,107,850
Goodwill	$	349,667

Thetable above represents the preliminary allocation of fair value related to the assets acquired and the liabilities assumed based on the fair value of Comstock. Certain data necessary to complete the fair value allocation is not yet available or is in the process of being finalized, and includes, but is not limited to, final income tax returns. We expect to complete the purchase price allocation during the twelve month period following the Jones Contribution date, during which time the value of the assets and liabilities, including goodwill, may be revised as appropriate.

Goodwill recognized is primarily attributable to the excess of the fair value of Comstock's common stock over the identifiable assets acquired net of liabilities assumed, measured in accordance with generally accepted accounting principles in the United States. The fair value of oil and gas properties, a Level 3 measurement, was determined using discounted cash flow valuation methodology.  Key inputs to the valuation included average oil prices of $79.72 per barrel, average natural gas prices of $3.87 per thousand cubic feet and discount factors of 10% - 25%. The combination of the Bakken Shale Properties with Comstock's Haynesville shale properties results in a Company with adequate resources and liquidity to fully exploit its Haynesville/Bossier shale asset base and to continue to expand its opportunity set with future acquisitions and leasing activity in the basin.

Transaction-related costs (i.e., advisory, legal, accounting, valuation, other professional or consulting fees) totaling approximately $2.6 million are not included as a component of consideration transferred but are accounted for as expenses in the predecessor periods in which the costs are incurred and the services received.  Costs incurred associated with the issuance of common stock have been accounted for as a reduction of additional paid-in capital.

The successful closing of the Jones Contribution triggered payment of an aggregate of $8.1 million including success fees to financial advisors and certain other fees under our licenses for technical data.  These costs were contingent on the consummation of the transactions, all of which were interdependent and all of which had to close in order to meet the legal requirements of the contribution agreement.  None of these fees would have been incurred otherwise.  The Jones Contribution also caused a change in control, upon which restricted shares granted to employees and directors vested, and performance share units granted to executive officers vested at the maximum number of shares granted.  The Company had previously recognized stock-based compensation expense of $7.2 million related to these restricted shares and performance share units. The Company did not recognize an expense for the remaining $11.9 million of unrecognized stock-based compensation expense.  The Company's accounting policy for any cost triggered by the consummation of the Jones Contribution was to recognize the cost when the Jones Contribution was consummated.  Accordingly, unrecognized stock-based compensation expense has not been recorded in the Consolidated Statement of Operations for the Predecessor period since that statement depicts the results of operations just prior to consummation of the transaction.  In addition, since the Successor period reflects the effects of push-down accounting, these costs have also not been recorded as an expense in the Successor period.  These costs are being considered in the purchase accounting adjustments in arriving at the fair value of the liabilities assumed since they were incurred only in the event the transactions successfully closed, and they are not clearly identifiable to operations either prior to or subsequent to the Jones Contribution.

Under the terms of the Jones Contribution, April 1, 2018 was the effective date for allocation of revenues and expenses related to net cash of the Bakken Shale Properties, and Comstock will receive $43.2 million related to net cash flow from April 1, 2018 to August 13, 2018 from the Jones Partnerships which has been accounted as part of the Jones Contribution.

These financial statements are presented on the basis of the Bakken Shale Properties being contributed to Comstock in exchange for common stock of Comstock. Comstock is a corporation, which is treated as a taxable C corporation and thus is subject to federal and state income taxes. A deferred tax liability of approximately $77.9 million has been recognized related to the tax basis of the Bakken Shale Properties long-lived assets being less than the book basis in those assets. The recording of this deferred tax liability has been treated as an adjustment to additional paid-in capital in these financial statements. The change in control of Comstock results in a new basis for Comstock as the company is applying pushdown accounting pursuant to ASC 805, Business Combinations. The new basis is pushed down to Comstock for financial reporting purposes, resulting in Comstock's assets, liabilities and equity accounts being recognized at fair value upon the closing of the Jones Contribution. A deferred tax liability, net of valuation allowance, of $52.4 million has been recognized related to the change in the basis for financial reporting purposes as compared to the tax basis of the historical Comstock assets.

The unaudited pro forma financial information presented below sets forth the Company's historical statements of operations for the periods indicated and gives effect to the Jones Contribution and the Company's debt refinancing transactions as if "push down" accounting had been applied as of January 1, 2017.  Such information is presented for comparative purposes to the Consolidated Statements of Operations only and does not purport to represent what the Company's results of operations would actually have been had these transactions occurred on the date indicated or to project its results of operations for any future period or date.

	Pro Forma
	Nine Months Ended
	September 30,
	2018 (1)			2017
Revenues:
Natural gas sales	$	196,049		$	158,679
Oil sales		194,328			159,812
Total oil and gas sales		390,377			318,491
Operating expenses:
Production taxes		22,168			16,722
Gathering and transportation		15,291			12,428
Lease operating		44,103			43,309
Depreciation, depletion and amortization		132,234			148,100
General and administrative		19,319			19,134
Loss on sale of oil and gas properties		35,340			1,060
Total operating expenses		268,455			240,753
Operating income		121,922			77,738
Other income (expenses):
Gain (loss) from derivative financial instruments		(1,134	)		14,585
Other income		719			398
Interest expense		(80,437	)		(89,063	)
Total other income (expenses)		(80,852	)		(74,080	)
Income before income taxes		41,070			3,658
Benefit from (provision for) income taxes		(10,818	)		(2,211	)
Net Income	$	30,252		$	1,447
Net income per share – basic and diluted	$	0.29		$	0.01
Weighted average shares outstanding –
Basic		105,448			105,095
Diluted		105,463			105,574
(1)Excludes $2.6 million of transaction costs associated with the Jones Contribution.

Property and Equipment

The Company follows the successful efforts method of accounting for its oil and gas properties. Costs incurred to acquire oil and gas leasehold are capitalized.

On April 27, 2018, Comstock completed the sale of its producing Eagle Ford shale oil and gas properties in McMullen, LaSalle, Frio, Atascosa, Wilson, and Karnes counties, Texas for $125.0 million.  The sale was effective November 1, 2017 and the estimated net cash flow from the properties from November 2017 to April 2018 was paid to the buyer at closing.  After the sale, the Company had approximately 8,400 net undeveloped acres that are prospective for Eagle Ford shale development.  During the predecessor period January 1, 2018 through August 13, 2018, the Company recognized a loss on sale of oil and gas properties of$32.7 million to reduce the carrying value of its assets held for sale to their fair value less costs to sell and to adjust the carrying value of the undeveloped acreage retained to their then fair value of $55.0 million which has been included in proved oil and gas properties. The fair value of the oil and gas properties retained, a Level 3 measurement, was determined using the discounted cash flow valuation methodology applied by Comstock in assessing oil and gas properties for impairment.  Key inputs to the valuation included average oil prices of $72.03 per barrel, average natural gas prices of $4.31 per thousand cubic feet and discount factors of 20% - 25%. The Company sold part of the Eagle Ford shale undeveloped acreage in September 2018 for $13.7 million.  Also included in the loss on sale for the Predecessor period January 1, 2018 through August 13, 2018 is a loss of $2.7 million resulting from a final settlement for a property sale completed in 2012.

Results of operations for properties that were sold were as follows:

	Predecessor			Predecessor			Predecessor
	Three Months Ended September 30, 2017			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
Total oil and gas sales	$	11,079		$	17,747		$	36,495
Total operating expenses(1)		(11,664	)		(6,134	)		(38,262	)
Operating income (loss)	$	(585	)	$	11,613		$	(1,767	)

(1)Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense.  No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale.

On July 31, 2018, the Company acquired oil and gas properties in North Louisiana and Texas for $39.3 million.  These properties consist of approximately 23,000 gross acres (12,000 net) and include 120 (26.2 net) producing natural gas wells, 49 (14.7 net) which produce from the Haynesville shale. All of the acreage acquired is held by production. Comstock has identified 112 (31.0 net) potential drilling locations on this acreage of which 21 (17.9 net) would be operated by Comstock.      

On August 14, 2018, in connection with the Jones Contribution, the strategic drilling venture previously entered into by the Company and Arkoma Drilling, LP was terminated and Comstock re-acquired working interests in wells drilled under the joint venture for $17.9 million representing the costs paid by Arkoma Drilling, LP.

The Company assesses the need for an impairment of the capitalized costs for its proved oil and gas properties on a property basis.  No impairments were recognized to adjust the carrying value of the Company's proved oil and gas properties during any of the periods presented. Unproved oil and gas properties are also periodically assessed and any impairment in value is charged to expense. The costs of unproved properties are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis as wells are drilled on these properties.

The Company determines the fair values of its oil and gas properties using a discounted cash flow model and proved and risk-adjusted probable oil and natural gas reserves.  Undrilled acreage can also be valued based on sales transactions in comparable areas.  Significant Level 3 assumptions associated with the calculation of discounted future cash flows included in the cash flow model include management's outlook for oil and natural gas prices, production costs, capital expenditures, and future production as well as estimated proved oil and gas reserves and risk-adjusted probable oil and natural gas reserves.  Management's oil and natural gas price outlook is developed based on third-party longer-term price forecasts as of each measurement date.  The expected future net cash flows are discounted using an appropriate discount rate in determining a property's fair value.

It is reasonably possible that the Company's estimates of undiscounted future net cash flows attributable to its oil and gas properties may change in the future.  The primary factors that may affect estimates of future cash flows include future adjustments, both positive and negative, to proved and appropriate risk-adjusted probable oil and gas reserves, results of future drilling activities, future prices for oil and natural gas, and increases or decreases in production and capital costs.  As a result of these changes, there may be future impairments in the carrying values of these or other properties.

Goodwill

Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets related to the Jones Transactions. The Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct an annual review of goodwill for impairment.  The Company will perform its first annual review of goodwill impairment starting on October 1, 2019.  The Company has goodwill of $349.7 million as of September 30, 2018 that was recorded in connection with the Jones Contribution.

Accrued Expenses

Accrued expenses at September 30, 2018 and December 31, 2017 consist of the following:

	Successor		Predecessor
	As of September 30, 2018		As of December 31, 2017
	(In thousands)
Accrued drilling costs	$	18,811	$	5,874
Accrued interest payable		14,328		21,277
Accrued transportation costs		5,022		3,269
Accrued employee compensation		3,841		6,449
Accrued ad valorem taxes		5,021		—
Accrued lease operating expenses		3,311		68
Asset retirement obligation – assets held for sale		—		4,557
Other		2,927		961
	$	53,261	$	42,455

Reserve for Future Abandonment Costs

Comstock's asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented:

	Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
			(In thousands)
Future abandonment costs — beginning of period	$	4,683		$	10,407		$	15,804
Accretion expense		45			346			645
New wells placed on production		10			17			5
Liabilities settled and assets disposed of		—			(87	)		(356	)
Future abandonment costs — end of period	$	4,738		$	10,683		$	16,098

Derivative Financial Instruments and Hedging Activities

All of the Company's derivative financial instruments are used for risk management purposes and, by policy, none are held for trading or speculative purposes.  Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company's derivative financial instruments involve payment or receipt of premiums.  The Company classifies the fair value amounts of derivative financial instruments as net current or noncurrent assets or liabilities, whichever the case may be, by commodity and counterparty.

All of Comstock's natural gas derivative financial instruments are tied to the Henry Hub-NYMEX price index and all of its crude oil derivative financial instruments are tied to the WTI-NYMEX index price. The Company had the following outstanding derivative financial instruments for natural gas price risk management at September 30, 2018:

	Future Production Period
	Three Months Ending December 31, 2018		Year Ending December 31, 2019		Total
Natural Gas Swap contracts:
Volume (MMbtu)		5,400,000		4,200,000		9,600,000
Average Price per MMbtu		$3.00		$3.00		$3.00
Natural Gas Collar contracts:
Volume (MMbtu)		6,300,000		13,200,000		19,500,000
Price per MMbtu
Average Ceiling		$3.40		$3.40		$3.40
Average Floor		$2.50		$2.50		$2.50
Crude Oil Collar contracts:
Volume (Barrels)		315,000		855,000		1,170,000
Price per Barrel
Average Ceiling		$77.85		$77.98		$77.94
Average Floor		$55.00		$55.00		$55.00

None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following:

Type	Consolidated Balance Sheet Location	Fair Value			Gross Amounts Offset in the Consolidated Balance Sheet					Net Fair Value Presented in the Consolidated Balance Sheet
				(in thousands)
Successor Fair Value of Derivative Instruments as of September 30, 2018
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments  – current		$18	$		(18		)	$		—
Liability Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$854	$		(18		)			836
Crude oil price derivatives	Derivative Financial Instruments – current		$2,013	$			—					2,013
										$		2,849
Predecessor Fair Value of Derivative Instruments as of December 31, 2017
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$1,318	$		—			$		1,318

The Company recognized cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). Gains and lossesrelated to the change in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:

	Successor			Predecessor				Predecessor		Successor			Predecessor		Predecessor
Location of Gain/(Loss) Recognized in Earnings on Derivatives	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				Three Months Ended September 30, 2017		For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
							(In thousands)
Gain (loss) from derivative financial instruments	$	(2,015	)	$	(83	)		$	1,430	$	(2,015	)	$	881	$	14,585

Stock-Based Compensation

Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period. The Company recognized $0.3 million of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and performance stock units ("PSUs") to its employees and directors during the Successor period August 14, 2018 through September 30, 2018 and $0.8 million during the predecessor period July 1 through August 13, 2018. For the predecessor periods of the three and nine months ended September 30, 2017, the Company recognized $1.7 million and $4.5 million, respectively, of stock-based compensation expense.  

During the period July 1, 2018 through August 13, 2018, the Predecessor Company granted 100,226 shares of restricted stock with a grant date fair value of $0.9 million, or $8.73 per share, to its independent directors. The change of control that occurred due to the Jones Contribution resulting in the vesting of all then outstanding restricted stock grants of 904,181 shares.  

During the successor period August 14, 2018 through September 30, 2018, the Company granted 422,545 shares of restricted stock with a grant date fair value of $3.7 million, or $8.70 per share, to its employees. The fair value of each restricted share on the date of grant was equal to its market price. Total unrecognized compensation cost related to unvested restricted stock grants of $3.5 million as of September 30, 2018 is expected to be recognized over a period of 2.9 years.

The change of control that occurred due to the Jones Contribution also resulted in the vesting of all then outstanding performance share units at the maximum amount that could be earned, and a total of 1,028,672 shares of common stock were issued to employees.

During the successor period August 14, 2018 through September 30, 2018, the Company granted 335,545 PSUs with a grant date fair value of $4.3 million, or $12.93 per unit, to its employees, all of which were outstanding as of September 30, 2018. The number of shares of common stock to be issued related to the PSUs is based on the Company's stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 671,090 shares of common stock. Total unrecognized compensation cost related to these grants of $4.2 million as of September 30, 2018 is expected to be recognized over a period of 2.9 years.  

Revenue Recognition

On January 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09").  Comstock adopted this standard using the modified retrospective method of adoption, and it applied the ASU only to contracts that were not completed as of January 1, 2018. Upon adoption, there were no adjustments to the opening balance of equity.

Comstock produces oil and natural gas and reports revenues separately for each of these two primary products in its statements of operations.  Revenues are recognized upon the transfer of produced volumes to the Company's customers, who take control of the volumes and receive all the benefits of ownership upon delivery at designated sales points.   Payment is reasonably assured upon delivery of production.  All sales are subject to contracts that have commercial substance, contain specific pricing terms, and define the enforceable rights and obligations of both parties.  These contracts typically provide for cash settlement within 25 days following each production month and are cancellable upon 30 days' notice by either party.  Prices for sales of oil and natural gas are generally based upon terms that are common in the oil and gas industry, including index or spot prices, location and quality differentials, as well as market supply and demand conditions.  As a result, prices for oil and natural gas routinely fluctuate based on changes in these factors.  Each unit of production (barrel of crude oil and thousand cubic feet of natural gas) represents a separate performance obligation under the Company's contracts since each unit has economic benefit on its own and each is priced separately according to the terms of the contracts.

Comstock has elected to exclude all taxes from the measurement of transaction prices, and its revenues are reported net of royalties and exclude revenue interests owned by others because the Company acts as an agent when selling crude oil and natural gas, on behalf of royalty owners and working interest owners.  Revenue is recorded in the month of production based on an estimate of the Company's share of volumes produced and prices realized.  The Company recognizes any differences between estimates and actual amounts received in the month when payment is received.  Historically, differences between estimated revenues and actual revenue received have not been significant.  The amount of oil or natural gas sold may differ from the amount to which the Company is entitled based on its revenue interests in the properties. The Company did not have any significant imbalance positions at December 31, 2017 or September 30, 2018. Sales of oil and natural gas generally occur at or near the wellhead. When sales of oil and gas occur at locations other than the wellhead, the Company accounts for costs incurred to transport the production to the delivery point as gathering and transportation expenses.  The Company has recognized accounts receivable of $61.0 million as of September 30, 2018 from customers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists.

Income Taxes

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. In recording deferred income tax assets, the Company considers whether it is more likely than not that some portion or all of its deferred income tax assets will be realized in the future.  The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible.  The Company believes that, after considering all the available objective evidence, historical and prospective, with greater weight given to historical evidence, management is not able to determine that it is more likely than not that all of its deferred tax assets will be realized.  As a result, the Company established valuation allowances for its deferred tax assets and U.S. federal and state net operating loss carryforwards that are not expected to be utilized due to the uncertainty of generating taxable income prior to the expiration of the carryforward periods.   

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

	Three Months ended September 30,									Nine Months ended September 30,
	Transition Period									Transition Period
	Successor		Predecessor				Predecessor			Successor		Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018			2017
						(In thousands)
Current - State	$	57	$	(22	)		$	18		$	57	$	13		$	115
- Federal		—		—				—			—		—			—
Deferred  - State		20		(309	)			(87	)		20		(1,360	)		768
- Federal		3,863		936				—			3,863		2,412			—
	$	3,940	$	605			$	(69	)	$	3,940	$	1,065		$	883

The difference between the Company's effective tax rate and the 21% federal statutory rate in effect in 2018 and the 35% rate in effect in 2017 is caused by valuation allowances on deferred taxes and state taxes. The impact of these items varies based upon the Company's projected full year loss and the jurisdictions that are expected to generate the projected losses.

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

	Three Months ended September 30,										Nine Months ended September 30,
	Transition Period										Transition Period
	Successor			Predecessor				Predecessor			Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			2017
							(In thousands)
Tax at statutory rate		21.0	%		21.0	%			35.0	%		21.0%			21.0	%		35.0	%
Tax effect of:
State income taxes, net of federal benefit		2.0			4.5				3.8			2.0			3.9			4.1
Valuation allowance on deferred tax assets		(0.6	)		(21.1	)			(37.8	)		(0.6	)		(24.1	)		(39.2	)
Nondeductible stock-based compensation		(0.2	)		(0.7	)			(0.7	)		(0.2	)		(0.7	)		(1.1	)
Other		—			(7.4	)			—			—			(1.3	)		(0.1	)
Effective tax rate		22.2	%		(3.7	)%			0.3	%		22.2	%		(1.2	)%		(1.3	)%

The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. Among the other significant tax law changes that potentially affect the Company are the elimination of the corporate alternative minimum tax ("AMT"), changes that require operating losses incurred in 2018 and beyond be carried forward indefinitely with no carryback up to 80% of taxable income in a given year, and limitations on the deduction for interest expense incurred in 2018 or later for amounts in excess of 30% of its adjusted taxable income (defined as taxable income before interest and net operating losses).  For tax years beginning before January 1, 2022, the adjusted taxable income for these purposes is also adjusted to exclude the impact of depreciation, depletion and amortization.  The Tax Cuts and Jobs Act preserved deductibility of intangible drilling costs for federal income tax purposes, which allows the Company to deduct a portion of drilling costs in the year incurred and minimizes current taxes payable in periods of taxable income.  At September 30, 2018, the Company has not completed its accounting for the tax effects of enactment of the Tax Cuts and Jobs Act; however, it has made reasonable estimates of the effects on its existing deferred tax balances.  The Company has remeasured certain deferred federal tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.  The provisional amount recognized at December 31, 2017 related to the remeasurement of its deferred federal tax balance was $140.4 million, which was subject to a valuation allowance. The Tax Cuts and Jobs Act also repealed the AMT for tax years beginning on or after January 1, 2018 and provides that existing AMT credit carryforwards can be utilized to offset federal taxes for any taxable year.  In addition, 50% of any unused AMT credit carryforwards can be refunded during tax years 2018 through 2020.  The Company reclassified $19.1 million to a non-current receivable at December 31, 2017 representing the amount of AMT that is now refundable through 2021.  The Company is still analyzing certain aspects of the Tax Cuts and Jobs Act, and refining its calculations, which could potentially affect the measurement of those balances or potentially give rise to new deferred tax amounts.  Comstock's estimates may also be affected in the future as the Company gains a more thorough understanding of the Tax Cuts and Jobs Act, and how the individual states are implementing this new law.

The shares of common stock issued as a result of the Jones Transaction triggered an ownership change under Section 382 of the Internal Revenue Code. As a result, Comstock's ability to use net operating losses ("NOLs") to reduce taxable income is generally limited to an annual amount based on the fair market value of its stock immediately prior to the ownership change multiplied by the long-term tax-exempt interest rate. The Company's NOLs are estimated to be limited to $3.3 million a year as a result of this limitation.  In addition to this limitation, IRC Section 382 provides that a corporation with a net unrealized built-in gain immediately before an ownership change may increase its limitation by the amount of recognized built-in gain recognized during a recognition period, which is generally the five-year period immediately following an ownership change. Based on the fair market value of the Company's common stock immediately prior to the ownership change, Comstock believes that it has a net unrealized built-in gain which will increase the Section 382 limitation during the five-year recognition period.  

NOLs that exceed the Section 382 limitation in any year continue to be allowed as carry forwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. NOLs incurred prior to 2018 generally have a 20-year life until they expire.  NOLs generated in 2018 and after would be carried forward indefinitely.  Comstock's use of new NOLs arising after the date of an ownership change would not be affected by the 382 limitation. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carry forward periods, then it will lose the ability to apply those NOLs as offsets to future taxable income.

The Company's federal income tax returns for the years subsequent to December 31, 2014 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2012. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.

Fair Value Measurements

The Company holds or has held certain financial assets and liabilities that are required to be measured at fair value.  These include cash and cash equivalents held in bank accounts and derivative financial instruments in the form of oil and natural gas price swap agreements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements:

Level 1 — Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2 — Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3 — Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions.

The Company's cash and cash equivalents valuation is based on Level 1 measurements.  The Company's oil and natural gas price swap agreements and its natural gas price collars were not traded on a public exchange, and their value is determined utilizing a discounted cash flow model based on inputs that are readily available in public markets and, accordingly, the valuation of these swap agreements, is categorized as a Level 2 measurement.  There are no financial assets or liabilities accounted for at fair value as of September 30, 2018 that are a Level 3 measurement.

At September 30, 2018, the Company had a liability of $2.8 million recorded for the fair value of its oil and natural gas swaps and collars.  At December 31, 2017, the Company had assets recorded for the fair value of its natural gas price swap agreements of $1.3 million.  There were no offsetting swap positions in 2018 or 2017. The change in fair value of these natural gas swaps and collars was recognized as a gain or loss and included as a component of other income (expense).

As of September 30, 2018, the Company's fixed rate debt had a carrying value of $816.3 million and a fair value of $850.0 million.  The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2018, a Level 2 measurement.  The fair value of the floating rate debt outstanding approximated its carrying value, a Level 2 measurement.

Earnings Per Share

Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participating securities and included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company's common stock that may range from zero to up to two times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. The shares that would have been issuable upon exercise of the conversion rights contains in the Predecessor Company's convertible debt for each period are based on the if-converted method for computing potentially dilutive shares of common stock that could be issued upon conversion. None of the Company's participating securities participate in losses and as such are excluded from the computation of basic earnings per share during periods of net losses.  

Basic and diluted income (loss) per share were determined as follows:

	Successor
	For the Period from August 14, 2018 through September 30, 2018
	Income			Shares		Per Share
	(In thousands, except per share amounts)
Net income attributable to common stock	$	13,823
Income allocable to unvested restricted shares		(51	)
Basic income attributable to common stock		13,772			105,448	$	0.13
Effect of Dilutive Securities:
Income allocable to unvested restricted shares		—			15
Diluted income attributable to common stock		13,772			105,463	$	0.13

	Predecessor
	For the Period from July 1, 2018 through August 13, 2018								Three Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(16,865	)		15,468	$	(1.09	)	$	(24,736	)		14,796	$	(1.67	)

	Predecessor
	For the Period from January 1, 2018 through August 13, 2018								Nine Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(92,754	)		15,262	$	(6.08	)	$	(69,109	)		14,591	$	(4.74	)

Basic and diluted per share amounts are the same for the predecessor periods due to the net loss in those periods.

At September 30, 2018 and December 31, 2017, 422,545 and 619,867 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a nonforfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company's stockholders.

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

Three Months ended September 30,

Nine Months ended September 30,

Successor

Predecessor

Predecessor

Successor

Predecessor

Predecessor

For the Period from August 14, 2018 through September 30, 2018

For the Period from July 1, 2018 through August 13, 2018

2017

For the Period from August 14, 2018 through September 30, 2018

For the Period from January 1, 2018 through August 13, 2018

2017

(In thousands)

Unvested restricted stock

396

813

666

396

839

612

All unvested PSUs, warrants exercisable into common stock and contingently issuable shares related to the convertible debt that would be dilutive in the computation of earnings per share were as follows:

	Three Months ended September 30,							Nine Months ended September 30,
	Successor		Predecessor			Predecessor		Successor		Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018			2017		For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018		2017
					(In thousands except per share/unit data)
Weighted average warrants for common stock		15		42			415		15		142		479
Weighted average exercise price per share	$	0.01	$	0.01		$	0.01	$	0.01	$	0.01	$	0.01
Weighted average PSUs		315		514			303		315		476		281
Weighted average grant date fair value per unit	$	12.93	$	13.83		$	17.12	$	12.93	$	13.83	$	17.12
Weighted average contingently convertible shares		—		40,631			37,624		—		39,819		36,676
Weighted average conversion price per share	$	—	$	12.32		$	12.32	$	—	$	12.32	$	12.32

All restricted shares, warrants, PSUs and potentially dilutive shares from conversion of senior notes in the Predecessor periods presented were anti-dilutive and excluded from the computation of loss per share.

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Cash payments made for interest and income taxes for the nine months ended September 30, 2018 and 2017, respectively, were as follows:

	Successor			Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
			(In thousands)
Interest payments	$	1,999		$	36,187	$	72,913
Income tax payments	$	—		$	2	$	3

Interest paid in-kind related to the Predecessor Company's convertible notes was $25.0 million during the period January 1, 2018 through August 13, 2018 and $28.2 million during the nine months ended September 30, 2017.

Recent Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company has initially recognized goodwill in its financial statements for the quarter ended September 30, 2018 and it will assess the impact of ASU 2017-04 on its financial statements when it performs its initial annual impairment assessment.

On January 1, 2018, the Company adopted ASU 2014-09, which supersedes nearly all existing revenue recognition guidance under existing generally accepted accounting principles.  This new standard is based upon the principal that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  Comstock adopted this standard using the modified retrospective method of adoption and it applied the ASU only to contracts that were not completed as of January 1, 2018.  Upon adoption, there were no adjustments to the opening balance of equity and the Company does not expect the standard to have a significant effect on its results of operations, liquidity or financial position.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02").  ASU 2016-02 requires lessees to include most leases on their balance sheets, but recognize lease costs in their financial statements in a manner similar to accounting for leases prior to ASC 2016-02.  ASU 2016-02 is effective for annual periods ending after December 15, 2018 and interim periods thereafter.  Early adoption is permitted.  The Company has analyzed its major contracts for indications that they contain a lease, and has identified some leases that will need to be reflected as an asset and a liability in its consolidated balance sheet.  The Company presently intends to use the modified retrospective method of adoption for this new standard and is evaluating the applicability of the available transition practical expedients as it finalizes its plans for adoption of ASC 2016-02.

XML

Long-Term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Debt

(2) LONG-TERM DEBT –

At September 30, 2018, long-term debt was comprised of the following:

	(In thousands)
9¾% Senior Notes due 2026:
Principal	$	850,000
Discount, net of amortization		(33,650	)
Bank Credit Facility
Principal		450,000
Debt issuance costs, net of amortization		(23,506	)
	$	1,242,844

In connection with the Jones Contribution, the Company completed a series of refinancing transactions in which it completed a private placement of $850.0 million of new unsecured 9¾% Senior Notes due 2026 and entered into a new bank credit facility with an initial borrowing base of $700.0 million.  The Company utilized the net proceeds from the notes offering, $450.0 million of borrowings under the new bank credit agreement and cash on hand to retire all of its other then-outstanding senior secured and unsecured notes.

The senior notes placement closed on August 3, 2018.  Interest on the notes is payable at an annual rate of 9¾% on February 15 and August 15 and the notes mature on August 15, 2026.  

On August 14, 2018, the Company entered into a new bank credit facility with Bank of Montreal, as administrative agent, and the participating banks. The bank credit facility is subject to a borrowing base, which is initially $700.0 million and is re-determined on a semi-annual basis and upon the occurrence of certain other events, and will mature on August 14, 2023.  As of September 30, 2018, there were $450.0 million of borrowings outstanding under the revolving credit facility. Borrowings under the bank credit facility are secured by substantially all of the assets of the Company and its subsidiaries. and bear interest at the Company's option, at either LIBOR plus 2.0% to 3.0% or a base rate plus 1.0% to 2.0%, in each case depending on the utilization of the borrowing base. The Company also pays a commitment fee of 0.375% to 0.5% on the unused borrowing base. The bank credit facility places certain restrictions upon the Company's, and its restricted subsidiaries', ability to, among other things, incur additional indebtedness, pay cash dividends, repurchase common stock, make certain loans, investments and divestitures and redeem the new senior notes. The only financial covenants are the maintenance of a leverage ratio of less than 4.0 to 1.0 and a current ratio of at least 1.0 to 1.0 beginning with the three months ended December 31, 2018.

XML

Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

(3) STOCKHOLDERS' EQUITY –

At the annual meeting of stockholders held August 10, 2018 the stockholders approved an increase in the authorized capital for the Company to a total of 160,000,000 shares, of which 155,000,000 shares are common stock, par value $0.50, and 5,000,000 shares, are preferred stock, par value $10.00.  Upon the closing of the Jones Contribution, the Company issued 88,571,429 shares of common stock to the Jones Partnerships.

As of September 30, 2018, all of the previously outstanding warrants to purchase shares of common stock at an exercise price of $0.01 per share were exercised or expired.  Warrants for 402,708 and 246,793 shares of common stock were exercised during the nine months ended September 30, 2018 and 2017, respectively.  The remaining 11,955 warrants expired without being exercised on September 7, 2018.

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

(4) Commitments and Contingencies –

From time to time, Comstock is involved in certain litigation that arises in the normal course of its operations. The Company records a loss contingency for these matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company does not believe the resolution of any of these matters will have a material effect on the Company's financial position or results of operations.

The Company has entered into natural gas transportation and treating agreements through July 2019. Maximum commitments under these transportation agreements as of September 30, 2018 totaled $1.0 million.  As of September 30, 2018, the Company had commitments for contracted drilling services through September 2019 of $16.5 million.

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

These unaudited consolidated financial statements include the accounts of Comstock and its wholly-owned subsidiaries. In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of Comstock Resources, Inc. and its subsidiaries (collectively, "Comstock" or the "Company") as of September 30, 2018, and the related results of operations and cash flows for the Predecessor and Successor periods being presented.  Net loss and comprehensive loss are the same in all periods presented.  All adjustments are of a normal recurring nature unless otherwise disclosed.

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to those rules and regulations, although Comstock believes that the disclosures made are adequate to make the information presented not misleading. These unaudited consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in Comstock's Annual Report on Form 10-K for the year ended December 31, 2017.

The results of operations for the Predecessor and Successor periods up to and through September 30, 2018 are not necessarily an indication of the results expected for the full year.

On August 14, 2018, Arkoma Drilling, L.P. and Williston Drilling, L.P. (collectively, the "Jones Partnerships") contributed certain oil and gas properties in North Dakota and Montana (the "Bakken Shale Properties") in exchange for common stock representing 84% of the Company's outstanding common stock (the "Jones Contribution"). The Jones Partnerships are wholly owned and controlled by Dallas businessman Jerry Jones and his children (collectively, the "Jones Group").  The Jones Partnerships received 88,571,429 newly issued shares of common stock based on an agreed upon share price of $7.00 per share.   

The Company assessed the Bakken Shale Properties to determine whether they meet the definition of a business under US generally accepted accounting principles, determining that they do not meet the definition of a business. As a result, the Jones Contribution is not being accounted for as a business combination. Upon the issuance of the shares of Comstock common stock, the Jones Group obtained control over Comstock through their ownership of the Jones Partnerships. Through the Jones Partnerships, the Jones Group owns a majority of the voting common stock as well as the ability to control the composition of the majority of the board of directors of Comstock. As a result of the change of control that occurred upon the issuance of the common stock, the Jones Group controls Comstock and, thereby, continues to control the Bakken Shale Properties.

Accordingly, the basis of the Bakken Shale Properties recognized by Comstock is the historical basis of the Jones Group. The historical cost basis of the Bakken Shale properties contributed was $397.6 million, which was comprised of $554.3 million of capitalized costs less $156.7 million of accumulated depletion, depreciation and amortization.  The change in control of Comstock results in a new basis for Comstock as the company has elected to apply pushdown accounting pursuant to ASC 805, Business Combinations. The new basis is pushed down to Comstock for financial reporting purposes, resulting in Comstock's assets, liabilities and equity accounts being recognized at fair value upon the closing of the Jones Transactions.

References to "Successor" or "Successor Company" relate to the financial position and results of operations of the Company subsequent to August 13, 2018.  Reference to "Predecessor" or "Predecessor Company" relate to the financial position and results of operations of the Company on or prior to August 13, 2018. The Company's consolidated financial statements and related footnotes are presented with a black line division which delineates the lack of comparability between amounts presented after August 13, 2018 and dates prior thereto.

Property and Equipment

Property and Equipment

The Company follows the successful efforts method of accounting for its oil and gas properties. Costs incurred to acquire oil and gas leasehold are capitalized.

On April 27, 2018, Comstock completed the sale of its producing Eagle Ford shale oil and gas properties in McMullen, LaSalle, Frio, Atascosa, Wilson, and Karnes counties, Texas for $125.0 million.  The sale was effective November 1, 2017 and the estimated net cash flow from the properties from November 2017 to April 2018 was paid to the buyer at closing.  After the sale, the Company had approximately 8,400 net undeveloped acres that are prospective for Eagle Ford shale development.  During the predecessor period January 1, 2018 through August 13, 2018, the Company recognized a loss on sale of oil and gas properties of$32.7 million to reduce the carrying value of its assets held for sale to their fair value less costs to sell and to adjust the carrying value of the undeveloped acreage retained to their then fair value of $55.0 million which has been included in proved oil and gas properties. The fair value of the oil and gas properties retained, a Level 3 measurement, was determined using the discounted cash flow valuation methodology applied by Comstock in assessing oil and gas properties for impairment.  Key inputs to the valuation included average oil prices of $72.03 per barrel, average natural gas prices of $4.31 per thousand cubic feet and discount factors of 20% - 25%. The Company sold part of the Eagle Ford shale undeveloped acreage in September 2018 for $13.7 million.  Also included in the loss on sale for the Predecessor period January 1, 2018 through August 13, 2018 is a loss of $2.7 million resulting from a final settlement for a property sale completed in 2012.

Results of operations for properties that were sold were as follows:

	Predecessor			Predecessor			Predecessor
	Three Months Ended September 30, 2017			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
Total oil and gas sales	$	11,079		$	17,747		$	36,495
Total operating expenses(1)		(11,664	)		(6,134	)		(38,262	)
Operating income (loss)	$	(585	)	$	11,613		$	(1,767	)

(1)Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense.  No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale.

On July 31, 2018, the Company acquired oil and gas properties in North Louisiana and Texas for $39.3 million.  These properties consist of approximately 23,000 gross acres (12,000 net) and include 120 (26.2 net) producing natural gas wells, 49 (14.7 net) which produce from the Haynesville shale. All of the acreage acquired is held by production. Comstock has identified 112 (31.0 net) potential drilling locations on this acreage of which 21 (17.9 net) would be operated by Comstock.      

On August 14, 2018, in connection with the Jones Contribution, the strategic drilling venture previously entered into by the Company and Arkoma Drilling, LP was terminated and Comstock re-acquired working interests in wells drilled under the joint venture for $17.9 million representing the costs paid by Arkoma Drilling, LP.

The Company assesses the need for an impairment of the capitalized costs for its proved oil and gas properties on a property basis.  No impairments were recognized to adjust the carrying value of the Company's proved oil and gas properties during any of the periods presented. Unproved oil and gas properties are also periodically assessed and any impairment in value is charged to expense. The costs of unproved properties are transferred to oil and gas properties and amortized on an equivalent unit-of-production basis as wells are drilled on these properties.

The Company determines the fair values of its oil and gas properties using a discounted cash flow model and proved and risk-adjusted probable oil and natural gas reserves.  Undrilled acreage can also be valued based on sales transactions in comparable areas.  Significant Level 3 assumptions associated with the calculation of discounted future cash flows included in the cash flow model include management's outlook for oil and natural gas prices, production costs, capital expenditures, and future production as well as estimated proved oil and gas reserves and risk-adjusted probable oil and natural gas reserves.  Management's oil and natural gas price outlook is developed based on third-party longer-term price forecasts as of each measurement date.  The expected future net cash flows are discounted using an appropriate discount rate in determining a property's fair value.

It is reasonably possible that the Company's estimates of undiscounted future net cash flows attributable to its oil and gas properties may change in the future.  The primary factors that may affect estimates of future cash flows include future adjustments, both positive and negative, to proved and appropriate risk-adjusted probable oil and gas reserves, results of future drilling activities, future prices for oil and natural gas, and increases or decreases in production and capital costs.  As a result of these changes, there may be future impairments in the carrying values of these or other properties.

Goodwill

Goodwill

Goodwill represents the excess of purchase price over fair value of net tangible and identifiable intangible assets related to the Jones Transactions. The Company is not required to amortize goodwill as a charge to earnings; however, the Company is required to conduct an annual review of goodwill for impairment.  The Company will perform its first annual review of goodwill impairment starting on October 1, 2019.  The Company has goodwill of $349.7 million as of September 30, 2018 that was recorded in connection with the Jones Contribution.

Accrued Expenses

Accrued Expenses

Accrued expenses at September 30, 2018 and December 31, 2017 consist of the following:

	Successor		Predecessor
	As of September 30, 2018		As of December 31, 2017
	(In thousands)
Accrued drilling costs	$	18,811	$	5,874
Accrued interest payable		14,328		21,277
Accrued transportation costs		5,022		3,269
Accrued employee compensation		3,841		6,449
Accrued ad valorem taxes		5,021		—
Accrued lease operating expenses		3,311		68
Asset retirement obligation – assets held for sale		—		4,557
Other		2,927		961
	$	53,261	$	42,455

Reserve for Future Abandonment Costs

Reserve for Future Abandonment Costs

Comstock's asset retirement obligations relate to future plugging and abandonment expenses on its oil and gas properties and related facilities disposal. The following table summarizes the changes in Comstock's total estimated liability for such obligations during the periods presented:

	Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
			(In thousands)
Future abandonment costs — beginning of period	$	4,683		$	10,407		$	15,804
Accretion expense		45			346			645
New wells placed on production		10			17			5
Liabilities settled and assets disposed of		—			(87	)		(356	)
Future abandonment costs — end of period	$	4,738		$	10,683		$	16,098

Derivative Financial Instruments and Hedging Activities

Derivative Financial Instruments and Hedging Activities

All of the Company's derivative financial instruments are used for risk management purposes and, by policy, none are held for trading or speculative purposes.  Comstock minimizes credit risk to counterparties of its derivative financial instruments through formal credit policies, monitoring procedures, and diversification. The Company is not required to provide any credit support to its counterparties other than cross collateralization with the assets securing its bank credit facility. None of the Company's derivative financial instruments involve payment or receipt of premiums.  The Company classifies the fair value amounts of derivative financial instruments as net current or noncurrent assets or liabilities, whichever the case may be, by commodity and counterparty.

All of Comstock's natural gas derivative financial instruments are tied to the Henry Hub-NYMEX price index and all of its crude oil derivative financial instruments are tied to the WTI-NYMEX index price. The Company had the following outstanding derivative financial instruments for natural gas price risk management at September 30, 2018:

	Future Production Period
	Three Months Ending December 31, 2018		Year Ending December 31, 2019		Total
Natural Gas Swap contracts:
Volume (MMbtu)		5,400,000		4,200,000		9,600,000
Average Price per MMbtu		$3.00		$3.00		$3.00
Natural Gas Collar contracts:
Volume (MMbtu)		6,300,000		13,200,000		19,500,000
Price per MMbtu
Average Ceiling		$3.40		$3.40		$3.40
Average Floor		$2.50		$2.50		$2.50
Crude Oil Collar contracts:
Volume (Barrels)		315,000		855,000		1,170,000
Price per Barrel
Average Ceiling		$77.85		$77.98		$77.94
Average Floor		$55.00		$55.00		$55.00

None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following:

Type	Consolidated Balance Sheet Location	Fair Value			Gross Amounts Offset in the Consolidated Balance Sheet					Net Fair Value Presented in the Consolidated Balance Sheet
				(in thousands)
Successor Fair Value of Derivative Instruments as of September 30, 2018
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments  – current		$18	$		(18		)	$		—
Liability Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$854	$		(18		)			836
Crude oil price derivatives	Derivative Financial Instruments – current		$2,013	$			—					2,013
										$		2,849
Predecessor Fair Value of Derivative Instruments as of December 31, 2017
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$1,318	$		—			$		1,318

The Company recognized cash settlements and changes in the fair value of its derivative financial instruments as a single component of other income (expenses). Gains and lossesrelated to the change in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:

	Successor			Predecessor				Predecessor		Successor			Predecessor		Predecessor
Location of Gain/(Loss) Recognized in Earnings on Derivatives	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				Three Months Ended September 30, 2017		For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
							(In thousands)
Gain (loss) from derivative financial instruments	$	(2,015	)	$	(83	)		$	1,430	$	(2,015	)	$	881	$	14,585

Stock-Based Compensation

Stock-Based Compensation

Comstock accounts for employee stock-based compensation under the fair value method. Compensation cost is measured at the grant date based on the fair value of the award and is recognized over the award vesting period. The Company recognized $0.3 million of stock-based compensation expense within general and administrative expenses related to awards of restricted stock and performance stock units ("PSUs") to its employees and directors during the Successor period August 14, 2018 through September 30, 2018 and $0.8 million during the predecessor period July 1 through August 13, 2018. For the predecessor periods of the three and nine months ended September 30, 2017, the Company recognized $1.7 million and $4.5 million, respectively, of stock-based compensation expense.  

During the period July 1, 2018 through August 13, 2018, the Predecessor Company granted 100,226 shares of restricted stock with a grant date fair value of $0.9 million, or $8.73 per share, to its independent directors. The change of control that occurred due to the Jones Contribution resulting in the vesting of all then outstanding restricted stock grants of 904,181 shares.  

During the successor period August 14, 2018 through September 30, 2018, the Company granted 422,545 shares of restricted stock with a grant date fair value of $3.7 million, or $8.70 per share, to its employees. The fair value of each restricted share on the date of grant was equal to its market price. Total unrecognized compensation cost related to unvested restricted stock grants of $3.5 million as of September 30, 2018 is expected to be recognized over a period of 2.9 years.

The change of control that occurred due to the Jones Contribution also resulted in the vesting of all then outstanding performance share units at the maximum amount that could be earned, and a total of 1,028,672 shares of common stock were issued to employees.

During the successor period August 14, 2018 through September 30, 2018, the Company granted 335,545 PSUs with a grant date fair value of $4.3 million, or $12.93 per unit, to its employees, all of which were outstanding as of September 30, 2018. The number of shares of common stock to be issued related to the PSUs is based on the Company's stock price performance as compared to its peers which could result in the issuance of anywhere from zero to 671,090 shares of common stock. Total unrecognized compensation cost related to these grants of $4.2 million as of September 30, 2018 is expected to be recognized over a period of 2.9 years.  

Revenue Recognition

Revenue Recognition

On January 1, 2018, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09").  Comstock adopted this standard using the modified retrospective method of adoption, and it applied the ASU only to contracts that were not completed as of January 1, 2018. Upon adoption, there were no adjustments to the opening balance of equity.

Comstock produces oil and natural gas and reports revenues separately for each of these two primary products in its statements of operations.  Revenues are recognized upon the transfer of produced volumes to the Company's customers, who take control of the volumes and receive all the benefits of ownership upon delivery at designated sales points.   Payment is reasonably assured upon delivery of production.  All sales are subject to contracts that have commercial substance, contain specific pricing terms, and define the enforceable rights and obligations of both parties.  These contracts typically provide for cash settlement within 25 days following each production month and are cancellable upon 30 days' notice by either party.  Prices for sales of oil and natural gas are generally based upon terms that are common in the oil and gas industry, including index or spot prices, location and quality differentials, as well as market supply and demand conditions.  As a result, prices for oil and natural gas routinely fluctuate based on changes in these factors.  Each unit of production (barrel of crude oil and thousand cubic feet of natural gas) represents a separate performance obligation under the Company's contracts since each unit has economic benefit on its own and each is priced separately according to the terms of the contracts.

Comstock has elected to exclude all taxes from the measurement of transaction prices, and its revenues are reported net of royalties and exclude revenue interests owned by others because the Company acts as an agent when selling crude oil and natural gas, on behalf of royalty owners and working interest owners.  Revenue is recorded in the month of production based on an estimate of the Company's share of volumes produced and prices realized.  The Company recognizes any differences between estimates and actual amounts received in the month when payment is received.  Historically, differences between estimated revenues and actual revenue received have not been significant.  The amount of oil or natural gas sold may differ from the amount to which the Company is entitled based on its revenue interests in the properties. The Company did not have any significant imbalance positions at December 31, 2017 or September 30, 2018. Sales of oil and natural gas generally occur at or near the wellhead. When sales of oil and gas occur at locations other than the wellhead, the Company accounts for costs incurred to transport the production to the delivery point as gathering and transportation expenses.  The Company has recognized accounts receivable of $61.0 million as of September 30, 2018 from customers for contracts where performance obligations have been satisfied and an unconditional right to consideration exists.

Income Taxes

Income Taxes

Deferred income taxes are provided to reflect the future tax consequences or benefits of differences between the tax basis of assets and liabilities and their reported amounts in the financial statements using enacted tax rates. In recording deferred income tax assets, the Company considers whether it is more likely than not that some portion or all of its deferred income tax assets will be realized in the future.  The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those deferred income tax assets would be deductible.  The Company believes that, after considering all the available objective evidence, historical and prospective, with greater weight given to historical evidence, management is not able to determine that it is more likely than not that all of its deferred tax assets will be realized.  As a result, the Company established valuation allowances for its deferred tax assets and U.S. federal and state net operating loss carryforwards that are not expected to be utilized due to the uncertainty of generating taxable income prior to the expiration of the carryforward periods.   

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

	Three Months ended September 30,									Nine Months ended September 30,
	Transition Period									Transition Period
	Successor		Predecessor				Predecessor			Successor		Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018			2017
						(In thousands)
Current - State	$	57	$	(22	)		$	18		$	57	$	13		$	115
- Federal		—		—				—			—		—			—
Deferred  - State		20		(309	)			(87	)		20		(1,360	)		768
- Federal		3,863		936				—			3,863		2,412			—
	$	3,940	$	605			$	(69	)	$	3,940	$	1,065		$	883

The difference between the Company's effective tax rate and the 21% federal statutory rate in effect in 2018 and the 35% rate in effect in 2017 is caused by valuation allowances on deferred taxes and state taxes. The impact of these items varies based upon the Company's projected full year loss and the jurisdictions that are expected to generate the projected losses.

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

	Three Months ended September 30,										Nine Months ended September 30,
	Transition Period										Transition Period
	Successor			Predecessor				Predecessor			Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			2017
							(In thousands)
Tax at statutory rate		21.0	%		21.0	%			35.0	%		21.0%			21.0	%		35.0	%
Tax effect of:
State income taxes, net of federal benefit		2.0			4.5				3.8			2.0			3.9			4.1
Valuation allowance on deferred tax assets		(0.6	)		(21.1	)			(37.8	)		(0.6	)		(24.1	)		(39.2	)
Nondeductible stock-based compensation		(0.2	)		(0.7	)			(0.7	)		(0.2	)		(0.7	)		(1.1	)
Other		—			(7.4	)			—			—			(1.3	)		(0.1	)
Effective tax rate		22.2	%		(3.7	)%			0.3	%		22.2	%		(1.2	)%		(1.3	)%

The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. Among the other significant tax law changes that potentially affect the Company are the elimination of the corporate alternative minimum tax ("AMT"), changes that require operating losses incurred in 2018 and beyond be carried forward indefinitely with no carryback up to 80% of taxable income in a given year, and limitations on the deduction for interest expense incurred in 2018 or later for amounts in excess of 30% of its adjusted taxable income (defined as taxable income before interest and net operating losses).  For tax years beginning before January 1, 2022, the adjusted taxable income for these purposes is also adjusted to exclude the impact of depreciation, depletion and amortization.  The Tax Cuts and Jobs Act preserved deductibility of intangible drilling costs for federal income tax purposes, which allows the Company to deduct a portion of drilling costs in the year incurred and minimizes current taxes payable in periods of taxable income.  At September 30, 2018, the Company has not completed its accounting for the tax effects of enactment of the Tax Cuts and Jobs Act; however, it has made reasonable estimates of the effects on its existing deferred tax balances.  The Company has remeasured certain deferred federal tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%.  The provisional amount recognized at December 31, 2017 related to the remeasurement of its deferred federal tax balance was $140.4 million, which was subject to a valuation allowance. The Tax Cuts and Jobs Act also repealed the AMT for tax years beginning on or after January 1, 2018 and provides that existing AMT credit carryforwards can be utilized to offset federal taxes for any taxable year.  In addition, 50% of any unused AMT credit carryforwards can be refunded during tax years 2018 through 2020.  The Company reclassified $19.1 million to a non-current receivable at December 31, 2017 representing the amount of AMT that is now refundable through 2021.  The Company is still analyzing certain aspects of the Tax Cuts and Jobs Act, and refining its calculations, which could potentially affect the measurement of those balances or potentially give rise to new deferred tax amounts.  Comstock's estimates may also be affected in the future as the Company gains a more thorough understanding of the Tax Cuts and Jobs Act, and how the individual states are implementing this new law.

The shares of common stock issued as a result of the Jones Transaction triggered an ownership change under Section 382 of the Internal Revenue Code. As a result, Comstock's ability to use net operating losses ("NOLs") to reduce taxable income is generally limited to an annual amount based on the fair market value of its stock immediately prior to the ownership change multiplied by the long-term tax-exempt interest rate. The Company's NOLs are estimated to be limited to $3.3 million a year as a result of this limitation.  In addition to this limitation, IRC Section 382 provides that a corporation with a net unrealized built-in gain immediately before an ownership change may increase its limitation by the amount of recognized built-in gain recognized during a recognition period, which is generally the five-year period immediately following an ownership change. Based on the fair market value of the Company's common stock immediately prior to the ownership change, Comstock believes that it has a net unrealized built-in gain which will increase the Section 382 limitation during the five-year recognition period.  

NOLs that exceed the Section 382 limitation in any year continue to be allowed as carry forwards until they expire and can be used to offset taxable income for years within the carryover period subject to the limitation in each year. NOLs incurred prior to 2018 generally have a 20-year life until they expire.  NOLs generated in 2018 and after would be carried forward indefinitely.  Comstock's use of new NOLs arising after the date of an ownership change would not be affected by the 382 limitation. If the Company does not generate a sufficient level of taxable income prior to the expiration of the pre-2018 NOL carry forward periods, then it will lose the ability to apply those NOLs as offsets to future taxable income.

The Company's federal income tax returns for the years subsequent to December 31, 2014 remain subject to examination. The Company's income tax returns in major state income tax jurisdictions remain subject to examination for various periods subsequent to December 31, 2012. The Company currently believes that all other significant filing positions are highly certain and that all of its other significant income tax positions and deductions would be sustained under audit or the final resolution would not have a material effect on the consolidated financial statements. Therefore, the Company has not established any significant reserves for uncertain tax positions.

Fair Value Measurements

Fair Value Measurements

The Company holds or has held certain financial assets and liabilities that are required to be measured at fair value.  These include cash and cash equivalents held in bank accounts and derivative financial instruments in the form of oil and natural gas price swap agreements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level hierarchy is followed for disclosure to show the extent and level of judgment used to estimate fair value measurements:

Level 1 — Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date.

Level 2 — Inputs used to measure fair value, other than quoted prices included in Level 1, are either directly or indirectly observable as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3 — Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management's estimates of market participant assumptions.

The Company's cash and cash equivalents valuation is based on Level 1 measurements.  The Company's oil and natural gas price swap agreements and its natural gas price collars were not traded on a public exchange, and their value is determined utilizing a discounted cash flow model based on inputs that are readily available in public markets and, accordingly, the valuation of these swap agreements, is categorized as a Level 2 measurement.  There are no financial assets or liabilities accounted for at fair value as of September 30, 2018 that are a Level 3 measurement.

At September 30, 2018, the Company had a liability of $2.8 million recorded for the fair value of its oil and natural gas swaps and collars.  At December 31, 2017, the Company had assets recorded for the fair value of its natural gas price swap agreements of $1.3 million.  There were no offsetting swap positions in 2018 or 2017. The change in fair value of these natural gas swaps and collars was recognized as a gain or loss and included as a component of other income (expense).

As of September 30, 2018, the Company's fixed rate debt had a carrying value of $816.3 million and a fair value of $850.0 million.  The fair value of the Company's fixed rate debt was based on quoted prices as of September 30, 2018, a Level 2 measurement.  The fair value of the floating rate debt outstanding approximated its carrying value, a Level 2 measurement.

Earnings Per Share

Earnings Per Share

Unvested share-based payment awards containing nonforfeitable rights to dividends are considered to be participating securities and included in the computation of basic and diluted earnings per share pursuant to the two-class method. PSUs represent the right to receive a number of shares of the Company's common stock that may range from zero to up to two times the number of PSUs granted on the award date based on the achievement of certain performance measures during a performance period. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, which would be issuable at the end of the respective period, assuming that date was the end of the contingency period. The treasury stock method is used to measure the dilutive effect of PSUs. The shares that would have been issuable upon exercise of the conversion rights contains in the Predecessor Company's convertible debt for each period are based on the if-converted method for computing potentially dilutive shares of common stock that could be issued upon conversion. None of the Company's participating securities participate in losses and as such are excluded from the computation of basic earnings per share during periods of net losses.  

Basic and diluted income (loss) per share were determined as follows:

	Successor
	For the Period from August 14, 2018 through September 30, 2018
	Income			Shares		Per Share
	(In thousands, except per share amounts)
Net income attributable to common stock	$	13,823
Income allocable to unvested restricted shares		(51	)
Basic income attributable to common stock		13,772			105,448	$	0.13
Effect of Dilutive Securities:
Income allocable to unvested restricted shares		—			15
Diluted income attributable to common stock		13,772			105,463	$	0.13

	Predecessor
	For the Period from July 1, 2018 through August 13, 2018								Three Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(16,865	)		15,468	$	(1.09	)	$	(24,736	)		14,796	$	(1.67	)

	Predecessor
	For the Period from January 1, 2018 through August 13, 2018								Nine Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(92,754	)		15,262	$	(6.08	)	$	(69,109	)		14,591	$	(4.74	)

Basic and diluted per share amounts are the same for the predecessor periods due to the net loss in those periods.

At September 30, 2018 and December 31, 2017, 422,545 and 619,867 shares of restricted stock, respectively, are included in common stock outstanding as such shares have a nonforfeitable right to participate in any dividends that might be declared and have the right to vote on matters submitted to the Company's stockholders.

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

Three Months ended September 30,

Nine Months ended September 30,

Successor

Predecessor

Predecessor

Successor

Predecessor

Predecessor

For the Period from August 14, 2018 through September 30, 2018

For the Period from July 1, 2018 through August 13, 2018

2017

For the Period from August 14, 2018 through September 30, 2018

For the Period from January 1, 2018 through August 13, 2018

2017

(In thousands)

Unvested restricted stock

396

813

666

396

839

612

All unvested PSUs, warrants exercisable into common stock and contingently issuable shares related to the convertible debt that would be dilutive in the computation of earnings per share were as follows:

	Three Months ended September 30,							Nine Months ended September 30,
	Successor		Predecessor			Predecessor		Successor		Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018			2017		For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018		2017
					(In thousands except per share/unit data)
Weighted average warrants for common stock		15		42			415		15		142		479
Weighted average exercise price per share	$	0.01	$	0.01		$	0.01	$	0.01	$	0.01	$	0.01
Weighted average PSUs		315		514			303		315		476		281
Weighted average grant date fair value per unit	$	12.93	$	13.83		$	17.12	$	12.93	$	13.83	$	17.12
Weighted average contingently convertible shares		—		40,631			37,624		—		39,819		36,676
Weighted average conversion price per share	$	—	$	12.32		$	12.32	$	—	$	12.32	$	12.32

All restricted shares, warrants, PSUs and potentially dilutive shares from conversion of senior notes in the Predecessor periods presented were anti-dilutive and excluded from the computation of loss per share.

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

Supplementary Information With Respect to the Consolidated Statements of Cash Flows

For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Cash payments made for interest and income taxes for the nine months ended September 30, 2018 and 2017, respectively, were as follows:

	Successor			Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
			(In thousands)
Interest payments	$	1,999		$	36,187	$	72,913
Income tax payments	$	—		$	2	$	3

Interest paid in-kind related to the Predecessor Company's convertible notes was $25.0 million during the period January 1, 2018 through August 13, 2018 and $28.2 million during the nine months ended September 30, 2017.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 (ASU 2017-04) “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. ASU 2017-04 is effective for annual or interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company has initially recognized goodwill in its financial statements for the quarter ended September 30, 2018 and it will assess the impact of ASU 2017-04 on its financial statements when it performs its initial annual impairment assessment.

On January 1, 2018, the Company adopted ASU 2014-09, which supersedes nearly all existing revenue recognition guidance under existing generally accepted accounting principles.  This new standard is based upon the principal that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  Comstock adopted this standard using the modified retrospective method of adoption and it applied the ASU only to contracts that were not completed as of January 1, 2018.  Upon adoption, there were no adjustments to the opening balance of equity and the Company does not expect the standard to have a significant effect on its results of operations, liquidity or financial position.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02").  ASU 2016-02 requires lessees to include most leases on their balance sheets, but recognize lease costs in their financial statements in a manner similar to accounting for leases prior to ASC 2016-02.  ASU 2016-02 is effective for annual periods ending after December 15, 2018 and interim periods thereafter.  Early adoption is permitted.  The Company has analyzed its major contracts for indications that they contain a lease, and has identified some leases that will need to be reflected as an asset and a liability in its consolidated balance sheet.  The Company presently intends to use the modified retrospective method of adoption for this new standard and is evaluating the applicability of the available transition practical expedients as it finalizes its plans for adoption of ASC 2016-02.

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Estimated Fair Value of Assets and Liabilities and Resulting Goodwill

The estimated fair value of Comstock's assets and liabilities and the resulting goodwill at the date of the transaction were as follows:

	(In thousands)
Fair Value of Comstock's common stock	$	149,357
Fair Value of Liabilities Assumed —
Current Liabilities		180,452
Long-Term Debt		2,059,560
Deferred Income Taxes		63,708
Reserve for Future Abandonment Costs		4,440
Net Liabilities Assumed		2,308,160
Fair Value of Assets Acquired —
Current Assets		936,026
Oil and Gas Properties		1,147,749
Other Property & Equipment		4,440
Income Taxes Receivable		19,086
Other Assets		549
Total Assets		2,107,850
Goodwill	$	349,667

Summary of Unaudited Pro Forma Financial Information

The unaudited pro forma financial information presented below sets forth the Company's historical statements of operations for the periods indicated and gives effect to the Jones Contribution and the Company's debt refinancing transactions as if "push down" accounting had been applied as of January 1, 2017.  Such information is presented for comparative purposes to the Consolidated Statements of Operations only and does not purport to represent what the Company's results of operations would actually have been had these transactions occurred on the date indicated or to project its results of operations for any future period or date.

	Pro Forma
	Nine Months Ended
	September 30,
	2018 (1)			2017
Revenues:
Natural gas sales	$	196,049		$	158,679
Oil sales		194,328			159,812
Total oil and gas sales		390,377			318,491
Operating expenses:
Production taxes		22,168			16,722
Gathering and transportation		15,291			12,428
Lease operating		44,103			43,309
Depreciation, depletion and amortization		132,234			148,100
General and administrative		19,319			19,134
Loss on sale of oil and gas properties		35,340			1,060
Total operating expenses		268,455			240,753
Operating income		121,922			77,738
Other income (expenses):
Gain (loss) from derivative financial instruments		(1,134	)		14,585
Other income		719			398
Interest expense		(80,437	)		(89,063	)
Total other income (expenses)		(80,852	)		(74,080	)
Income before income taxes		41,070			3,658
Benefit from (provision for) income taxes		(10,818	)		(2,211	)
Net Income	$	30,252		$	1,447
Net income per share – basic and diluted	$	0.29		$	0.01
Weighted average shares outstanding –
Basic		105,448			105,095
Diluted		105,463			105,574
(1)Excludes $2.6 million of transaction costs associated with the Jones Contribution.

Results of Operations for Properties

Results of operations for properties that were sold were as follows:

	Predecessor			Predecessor			Predecessor
	Three Months Ended September 30, 2017			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
Total oil and gas sales	$	11,079		$	17,747		$	36,495
Total operating expenses(1)		(11,664	)		(6,134	)		(38,262	)
Operating income (loss)	$	(585	)	$	11,613		$	(1,767	)

Summary of Accrued Expenses

Accrued expenses at September 30, 2018 and December 31, 2017 consist of the following:

	Successor		Predecessor
	As of September 30, 2018		As of December 31, 2017
	(In thousands)
Accrued drilling costs	$	18,811	$	5,874
Accrued interest payable		14,328		21,277
Accrued transportation costs		5,022		3,269
Accrued employee compensation		3,841		6,449
Accrued ad valorem taxes		5,021		—
Accrued lease operating expenses		3,311		68
Asset retirement obligation – assets held for sale		—		4,557
Other		2,927		961
	$	53,261	$	42,455

Summary of Changes in Reserve for Future Abandonment Costs

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

	Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			Nine Months Ended September 30, 2017
			(In thousands)
Future abandonment costs — beginning of period	$	4,683		$	10,407		$	15,804
Accretion expense		45			346			645
New wells placed on production		10			17			5
Liabilities settled and assets disposed of		—			(87	)		(356	)
Future abandonment costs — end of period	$	4,738		$	10,683		$	16,098

Schedule of Gas Derivative Contracts Volume and Prices

The Company had the following outstanding derivative financial instruments for natural gas price risk management at September 30, 2018:

	Future Production Period
	Three Months Ending December 31, 2018		Year Ending December 31, 2019		Total
Natural Gas Swap contracts:
Volume (MMbtu)		5,400,000		4,200,000		9,600,000
Average Price per MMbtu		$3.00		$3.00		$3.00
Natural Gas Collar contracts:
Volume (MMbtu)		6,300,000		13,200,000		19,500,000
Price per MMbtu
Average Ceiling		$3.40		$3.40		$3.40
Average Floor		$2.50		$2.50		$2.50
Crude Oil Collar contracts:
Volume (Barrels)		315,000		855,000		1,170,000
Price per Barrel
Average Ceiling		$77.85		$77.98		$77.94
Average Floor		$55.00		$55.00		$55.00

Schedule of Derivative Instruments

None of the Company's derivative contracts were designated as cash flow hedges. The aggregate fair value of the Company's derivative instruments reported in the accompanying consolidated balance sheets by type, including the classification between assets and liabilities, consists of the following:

Type	Consolidated Balance Sheet Location	Fair Value			Gross Amounts Offset in the Consolidated Balance Sheet					Net Fair Value Presented in the Consolidated Balance Sheet
				(in thousands)
Successor Fair Value of Derivative Instruments as of September 30, 2018
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments  – current		$18	$		(18		)	$		—
Liability Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$854	$		(18		)			836
Crude oil price derivatives	Derivative Financial Instruments – current		$2,013	$			—					2,013
										$		2,849
Predecessor Fair Value of Derivative Instruments as of December 31, 2017
Asset Derivatives:
Natural gas price derivatives	Derivative Financial Instruments – current		$1,318	$		—			$		1,318

Schedule of Gains and Losses from Derivative Financial Instruments

Gains and lossesrelated to the change in the fair value recognized on the Company's derivative contracts recognized in the consolidated statement of operations were as follows:

	Successor			Predecessor				Predecessor		Successor			Predecessor		Predecessor
Location of Gain/(Loss) Recognized in Earnings on Derivatives	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				Three Months Ended September 30, 2017		For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
							(In thousands)
Gain (loss) from derivative financial instruments	$	(2,015	)	$	(83	)		$	1,430	$	(2,015	)	$	881	$	14,585

Consolidated Income Tax Provision (Benefit)

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

	Three Months ended September 30,									Nine Months ended September 30,
	Transition Period									Transition Period
	Successor		Predecessor				Predecessor			Successor		Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018			2017
						(In thousands)
Current - State	$	57	$	(22	)		$	18		$	57	$	13		$	115
- Federal		—		—				—			—		—			—
Deferred  - State		20		(309	)			(87	)		20		(1,360	)		768
- Federal		3,863		936				—			3,863		2,412			—
	$	3,940	$	605			$	(69	)	$	3,940	$	1,065		$	883

Difference Between Federal Statutory Rate and Effective Tax Rate

The difference between the Company's effective tax rate and the 21% federal statutory rate in effect in 2018 and the 35% rate in effect in 2017 is caused by valuation allowances on deferred taxes and state taxes. The impact of these items varies based upon the Company's projected full year loss and the jurisdictions that are expected to generate the projected losses.

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

	Three Months ended September 30,										Nine Months ended September 30,
	Transition Period										Transition Period
	Successor			Predecessor				Predecessor			Successor			Predecessor			Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from July 1, 2018 through August 13, 2018				2017			For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018			2017
							(In thousands)
Tax at statutory rate		21.0	%		21.0	%			35.0	%		21.0%			21.0	%		35.0	%
Tax effect of:
State income taxes, net of federal benefit		2.0			4.5				3.8			2.0			3.9			4.1
Valuation allowance on deferred tax assets		(0.6	)		(21.1	)			(37.8	)		(0.6	)		(24.1	)		(39.2	)
Nondeductible stock-based compensation		(0.2	)		(0.7	)			(0.7	)		(0.2	)		(0.7	)		(1.1	)
Other		—			(7.4	)			—			—			(1.3	)		(0.1	)
Effective tax rate		22.2	%		(3.7	)%			0.3	%		22.2	%		(1.2	)%		(1.3	)%

Basic and Diluted Income (Loss) Per Share

Basic and diluted income (loss) per share were determined as follows:

	Successor
	For the Period from August 14, 2018 through September 30, 2018
	Income			Shares		Per Share
	(In thousands, except per share amounts)
Net income attributable to common stock	$	13,823
Income allocable to unvested restricted shares		(51	)
Basic income attributable to common stock		13,772			105,448	$	0.13
Effect of Dilutive Securities:
Income allocable to unvested restricted shares		—			15
Diluted income attributable to common stock		13,772			105,463	$	0.13

	Predecessor
	For the Period from July 1, 2018 through August 13, 2018								Three Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(16,865	)		15,468	$	(1.09	)	$	(24,736	)		14,796	$	(1.67	)

	Predecessor
	For the Period from January 1, 2018 through August 13, 2018								Nine Months Ended September 30, 2017
	Loss			Shares		Per Share			Loss			Shares		Per Share
	(In thousands, except per share amounts)
Basic and diluted net loss attributable to common stock	$	(92,754	)		15,262	$	(6.08	)	$	(69,109	)		14,591	$	(4.74	)

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,

Successor

Predecessor

Predecessor

Successor

Predecessor

Predecessor

For the Period from August 14, 2018 through September 30, 2018

For the Period from July 1, 2018 through August 13, 2018

2017

For the Period from August 14, 2018 through September 30, 2018

For the Period from January 1, 2018 through August 13, 2018

2017

(In thousands)

Unvested restricted stock

396

813

666

396

839

612

Common Stock and Convertible Stock Dilutive in Computation of Earning Per Share

All unvested PSUs, warrants exercisable into common stock and contingently issuable shares related to the convertible debt that would be dilutive in the computation of earnings per share were as follows:

	Three Months ended September 30,							Nine Months ended September 30,
	Successor		Predecessor			Predecessor		Successor		Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018		For the Period from July 1, 2018 through August 13, 2018			2017		For the Period from August 14, 2018 through September 30, 2018		For the Period from January 1, 2018 through August 13, 2018		2017
					(In thousands except per share/unit data)
Weighted average warrants for common stock		15		42			415		15		142		479
Weighted average exercise price per share	$	0.01	$	0.01		$	0.01	$	0.01	$	0.01	$	0.01
Weighted average PSUs		315		514			303		315		476		281
Weighted average grant date fair value per unit	$	12.93	$	13.83		$	17.12	$	12.93	$	13.83	$	17.12
Weighted average contingently convertible shares		—		40,631			37,624		—		39,819		36,676
Weighted average conversion price per share	$	—	$	12.32		$	12.32	$	—	$	12.32	$	12.32

Cash Payments Made for Interest and Income Taxes

Cash payments made for interest and income taxes for the nine months ended September 30, 2018 and 2017, respectively, were as follows:

	Successor			Predecessor		Predecessor
	For the Period from August 14, 2018 through September 30, 2018			For the Period from January 1, 2018 through August 13, 2018		Nine Months Ended September 30, 2017
			(In thousands)
Interest payments	$	1,999		$	36,187	$	72,913
Income tax payments	$	—		$	2	$	3

XML

Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-term Debt

At September 30, 2018, long-term debt was comprised of the following:

	(In thousands)
9¾% Senior Notes due 2026:
Principal	$	850,000
Discount, net of amortization		(33,650	)
Bank Credit Facility
Principal		450,000
Debt issuance costs, net of amortization		(23,506	)
	$	1,242,844

XML

Summary of Significant Accounting Policies - Additional Information 1 (Detail)					1 Months Ended		2 Months Ended	3 Months Ended	4 Months Ended	7 Months Ended	9 Months Ended
	Aug. 14, 2018 USD ($) $ / shares $ / bbl $ / Mcf shares	Aug. 13, 2018 USD ($)	Jul. 31, 2018 USD ($) a Well Location	Apr. 27, 2018 USD ($)	Sep. 30, 2018 USD ($) a	Aug. 13, 2018 USD ($)	Sep. 30, 2018 USD ($) a	Sep. 30, 2017 USD ($)	Aug. 13, 2018 USD ($)	Aug. 13, 2018 USD ($)	Sep. 30, 2018 USD ($) a $ / bbl $ / Mcf	Sep. 30, 2017 USD ($)
Operations And Summary Of Significant Accounting Policies [Line Items]
Jones contribution transaction, ownership percentage	84.00%
Jones contribution transaction, Shares issued | shares	88,571,429
Jones contribution transaction, share price | $ / shares	$ 7.00
Purchase price allocation period	12 months
Success fee for contribution transaction		$ 8,100,000				$ 8,100,000			$ 8,100,000	$ 8,100,000
Recognized stock-based compensation expense		7,200,000
Unrecognized stock-based compensation expense		11,900,000				11,900,000			11,900,000	11,900,000
Jones contribution transaction							$ 36,365,000		43,200,000
Deferred tax liability adjustment to additional paid-in capital											$ 77,900,000
Deferred tax liability related to tax basis of long-lived assets					$ 52,400,000		52,400,000				52,400,000
Loss on sale of oil and gas properties							(98,000)
Working interests re-acquired under the joint venture	$ 17,900,000
Impairment of oil and gas properties							0
Goodwill	349,667,000				349,667,000		349,667,000				$ 349,667,000
Annual goodwill impairment test, description											The Company will perform its first annual review of goodwill impairment starting on October 1, 2019.
Cash flow hedges derivative instruments					$ 0		$ 0				$ 0
Predecessor
Operations And Summary Of Significant Accounting Policies [Line Items]
Transaction-related costs						2,600,000
Loss on sale of oil and gas properties								$ 1,060,000		35,438,000		$ 1,060,000
Loss resulting from final settlement for property sale										2,700,000
Impairment of oil and gas properties						0		$ 0		0		$ 0
Predecessor | North Louisiana and Texas Properties
Operations And Summary Of Significant Accounting Policies [Line Items]
Acquired oil and gas properties			$ 39,300,000
Oil and gas properties, gross acres | a			23,000
Oil and gas properties, net acres | a			12,000
Producing natural gas wells, gross | Well			120
Producing natural gas wells, net | Well			26.2
Producing Haynesville shale natural gas wells, gross | Well			49
Producing Haynesville shale natural gas wells, net | Well			14.7
Potential drilling locations, gross | Location			112
Potential drilling locations, net | Location			31.0
Potential operated drilling locations, gross | Location			21
Potential operated drilling locations, net | Location			17.9
Predecessor | South Texas Sold Properties
Operations And Summary Of Significant Accounting Policies [Line Items]
Gross proceeds from sale of oil and gas properties				$ 125,000,000
Effective date of sale				Nov. 01, 2017
Bakken Shale Properties
Operations And Summary Of Significant Accounting Policies [Line Items]
Oil and gas property cost basis	397,600,000
Oil and gas property capitalized costs	554,300,000
Oil and gas property accumulated depletion, depreciation and amortization	$ 156,700,000
Goodwill Oil and Gas Property Valuation
Operations And Summary Of Significant Accounting Policies [Line Items]
Management's oil price outlook | $ / bbl	79.72
Management's gas price outlook | $ / Mcf	3.87
Annual minimum discount rate	10.00%
Annual maximum discount rate	25.00%
South Texas Asset Held for Sale
Operations And Summary Of Significant Accounting Policies [Line Items]
Management's oil price outlook | $ / bbl											72.03
Management's gas price outlook | $ / Mcf											4.31
Annual minimum discount rate											20.00%
Annual maximum discount rate											25.00%
Undeveloped Acres | a					8,400		8,400				8,400
Proceeds from sale of undeveloped acreage					$ 13,700,000
South Texas Asset Held for Sale | Predecessor
Operations And Summary Of Significant Accounting Policies [Line Items]
Assets held for sale, fair value		$ 55,000,000				$ 55,000,000			$ 55,000,000	55,000,000
Loss on sale of oil and gas properties										$ 32,700,000

XML

Summary of Significant Accounting Policies - Summary of Estimated Fair Value of Assets and Liabilities and Resulting Goodwill (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Aug. 14, 2018
Jones Contribution And Refinancing Plans [Abstract]
Fair Value of Comstock's common stock		$ 149,357
Fair Value of Liabilities Assumed —
Current Liabilities		180,452
Long-Term Debt		2,059,560
Deferred Income Taxes		63,708
Reserve for Future Abandonment Costs		4,440
Net Liabilities Assumed		2,308,160
Fair Value of Assets Acquired —
Current Assets		936,026
Oil and Gas Properties		1,147,749
Other Property & Equipment		4,440
Income Taxes Receivable		19,086
Other Assets		549
Total Assets		2,107,850
Goodwill	$ 349,667	$ 349,667

XML

Summary of Significant Accounting Policies - Summary of Unaudited Pro Forma Financial Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	[1]	Sep. 30, 2017
Revenues:
Total oil and gas sales		$ 70,123
Operating expenses:
Production taxes		4,051
Gathering and transportation		3,450
Lease operating		7,016
Depreciation, depletion and amortization		17,820
General and administrative		3,303
Loss (gain) on sale of oil and gas properties		(98)
Total operating expenses		35,542
Operating income		34,581
Other income (expenses):
Gain (loss) from derivative financial instruments		(2,015)
Other income		42
Interest expense		(14,845)
Total other income (expenses)		(16,818)
Income (loss) before income taxes		17,763
Benefit from (provision for) income taxes		(3,940)
Net income (loss)		$ 13,823
Net income (loss) per share – basic and diluted	$ (1.09)	$ 0.13	$ (1.67)
Weighted average shares outstanding –
Basic		105,448
Diluted		105,463
Natural Gas Sales
Revenues:
Total oil and gas sales		$ 36,393
Oil Sales
Revenues:
Total oil and gas sales		$ 33,730
Pro Forma
Revenues:
Total oil and gas sales				$ 390,377		$ 318,491
Operating expenses:
Production taxes				22,168		16,722
Gathering and transportation				15,291		12,428
Lease operating				44,103		43,309
Depreciation, depletion and amortization				132,234		148,100
General and administrative				19,319		19,134
Loss (gain) on sale of oil and gas properties				35,340		1,060
Total operating expenses				268,455		240,753
Operating income				121,922		77,738
Other income (expenses):
Gain (loss) from derivative financial instruments				(1,134)		14,585
Other income				719		398
Interest expense				(80,437)		(89,063)
Total other income (expenses)				(80,852)		(74,080)
Income (loss) before income taxes				41,070		3,658
Benefit from (provision for) income taxes				(10,818)		(2,211)
Net income (loss)				$ 30,252		$ 1,447
Net income (loss) per share – basic and diluted				$ 0.29		$ 0.01
Weighted average shares outstanding –
Basic				105,448		105,095
Diluted				105,463		105,574
Pro Forma | Natural Gas Sales
Revenues:
Total oil and gas sales				$ 196,049		$ 158,679
Pro Forma | Oil Sales
Revenues:
Total oil and gas sales				$ 194,328		$ 159,812

[1] Excludes $2.6 million of transaction costs associated with the Jones Contribution.

XML

Summary of Significant Accounting Policies - Summary of Unaudited Pro Forma Financial Information (Parenthetical) (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Pro Forma
Transaction-related costs	$ 2.6

XML

Summary of Significant Accounting Policies - Results of Operations for Properties (Detail) - Predecessor - USD ($) $ in Thousands		3 Months Ended	7 Months Ended	9 Months Ended
		Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2017
Operations And Summary Of Significant Accounting Policies [Line Items]
Total oil and gas sales		$ 11,079	$ 17,747	$ 36,495
Total operating expenses	[1]	(11,664)	(6,134)	(38,262)
Operating income (loss)		$ (585)	$ 11,613	$ (1,767)

[1] Includes direct operating expenses, depreciation, depletion and amortization and exploration expense and excludes interest and general and administrative expense. No depreciation, depletion and amortization expense has been provided for subsequent to the date the assets were designated as held for sale.

XML

Summary of Significant Accounting Policies - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Accrued Liabilities, Current [Abstract]
Accrued drilling costs	$ 18,811
Accrued interest payable	14,328
Accrued transportation costs	5,022
Accrued employee compensation	3,841
Accrued ad valorem taxes	5,021
Accrued lease operating expenses	3,311
Other	2,927
Total accrued expenses	$ 53,261
Predecessor
Accrued Liabilities, Current [Abstract]
Accrued drilling costs		$ 5,874
Accrued interest payable		21,277
Accrued transportation costs		3,269
Accrued employee compensation		6,449
Accrued lease operating expenses		68
Asset retirement obligation – assets held for sale		4,557
Other		961
Total accrued expenses		$ 42,455

XML

Summary of Significant Accounting Policies - Summary of Changes in Reserve for Future Abandonment Costs (Detail) - USD ($) $ in Thousands	2 Months Ended	7 Months Ended	9 Months Ended
	Sep. 30, 2018	Aug. 13, 2018	Sep. 30, 2017
Asset Retirement Obligations Noncurrent [Abstract]
Future abandonment costs — beginning of period	$ 4,683
Accretion expense	45
New wells placed on production	10
Future abandonment costs — end of period	4,738	$ 4,683
Predecessor
Asset Retirement Obligations Noncurrent [Abstract]
Future abandonment costs — beginning of period	$ 10,683	10,407	$ 15,804
Accretion expense		346	645
New wells placed on production		17	5
Liabilities settled and assets disposed of		(87)	(356)
Future abandonment costs — end of period		$ 10,683	$ 16,098

XML

Summary of Significant Accounting Policies - Schedule of Gas Derivative Contracts Volume and Prices (Detail)	Sep. 30, 2018 MMBTU bbl $ / bbl $ / MMBTU
Natural Gas Contracts, in MMBTU | Swap Contracts for Q4
Derivative [Line Items]
Volume, MMBTU | MMBTU	5,400,000
Average price per MMBtu in usd	3.00
Natural Gas Contracts, in MMBTU | Swap Contracts for 2019
Derivative [Line Items]
Volume, MMBTU | MMBTU	4,200,000
Average price per MMBtu in usd	3.00
Natural Gas Contracts, in MMBTU | Swap Contracts
Derivative [Line Items]
Volume, MMBTU | MMBTU	9,600,000
Average price per MMBtu in usd	3.00
Natural Gas Contracts, in MMBTU | Collar Contracts for Q4
Derivative [Line Items]
Volume, MMBTU | MMBTU	6,300,000
Ceiling, Average price per MMBTU	3.40
Floor, Average price per MMBTU	2.50
Natural Gas Contracts, in MMBTU | Swap Contracts for 2019
Derivative [Line Items]
Volume, MMBTU | MMBTU	13,200,000
Ceiling, Average price per MMBTU	3.40
Floor, Average price per MMBTU	2.50
Natural Gas Contracts, in MMBTU | Collar Contracts
Derivative [Line Items]
Volume, MMBTU | MMBTU	19,500,000
Ceiling, Average price per MMBTU	3.40
Floor, Average price per MMBTU	2.50
Crude Oil Contracts, in Barrels | Collar Contracts for Q4
Derivative [Line Items]
Volume, MMBTU | bbl	315,000
Ceiling, Average price per MMBTU | $ / bbl	77.85
Floor, Average price per MMBTU | $ / bbl	55.00
Crude Oil Contracts, in Barrels | Swap Contracts for 2019
Derivative [Line Items]
Volume, MMBTU | bbl	855,000
Ceiling, Average price per MMBTU | $ / bbl	77.98
Floor, Average price per MMBTU | $ / bbl	55.00
Crude Oil Contracts, in Barrels | Collar Contracts
Derivative [Line Items]
Volume, MMBTU | bbl	1,170,000
Ceiling, Average price per MMBTU | $ / bbl	77.94
Floor, Average price per MMBTU | $ / bbl	55.00

XML

Summary of Significant Accounting Policies - Schedule of Derivative Instruments (Detail) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Derivative [Line Items]
Net Fair Value Presented in the Consolidated Balance Sheet, Liabilities Derivatives - current	$ 2,849
Predecessor
Derivative [Line Items]
Net Fair Value Presented in the Consolidated Balance Sheet, Asset Derivatives - current		$ 1,318
Natural Gas Price Derivatives | Derivative Financial Instruments – Current
Derivative [Line Items]
Asset Derivatives, Fair Value	18
Gross Amounts Offset in the Consolidated Balance Sheet, Assets Derivatives	(18)
Net Fair Value Presented in the Consolidated Balance Sheet, Asset Derivatives - current	0
Liability Derivatives, Fair Value	854
Gross Amounts Offset in the Consolidated Balance Sheet, Liabilities Derivatives	(18)
Net Fair Value Presented in the Consolidated Balance Sheet, Liabilities Derivatives - current	836
Natural Gas Price Derivatives | Predecessor | Derivative Financial Instruments – Current
Derivative [Line Items]
Asset Derivatives, Fair Value		1,318
Gross Amounts Offset in the Consolidated Balance Sheet, Assets Derivatives		0
Net Fair Value Presented in the Consolidated Balance Sheet, Asset Derivatives - current		$ 1,318
Crude Oil Price Derivatives | Derivative Financial Instruments – Current
Derivative [Line Items]
Liability Derivatives, Fair Value	2,013
Net Fair Value Presented in the Consolidated Balance Sheet, Liabilities Derivatives - current	$ 2,013

XML

Summary of Significant Accounting Policies - Schedule of Gains and Losses from Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2017
Derivative [Line Items]
Gain (loss) from derivative financial instruments		$ (2,015)
Predecessor
Derivative [Line Items]
Gain (loss) from derivative financial instruments	$ (83)		$ 1,430	$ 881	$ 14,585
Gain (Loss) from Derivative Financial Instruments | Natural Gas Price Derivatives
Derivative [Line Items]
Gain (loss) from derivative financial instruments		$ (2,015)
Gain (Loss) from Derivative Financial Instruments | Natural Gas Price Derivatives | Predecessor
Derivative [Line Items]
Gain (loss) from derivative financial instruments	$ (83)		$ 1,430	$ 881	$ 14,585

XML

Summary of Significant Accounting Policies - Additional Information 2 (Detail) $ / shares in Units, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018 USD ($) $ / shares shares	Sep. 30, 2018 USD ($) Unit $ / shares $ / EquityUnit shares	Sep. 30, 2017 USD ($)	Aug. 13, 2018 USD ($) shares	Sep. 30, 2018 USD ($) Product shares	Sep. 30, 2017 USD ($)	Dec. 31, 2017 shares
Operations And Summary Of Significant Accounting Policies [Line Items]
Stock-based compensation expense recognized		$ 329
Number of primary products | Product					2
Contract cash settlement max days					25 days
Contract cancellable notice term					30 days
Accounts Receivable related to satisfied performance obligations and unconditional right to consideration		$ 61,000			$ 61,000
Restricted Stock
Operations And Summary Of Significant Accounting Policies [Line Items]
Number of shares granted | shares		422,545
Restricted stock grant date fair value		$ 3,700
Grant date fair value of share units, per share | $ / shares		$ 8.70
Shares of unvested restricted stock outstanding | shares		422,545			422,545
Unrecognized compensation cost related to unvested restricted stock		$ 3,500			$ 3,500
Period in which compensation cost expected to be recognized					2 years 10 months 24 days
Potential Performance Shares (PSU)
Operations And Summary Of Significant Accounting Policies [Line Items]
Shares of unvested restricted stock outstanding | shares		1,028,672			1,028,672
Period in which compensation cost expected to be recognized					2 years 10 months 24 days
Number of units granted | Unit		335,545
Performance share units grant date fair value		$ 4,300
Grant date fair value of share units, per unit | $ / EquityUnit		12.93
Minimum final number of shares of common stock issuable based on performance multiplier | shares		0
Maximum final number of shares of common stock issuable based on performance multiplier | shares		671,090
Unrecognized expense, performance share units					$ 4,200
Predecessor
Operations And Summary Of Significant Accounting Policies [Line Items]
Stock-based compensation expense recognized				$ 3,912		$ 4,455
Predecessor | Restricted Stock
Operations And Summary Of Significant Accounting Policies [Line Items]
Number of shares granted | shares	100,226
Restricted stock grant date fair value	$ 900
Grant date fair value of share units, per share | $ / shares	$ 8.73
Shares of unvested restricted stock outstanding | shares	904,181			904,181			619,867
General and Administrative Expense
Operations And Summary Of Significant Accounting Policies [Line Items]
Stock-based compensation expense recognized		$ 300
General and Administrative Expense | Predecessor
Operations And Summary Of Significant Accounting Policies [Line Items]
Stock-based compensation expense recognized	$ 800		$ 1,700			$ 4,500

XML

Summary of Significant Accounting Policies - Consolidated Income Tax Provision (Benefit) (Detail) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2017
Income Tax Expense Benefit From Continuing Operations [Line Items]
Current - State		$ 57
Deferred - State		20
Deferred - Federal		3,863
Total		$ 3,940
Predecessor
Income Tax Expense Benefit From Continuing Operations [Line Items]
Current - State	$ (22)		$ 18	$ 13	$ 115
Deferred - State	(309)		(87)	(1,360)	768
Deferred - Federal	936			2,412
Total	$ 605		$ (69)	$ 1,065	$ 883

XML

Summary of Significant Accounting Policies - Additional Information 3 (Detail) - USD ($)		1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended		12 Months Ended
	Dec. 31, 2017	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Operations And Summary Of Significant Accounting Policies [Line Items]
Federal statutory rate			21.00%			21.00%
Operating losses carryforward indefinitely with no carryback as percentage of taxable income						80.00%
Interest expense threshold percentage of adjusted taxable income beyond which interest expense is deductible						30.00%
Deferred federal tax, Remeasurement Rate						21.00%
Refundable unused AMT credit carryforward, Percentage						50.00%
Refundable unused alternative minimum tax credit carryforward years						2018 through 2020
Refundable unused AMT credit carryforward, year fully refunded by						2021
Net operating loss limitation						$ 3,300,000
Period of increase in net operating loss limitation						5 years
Net operating loss expiration period						20 years
Net Fair Value Presented in the Consolidated Balance Sheet, Liabilities Derivatives - current			$ 2,849,000			$ 2,849,000
Fixed Rate Debt
Operations And Summary Of Significant Accounting Policies [Line Items]
Long-term debt, including current portion, Carrying Value			816,300,000			816,300,000
Level 2 | Fixed Rate Debt
Operations And Summary Of Significant Accounting Policies [Line Items]
Long-term debt, including current portion, Fair Value			850,000,000			850,000,000
Predecessor
Operations And Summary Of Significant Accounting Policies [Line Items]
Federal statutory rate		21.00%		35.00%	21.00%		35.00%	35.00%
Deferred federal tax, Remeasurement Value	$ 140,400,000
Refundable unused AMT credit carryforward, Valuation Allowance	19,100,000							$ 19,100,000
Derivative financial instruments, asset	$ 1,300,000							$ 1,300,000
Predecessor | Fair Value, Measurements, Recurring | Level 3
Operations And Summary Of Significant Accounting Policies [Line Items]
Financial assets			0			0
Financial liabilities			$ 0			$ 0

XML

Summary of Significant Accounting Policies - Difference Between Federal Statutory Rate and Effective Tax Rate (Detail)	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended		12 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Line Items]
Tax at statutory rate		21.00%			21.00%
Tax effect of:
State income taxes, net of federal benefit		2.00%
Valuation allowance on deferred tax assets		(0.60%)
Nondeductible stock-based compensation		(0.20%)
Effective tax rate		22.20%
Predecessor
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Line Items]
Tax at statutory rate	21.00%		35.00%	21.00%		35.00%	35.00%
Tax effect of:
State income taxes, net of federal benefit	4.50%		3.80%	3.90%		4.10%
Valuation allowance on deferred tax assets	(21.10%)		(37.80%)	(24.10%)		(39.20%)
Nondeductible stock-based compensation	(0.70%)		(0.70%)	(0.70%)		(1.10%)
Other	(7.40%)			(1.30%)		(0.10%)
Effective tax rate	(3.70%)		0.30%	(1.20%)		(1.30%)

XML

Summary of Significant Accounting Policies - Additional Information 4 (Detail) - USD ($) $ in Thousands	7 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Operations And Summary Of Significant Accounting Policies [Line Items]
Performance multiplier, minimum		0.00%
Performance multiplier, maximum		200.00%
Participating securities that share in losses		0
Convertible Notes
Operations And Summary Of Significant Accounting Policies [Line Items]
Interest paid in-kind	$ 25,000
Restricted Stock
Operations And Summary Of Significant Accounting Policies [Line Items]
Shares of unvested restricted stock outstanding		422,545
Predecessor
Operations And Summary Of Significant Accounting Policies [Line Items]
Participating securities that share in losses			0
Interest paid in-kind	$ 25,004		$ 28,194
Predecessor | Convertible Notes
Operations And Summary Of Significant Accounting Policies [Line Items]
Interest paid in-kind			$ 28,200
Predecessor | Restricted Stock
Operations And Summary Of Significant Accounting Policies [Line Items]
Shares of unvested restricted stock outstanding	904,181			619,867

XML

Summary of Significant Accounting Policies - Basic and Diluted Income (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2017
Earnings Per Share [Line Items]
Basic income attributable to common stock, Per Share		$ 0.13
Diluted income attributable to common stock, Per Share		$ 0.13
Net income (loss)		$ 13,823
Income allocable to unvested restricted shares		(51)
Basic income attributable to common stock		13,772
Diluted income attributable to common stock		$ 13,772
Basic income attributable to common stock, Shares		105,448
Effect of Dilutive Securities: Income allocable to unvested restricted shares, Shares		15
Diluted income attributable to common stock, Shares		105,463
Basic and diluted net loss attributable to common stock	$ (16,865)		$ (24,736)
Basic and diluted net loss attributable to common stock, Shares	15,468		14,796
Net income (loss) per share – basic and diluted	$ (1.09)	$ 0.13	$ (1.67)
Predecessor
Earnings Per Share [Line Items]
Net income (loss)	$ (16,865)		$ (24,736)	$ (92,754)	$ (69,109)
Basic income attributable to common stock, Shares	15,468		14,796	15,262	14,591
Diluted income attributable to common stock, Shares	15,468		14,796	15,262	14,591
Basic and diluted net loss attributable to common stock				$ (92,754)
Basic and diluted net loss attributable to common stock, Shares				15,262
Net income (loss) per share – basic and diluted	$ (1.09)		$ (1.67)	$ (6.08)	$ (4.74)

XML

Summary of Significant Accounting Policies - Weighted Average Shares of Unvested Restricted Stock (Detail) - shares shares in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 13, 2018	Sep. 30, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested restricted stock		396
Predecessor
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested restricted stock	813		666	839	612

XML

Summary of Significant Accounting Policies - Common Stock and Convertible Stock Dilutive in Computation of Earning Per Share (Detail) shares in Thousands, EquityUnit in Thousands	1 Months Ended	2 Months Ended	3 Months Ended	7 Months Ended	9 Months Ended
	Aug. 13, 2018 EquityUnit $ / shares $ / EquityUnit shares	Sep. 30, 2018 EquityUnit $ / shares $ / EquityUnit shares	Sep. 30, 2017 EquityUnit $ / shares $ / EquityUnit shares	Aug. 13, 2018 EquityUnit $ / shares $ / EquityUnit shares	Sep. 30, 2017 EquityUnit $ / shares $ / EquityUnit shares
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average warrants for common stock | shares		15
Weighted average PSUs | EquityUnit		315
Weighted average grant date fair value per unit | $ / EquityUnit		12.93
Predecessor
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average warrants for common stock | shares	42		415	142	479
Weighted average PSUs | EquityUnit	514		303	476	281
Weighted average grant date fair value per unit | $ / EquityUnit	13.83		17.12	13.83	17.12
Weighted average contingently convertible shares | shares	40,631		37,624	39,819	36,676
Warrants for Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average exercise price per share | $ / shares		$ 0.01
Warrants for Common Stock | Predecessor
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average exercise price per share | $ / shares	$ 0.01		$ 0.01	$ 0.01	$ 0.01
Contingently Convertible Shares | Predecessor
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average exercise price per share | $ / shares	$ 12.32		$ 12.32	$ 12.32	$ 12.32

XML

Summary of Significant Accounting Policies - Cash Payments Made for Interest and Income Taxes (Detail) - USD ($) $ in Thousands	2 Months Ended	7 Months Ended	9 Months Ended
	Sep. 30, 2018	Aug. 13, 2018	Sep. 30, 2017
Supplemental Cash Flow Information [Line Items]
Interest payments	$ 1,999
Predecessor
Supplemental Cash Flow Information [Line Items]
Interest payments		$ 36,187	$ 72,913
Income tax payments		$ 2	$ 3

XML

Long-Term Debt - Long-term Debt (Detail) $ in Thousands	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
Debt issuance costs, net of amortization	$ (23,506)
Long-term Debt	1,242,844
Bank Credit Facility
Debt Instrument [Line Items]
Principal	450,000
9¾% Senior Notes due 2026
Debt Instrument [Line Items]
Principal	850,000
Discount, net of amortization	$ (33,650)

XML

Long-Term Debt - Long-term Debt (Parenthetical) (Detail)	Sep. 30, 2018
9¾% Senior Notes due 2026
Debt Instrument [Line Items]
Interest rate on debt instrument	9.75%

XML

Long-Term Debt - Additional Information (Detail) - USD ($)		9 Months Ended
	Aug. 03, 2018	Sep. 30, 2018	Aug. 14, 2018
9¾% Senior Notes due 2026
Debt Instrument [Line Items]
Principal amount of notes issued		$ 850,000,000
Interest rate on debt instrument		9.75%
Interest payment terms		payable at an annual rate of 9¾% on February 15 and August 15
Maturity of senior notes	Aug. 15, 2026
Bank Credit Facility
Debt Instrument [Line Items]
Principal amount of notes issued		$ 450,000,000
Bank credit facility		700,000,000	$ 700,000,000
Bank credit facility borrowing outstanding		$ 450,000,000

XML

Long-Term Debt - Additional Information 1 (Detail) - Bank Credit Facility - USD ($)		3 Months Ended
	Aug. 14, 2018	Dec. 31, 2018	Sep. 30, 2018
Debt Instrument [Line Items]
Bank credit facility	$ 700,000,000		$ 700,000,000
Maturity of credit facility	Aug. 14, 2023
Bank credit facility borrowing outstanding			$ 450,000,000
Scenario, Forecast
Debt Instrument [Line Items]
Leverage ratio		400.00%
Current ratio		100.00%
Minimum
Debt Instrument [Line Items]
Commitment fee on unused borrowing base	0.375%
Maximum
Debt Instrument [Line Items]
Commitment fee on unused borrowing base	0.50%
LIBOR | Minimum
Debt Instrument [Line Items]
Spread rate for interest rate on credit facility	2.00%
LIBOR | Maximum
Debt Instrument [Line Items]
Spread rate for interest rate on credit facility	3.00%
Base Rate | Minimum
Debt Instrument [Line Items]
Spread rate for interest rate on credit facility	1.00%
Base Rate | Maximum
Debt Instrument [Line Items]
Spread rate for interest rate on credit facility	2.00%

XML

Stockholders' Equity - Additional Information (Detail) - $ / shares		9 Months Ended
	Aug. 14, 2018	Sep. 30, 2018	Sep. 30, 2017	Aug. 10, 2018	Dec. 31, 2017
Stockholders Equity [Line Items]
Common stock, shares authorized		155,000,000
Common stock, par value		$ 0.50
Jones contribution transaction, Shares issued	88,571,429
Exercise price of warrants for common stock		$ 0.01
Common stock warrants exercised, Shares		402,708
Remaining warrants expired without being exercised		11,955
Predecessor
Stockholders Equity [Line Items]
Total authorized shares				160,000,000
Common stock, shares authorized				155,000,000	75,000,000
Common stock, par value				$ 0.50	$ 0.50
Preferred stock, shares authorized				5,000,000
Preferred stock, par value				$ 10.00
Common stock warrants exercised, Shares			246,793

XML

Commitments and Contingencies - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2018 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Natural gas transportation and treating agreements	through July 2019
Maximum commitments under natural gas transportation and treating agreements	$ 1.0
Contract term related to drilling services	through September 2019
Commitments for contracted drilling services	$ 16.5