What the changes say
- New risks cover lease expirations before 2028, drilling-service costs, cybersecurity reporting, derivative counterparties, and ESG scrutiny.
- Debt risk moved from a standalone $3.0 billion disclosure to a $2.8 billion disclosure within regulatory risks.
- Climate risk now includes higher insurance costs or reduced coverage after extreme weather.
- Natural-gas price risk adds armed conflicts and U.S. or foreign tariffs and trade restrictions.
What changed since the prior 10-K
New
- New
the price and availability of alternative fuels; and
Lower natural-gas prices could reduce revenue, reserve values, drilling economics, borrowing capacity, and access to capital amid broader economic and geopolitical pressures.
- New
Prospects that we decide to drill may not yield natural gas in commercially viable quantities or quantities sufficient to meet our targeted rate of return and firm transportation commitments
Drilling prospects may fail to produce commercially viable natural gas or enough output to meet targeted returns and firm transportation commitments.
- New
Some of our undeveloped leasehold acreage is subject to leases that will expire unless production is established on units containing the acreage. Failure to administer lease acquisitions, lease contracting, lease maintenance and timely lease payments could lead to loss of leased land
Leases covering undeveloped acreage may expire before 2028 if production is not established or renewal is not economically available.
- New
The unavailability or high cost of drilling rigs, completion equipment, supplies, qualified personnel and oilfield services could adversely affect our ability to execute our exploration and development plans on a timely basis and within our budget
Shortages or higher costs for rigs, completion equipment, supplies, personnel, and services could delay development, reduce reserves, or require costly outside capital.
- New
Other negative consequences
Expanding data-protection and cybersecurity reporting rules, including SEC deadlines for material incidents, could increase compliance costs and operational exposure.
- New
liquidity. As a result of these factors, our derivative activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flows
Derivative hedges may increase cash-flow volatility through ineffective hedging, counterparty failure, price differentials, missed policy violations, or limited upside from higher gas prices.
- New
Scrutiny and uncertain expectations from stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks
Conflicting and changing stakeholder expectations for environmental, social, and governance practices could raise costs or damage Comstock’s reputation, business, or stock price.
Dropped
- Dropped
overall U.S. and global economic and political conditions, including inflationary pressures, further increases in interest rates, a general economic slowdown or recession, political tensions and war (including future developments in the ongoing Russia-Ukraine and Israel-Hamas conflicts)
- Dropped
We had $3.0 billion principal amount of debt as of December 31, 2024
Explicitly cited further interest-rate increases and the Israel-Hamas conflict alongside economic and geopolitical conditions.
Reworded
- 78% rewritten
our ability to acquire, locate and produce new reserves
The risk now focuses on reduced capital limiting exploration and reserve replacement; the separate warning about unsuccessful drilling was removed.
- 69% rewritten
We may be subject to physical and financial risks associated with climate-related effects
Adds that extreme weather or volatility could increase insurance costs or reduce coverage for assets in severely affected areas.
Was: We may be subject to physical and financial risks associated with climate change
- 67% rewritten
Our future production and revenues depend on our ability to replace our reserves
No substantive change; it continues to address the need to find, develop, or acquire economically recoverable natural-gas reserves.
- 55% rewritten
governmental sanctions, such as fines and penalties
Adds debt-service and growth constraints and updates the disclosed debt amount to $2.8 billion as of December 31, 2025.
- 39% rewritten
An extended period of depressed natural gas prices would adversely affect our business, financial condition, cash flow, liquidity, results of operations and our ability to meet our capital expenditure obligations and financial commitments
Adds armed conflicts and U.S. or foreign tariffs and trade restrictions on natural resources, including natural gas, as price drivers.
- 36% rewritten
Our hedging transactions could result in financial losses or could reduce our income. To the extent we have hedged a significant portion of our expected production and our actual production is lower than we expected or the costs of goods and services increase, our profitability would be adversely affected
Removes the word “continuing” from the warning that hedges may not protect against prolonged natural-gas price declines.
- 24% rewritten
If we experience any of the above operating risks, our well bores, gathering systems and processing facilities could be affected, which could adversely affect our ability to conduct operations
No substantive change; it continues to cover losses from injury, property damage, pollution, cleanup, penalties, and suspended operations.
All 24 risk factors
Headings as the filing states them, in filing order.
Other
- 01An extended period of depressed natural gas prices would adversely affect our business, financial condition, cash flow, liquidity, results of operations and our ability to meet our capital expenditure obligations and financial commitments39% rewritten
- 02the price and availability of alternative fuels; andNew
- 03Our future production and revenues depend on our ability to replace our reserves67% rewritten
- 04Prospects that we decide to drill may not yield natural gas in commercially viable quantities or quantities sufficient to meet our targeted rate of return and firm transportation commitmentsNew
- 05Market conditions or operational impediments may hinder our access to natural gas markets or delay our production
- 06Some of our undeveloped leasehold acreage is subject to leases that will expire unless production is established on units containing the acreage. Failure to administer lease acquisitions, lease contracting, lease maintenance and timely lease payments could lead to loss of leased landNew
- 07The unavailability or high cost of drilling rigs, completion equipment, supplies, qualified personnel and oilfield services could adversely affect our ability to execute our exploration and development plans on a timely basis and within our budgetNew
- 08our ability to acquire, locate and produce new reserves78% rewritten
- 09We pursue acquisitions as part of our growth strategy and there are risks associated with such acquisitions
- 10potential environmental and other liabilities
- 11Our operations may incur substantial liabilities due to compliance with environmental laws and regulations
- 12Our business involves many uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses
- 13If we experience any of the above operating risks, our well bores, gathering systems and processing facilities could be affected, which could adversely affect our ability to conduct operations24% rewritten
- 14repairs to resume operations
- 15Loss of our information and computer systems could adversely affect our business
- 16Our business could be negatively impacted by security threats, including cybersecurity threats and other disruptions
- 17Other negative consequencesNew
- 18We are subject to extensive governmental laws and regulations that may adversely affect the cost, manner or feasibility of doing business
- 19governmental sanctions, such as fines and penalties55% rewritten
- 20our debt limits (i) our ability to capitalize on significant business opportunities, (ii) our flexibility in planning for or reacting to changes in market conditions, and (iii) our ability to withstand competitive pressures and economic downturns
- 21Our hedging transactions could result in financial losses or could reduce our income. To the extent we have hedged a significant portion of our expected production and our actual production is lower than we expected or the costs of goods and services increase, our profitability would be adversely affected36% rewritten
- 22liquidity. As a result of these factors, our derivative activities may not be as effective as we intend in reducing the volatility of our cash flows, and in certain circumstances may actually increase the volatility of our cash flowsNew
- 23We may be subject to physical and financial risks associated with climate-related effects69% rewritten
- 24Scrutiny and uncertain expectations from stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risksNew
Other Comstock Resources 10-Ks
- FY2024 10-K risk factors19 risks
Comstock Resources depends heavily on volatile natural gas prices to support its operations and capital expenditures.
Filed Feb 21, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.