A gas producer waiting on captive demand
- Comstock makes almost all of its production revenue from natural gas, not oil.
- The big upside is a 5.2 GW Anderson County power hub that could use almost 1 Bcf per day of gas by 2031.
- Q1 2026 showed higher gas prices, but production fell 15% from the prior year quarter.
- Western Haynesville wells are deep and high pressure, so cost control and early flow rates matter a lot.
- Pinnacle Gas Services could become cleaner to own, but the equity raise may dilute shareholders.
Power demand is the swing factor
Comstock is a direct bet on U.S. natural gas demand. The company drills mostly in the Haynesville and Bossier shales. Its biggest new story is not a new oilfield. It is a possible customer right next door.
On March 19, the U.S. Department of Commerce selected Comstock's Western Haynesville site for a 5.2 GW natural gas-fired power hub in Anderson County, Texas. Comstock says it would supply the gas for the facility, which could reach almost 1 Bcf per day by 2031. If signed contracts back that plan, Comstock could get a large local buyer for its gas and reduce some exposure to weak regional prices.
The bear case is still real. Q1 2026 production fell 15% from Q1 2025, even though realized natural gas prices rose 19%. Management also said high water during flowback can make early well results harder to read. That matters because the Western Haynesville is deep, high pressure, and expensive to develop.
Finn's cautious view fits the setup. The company has a large demand option, but investors still need proof on three things: final gas supply terms with NextEra, cheaper repeatable Western Haynesville wells, and a Pinnacle Gas Services equity deal that does not overly dilute common shareholders.
Drill gas, hedge prices, move molecules
Comstock earns most of its money by drilling natural gas wells and selling the gas. In Q1 2026, natural gas sales were $418.3 million out of $419.0 million of natural gas and oil sales. Oil was only $0.8 million, so it is not a key driver.
The company also uses hedges. A hedge is a contract that can protect against lower prices, but it can also reduce upside when prices rise. In Q1 2026, realized natural gas was $4.27 per Mcf before hedge cash settlements and $3.45 per Mcf after them.
Pinnacle Gas Services is the midstream piece. Midstream assets gather, treat, and move gas, which helps Comstock control the path from wellhead to market. In January 2026, Pinnacle agreed to redeem Quantum's Class B units for $440 million plus accrued distributions, and management later said it was seeking a common equity partner.
The model breaks when gas prices stay low, wells cost more than expected, or financing gets tight. Comstock planned $1.4 billion to $1.5 billion of 2026 development and exploration spending, plus $100 million to $150 million for the Western Haynesville midstream partnership. That is a large spend plan for a company still exposed to gas cycles.
Mostly one product, many ways to sell it
Natural gas production
This is the core business. Q1 2026 natural gas sales were $418.3 million, which was almost all natural gas and oil sales.
Western Haynesville drilling
This is the main growth asset. Comstock says the Western Haynesville position covers 520,000 net acres, and it is the area tied to the Anderson County power hub.
Legacy Haynesville wells
The legacy assets still help supply production and cash flow. Capital focus has shifted toward the Western Haynesville after non-core sales.
Pinnacle Gas Services
Pinnacle is the midstream platform tied to moving and handling gas. A new common equity partner could make the structure cleaner, but the terms are not known yet.
Gas services activity
Comstock also reports gas services revenue and expense tied to purchased gas and transport capacity. In Q1 2026, gas services revenue was $166.5 million and gas services expense was $162.9 million.
NextEra power supply project
The Anderson County project could become a large local demand source. The key proof point is signed supply terms, including price and volume commitments.
One segment, gas-heavy mix
Comstock reports as one operating segment. The mix below uses Q1 2026 natural gas and oil sales from the 10-Q, where natural gas was $418.3 million of $419.0 million.
What could break the thesis
Natural gas price slump
High impact · Medium oddsComstock is highly tied to natural gas prices. A long period of weak gas prices can cut cash flow, pressure drilling returns, and reduce reported reserves. The 2024 10-K showed this risk when low SEC prices removed 1.2 Tcf of proved undeveloped reserves from the books.
Western Haynesville execution
High impact · Medium oddsThe Western Haynesville is the growth story, but it is also harder to drill. Management said high water during flowback can hurt initial production readings. If the new well designs do not lower costs or lift recoveries, the growth case weakens.
NextEra contract uncertainty
High impact · Medium oddsThe 5.2 GW Anderson County power hub is the biggest upside catalyst. But selection of the site is not the same as final gas supply economics. The company still needs clear commercial contracts that show volumes, pricing, timing, and credit support.
Pinnacle financing and dilution
Medium impact · Medium oddsPinnacle agreed to redeem Quantum's Class B units for $440 million plus accrued distributions. Management also said it is running a process to raise common equity for Pinnacle. If the valuation is weak, common shareholders may face dilution or higher leverage.
Hedge drag
Medium impact · Medium oddsHedges can protect Comstock when gas prices fall, but they can also cap upside. In Q1 2026, the natural gas price was $4.27 per Mcf before cash hedge settlements and $3.45 per Mcf after them. That gap matters when investors expect a gas price recovery.
In one breath
Is Comstock Resources mostly a natural gas company?
Yes. In Q1 2026, natural gas sales were $418.3 million out of $419.0 million of natural gas and oil sales. Oil was only a small part of revenue.
Why does the NextEra project matter for CRK?
It could create a large local gas customer near Comstock's Western Haynesville assets. The company says the Anderson County power hub could use almost 1 Bcf per day of gas by 2031.
What is the main risk for Comstock Resources?
The biggest risk is still natural gas price weakness. A second major risk is execution in the Western Haynesville, where deep, high-pressure wells can cost more and produce less than expected.
What is Pinnacle Gas Services?
Pinnacle is Comstock's midstream platform, which helps gather, treat, and move gas. Comstock is working on an equity process tied to replacing Quantum's preferred stake with a common equity partner.