The winter storms gripping much of the United States have devastated many families and businesses, with frigid temperatures and power outages causing particularly dire conditions in Texas.
But for oil and gas producers that have managed to keep production going, this is proving to be a big payday. Jerry Jones, the billionaire owner of the Dallas Cowboys, appears to be one of the beneficiaries.
Comstock Resources Inc., a shale driller that operates in Texas and Louisiana, told investors on an earnings call this week that the surge in natural gas prices was providing it with a major — albeit almost certainly temporary — financial boost. The company is publicly traded but Jones holds a majority of the shares.
"Obviously, this week is like hitting the jackpot," President and Chief Financial Officer Roland Burns said Wednesday.
🔥🔥BOOM 🔥🔥 GameStop? Nope; it's the price of the Oklahoma regional benchmark natural gas (OGT), rising vertically to $999 per mBtu (this is up ~33,200% from its price two weeks ago of less than $3 per mBtu) | #OOTT #TexasFreeze #texaspoweroutage #LogarithmicScaleForOGT pic.twitter.com/oX2JjSYsZ9— Javier Blas (@JavierBlas) February 16, 2021
The storm has reduced natural gas output at the same time that demand — for both home heating and power generation — has skyrocketed.
That's resulted in catastrophic shortages, as well as some truly eye-popping prices for natural gas in the affected regions.
Many in the oil and gas industry have taken a blow because wells and pipelines have stopped working in the unexpected cold.
But Comstock was already ramping up production in anticipation that natural gas prices would increase, and now finds itself benefiting from what it described as "super-premium prices" of "anywhere from" $15 per thousand cubic feet to as much as $179 per thousand cubic feet.
For comparison, the company had sold the same gas last quarter for an average of $2.40 per thousand cubic feet.