Comstock sells SOCAR a $1.65 billion stake in its Haynesville gas assets

Comstock Resources, Inc. agreed to sell SOCAR working interests in its Haynesville shale assets for $1.65 billion in cash, the Frisco, Texas producer said Sept. 1. The State Oil Company of the Azerbaijan Republic, or a subsidiary, would acquire a 20% non-operated interest in Comstock's Legacy Haynesville assets and a 15% non-operated interest in its Western Haynesville assets, along with 15% of Comstock's 73% stake in Pinnacle Gas Services LLC, the midstream unit serving Western Haynesville.

SOCAR's Western Haynesville interest would fall to 7.5% after five years, once SOCAR reaches a 15% return on its investment there. The agreement is a letter of intent. The two companies are targeting a definitive purchase and sale agreement by October 31, 2026, and a closing by year end, subject to negotiations and regulatory approval. The transaction carries an effective date of July 1, 2026.

Comstock plans to use the proceeds to cut debt. Pro forma for the sale, the company's net debt would fall from $3.1 billion to $1.5 billion as of June 30, 2026. Comstock will keep operating all of the upstream assets in the deal and will continue to run Pinnacle Gas Services. Under the partnership, SOCAR can also take part in Comstock's future Legacy and Western Haynesville opportunities at the same percentages, and SOCAR will give Comstock ways to market its gas to international buyers.

545,000 acres on the Gulf Coast

Comstock holds 545,000 net acres in the Western Haynesville, which it called one of the largest undeveloped natural gas resources in the United States. The company said the acreage is positioned to supply growing LNG, power generation and data center demand along the Gulf Coast, including the Texas Power Generation Hub in Anderson County, Texas.

Chairman and Chief Executive Officer M. Jay Allison said the SOCAR partnership would help accelerate value creation for investors while Comstock keeps "operatorship and control of the upstream and midstream assets." SOCAR President Rovshan Najaf said the deal creates "a strong foundation for the further expansion of our strategic cooperation."

$450 million drilling venture with Jerry Jones

Comstock separately agreed to a Haynesville drilling venture with Jerry Jones, the company's majority stockholder. Starting September 1, 2026, a partnership owned by the Jones family will fund 85% of the drilling and completion costs on 18 Western Haynesville wells and 80% of the costs on nine Legacy Haynesville wells that Comstock will drill and complete over the next twelve months, work Comstock estimated will cost about $450 million. Once that investment reaches a 15% return, half the interest in the wells will revert to Comstock. The venture is meant to fund development of the Western Haynesville acreage and supply gas volumes to Pinnacle Gas Services. Comstock said the drilling venture will also support its balance sheet.

Wells Fargo advised Comstock on the SOCAR transaction, with O'Melveny & Myers LLP as legal counsel. J.P. Morgan Securities LLC advised SOCAR, with Baker Botts LLP as legal counsel.