Comstock Resources has announced a proposed $1.65 billion strategic partnership with SOCAR along with a separate approximately $450 million drilling venture with Jerry Jones, providing substantial capital to reduce debt and accelerate development of Comstock’s Haynesville assets.
Under a letter of intent, the State Oil Company of the Azerbaijan Republic, or SOCAR, would acquire interests in Comstock’s Legacy Haynesville and Western Haynesville upstream assets along with part of Comstock’s ownership interest in Pinnacle Gas Services.
SOCAR would pay an aggregate $1.65 billion in cash, subject to customary adjustments.
The proposed transaction includes a 20% non-operated working interest in Comstock’s Legacy Haynesville assets and a 15% interest in its Western Haynesville assets.
SOCAR’s Western Haynesville interest would decline to 7.5% after five years and after SOCAR achieves a 15% return on its investment.
SOCAR would also acquire 15% of Comstock’s 73% ownership interest in Pinnacle Gas Services.
The companies are targeting a definitive purchase agreement by October 31 and closing by the end of 2026, subject to negotiations, approvals and other customary conditions.
Comstock plans to use proceeds from the deal to reduce total debt.
On a pro forma basis, the company said its net debt would decline from $3.1 billion to approximately $1.5 billion based on June 30, 2026 figures.
The stronger balance sheet is expected to support continued development of Comstock’s approximately 545,000 net acres in the Western Haynesville, which the company describes as one of the largest undeveloped natural gas resources in the United States.
The acreage is positioned to serve growing demand from LNG exports, power generation and data centers along the Gulf Coast.
Comstock will retain operational control of its upstream assets and continue managing Pinnacle Gas Services.
Separately, Comstock entered into a drilling venture with Jerry Jones, the company’s majority shareholder.
Beginning September 1, a Jones family partnership will fund 85% of the drilling and completion costs for 18 Western Haynesville wells and 80% of the costs for nine Legacy Haynesville wells scheduled over the next 12 months.
The program is expected to cost approximately $450 million.
Once the Jones partnership achieves a 15% return on investment, 50% of its interest in the wells will revert to Comstock.
Wells Fargo is serving as financial advisor to Comstock, with O’Melveny & Myers as legal counsel.
J.P. Morgan Securities is serving as financial advisor to SOCAR, with Baker Botts providing legal counsel.
KEY QUOTES:
“We are excited to announce a strategic alliance with SOCAR. This partnership introduces a reputable international strategic partner to help accelerate value creation for our investors, while allowing us to materially reduce debt and fully fund the planned development of our Western Haynesville acreage, all while Comstock retains operatorship and control of the upstream and midstream assets while maintaining substantial upside through the reversionary structure. We are also excited about the investment Jerry Jones is making in our Haynesville drilling program which will strengthen our balance sheet and allow us to continue to create value in our vast Western Haynesville assets.”
M. Jay Allison, Chairman and Chief Executive Officer of Comstock Resources
“This partnership brings together SOCAR’s and Comstock’s extensive experience and capabilities, creating a strong foundation for the further expansion of our strategic cooperation. We are pleased to invest alongside a team with a demonstrated track record in developing the Haynesville and Western Haynesville, and we look forward to a long-term partnership.”
Rovshan Najaf, President of SOCAR
