Comstock Signs Letter of Intent with SOCAR for $1.65 Billion Haynesville Asset Transaction

en.Wedoany.com Reported - On September 1, Comstock Resources signed a letter of intent with Azerbaijan's state oil company SOCAR, under which SOCAR or its wholly-owned subsidiary plans to acquire interests in certain upstream and midstream assets held by Comstock in the Haynesville shale play for $1.65 billion in cash. The transaction price remains subject to customary adjustments under the definitive agreement, with both parties targeting the execution of a formal purchase and sale agreement by October 31 and closing by the end of 2026; closing is also subject to governmental and third-party approvals. The effective date of the transaction is proposed to be retroactive to July 1, 2026.

Under the letter of intent, SOCAR intends to acquire a 20% non-operated working interest in Comstock's Legacy Haynesville upstream asset interests, as well as a 15% non-operated working interest in its Western Haynesville asset interests. The Western Haynesville interest will be reduced to 7.5% after a five-year holding period and once SOCAR achieves a 15% return on investment. SOCAR will also acquire 15% of Comstock's current 73% interest in Pinnacle Gas Services. Pinnacle owns and operates natural gas gathering and processing systems that provide midstream services to Comstock's Western Haynesville production assets in East Texas.

Upon completion of the transaction, Comstock will remain the operator of the Legacy Haynesville and Western Haynesville upstream assets and will continue to be responsible for the management, operation, and control of Pinnacle Gas Services. The parties also plan to establish subsequent investment arrangements through a development and ownership agreement; SOCAR may participate in future development opportunities generated by Comstock in the two Haynesville asset areas in proportion to the corresponding interests acquired in this transaction, and will receive pro-rata participation rights in future leasing and acquisition projects in designated areas.

Comstock currently holds approximately 545,000 net acres in the Western Haynesville. The company plans to use the proceeds from this transaction to repay debt; based on data as of June 30, 2026, pro forma net debt after closing would decrease from $3.1 billion to approximately $1.5 billion. This asset sale does not represent Comstock's exit from its Haynesville assets; Comstock retains operational control of the related upstream assets and control of the Pinnacle midstream system.

On the same day, Comstock also signed a Haynesville drilling cooperation arrangement of approximately $450 million with a partnership affiliated with its largest shareholder, the Jerry Jones family. Over the 12 months commencing September 1, the partnership will fund 85% of the drilling and completion costs for 18 Western Haynesville wells and 80% of the drilling and completion costs for 9 Legacy Haynesville wells, covering 27 wells in total. After the investor achieves a 15% return on investment, 50% of the well interests will revert to Comstock.

The SOCAR transaction is currently at the stage of a binding letter of intent, with both parties undertaking an obligation to negotiate the definitive purchase agreement in good faith, though no final purchase and sale agreement has been executed. The target date for executing the definitive agreement is October 31, with closing planned for the end of 2026.