Comstock Resources has signed a letter of intent (LoI) with the State Oil Company of the Azerbaijan Republic (SOCAR) for the sale of stakes in its Haynesville shale assets in the US and a midstream subsidiary.
The proposed deal values the interests at $1.65bn in cash, with closing conditions subject to negotiation, regulatory approval and customary adjustments.
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The transaction is set to be completed by the end of 2026, following an effective date of 1 July 2026.
Under the terms outlined, SOCAR, or one of its wholly owned subsidiaries, would acquire a non-operated 20% working interest in Comstock’s legacy Haynesville upstream assets.
SOCAR would also initially take a 15% non-operated working interest in the Western Haynesville upstream assets, which would reduce to 7.5% after five years and following a 15% return on investment from those assets.
In addition, SOCAR would acquire 15% of Comstock’s holding of a 73% stake in Pinnacle Gas Services, a midstream business serving the Western Haynesville region.
The partnership contemplates SOCAR participating in future development opportunities within the identified Haynesville areas.
Comstock is an independent natural gas company with its operations focused on the Haynesville shale in North Louisiana and East Texas.
SOCAR will also offer Comstock options for marketing natural gas to international customers.
SOCAR president Rovshan Najaf said: “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.”
Comstock stated that it intends to use proceeds from the transaction primarily to cut debt. According to its plans, the company’s net debt would fall from $3.1bn to $1.5bn, based on figures as of 30 June 2026, if the deal closes as outlined.
The company will retain operational control of all upstream assets and remain the operator of Pinnacle Gas Services.
Furthermore, Comstock disclosed a separate drilling initiative with Jerry Jones, who holds a majority stake in the company.
Starting from 1 September 2026, a Jones family partnership will provide funding for most of the drilling and completion expenses for a total of 18 Western Haynesville wells and nine Legacy Haynesville wells to be drilled by Comstock within the following year.
The partnership will cover 85% of costs for the Western Haynesville wells and 80% for the Legacy Haynesville wells, with the total investment estimated at around $450m.
Under the terms agreed, once the investment has returned 15%, half of the interest in these wells will transfer back to Comstock.
The drilling programme is expected to contribute to the ongoing development of Comstock’s 545,000 net acres in the Western Haynesville area, provide gas volumes to Pinnacle Gas Services and support the company’s balance sheet.
Wells Fargo provided financial advice to Comstock, while O’Melveny & Myers is serving as its legal representative.
SOCAR has appointed J P Morgan Securities as financial adviser and Baker Botts as legal counsel.
In June 2026, Comstock divested a 27% non-controlling common equity interest in Pinnacle Gas Services to funds managed by Sixth Street for $600m.
