Comstock Resources and the State Oil Company of the Azerbaijan Republic (SOCAR) have signed a framework agreement advancing the latter’s investment of $1.65bn (2.8bn manat) in the US-based company’s Haynesville Shale assets.
The agreement, executed at the Azerbaijan International Investment Forum, formalises commitments set out in a previously announced letter of intent relating to SOCAR’s investment in the basin.
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Both parties have committed to negotiating and completing a definitive purchase and sale agreement by no later than 31 October 2026, with the transaction expected to close before year-end.
On a pro forma basis as of 30 June 2026, Comstock’s net debt would decrease from $3.1bn to $1.5bn following completion.
The company said it plans to direct the proceeds towards reducing total indebtedness, which would substantially lower its financial leverage and strengthen liquidity.
The partnership focuses on Comstock’s position in the Haynesville Shale, a natural gas basin close to the Gulf Coast’s liquefied natural gas (LNG) export facilities.
The deal seeks to provide for joint development and management of upstream and midstream assets, while allowing SOCAR to market natural gas produced by Comstock as LNG to international buyers outside the US.
Both companies plan to identify prospective offtake partners and examine pricing, logistics and regulatory issues related to international LNG sales.
Under the agreement, Comstock will retain operational control of all upstream assets and continue managing its midstream subsidiary, Pinnacle Gas Services.
SOCAR will gain the right to participate in future Comstock opportunities in the Legacy and Western Haynesville in the same proportions it is acquiring in the initial transaction.
The deal structure is designed to give SOCAR the opportunity to achieve a 15% return on its investment while retaining a 7.5% long-term interest in Western Haynesville upstream assets. A reversion mechanism within the deal is designed to provide Comstock with increased participation in future upside.
The framework agreement forms part of broader economic and energy cooperation between the US and Azerbaijan following the signing of the protocol of the Azerbaijan-United States Economic Dialogue in June 2026.
Comstock also plans to support the development of its 545,000 net acres in the Western Haynesville, a resource positioned to meet LNG, power generation and data centre demand along the Gulf Coast.
The company is an independent producer of natural gas with operations concentrated in the Haynesville Shale region of North Louisiana and East Texas.
In June 2026, the company divested a 27% non-controlling common equity interest in Pinnacle Gas Services to funds managed by Sixth Street for $600m.
