SOCAR to Buy Haynesville Interests From Comstock for $1.65 Billion
The Azerbaijan state oil company will take non-operated stakes in Comstock’s Legacy and Western Haynesville assets plus a slice of Pinnacle Gas Services, with a reversion that trims its Western interest after a 15% return.
SOCAR (SOCAR) entered a letter of intent to acquire a $1.65 billion package of Haynesville working interests and midstream equity from Comstock Resources, Inc. (CRK), in cash, subject to customary purchase-price adjustments.
The deal is an asset purchase, not a company acquisition. SOCAR or a wholly owned subsidiary would take a non-operated working interest equal to 20% of Comstock’s interest in its Legacy Haynesville upstream assets, a non-operated working interest equal to 15% of Comstock’s interest in its Western Haynesville upstream assets, and 15% of Comstock’s 73% ownership interest in Pinnacle Gas Services LLC, which provides midstream services to the Western Haynesville.
The Western Haynesville stake carries a reversion. After five years and once SOCAR has achieved a 15% return on investment in those assets, its interest reduces to 7.5%. The structure gives SOCAR the opportunity to reach that 15% return while retaining a 7.5% long-term interest, and gives Comstock increased participation in future upside through the reversion.
The letter of intent binds the parties to negotiate a definitive purchase and sale agreement in good faith, with execution targeted by October 31, 2026, and closing by year-end, subject to the progress of negotiations and customary conditions including required government and third-party approvals. The transaction is set for an effective date of July 1, 2026.
Comstock, a leading independent natural gas producer focused on the Haynesville shale in North Louisiana and East Texas, intends to use the proceeds to reduce total indebtedness. Pro forma for the transaction, net debt would reduce from $3.1 billion to $1.5 billion as of June 30, 2026. Comstock will remain operator of all upstream assets and will continue to manage, operate and control Pinnacle.
Under the partnership, SOCAR will have the opportunity to participate in future opportunities generated by Comstock in the Legacy and Western Haynesville at the same percentages it is acquiring, and SOCAR will provide opportunities for Comstock to market its natural gas to international customers. The stronger balance sheet will support continued delineation and development of its 545,000 net acres in the Western Haynesville, positioned to serve growing LNG, power generation and data-center demand along the Gulf Coast.
Rovshan Najaf, President of SOCAR, commented: “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.”
M. Jay Allison, Chairman and Chief Executive Officer of Comstock, said the alliance introduces an international strategic partner to help accelerate value creation, allows the company to materially reduce debt and fund planned Western Haynesville development, and preserves operatorship and control with substantial upside through the reversionary structure.
Wells Fargo is acting as financial advisor to Comstock, with O’Melveny & Myers LLP as legal counsel. J.P. Morgan Securities LLC is acting as financial advisor to SOCAR, with Baker Botts LLP as legal counsel.