Comstock’s $1.65 Billion SOCAR Deal Enters Final Agreement Stage
Key Facts
Comstock Resources entered into a definitive agreement on November 4, 2026, to sell non-operated interests to Azerbaijan’s state oil company SOCAR for $1.65 billion in cash, subject to customary adjustments, according to a Comstock statement. The transaction includes 20% of Comstock’s interest in Legacy Haynesville assets, 15% of its interest in West Haynesville assets and 15% of its interest in Pinnacle Gas Services. The company said the proceeds would be used to reduce total debt, and that it would remain the operator of the upstream assets and continue to manage, operate and control Pinnacle. The definitive agreement follows the company’s announcement in September of a strategic partnership with SOCAR, while the current deal links producing assets and gas services to an expected closing before year-end. Under the statement, the agreement is effective July 1, 2026, with closing subject to customary conditions, including any required government approvals.
In the background to the deal, Comstock said in its September statement that net debt, based on figures as of June 30, 2026, would fall from $3.1 billion to $1.5 billion on a pro forma basis after the transaction. The company said its debt-reduction estimate assumes the proceeds are used for that purpose, while the latest announcement says the proceeds will be directed toward reducing total debt. The agreement does not transfer operational control: Comstock said it would remain the operator of the upstream assets and continue to manage Pinnacle Gas Services. The company also said SOCAR’s interest in West Haynesville assets would decline to 7.5% after five years, provided SOCAR achieves a 15% return on investment in those assets. The condition adds a later stage to the partnership, with the reduction in the stake tied to both the specified period and return being achieved.
The deal comes as Comstock’s operating and financial indicators diverged in the third quarter of 2026. Production totaled 122.4 billion cubic feet equivalent, up 9% year over year and 8% from the second quarter, with the company attributing the increase to its drilling program. Natural gas and oil sales were $359.3 million, including $39.5 million in realized hedge gains. By contrast, net income available to the company fell to $22.270 million from $111.128 million in the third quarter of 2025, while diluted earnings per share declined to $0.08 from $0.40. The agreement’s backdrop therefore combines quarterly production growth with lower net income available compared with the same period a year earlier.
Comstock announced in September a drilling and completion financing arrangement under which a partnership owned by the Jerry Jones family would fund 85% of the costs of 18 wells in West Haynesville and 80% of the costs of 9 wells in Legacy Haynesville during the 12 months following the announcement. The company estimated the project cost at about $450 million, with funding to begin on September 1, 2026. In the same announcement, it said SOCAR would have the opportunity to participate on similar terms in future opportunities developed by Comstock in the Legacy and West Haynesville areas, and that it would provide opportunities to market gas to international customers. The current definitive agreement remains subject to customary closing conditions, and Comstock expects to complete it by the end of 2026. The company’s statement had scheduled its third-quarter results call for November 5, 2026, at 10:00 a.m. Central Time.
After Comstock announced its third-quarter results on November 5, its shares fell 0.22% in premarket trading, according to Investing.com. The site reported adjusted earnings of $0.02 per share, below the analyst consensus estimate of $0.03. Revenue was $319.88 million, compared with an estimate of $425 million. These figures relate to quarterly results announced after the definitive agreement and put the share reaction in the context of third-quarter performance. The next deal-related milestone remains the expected closing by year-end, subject to the required conditions.