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The proposed SOCAR transaction covers interests in Comstock’s Legacy and Western Haynesville assets and Pinnacle Gas Services, while a separate Jones family venture will fund most of the drilling and completion costs for 27 wells.
Published by Allstream Insiders
Allstream Insiders Summary
Comstock Resources has signed a letter of intent for a proposed $1.65 billion strategic partnership with the State Oil Company of the Azerbaijan Republic, or SOCAR, and entered into a separate approximately $450 million Haynesville drilling venture with a partnership owned by the Jones family.
Under the SOCAR letter of intent, SOCAR or a wholly owned subsidiary would acquire non-operated interests in Comstock’s Legacy Haynesville and Western Haynesville upstream assets, along with an interest in Comstock’s ownership of Pinnacle Gas Services. Comstock would remain operator of the upstream assets and would continue to manage, operate and control Pinnacle.
The SOCAR transaction is not yet a definitive acquisition. The parties are targeting a definitive purchase and sale agreement by October 31, 2026, and a closing by year-end, subject to negotiations, required approvals and other customary closing conditions.
The separate drilling venture began September 1, 2026. Over the following 12 months, the Jones family partnership will fund specified portions of the drilling and completion costs for 18 Western Haynesville wells and nine Legacy Haynesville wells being drilled and completed by Comstock.
Comstock Haynesville Transaction Tracker
| Transaction item | Company-reported terms | Current stage |
|---|---|---|
| SOCAR strategic partnership | $1.65 billion aggregate cash purchase price, subject to customary adjustments | Letter of intent; definitive agreement and closing remain pending |
| Legacy Haynesville interest | Non-operated working interest representing 20% of Comstock’s interest | Proposed under the SOCAR letter of intent |
| Western Haynesville interest | Non-operated working interest equal to 15% of Comstock’s interest, reducing to 7.5% after five years and once the disclosed return threshold is achieved | Proposed under the SOCAR letter of intent |
| Pinnacle Gas Services interest | 15% of Comstock’s 73% ownership interest in Pinnacle | Proposed under the SOCAR letter of intent |
| Jones family drilling venture | Approximately $450 million for 27 Western and Legacy Haynesville wells over 12 months | Entered into; funding period began September 1, 2026 |
What would SOCAR acquire from Comstock?
SOCAR would acquire minority, non-operated positions across two Haynesville upstream portfolios and part of Comstock’s interest in a supporting midstream business. The proposed interests are:
- A non-operated working interest representing 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
- 15% of Comstock’s 73% ownership interest in Pinnacle Gas Services, which supports Western Haynesville production in East Texas
The Western Haynesville interest would reduce from 15% to 7.5% after five years and once SOCAR has achieved the 15% return-on-investment threshold described by Comstock. Comstock said future leasing, acquisitions and development participation within an agreed area of mutual interest would be governed by a development and ownership agreement forming part of the proposed transaction.
Comstock also said SOCAR would have opportunities to participate in future Legacy and Western Haynesville opportunities at the applicable percentages and could provide international marketing opportunities for Comstock’s natural gas. Those arrangements remain tied to completion and documentation of the proposed partnership.
The proposed SOCAR transaction still requires a definitive agreement
The letter of intent requires Comstock and SOCAR to negotiate in good faith, but it does not guarantee that the proposed transaction will close. The parties are targeting:
- October 31, 2026 for execution of a definitive purchase and sale agreement
- Year-end 2026 for closing
- July 1, 2026 as the transaction’s stated effective date if completed
Comstock said closing would depend on the progress of negotiations, customary closing conditions and any required government and third-party approvals. Until a definitive agreement is executed and the closing conditions are satisfied, the $1.65 billion transaction should be treated as proposed.
The Jones family venture funds a 27-well drilling program
The separate drilling venture establishes funding for 27 Haynesville wells that Comstock plans to drill and complete over a 12-month period. A partnership owned by the Jones family will fund:
- 85% of drilling and completion costs for 18 Western Haynesville wells
- 80% of drilling and completion costs for nine Legacy Haynesville wells
Comstock expects the combined program to cost approximately $450 million. After the Jones family partnership achieves a 15% return on its investment, 50% of the interest in the wells will revert to Comstock.
Comstock said the program will support continued development and delineation of its 545,000 net acres in the Western Haynesville. The company also expects the wells to provide volumes to the Pinnacle gathering and treating system.
Comstock retains upstream operatorship and Pinnacle control
Comstock would continue operating its upstream assets under the proposed SOCAR structure and will remain responsible for drilling and completing the wells covered by the Jones family venture. SOCAR’s contemplated upstream positions are non-operated interests.
Comstock also said it would continue to manage, operate and control Pinnacle Gas Services. Pinnacle owns and operates a gathering and treating system supporting the company’s Western Haynesville natural gas operations in East Texas.
The announcement does not identify a new Pinnacle expansion, added gathering or treating capacity, or a separate midstream construction budget. The expected delivery of additional well volumes does not by itself confirm that new midstream facilities have been approved.
Allstream perspective: the defined well program creates the clearest near-term scope
The 27-well drilling venture is the most concrete near-term execution program in the announcement. Unlike the proposed SOCAR transaction, Comstock says the drilling venture has been entered into and its funding period began September 1.
Based on the disclosed drilling and completion program—not on announced procurement packages—the work could require services and equipment involving:
- Drilling rigs, directional drilling and wellsite services
- Casing, tubing, cementing and other well-construction materials
- Hydraulic-fracturing fleets, proppant, chemicals and water logistics
- Wireline, coiled tubing, flowback and production-testing services
- Wellsite facilities, measurement and automation systems
- Gathering connections and treating support where required for completed wells
These categories are Allstream analysis of the announced 27-well program. They are not confirmed bid packages, solicitations or contractor awards. Comstock did not disclose individual well locations, contractor selections, lateral lengths, completion designs or a well-by-well schedule in the September 1 announcement.
