Comstock Resources, Inc. (NYSE: CRK) announced it has signed a letter of intent with the State Oil Company of the Azerbaijan Republic (SOCAR) for a $1.65 billion cash transaction involving working interests in Comstock's Haynesville natural gas assets.

Under the agreement, SOCAR or a wholly owned subsidiary would acquire a 20% non-operated working interest in Comstock's Legacy Haynesville upstream assets, a 15% non-operated working interest in its Western Haynesville upstream assets — reducing to 7.5% after five years once SOCAR achieves a 15% return on investment — and 15% of Comstock's 73% ownership stake in Pinnacle Gas Services LLC, a midstream services provider.

The parties are targeting execution of a definitive purchase and sale agreement by October 31, 2026, with a closing by year end, subject to government and third-party approvals. The transaction carries an effective date of July 1, 2026.

Comstock said it intends to use the proceeds to reduce total debt, bringing its net debt from approximately $3.1 billion to $1.5 billion as of June 30, 2026. Comstock will retain operational control of all upstream assets and Pinnacle Gas Services.

Separately, Comstock announced a $450 million drilling venture with Jerry Jones, the company's majority stockholder. Beginning September 1, 2026, a Jones family partnership will fund 85% of drilling and completion costs for 18 Western Haynesville wells and 80% of costs for nine Legacy Haynesville wells over the next 12 months. After a 15% return on investment, 50% of the interest in those wells will revert to Comstock.

M. Jay Allison, Chairman and Chief Executive Officer of Comstock, said the SOCAR partnership would allow the company to "materially reduce debt and fully fund the planned development of our Western Haynesville acreage" while retaining operatorship and control.

Wells Fargo and O'Melveny & Myers LLP are advising Comstock. J.P. Morgan Securities LLC and Baker Botts LLP are advising SOCAR.