Comstock Expects Co-Op With Azerbaijan's SOCAR To Expand Gas Market Reach (Exclusive Interview)

(MENAFN- Trend News Agency) BAKU, Azerbaijan, September 5. A $1.65 billion strategic partnership with the State Oil Company of Azerbaijan (SOCAR) is expected to expand access to U.S. natural gas in both domestic and international markets, U.S.-based Comstock Resources, Inc., told in an exclusive interview with Trend.

According to the company, the partnership between Comstock and SOCAR is designed to develop the extensive reserve potential Comstock holds in the Haynesville shale and deliver supply growth to meet the growing demand for natural gas from LNG and data center development.

Comstock noted that, since the company has not yet announced its 2027 investment program, it is currently unable to provide a specific forecast of how much natural gas production and reserves will increase as a result of the partnership.

“The transaction proceeds will support Comstock's balance sheet and provide additional financial flexibility for the continued development of its Haynesville assets,” the company stated.

One of the key focuses of the partnership is expanding Comstock's access to natural gas in international markets.

"The partnership combines Comstock's Gulf Coast location near the US LNG export market, its access to significant reserve potential to meet long-term demand and contract needs, and midstream assets in the Western Haynesville with SOCAR's LNG and grading platforms through potential LNG marketing opportunities. The partnership is positioned to maximize price netback in both the US and internationally while minimizing volatility,” the company said in a statement.

The company also noted that the partnership will not be limited to the current agreement.

“Under the terms of the agreement, SOCAR has the opportunity to participate in future leasing and acquisition opportunities in the Haynesville,” the statement emphasized.

On September 1 of this year, a letter of intent was signed between the State Oil Company of Azerbaijan (SOCAR) and the U.S. company Comstock Resources, Inc. to establish a strategic partnership.

According to the document, SOCAR will acquire 20% of Comstock's interest in the Legacy Haynesville production assets, 15% of its own interest in the Western Haynesville production assets, and 15% of Comstock's 73% interest in Pinnacle Gas Services LLC. SOCAR's 15% stake in the Western Haynesville assets is expected to be reduced to 7.5% in accordance with the relevant terms upon achieving a 15% return on investment in these assets.

The total value of the transaction, subject to standard purchase price adjustments, is $1.65 billion. SOCAR plans to take the necessary steps to finance the transaction. The parties intend to negotiate and sign a definitive purchase agreement no later than October 31, 2026, and close the transaction by December 31, 2026, subject to the fulfillment of relevant conditions, including obtaining the necessary approvals from the government and third parties.

As part of the strategic partnership, SOCAR plans to participate in future opportunities created by Comstock in the“Legacy Haynesville” and“Western Haynesville” fields in accordance with their respective ownership stakes. In addition, the parties will collaborate to expand Comstock's access to international natural gas markets.

SOCAR President Rovshan Najaf stated:“This partnership brings together the extensive experience and broad capabilities of SOCAR and Comstock, creating a solid foundation for the further expansion of our strategic cooperation. We are pleased to invest alongside a team with extensive experience in developing the Hainesville and West Hainesville fields, and we are confident that our long-term partnership will be a success.”

Jay Allison, Chairman and CEO of Comstock, said:“We are pleased to announce our strategic partnership with SOCAR. This partnership will enable us to bring on board a reputable international strategic partner that will help accelerate value creation for our investors, while significantly reducing our debt burden and fully financing the planned development of the West Hainesville area. At the same time, Comstock will retain operational control of its production and transportation assets and safeguard the potential for future value creation through a mechanism that provides for a gradual reduction of its ownership stake.”

Comstock will remain the operator of all production assets and will continue to manage and control the operations of Pinnacle Gas Services LLC. SOCAR's proportional participation in future development programs, as well as in new lease agreements and acquisitions in areas of mutual interest, will be governed by separate agreements as part of the final transaction.

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