The tension in Comstock Resources' announcement Tuesday is this: the company is selling working interests in its best acreage to repair a balance sheet carrying $3.1 billion in net debt as of June 30, 2026, and the entire value proposition rests on a transaction that has not yet been signed. The case for the deal is clean. The risk is that a letter of intent is not a closing.
Under the agreement in principle, the State Oil Company of the Azerbaijan Republic (SOCAR) would pay $1.65 billion in cash for working interests across Comstock's Haynesville operations: 20% of the company's Legacy Haynesville upstream assets, 15% of its Western Haynesville upstream assets (stepping down to 7.5% after five years once SOCAR earns a 15% return on its investment), and 15% of Comstock's 73% interest in Pinnacle Gas Services LLC, the midstream subsidiary serving the Western Haynesville. Comstock (NYSE: CRK) keeps operatorship across all three. The effective date is July 1, 2026.
The proceeds go straight at the debt stack. Pro forma for the transaction, Comstock's net debt drops from $3.1 billion to $1.5 billion, per the company's release. That is the core read-through: cash that cuts the net debt load by $1.6 billion redirects toward delineating Comstock's 545,000 net acres in the Western Haynesville, a position the company says is built to serve LNG, power generation, and data center demand along the Gulf Coast. SOCAR also brings an investment-grade balance sheet and global LNG marketing operations to the arrangement, per the release, giving Comstock a potential channel to international gas buyers.
Separately, Comstock announced a $450 million drilling venture with Jerry Jones, the company's majority stockholder. A Jones family partnership will fund 85% of drilling and completion costs on 18 Western Haynesville wells and 80% of nine Legacy Haynesville wells over the next twelve months. After Jones earns a 15% return, 50% of the interest in those wells reverts to Comstock.
The counterargument is execution. What Comstock filed is a letter of intent, not a purchase and sale agreement. The parties are targeting a definitive PSA by October 31, 2026, and a closing by year end, subject to the progress of negotiations and any required government and third-party approvals. A cross-border transaction involving a state-owned energy company does not close on a schedule. If the price or structure shifts in negotiation, the $1.5 billion net debt projection shifts with it.
On balance, the unit economics of the structure hold up: Comstock monetizes minority positions, retains operational control, and brings in two capital partners through the SOCAR and Jones arrangements to fund the Western Haynesville development program. The line to watch is October 31. That is when the parties are targeting a signed definitive agreement, and the gap between this LOI and a closed transaction is where the $1.5 billion net debt figure either becomes real or gets revised.