Comstock Resources Inc

Comstock Resources and SOCAR have signed a Framework Agreement memorializing their previously announced strategic partnership and SOCAR's $1.65 billion investment in the Haynesville Shale. The agreement, signed in conjunction with the Azerbaijan International Investment Forum, commits both parties to negotiate and execute a definitive purchase and sale agreement consistent with the previously announced letter of intent. The definitive agreement is anticipated to be signed no later than October 31, 2026, with the transaction expected to close by the end of 2026. The two companies will also explore opportunities for SOCAR to market natural gas produced from the Haynesville Shale assets attributable to Comstock's interest for sale as LNG in international markets outside the United States. The partnership is part of a broader relationship between the United States and Azerbaijan under the protocol of the 1st Azerbaijan-United States Economic Dialogue signed in June 2026.

Comstock Resources signed a nonbinding letter of intent under which SOCAR would pay $1.65 billion in cash for non-operated working interests representing 20% of the Legacy Haynesville and 15% of the Western Haynesville upstream interests held by the company, plus 15% of Comstock's 73% ownership interest in Pinnacle Gas Services. The parties are targeting a definitive agreement by October 31, 2026, and closing by year-end, subject to negotiations, approvals, and customary conditions. Separately, a Jerry Jones family partnership will fund 85% of the drilling and completion costs for 18 Western Haynesville wells and 80% for nine Legacy Haynesville wells, a 27-well program expected to cost approximately $450 million over 12 months, with 50% of the covered interest reverting to Comstock after a 15% return on investment. Comstock estimates the SOCAR proceeds would cut company-defined non-GAAP net debt from $3.1 billion to $1.5 billion as of June 30, 2026, a roughly $1.6 billion reduction that would nearly halve the measure, while Comstock would retain operatorship of the upstream assets and control of Pinnacle. SOCAR's Western Haynesville interest would fall from 15% to 7.5% after five years once it earns a 15% return, and the drilling venture is a related-party arrangement with the family of Jerry Jones, the majority stockholder.

Comstock Resources finished 11 percent higher on Tuesday after clinching $2.1 billion worth of investment and partnership deals with two companies. The first deal involved raising $1.65 billion from the sale of a portion of its natural gas assets to the State Oil Company of the Azerbaijan Republic, including 20 percent of its interest in Legacy Haynesville assets, 15 percent of its interest in Western Haynesville assets, and 15 percent of its 73 percent stake in Pinnacle Gas Services. Proceeds will be used to cut debt to $1.5 billion from $3.1 billion as of the second quarter. The company also signed a $450 million joint drilling venture with Jerry Jones, its majority stakeholder, to drill 27 wells in Western Haynesville and Legacy Haynesville, with the Jones family funding 85 percent of 18 Western Haynesville wells and 80 percent of nine Legacy Haynesville wells. These moves follow weak second-quarter earnings, with attributable net income down 92 percent to $8.766 million from $124.8 million a year earlier.

Comstock Resources advanced 11% on Tuesday after the independent natural gas producer announced a $1.65 billion strategic partnership with Azerbaijan's state energy company SOCAR, alongside a separate $450 million drilling joint venture. Shares closed at $16.02, up $1.59, on volume roughly 5.6 times the one-month average. The partnership includes a $1.65 billion investment from SOCAR, which is part of a broader deal that also involves a $450 million drilling joint venture. The stock's 52-week high is $28.10, about 43% above the current price, while the 52-week low is $12.12, about 24% below. Short interest stands at 38.72% of float, and the forward P/E ratio is 34.93.

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Comstock Resources has delivered a strong 140% return over the past five years, yet its share price remains well below recent highs and valuation checks suggest the stock still screens as cheap on several fronts. The company currently trades on a price-to-earnings ratio of about 6.1 times, well below the Oil and Gas industry average of roughly 13.4 times and the broader peer average of about 20.5 times. A tailored fair P/E ratio for Comstock Resources is estimated at around 7.2 times, indicating the stock trades at a discount to this benchmark. The stock passes five of six valuation checks, with a value score of five, leaning toward a discount to fundamentals. However, exposure to commodity price swings remains a key risk to how the market prices its cash flows.