BAKU, Azerbaijan, September 1. A Letter of Intent has been signed between the State Oil Company of Azerbaijan (SOCAR) and the U.S. Comstock Resources, Inc. to establish a strategic partnership.

This was announced in a report released by SOCAR.

According to the document, SOCAR will acquire 20% of Comstock's stake in Legacy Haynesville upstream assets, 15% of its stake in Western Haynesville upstream assets, and 15 % of Comstock's 73% stake in Pinnacle Gas Services LLC. SOCAR's 15% stake in Western Haynesville assets is expected to be reduced to 7.5% in accordance with relevant conditions when a 15% return on investment in those assets is achieved.

The total transaction value, subject to standard purchase price adjustments, is $1.65 billion. Appropriate measures for financing the operation are planned by SOCAR. The parties aim to agree and sign the final purchase agreement no later than October 31, 2026, and to complete the transaction by December 31, 2026, subject to the fulfillment of relevant conditions, including the receipt of necessary governmental and third-party approvals.

As part of the strategic partnership, SOCAR is expected to participate in the new opportunities to be created by Comstock in Legacy Haynesville and Western Haynesville in accordance with their respective participation shares. In addition, the parties will cooperate to expand Comstock's natural gas access to international markets.

SOCAR President Rovshan Najaf said that this partnership brings together the rich experience and extensive capabilities of SOCAR and Comstock, creating a solid foundation for further expansion of our strategic cooperation.

"We are pleased to invest together with a team with extensive experience in the development of the Haynesville and Western Haynesville fields and believe that our long-term partnership will develop successfully," he added.

Comstock Chairman and CEO Jay Allison also highly appreciated the deal.

"We are pleased to announce our strategic partnership with SOCAR. This partnership will allow us to attract a reputable international strategic partner that will contribute to accelerating value creation for our investors. At the same time, it will significantly reduce our debt burden and fully finance the planned development of the Western Haynesville area. Moreover, Comstock will retain operatorship and control over the upstream and midstream assets, and will also protect the potential for future value creation through a mechanism that provides for a gradual reduction in the participation interest," he said.

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

Source: www.trend.az