Comstock Resources (NYSE: CRK) has announced a significant strategic transaction that underscores growing investor confidence in the Western Haynesville natural gas play. The company sold a 27% minority interest in its midstream subsidiary, Pinnacle Gas Services, to global investment firm Sixth Street for $600 million.
The investment values Pinnacle at approximately $2.2 billion and provides Comstock with a stronger balance sheet while maintaining operational control of the business. Proceeds from the transaction were used to eliminate Pinnacle’s preferred equity and debt obligations, reducing annual fixed charges by an estimated $40 million.
Pinnacle owns and operates gathering and treating infrastructure supporting Comstock’s Western Haynesville development across East Texas. The valuation reflects expectations for continued production growth from Comstock’s 540,000 net-acre position, one of the largest undeveloped natural gas resources in North America.
The deal also highlights growing demand for natural gas infrastructure driven by LNG exports, data centers, and power generation. Comstock noted that its Western Haynesville assets are strategically positioned to serve Gulf Coast markets and the recently announced Texas Power Generation Hub in Anderson County.
Despite the sale, Comstock retains a 73% ownership interest in Pinnacle and continues to manage and operate the system. Under certain performance milestones, Comstock’s ownership could increase to more than 80% in the future.
The transaction represents another major vote of confidence in the long-term outlook for U.S. natural gas and the critical infrastructure needed to support rising energy demand.
Author: phinds