A planned partnership with the State Oil Company of the Azerbaijan Republic (SOCAR) could give US energy company Comstock Resources new opportunities to sell natural gas to international customers.

The proposed transaction could provide Comstock Resources with greater access to global natural gas markets, including opportunities in the liquefied natural gas (LNG) sector, according to an assessment by S&P Global Ratings.

S&P said the partnership could help Comstock expand its international sales channels, develop trading capabilities and strengthen its downstream marketing operations.

The deal could also help the US company address a free cash flow shortfall recorded since the beginning of the year and improve its financial performance in the near term.

According to S&P, part of the net proceeds from the transaction could be used to reduce borrowings under Comstock’s credit facility. The company may also repurchase some or all of its bonds due in 2029, which become callable from March 2027, while directing funds toward broader corporate needs.

These investments could include the development of 545,000 net acres in Western Haynesville, a major natural gas-producing area.

Comstock Resources is expected to remain the operator of all assets included in the transaction. The company will also retain a controlling stake in Pinnacle Gas Services, with its ownership expected to stand at 62% after the deal closes.

S&P also gave a positive assessment to a separate joint drilling project between Comstock Resources and its largest shareholder, Jerry Jones. Under the arrangement, a Jones family-owned partnership is expected to finance 80%-85% of the costs of drilling and completing 27 wells over the next 12 months.

The project is estimated to cost approximately $450 million. S&P said it could help finance production in Legacy Haynesville, support further development in Western Haynesville and provide additional gas volumes for Pinnacle Gas Services.

At the same time, the arrangement could reduce Comstock Resources’ upfront capital requirements and strengthen its balance sheet.

Despite viewing the planned SOCAR transaction as credit-positive, S&P maintained Comstock Resources’ issuer rating at “B” with a stable outlook. The agency noted that the deal has not yet been finalized and that the company’s credit metrics remain heavily exposed to fluctuations in natural gas prices.