The State Oil Company of the Azerbaijan Republic (SOCAR) and US-based Comstock Resources, Inc. have signed a Letter of Intent to establish a strategic partnership, marking a major expansion of SOCAR’s presence in the US natural gas sector.

Under the agreement, SOCAR will acquire a 20% interest in Comstock’s Legacy Haynesville upstream assets, a 15% interest in its Western Haynesville upstream assets, and 15% of Comstock’s 73% stake in Pinnacle Gas Services LLC, according to SOCAR.

The transaction, including standard purchase price adjustments, is valued at approximately $1.65 billion.

The agreement includes a mechanism under which SOCAR’s 15% interest in the Western Haynesville assets will be reduced to 7.5% once a 15% return on investment in those assets is achieved.

SOCAR plans to take the necessary steps to finance the transaction.

The two companies intend to finalize and sign a definitive purchase agreement by October 31, 2026, with the transaction expected to close by December 31, 2026, subject to required government approvals and third-party consents.

As part of the strategic partnership, SOCAR is expected to participate proportionally in new opportunities developed by Comstock in the Legacy Haynesville and Western Haynesville areas.

The companies also plan to cooperate on expanding opportunities for Comstock’s natural gas to reach international markets, potentially strengthening the global reach of US gas supplies.

SOCAR President Rovshan Najaf said the partnership combines the extensive experience and capabilities of both companies and provides a strong foundation for expanding long-term strategic cooperation.

“We are pleased to invest jointly with a team that has extensive experience in developing the Haynesville and Western Haynesville fields, and we believe in the successful development of our long-term partnership,” Najaf said.

Comstock Chairman and CEO M. Jay Allison said the partnership would bring in a reputable international strategic partner, helping accelerate value creation for investors while significantly reducing the company’s debt burden and fully financing planned development of the Western Haynesville area.

Comstock will retain operatorship and control of its upstream and midstream assets, while also maintaining the potential to create additional value through a mechanism that gradually reduces its ownership stake.

SOCAR said Comstock will remain the operator of all its upstream assets and will continue to manage and exercise operational control over Pinnacle Gas Services LLC.

SOCAR’s proportional participation in future development programs, as well as new lease acquisitions and assets of mutual interest, will be governed by separate agreements under the final transaction structure.