Comstock farms out minority interest in midstream subsidiary for $600 million
Comstock Resources Inc. sold a minority equity interest in its midstream subsidiary, Pinnacle Gas Services LLC, to certain funds managed by investment firm Sixth Street.
Pinnacle provides gathering and treating services for Comstock's Western Haynesville production through 246 miles of high-pressure pipeline and two gas treating plants. The infrastructure supports development of Comstock's 540,000-net-acre Western Haynesville position, part of its 1,074,868 gross-acre (806,980 net) Haynesville/Bossier portfolio in Texas and Louisiana.
Comstock is operating four rigs in the Western Haynesville this year as it continues delineating the play and expects to drill 21 wells and bring 20 online in 2026. The company also plans to operate five rigs in its legacy Haynesville position, where it expects to drill 50 wells and bring 48 online to support production growth through 2027.
Sixth Street invested $600 million for a 27% equity interest in Pinnacle Gas Services, while Comstock Resources retains a 73% controlling interest and continues to manage and operate Pinnacle under a management services agreement.
Under the terms of deal, Sixth Street’s ownership will be reduced to 19.5% when certain return thresholds are met, with Comstock’s interest increasing to 80.5%.
Comstock chief executive officer M. Jay Allison said the transaction validates the development potential of the Western Haynesville acreage, which he said is positioned to meet growing Gulf Coast natural gas demand from both industrial users and power generation, including the planned Texas Power Generation Hub in Anderson County, Tex.
Texas Power Generation Hub
The Texas Power Generation Hub is expected to provide up to 5.2 Gw of natural gas-fired generation capacity to serve large-load demand, including data centers and advanced manufacturing, within the ERCOT market.
The project, selected by the US Department of Commerce in connection with Japan’s $550-billion US investment commitment, is estimated to cost about $16 billion and will be jointly owned by Japan and the US. NextEra Energy Resources will build and operate the hub.
Comstock is expected to supply natural gas to the project, with potential deliveries approaching 1 bcfd by 2031.
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Mikaila Adams
Managing Editor, Content Strategist
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was later named Managing Editor - News. Her role has expanded into content strategy. She holds a degree from Texas Tech University.