Comstock Resources has signed a letter of intent with Azerbaijan’s SOCAR for $1.65 billion in cash for interests in its Haynesville upstream and midstream assets.

SOCAR would acquire a non-operated working interest representing 20% of Comstock’s Legacy Haynesville interest and 15% of its Western Haynesville interest. The Western Haynesville interest would fall to 7.5% after 5 years and once SOCAR achieves a 15% return on investment.

SOCAR also would acquire 15% of Comstock’s’ 73% interest in Pinnacle Gas Services, which provides midstream services to the Western Haynesville.

The partnership covers Comstock's 545,000 net acres in the Western Haynesville, which the company said it intends to continue delineating and developing to serve natural gas demand from LNG, power generation, and data centers along the US Gulf Coast.

Comstock will retain operatorship of all upstream assets and Pinnacle. The company said it plans to use the proceeds to reduce net debt from $3.1 billion to $1.5 billion, based on June 30 figures.

The partners are targeting a definitive purchase agreement by Oct. 31 and closing by yearend, subject to negotiations and required approvals. The transaction has an effective date of July 1.

“This partnership introduces a reputable international strategic partner to help accelerate value creation for our investors, while allowing us to materially reduce debt and fully fund the planned development of our Western Haynesville acreage," said M. Jay Allison, Comstock chairman and chief executive officer.

Comstock, in addition, announced a Haynesville drilling venture with a partnership owned by the family of Jerry Jones, Comstock’s majority stockholder.

Beginning Sept. 1, the Jones family partnership will fund 85% of drilling and completion costs for 18 Western Haynesville wells and 80% of costs for nine Legacy Haynesville wells that Comstock plans to drill and complete over the following 12 months at an estimated cost of about $450 million.