Comstock Resources (NYSE:CRK) finished 11 percent higher on Tuesday after clinching $2.1 billion worth of investment and partnership deals with two companies.
The first deal involved the raising of $1.65 billion in fresh funds from the sale of a portion of its natural gas assets to the State Oil Company of the Azerbaijan Republic (SOCAR).
The assets include 20 percent of Comstock’s interest in Legacy Haynesville assets; 15 percent of its interest in Western Haynesville assets; and another 15 percent of Comstock’s 73 percent stake in Pinnacle Gas Services.
The New York Stock Exchange building. Photo by Дмитрий Трепольский on Pexels
Signing of a definitive purchase and sale agreement is expected by October 31, with closing targeted by the end of the year.
According to Comstock Resources (NYSE:CRK), proceeds from the sale are intended to be used to effectively slash its debt to $1.5 billion from $3.1 billion as of the second quarter of the year.
Despite the investments, Comstock will maintain operations of all upstream assets and will continue to manage, operate, and control Pinnacle Gas Services.
“We are excited to announce a strategic alliance with SOCAR. 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—all while Comstock retains operatorship and control of the upstream and midstream assets while maintaining substantial upside through the reversionary structure,” said Comstock Resources (NYSE:CRK) Chairman and CEO Jay Allison.
$450M Drilling Venture
Investments aside, Comstock Resources (NYSE:CRK) also signed a new $450 million joint drilling venture with Jerry Jones—its majority stakeholder for the drilling of 27 wells in Western Haynesville and Legacy Haynesville.
Under the agreement, a partnership owned by the Jones family will fund the drilling and completion costs of 85 percent of 18 Western Haynesville wells, as well as 80 percent of nine Legacy Haynesville wells being drilled and completed by Comstock over the next twelve months.
“We are … excited about the investment Jerry Jones is making in our Haynesville drilling program which will strengthen our balance sheet and allow us to continue to create value in our vast Western Haynesville assets,” Allison said.
Weak Earnings
The investments followed Comstock Resources’ (NYSE:CRK) weak earnings performance in the second quarter of the year, with attributable net income dwindling by 92 percent to only $8.766 million from $124.8 million in the same period last year.
Total revenues also fell by 15 percent to $288 million from $340 million year-on-year, dragged by lower oil and gas sales.
For the six-month period, production declined by 7 percent to 1,166 MMcfe per day compared to the same period in 2025, while oil and gas sales decreased by 6 percent to $707 million from $752.9 million.
Weak Hedge Fund Conviction
Despite weak earnings, institutional sentiment turned mixed for Comstock Resources (NYSE:CRK) in the second quarter of the year, even as it saw an increase in the number of hedge fund holders.
Data from Insider Monkey showed that during the period, 33 hedge funds held positions in the company, up from 23 quarter-on-quarter.
However, their combined holdings fell by 22 percent to $83.3 million from $106.88 million, signaling that investors are reducing their investments in the stock despite establishing their exposure.
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