FRISCO, Texas - Comstock Resources Inc. (NYSE:CRK) sold a 27% non-controlling equity interest in its midstream subsidiary Pinnacle Gas Services LLC to funds managed by Sixth Street for $600 million, the company said in a statement today. The company’s shares, currently trading at $13.05 with a market capitalization of $3.85 billion, have fallen 42% year-to-date and are hovering near their 52-week low of $12.44.
The investment values Pinnacle at a $2.2 billion enterprise value. Comstock retained a 73% controlling common equity interest in Pinnacle, valued at approximately $1.6 billion, and will continue to manage and operate the business under a management services agreement.
The proceeds were used to retire Pinnacle’s preferred equity securities for $445 million plus accrued dividends, outstanding debt, transaction costs and working capital. The transaction is expected to reduce Pinnacle’s fixed charges by approximately $40 million annually. This debt reduction comes as InvestingPro data shows Comstock operates with a significant debt burden, with a debt-to-equity ratio of 1.1 and short-term obligations exceeding liquid assets. For deeper insights into Comstock’s financial health and access to exclusive ProTips, investors can explore the comprehensive Pro Research Report available on InvestingPro.
Under the terms of the agreement, once Sixth Street achieves certain return hurdles, its ownership will decrease from 27% to 19.5%, while Comstock’s stake will increase from 73% to 80.5%.
Pinnacle owns and operates a gathering and treating system that supports Comstock’s Western Haynesville natural gas development operations in East Texas. Comstock holds 540,000 net acres in the Western Haynesville region.
"This transaction is another validation of the future potential of Comstock’s Western Haynesville acreage, which is well positioned to service the growing demand for natural gas in our region," said M. Jay Allison, Chief Executive Officer of Comstock.
Jefferies LLC served as financial advisor to Comstock, with O’Melveny & Myers as legal counsel. Wells Fargo and RBC Capital Markets advised Sixth Street, with Latham & Watkins as legal counsel.
Sixth Street is a global investment firm founded in 2009 with over $130 billion in assets under management.
In other recent news, Comstock Resources Inc. reported its Q1 2026 earnings, showing a mixed financial performance. The company fell short of earnings per share (EPS) expectations, with an actual EPS of $0.15, which was below the forecasted $0.2584. This represents a 41.95% negative surprise. On a positive note, Comstock Resources exceeded revenue expectations, reporting $587.35 million compared to the anticipated $550.94 million, marking a 6.61% positive surprise. The earnings miss and revenue beat were notable developments for the company. Additionally, analyst firms have been closely monitoring these results, though no specific upgrades or downgrades were mentioned in this context. These recent developments provide investors with important insights into Comstock’s financial health.
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