Comstock sells 27% Pinnacle stake to Sixth Street for $600M

Comstock Resources sold a 27% minority stake in its midstream unit Pinnacle Gas Services to Sixth Street for $600 million, valuing the gathering and treating system at $2.2 billion and confirming the company's Western Haynesville natural gas position.

"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 Resources.

The Frisco, Texas-based natural gas producer retained a 73% controlling equity interest in Pinnacle, valued at roughly $1.6 billion. Proceeds from the deal were used to fully retire $445 million in Pinnacle preferred equity securities plus accrued dividends, pay off all outstanding indebtedness at the subsidiary, cover transaction costs and provide additional working capital. The moves will cut Pinnacle's fixed charges by about $40 million per year.

The transaction highlights the growing value of midstream infrastructure tied to the Haynesville Shale, one of the largest U.S. natural gas basins, as demand from data centers, LNG exports and electrification drives consumption higher. If Sixth Street meets specified return thresholds, its stake will decline to 19.5% while Comstock's interest rises to 80.5%, compared with the 70% it would have held had the preferred units not been redeemed.

Comstock holds about 540,000 net acres in the Western Haynesville, which Allison said is positioned to serve growing demand along the Gulf Coast and the recently announced Texas Power Generation Hub in Anderson County. The company will continue to manage and operate Pinnacle under a management services agreement, preserving alignment between its upstream and midstream operations.

Sixth Street, a global investment firm with over $130 billion in assets, is betting on the critical role natural gas infrastructure will play in meeting U.S. energy demand. "The transaction highlights Sixth Street's focus on providing large-scale, flexible capital solutions to support the development of critical energy infrastructure needed to meet the rapid growth in energy demand from data centers, hyper-scalers, global LNG, and the secular electrification trends underway in the economy more broadly," said Zack Winegrad, partner and co-head of energy and co-head of global infrastructure at Sixth Street.

Jefferies LLC acted as financial adviser to Comstock, with O'Melveny & Myers as legal counsel. Wells Fargo and RBC Capital Markets advised Sixth Street, with Latham & Watkins as legal counsel.

The deal is the latest example of energy companies monetizing midstream assets to strengthen balance sheets while retaining operational control, a strategy that has gained traction as natural gas demand forecasts rise.

This article is for informational purposes only and does not constitute investment advice.