In a significant financial move, Comstock Resources has divested a 27% non-controlling equity interest in its midstream division, Pinnacle Gas Services, to Sixth Street-managed funds for a substantial sum of $600 million. This transaction places the enterprise value of Pinnacle Gas Services, a Delaware limited liability company, at an impressive $2.2 billion. The capital infusion from this sale was strategically deployed to eradicate all preferred equity securities at Pinnacle, amounting to $445 million plus accrued dividends, and to address outstanding indebtedness, thereby covering transaction costs and bolstering working capital. This move is projected to cut Pinnacle Gas Services' annual fixed charges by approximately $40 million, marking a notable improvement in its financial health.

Comstock's Strategic Divestment and Future Outlook for Pinnacle Gas Services

On Tuesday, June 16, 2026, natural gas producer Comstock Resources announced a major transaction that saw them sell a significant minority stake in their midstream subsidiary, Pinnacle Gas Services. The buyer, Sixth Street, a prominent global investment firm, acquired a 27% non-controlling common equity interest for a robust $600 million. This deal underscores a valuation of $2.2 billion for Pinnacle Gas Services, which is responsible for the critical Pinnacle gathering and treating system that supports Comstock's Western Haynesville natural gas development in East Texas. Post-sale, Comstock retains a controlling 73% equity interest, valued at roughly $1.6 billion, and will continue to manage and operate Pinnacle through a dedicated services agreement. This strategic divestment has allowed Comstock to significantly deleverage Pinnacle Gas Services by eliminating preferred equity and reducing debt, leading to an estimated annual reduction of $40 million in fixed charges. M. Jay Allison, CEO of Comstock, highlighted the transaction as a strong affirmation of the future potential of Comstock's Western Haynesville acreage, which is strategically positioned to meet the escalating natural gas demand in the region, including the newly announced Texas Power Generation Hub in Anderson County. Furthermore, the agreement includes a clause where Sixth Street's stake could decrease to 19.5% (with Comstock's increasing to 80.5%) if specific return thresholds are met. Zack Winegrad, partner at Sixth Street, emphasized their focus on providing substantial, adaptable capital solutions to bolster essential energy infrastructure, aligning with the burgeoning energy demands from data centers, hyper-scalers, and the broader electrification trends. This transaction was facilitated by Jefferies as financial advisor and O'Melveny & Myers as legal counsel for Comstock, while Wells Fargo, RBC Capital Markets, and Latham & Watkins advised Sixth Street.

This strategic transaction by Comstock Resources offers compelling insights into the dynamic energy market. It exemplifies a shrewd financial maneuver that not only injects significant capital into the midstream operations but also substantially strengthens the balance sheet of Pinnacle Gas Services. The reduction in fixed charges positions Pinnacle for enhanced profitability and operational flexibility. From an industry perspective, this deal highlights the increasing appetite for critical energy infrastructure, particularly in regions like the Haynesville Shale, which are vital for meeting growing energy demands, including those from emerging sectors like data centers and liquefied natural gas. The flexibility embedded in the agreement, allowing for a potential shift in ownership based on performance, demonstrates a forward-thinking approach to partnership and value creation. This move could serve as a blueprint for other energy companies seeking to optimize their asset portfolios and secure long-term growth in a rapidly evolving energy landscape.