Comstock Sells Pinnacle Gas Interest

Comstock Resources announced the sale of a minority equity interest in its midstream subsidiary, Pinnacle Gas Services LLC, to Sixth Street Partners for $600 million. Sixth Street Partners acquired a 27% non-controlling common equity interest, valuing Pinnacle Gas Services LLC at a $2.2 billion enterprise value. Comstock Resources retained a 73% controlling interest and will continue to manage and operate Pinnacle Gas Services LLC. The proceeds from the investment were used to fully extinguish and retire Pinnacle Gas Services LLC's preferred equity securities and all outstanding indebtedness, which is expected to reduce fixed charges by approximately $40 million per year. This transaction strengthens Comstock Resources' balance sheet, validates the value of its Western Haynesville acreage, and increases Comstock Resources' future ownership in Pinnacle Gas Services LLC to 80.5% upon Sixth Street Partners achieving certain return hurdles. M. Jay Allison, CEO of Comstock Resources, and Zack Winegrad, Partner at Sixth Street Partners, both commented on the strategic importance of the deal.