Comstock Resources Sells Minority Equity Interest in Midstream Subsidiary

Comstock Resources, Inc. has sold a 27% non-controlling common equity interest in its midstream subsidiary, Pinnacle Gas Services LLC, to funds managed by Sixth Street for $600 million. Comstock retains a 73% controlling interest and will continue to manage Pinnacle. The proceeds were used to extinguish preferred equity, retire indebtedness, cover transaction costs, and for working capital. This transaction de-leverages Comstock's balance sheet and is expected to reduce Pinnacle's annual fixed charges by approximately $40 million. The investment values Pinnacle at a $2.2 billion enterprise value, confirming the value of Comstock's midstream infrastructure and Western Haynesville acreage. Comstock's ownership in Pinnacle may increase to 80.5% under certain conditions, while Sixth Street's would decrease to 19.5%. Comstock will maintain operational control of Pinnacle.