Comstock sells 27% stake in Pinnacle Gas Services to Sixth Street

Summary

Comstock Resources sold a 27% non-controlling equity interest in its midstream subsidiary Pinnacle Gas Services to funds managed by Sixth Street for $600 million, valuing Pinnacle at a $2.2 billion enterprise value, with proceeds used to eliminate preferred equity, pay down debt, and fund the company's Western Haynesville natural gas development serving growing Gulf Coast and data center demand.

Market Impact

The transaction validates the value of Comstock's Western Haynesville natural gas acreage—one of the largest undeveloped gas resources—amid rising demand from data centers, hyperscalers, LNG, and electrification. Comstock retains a 73% controlling interest (~$1.6 billion) and continues operating Pinnacle under a management agreement, while the deal reduces Pinnacle's fixed charges by roughly $40 million annually through debt and preferred equity extinguishment. Sixth Street's stake could fall from 27% to 19.5% if return thresholds are met, raising Comstock's interest to 80.5%. The investment reflects how infrastructure capital is funding midstream gas assets to serve the Texas Power Generation Hub and broader electrification-driven demand, with Sixth Street emphasizing critical energy infrastructure for data-center-driven demand growth.

Why It Matters

The Comstock-Sixth Street deal illustrates how infrastructure capital is flowing into midstream natural gas assets to serve surging electricity demand from data centers and LNG, validating undeveloped gas resources positioned near growing Gulf Coast demand.

Key Points

• Comstock Resources sold a 27% non-controlling equity interest in midstream subsidiary Pinnacle Gas Services to Sixth Street funds for $600 million, valuing Pinnacle at a $2.2 billion enterprise value
• Comstock retains a 73% controlling interest valued around $1.6 billion and will continue operating Pinnacle under a management services agreement
• Proceeds eliminated all preferred equity at Pinnacle for $445 million plus accrued dividends, paid down debt, and reduced Pinnacle's fixed charges by approximately $40 million per year
• If Sixth Street meets return thresholds, its stake falls from 27% to 19.5% and Comstock's rises to 80.5%; Pinnacle serves the Western Haynesville and the planned Texas Power Generation Hub

Key Entities

Evidence

Comstock Resources has divested a 27% non-controlling common equity interest in its midstream subsidiary Pinnacle Gas Services to funds managed by Sixth Street for $600m. The transaction values Pinnacle Gas Services,...

Supports: Confirms the stake sale, price, and Pinnacle valuation

Following the sale, Comstock will retain a 73% controlling equity interest valued at around $1.6bn. The company will continue to manage and operate Pinnacle under a management services agreement.

Supports: Documents Comstock's retained stake and operating role

The transaction will decrease Pinnacle Gas Services' fixed charges by around $40m per year due to the extinguishment of debt and preferred equity.

Supports: Grounds the financial benefit from debt and preferred equity extinguishment