(Updates with the latest stock price movement in the headline and first paragraph.)
Comstock Resources (CRK) shares rose 9.3% in Tuesday trading after the company said it entered into a letter of intent under which the State Oil Company of the Azerbaijan Republic, or SOCAR, would acquire interests in certain of the company's Haynesville assets for $1.65 billion in cash.
The assets include a non-operated working interest representing 20% of Comstock's interest in its Legacy Haynesville upstream project, a non-operated working interest equal to 15% of Comstock's interest in its Western Haynesville upstream assets, and 15% of Comstock's 73% ownership interest in Pinnacle Gas Services, the company said.
SOCAR's interest in the Western Haynesville assets would fall to 7.5% after five years, and once SOCAR achieves a 15% return on its investment, according to Comstock.
The letter of intent binds the parties to negotiate a final deal by Oct. 31, the company said.
The deal is targeted to close by year-end, subject to negotiations, customary conditions and required approvals, Comstock said.
Comstock plans to use proceeds from the deal to reduce debt, the company said.
Price: $15.80, Change: $+1.37, Percent Change: +9.49%