CRK: Sixth Street strategic investment affirms embedded midstream value.

Research evidence excerpt

CRK: Sixth Street strategic investment affirms embedded midstream value.

Oil & Gas Exploration & Production

FLASH

FLASH: COMSTOCK RESOURCES, INC. (CRK) June 15, 2026

CRK: Sixth Street strategic investment affirms embedded Rating:

midstream value. Outperform

Price:

Pinnacle sell down places $1.6bn valuation marker on remaining 73% ownership. $13.05

More specifically, CRK has sold a 27% interest in Pinnacle Midstream to Sixth Street, Price Target:

$25for $600mm. Proceeds will be utilized to extinguish $445mm in preferred (owned by % Upside:

Quantum) plus accrued dividends as well other indebtness related to the midstream 91.6%

business. While management had telegraphed it was seeking a transaction, we

Source: FactSet, Wolfe Research

view the announced deal as directionally positive on the elimination of the high- Priced as of 06/15/26

cost preferred (12.5% distribution), saving ~$40mm annually, and CRK's increased

ownership in Pinnacle to 73% — ahead of what would have been a step-up in

the preferred distribution rate that capped CRK's interest at 70%. It also brings in

another party that helps to provide confidence in the future outlook of the Western

Haynesville despite weak natural gas spot and curve prices.

Carlos Escalante

The implied midstream valuation suggests CRK's shares could be misvalued. While cescalante@wolferesearch.com

we are hesitant to say that the current share price reflects no value for Pinnacle, if 832-810-9912

View CRK Model

we assume strip pricing of $3.70/Mmbtu, a 10% WACC, and a 40% initial decline

with no margin uplift from its prospective power deal, we estimate the company's Doug Leggate

dleggate@wolferesearch.com

upstream business is worth $5.3bn after Net debt of ~$3.0bn, or $18/sh. Based on (832) 810-9915