Comet Ridge Accelerates Mahalo Gas Project with FEED Approval and $19.3M Cash Boost

Mahalo Joint Venture Advances to Upstream FEED

Comet Ridge, in partnership with Santos as the Development Operator, has approved the scope and budget for the Front End Engineering Design (FEED) phase of the Mahalo Joint Venture Gas Project. This upstream FEED covers the gas field, gathering system, compression, and water handling facilities, marking a critical step toward a final investment decision (FID) expected later in 2025.

The Mahalo JV's scale, with gross 2P reserves of 266 PJ and 3P reserves of 458 PJ, underpins the project's potential to supply gas to Queensland and broader east coast markets. The JV is also advancing pipeline infrastructure, with Jemena providing an amended FEED offer to construct a new 10-inch pipeline connecting the Mahalo Gas Hub to existing domestic and LNG export pipelines. This build-own-operate arrangement by Jemena will shift pipeline capital costs to operating tariffs, easing upfront expenditure for the JV.

Pilot Testing and Environmental Progress at Mahalo East and North

In parallel, Comet Ridge has commenced pilot testing at Mahalo East following the successful drilling of vertical and lateral wells funded largely by a $5 million Queensland Government grant. Early indications from coal sample gas desorption are encouraging, with laboratory analyses underway. The pilot aims to convert contingent resources into certified reserves, supporting future development plans.

At Mahalo North, Comet Ridge secured the Queensland Government's Environmental Authority for its Petroleum Lease application and is actively responding to federal EPBC Act information requests. Additional fieldwork, including groundwater monitoring and ecosystem assessments, is underway to satisfy regulatory requirements, a prerequisite for lease award and project advancement.

Strategic Positioning Amid East Coast Gas Supply Challenges

Comet Ridge's developments come at a pivotal time for Australia's east coast gas market, which faces declining traditional supplies from southern offshore fields and increasing demand, especially for gas-powered generation. The Australian Competition and Consumer Commission's December 2024 interim update highlights a looming supply shortfall and the need for new, reliable gas sources.

The Mahalo Gas Hub's proximity to key pipeline infrastructure near Gladstone and Wallumbilla positions Comet Ridge to play a vital role in alleviating supply constraints. The company's strategy to develop multiple project areas, including Mahalo North, East, Far East, and extensions, aims to deliver low-cost, low-CO2 gas to meet market needs.

Financial Health and Corporate Developments

Comet Ridge ended the December quarter with $19.3 million in cash, bolstered by a $12 million placement and government grants supporting exploration activities. The company maintains secured debt facilities with PURE Asset Management, with warrants that could inject further capital upon exercise.

Ongoing commercial discussions and due diligence with multiple parties indicate active efforts to secure project funding, equity partnerships, and gas sale agreements. However, these negotiations remain confidential and without guaranteed outcomes.

Payments to related parties during the quarter were consistent with executive and director remuneration, reflecting stable corporate governance.