Mahalo East’s Reserve Upgrade Raises Questions on Development Timing and Market Access

A Significant Step for Mahalo East

Comet Ridge Limited (ASX – COI) has announced a major upgrade to its gas reserves portfolio with the independent certification of 51.8 petajoules (PJ) of 2P reserves and 118.5 PJ of 3P reserves at its wholly owned Mahalo East Project (ATP 2061) in Queensland’s Bowen Basin. This certification marks a pivotal transition from contingent resources to proven reserves, underscoring the project’s commercial viability and strategic importance within the Mahalo Gas Hub.

The Mahalo East Project, located between Rolleston and Blackwater, benefits from extensive drilling, including vertical and lateral wells, and a six-month production test completed earlier this year. These activities, supported by a $5 million grant from the Queensland Government’s Frontier Gas Exploration Grants Program, have provided robust data that enhanced reservoir models and confirmed higher gas content and permeability than previously estimated.

Strengthening the Mahalo Gas Hub Portfolio

With this certification, Comet Ridge’s net 2P reserves across the Mahalo Gas Hub now approach 250 PJ, while 3P reserves exceed 530 PJ. The addition of Mahalo East’s reserves represents a 27% increase in 2P reserves and a 29% uplift in 3P reserves, significantly bolstering the company’s east coast gas supply credentials. Managing Director Tor McCaul highlighted the enhanced geological understanding gained from recent drilling and testing, which has materially improved confidence in the project’s development potential.

Importantly, the Mahalo East reserves are situated close to existing and planned infrastructure, including the Mahalo JV Gas Project operated jointly with Santos QNT Pty Ltd. This proximity is expected to facilitate future tie-ins, reducing development costs and accelerating time to market once environmental approvals and commercial agreements are secured.

Next Steps and Market Implications

While the certification confirms the technical and commercial viability of Mahalo East’s gas reserves, Comet Ridge has yet to sanction full development. The company plans to pursue environmental approvals and finalize transport and gas sales agreements, leveraging the region’s growing demand for domestic gas amid east coast supply constraints.

The project’s development strategy involves drilling approximately 13 wells under the 2P case, expanding to 33 wells for the 3P scenario, with onsite gas-powered electricity generation to optimize operational efficiency. Given the tight gas market and supportive funding environment, Comet Ridge anticipates multiple financing pathways, including equity, debt, or pre-sales.

As Australia’s east coast grapples with energy security and transition challenges, Mahalo East’s emergence as a material gas reserve adds a promising new source of cleaner energy and industrial feedstock. The project’s progress will be closely watched by investors and policymakers alike, as it could play a meaningful role in stabilizing domestic gas supply and prices.