How Will Comet Ridge’s Full Control of Mahalo Gas Project Transform East Coast Supply?

Full Ownership and Operational Control

Comet Ridge Limited (ASX – COI) has announced a strategic acquisition that will see it take full ownership of the Mahalo Gas Project by purchasing Santos QNT Pty Ltd’s 42.86% interest. This transaction, valued at $40 million payable upon completion and supplemented by up to $20 million in contingent payments tied to production milestones, will elevate Comet Ridge’s stake from 57.14% to 100%. The acquisition is scheduled to complete either at the project’s Final Investment Decision (FID) or by 30 June 2026, whichever comes first.

With this consolidation, Comet Ridge will become the sole operator of the Mahalo Gas Hub, a significant portfolio of gas assets spanning approximately 1,850 square kilometres in Queensland. This simplified ownership structure is expected to streamline decision-making and development planning, enabling the company to optimise the project’s full potential.

Substantial Increase in Gas Reserves

The acquisition will increase Comet Ridge’s certified 2P Reserves and 2C Resources to 677 petajoules (PJ), a substantial boost that enhances the company’s standing in the competitive east coast gas market. The Mahalo Gas Hub includes the Mahalo Gas Project itself, plus adjacent Mahalo North and Mahalo East blocks, all of which will now be under unified control.

These reserves are notable for their high quality, low CO2 content, and proximity to existing infrastructure such as the Jemena pipeline to Gladstone, which is approximately 80 kilometres away. The shallow depth of the coal seams targeted also promises lower drilling and operational costs, factors that contribute to the project’s commercial attractiveness.

Strategic and Commercial Implications

Comet Ridge’s Managing Director, Tor McCaul, highlighted the strategic benefits of the acquisition, emphasizing the ability to optimise development sequencing and capital efficiency across the entire Mahalo Gas Hub. The company aims to leverage its full ownership to ensure the project makes a meaningful contribution to Queensland’s domestic gas supply, a critical need given the current market pressures on east coast gas availability.

By integrating the Mahalo North and East resources, Comet Ridge expects to achieve economies of scale and operational flexibility, which should translate into cost savings and improved project economics. The company is also in advanced discussions with potential funding partners to finance the acquisition and subsequent development, with equity issuance among the considered options.

Funding and Next Steps

While the acquisition agreement includes a $2 million non-refundable deposit and conditions precedent such as funding arrangements and potential shareholder approvals, Comet Ridge has expressed confidence in securing the necessary capital. The company has engaged Taylor Collison Limited as financial advisor and Corrs Chambers Westgarth as legal counsel to support the transaction.

Completion is contingent on the Final Investment Decision or the 30 June 2026 deadline, and Comet Ridge plans to continue advancing engineering design work, which Santos has already progressed into Front End Engineering Design (FEED). The transition to operator status is expected in early 2026, positioning Comet Ridge to drive the project forward.

Positioning for the East Coast Gas Market

The Mahalo Gas Project’s attributes, licensed development-ready status, high-quality gas, and low operational complexity, make it a compelling asset in Australia’s energy landscape. With full ownership, Comet Ridge is better placed to respond to domestic demand, particularly as east coast gas markets face tightening supply conditions.

Investors and market watchers will be keen to see how the company manages funding, executes the FID, and delivers on production milestones that trigger contingent payments. The acquisition marks a pivotal step in Comet Ridge’s growth strategy and its role in Australia’s energy transition.