Highlights

  • Comet Ridge Limited (ASX:COI) is working towards acquiring Santos QNT’s 42.86% interest in the Mahalo Gas Project, with completion targeted by 30 September 2026.
  • The company secured $40 million in Placement commitments and completed a share purchase plan to support the acquisition.
  • Mahalo Gas Hub contains 677 PJ of 2P reserves and 2C contingent resources across the company’s project areas.
  • Pipeline licence approval for Jemena’s Mahalo Gas Hub Pipeline supports future connection to Queensland gas infrastructure.

A small Brisbane gas developer has spent the winter trying to buy out a major. Comet Ridge Limited (ASX:COI) secured $40 million in placement commitments in late June, closed a share purchase plan in July, and put the enabling resolutions to shareholders at a general meeting in Brisbane on 6 August. It is now working to a funding satisfaction date of 14 August 2026 on its agreement to acquire Santos QNT's 42.86% interest in the Mahalo Gas Project, with completion due by 30 September 2026. Clear those two dates and Comet Ridge owns 100% of the Mahalo Gas Hub in central Queensland. That is the shift the market is focused on.

Company and market context

Comet Ridge Limited (ASX:COI) is an explorer and developer, not yet a producer. Its coal seam gas acreage sits in the Bowen Basin in central Queensland, grouped under the Mahalo Gas Hub banner as three pieces: the Mahalo Gas Project, held through petroleum leases 1082 and 1083 plus three potential commercial areas; Mahalo North, covering Lease applications 1128 and 1132 and ATP 2048; and Mahalo East, covering ATP 2061. The northern and eastern blocks are already wholly owned. The Gas Project is the piece Santos has held a minority stake in.

The strategic logic is geography. Mahalo sits close to transmission infrastructure feeding both the domestic east coast market and the Gladstone LNG trains, in a market where southern-state Supply adequacy remains a policy focus. Comet Ridge is one of a group of developers with reserves booked, environmental approvals granted and a signed foundation customer, but no revenue.

The latest catalyst

The sequence started on 17 December 2025, when Comet Ridge Limited (ASX:COI) announced a binding, conditional agreement to acquire Santos QNT's 42.86% share of the Mahalo Gas Project. The transaction was revised on 21 May 2026 after the company cited uncertainty created by Federal Government signalling on a gas reservation policy that had not been released in full.

Under the revised terms, the upfront cash component was cut to $18 million, $10 million is payable in shares subject to Shareholder approval, and up to $30 million is contingent on gas sales milestones at 10 PJ, 20 PJ and 30 PJ. The funding deadline moved to 14 August 2026, with completion targeted for 30 September 2026.

Three developments followed quickly. On 24 June the Queensland Government awarded the pipeline licence for Jemena's Mahalo Gas Hub Pipeline, roughly 85 kilometres plus a 6-kilometre connection, linking the hub to the Queensland Gas Pipeline and the Santos GLNG transmission pipeline. The same day, the $40 million placement was announced. On 30 June the company reset its gas sales agreement with Queensland government-owned CleanCo.

What the numbers show

The raise was priced at 10.25 cents, a 21.2% discount to the 13.0 cent close on 19 June 2026, with one free unlisted option per two securities issued, exercisable at 15.0 cents and expiring 30 June 2028. Tranche 1 raised $30.6 million and settled on 30 June; Tranche 2 of $9.4 million required shareholder approval. Shares on issue, 1,196,438,720 before the raise, are expected to reach about 1.64 billion.

Cash was $7.1 million at 31 December 2025 and $2.63 million at 31 March 2026; the June 2026 quarterly reported $27.7 million unaudited. Debt is a $9.5 million Facility from PURE Asset Management at 12% per annum, maturing 30 June 2027.

Comet Ridge Limited (ASX:COI) reports 677 PJ of 2P reserves and 2C contingent resources across the hub. Of that, the Mahalo Gas Project accounts for 152 PJ of 2P and 332 PJ on a 2P-plus-2C basis; Mahalo North holds 43 PJ of 2P and Mahalo East 52 PJ. Mahalo North is approved for up to 68 wells, with its Queensland environmental authority granted in August 2024. The stated sales gas target is roughly 28 TJ per day, expanding to about 70 to 75 TJ per day. The CleanCo contract covers 21 to 25 PJ, with take-or-pay reduced from 90% to 80% under the June reset and the base price unchanged.

Why investors are watching

The Investment case centres on consolidation of the Mahalo Gas Hub and the potential transition from developer to gas supplier. Full ownership of the Mahalo Gas Project would provide Comet Ridge Limited (ASX:COI) with control over development decisions, the FEED-to-FID pathway and future commercial arrangements across the project.

The payment structure reduces the immediate upfront funding requirement. Under the revised agreement, completion consideration includes $18 million in cash and $10 million in shares, with up to $30 million linked to future gas sales milestones. The pipeline development pathway is also progressing, with Jemena managing pipeline FEED and holding the pipeline licence for the connection from the Mahalo Gas Hub to existing gas infrastructure.

What could drive the next move

The nearest milestones are the 14 August 2026 funding satisfaction date and the 30 September 2026 completion deadline for the Santos QNT transaction. Beyond completion, Comet Ridge Limited (ASX:COI) expects further progress on commercial arrangements, Upstream FEED activities and the pathway towards a final investment decision.

The CleanCo agreement remains another important development point, with future financing, gas transportation and processing arrangements required as the project progresses towards the planned supply timeline. The company’s ability to complete infrastructure agreements, progress FEED and move towards development approvals will determine the next stages of the Mahalo Gas Hub.

Risks

Dilution remains a key consideration. Shares on issue are expected to increase following the placement and share purchase plan, while additional consideration shares and attaching Options may further affect existing shareholders. The lower-than-targeted share purchase plan participation also highlights limited retail participation at the offer price.

Execution risk remains material. Comet Ridge Limited (ASX:COI) does not yet generate production revenue, carries a $9.5 million debt facility maturing on 30 June 2027 at a 12% coupon, and must progress drilling, infrastructure development and commercial arrangements before production. The CleanCo agreement includes production milestones, creating additional delivery requirements.

Policy changes remain another factor, with the company previously highlighting uncertainty around potential gas reservation settings. Changes to market rules, funding conditions or east coast gas Demand could influence future development decisions.

Outlook

Comet Ridge Limited (ASX:COI) has progressed financing, approvals and commercial arrangements required to move towards full ownership of the Mahalo Gas Project, but the company remains in the development phase without commercial gas production. Attention over the coming months is expected to focus on completion of the Santos acquisition, pipeline and upstream FEED progress, commercial agreements and the pathway towards a final investment decision. The 2030 CleanCo supply timeline highlights the extended development period before potential Revenue generation.