Key Highlights

  • Comet Ridge (ASX:COI) is assessing the proposed Domestic Gas Reservation Scheme as it progresses the Mahalo Gas Hub toward a final investment decision targeted for mid-2027.
  • The company completed the acquisition of the remaining 42.86% interest in the Mahalo joint venture on 21 August 2026, securing 100% ownership of the 1,847-square-kilometre project.
  • Mahalo holds approximately 361 petajoules (PJ) of 2P reserves and 725 PJ of 3P reserves, with first commercial gas targeted for 2029.
  • The proposed reservation framework introduces regulatory considerations, while pipeline agreements, production tenure, financing and binding gas sales contracts remain important development requirements.

Comet Ridge Limited (ASX:COI) is an Australian coal seam gas exploration and development company focused on Queensland's Bowen and Mahalo gas assets. Following its acquisition of the remaining interest in the Mahalo joint venture, the company now controls 100% of the Mahalo Gas Hub. The proposed federal Domestic Gas Reservation Scheme introduces additional commercial and regulatory considerations as Comet Ridge (ASX:COI) progresses its development plans. With a final investment decision targeted for mid-2027 and first gas anticipated in 2029, the company's immediate priorities include securing the necessary approvals, commercial arrangements and financing for the initial development stage.

How Could the Domestic Gas Reservation Scheme Affect Mahalo?

Australia's proposed Domestic Gas Reservation Scheme is designed to increase gas availability for domestic consumers by introducing supply obligations for liquefied natural gas exporters.

The proposed framework would require LNG exporters to make gas available to the domestic market, with obligations calibrated to market requirements.

The framework also contains provisions intended to recognise additional gas production, potentially creating commercial opportunities for new upstream gas developments.

Comet Ridge (ASX:COI) has indicated that gas produced from Mahalo could qualify as additional gas under the proposed arrangements.

This interpretation is relevant because the project represents a potential new source of supply rather than existing commercial gas production.

However, the company's interpretation does not constitute a final regulatory determination.

The eventual implications for Mahalo will depend on the legislation's final provisions and the commercial arrangements negotiated with prospective gas buyers.

What Is the Current Status of the Proposed Reservation Legislation?

The Australian Government released exposure-draft legislation for the Domestic Gas Reservation Scheme on 10 September 2026.

The legislation was subsequently introduced into Parliament on 14 October 2026, with a parliamentary committee report scheduled for 11 November 2026.

Under the proposed implementation timetable, preparatory licensing arrangements would commence in January 2027, followed by domestic gas supply obligations from January 2028.

The scheme principally targets LNG exporters rather than automatically imposing equivalent obligations on every upstream gas producer.

For Comet Ridge (ASX:COI), the distinction matters because Mahalo's commercial strategy includes supplying gas to domestic buyers and potentially companies operating in Queensland's LNG export industry.

Nevertheless, the regulatory framework remains subject to parliamentary consideration and possible amendments.

Any changes affecting the treatment of additional gas supplies could influence negotiations and the commercial structure of future sales agreements.

How Does Full Ownership Support Mahalo's Development Strategy?

Comet Ridge (ASX:COI) completed the acquisition of the remaining 42.86% interest in the Mahalo joint venture on 21 August 2026.

The transaction increased its ownership of the Mahalo Gas Hub to 100%, consolidating approximately 1,847 square kilometres of project acreage under a single owner.

This ownership structure allows the company to coordinate development planning, commercial negotiations and future capital allocation across its Mahalo assets.

The project contains approximately 361 PJ of 2P reserves, 725 PJ of 3P reserves and 515 PJ of 3C contingent resources.

Of the 2P reserve base, approximately 74% is located within petroleum leases PL 1082 and PL 1083.

These reserves provide the resource foundation for Mahalo's proposed production development.

However, the conversion of reserves into commercial production remains dependent on infrastructure construction, funding and regulatory approvals.

What Are the Proposed Production Stages at Mahalo?

Comet Ridge (ASX:COI) intends to develop the Mahalo Gas Hub through a staged production programme.

Stage 1A involves approximately 50 well sets and initial gas compression capacity of around 50 terajoules per day (TJ/d).

Subsequent development stages could increase compression capacity to approximately 70 TJ/d, subject to operational requirements and commercial demand.

A longer-term Stage 2 development concept includes pipeline capacity of up to 100 TJ/d.

The company has also incorporated produced-water management into its initial development design, including a proposed reverse-osmosis treatment facility with capacity of approximately 1.5 megalitres per day.

These development stages are intended to progressively increase production while aligning expenditure with contracted gas demand.

However, capacity targets do not represent confirmed production volumes, and expansion beyond the initial stage will require further investment decisions.

How Important Are Gas Sales Agreements and Pipeline Infrastructure?

Comet Ridge (ASX:COI) has progressed a gas sales agreement with CleanCo Queensland covering approximately 21–25 PJ over seven years.

The agreement remains subject to conditions precedent, meaning its full commercial implementation depends on the satisfaction of outstanding requirements.

Assuming 25 PJ is supplied under the agreement, approximately 336 PJ of the company's 2P reserves would remain uncontracted.

This provides scope for additional gas marketing arrangements, although reserve availability does not guarantee future sales.

The company has also completed front-end engineering design for an approximately 80-kilometre pipeline connecting Mahalo to existing regional gas infrastructure.

Commercial negotiations concerning a build-own-operate structure for the pipeline remain ongoing.

The pipeline is an important component of the development because it would provide a connection between the project's planned production facilities and downstream gas markets.

Securing binding transportation arrangements and additional gas sales agreements will therefore be relevant to the proposed final investment decision.

What Is Comet Ridge's (ASX:COI) Financial Position?

Comet Ridge (ASX:COI) completed a capital raising during the June 2026 quarter, securing approximately AUD 40mn through a placement.

The company also raised approximately AUD 0.88mn through a share purchase plan.

These proceeds were intended to support the acquisition of additional Mahalo interests, project development activities and ongoing working capital requirements.

The funding provides capital for activities leading toward the final investment decision.

However, the company has not yet announced the completion of financing arrangements covering the full Stage 1A development.

Additional capital requirements will depend on the final project configuration, construction costs, infrastructure ownership arrangements and commercial commitments.

The proposed gas reservation framework may also influence the commercial assumptions used in financing discussions, particularly where future gas sales could involve LNG exporters.

What Are the Main Regulatory and Development Risks?

Comet Ridge (ASX:COI) faces uncertainty regarding the final structure and implementation of the proposed Domestic Gas Reservation Scheme.

Although the company considers Mahalo gas potentially eligible for treatment as additional gas, that position remains subject to the final regulatory framework.

The project also requires the granting of petroleum lease PLA 1128 before the planned final investment decision.

Other outstanding requirements include financing, pipeline commercial arrangements and additional binding gas sales commitments.

Construction expenditure, drilling performance and produced-water management introduce further operational considerations.

Delays involving any of these matters could affect the company's targeted development schedule.

Moreover, future gas prices and customer demand will influence the economics of subsequent production expansion.

What Are the Next Milestones for Comet Ridge (ASX:COI)?

The next regulatory milestone is the scheduled parliamentary committee report on the proposed Domestic Gas Reservation Scheme on 11 November 2026.

Comet Ridge (ASX:COI) will also continue progressing commercial agreements, infrastructure negotiations and development approvals for the Mahalo Gas Hub.

The granting of PLA 1128 remains an important requirement ahead of the planned investment decision.

The company is targeting a final investment decision for Stage 1A in mid-2027, followed by first commercial gas production in 2029.

These dates remain development targets rather than confirmed operational outcomes.

Progress on financing, binding gas sales contracts and infrastructure arrangements will provide further information about whether the company can advance Mahalo within its proposed timetable.