Key Takeaways

  • Recently Comet Ridge agreed to acquire Santos QNT's 42.86% interest in the Mahalo Gas Project, which would take it from 57.14% to 100% on completion.
  • In May 2026 the terms were renegotiated to softer terms: initial cash consideration reduced to A$18m plus A$10m in Comet Ridge scrip issued to Santos, plus up to A$30m in contingent payments tied to sales-gas milestones, with extended timelines.
  • Recently Comet Ridge launched a A$5m Share Purchase Plan at A$0.1025 per share, part of a larger raising of around A$40m, with a general meeting around recently and settlement in mid-August.
  • During 2025 the project advanced through an Upstream FEED managed by Santos and a Pipeline FEED managed by Jemena.
  • The acquisition remains subject to completion, approvals and funding, and Santos is transitioning from joint-venture partner to vendor and prospective shareholder.

Comet Ridge Limited (ASX: COI) is positioning for a potentially pivotal phase for its flagship Mahalo Gas Project, and it is doing so as Australia's gas policy landscape shifts. The central question, whether Mahalo could gain momentum, has a measured answer: Comet Ridge is moving toward full ownership of the project and is raising capital to support its plans, steps that could advance Mahalo, though the key acquisition remains subject to completion, approvals and funding.

For Comet Ridge (ASX: COI), a Queensland-focused gas developer, Mahalo is the centrepiece. In December 2025 the company agreed to acquire the remaining interest it did not already hold, and in May 2026 those terms were renegotiated to softer conditions. In July 2026 it launched a capital raising. Set against a national debate about east-coast gas supply, these developments frame a story about consolidating ownership of a potential new source of Queensland gas, tempered by the conditions that still need to be met.

For a company at Comet Ridge's stage, ownership consolidation and funding tend to go hand in hand. Acquiring a partner's interest increases both the potential rewards and the responsibilities that fall on a single company, and it typically requires capital to complete. That is why the December 2025 agreement, its May 2026 renegotiation and the July 2026 raising are best read as connected parts of a single effort rather than as separate events.

What has happened?

Several concrete steps have taken place. Recently, Comet Ridge agreed to acquire Santos QNT's 42.86% interest in the Mahalo Gas Project. On completion, this would take Comet Ridge from its existing 57.14% interest to 100% ownership of the project.

In May 2026, the terms of that acquisition were renegotiated to softer terms. The initial cash consideration was reduced to A$18m, plus A$10m in Comet Ridge scrip issued to Santos, plus up to A$30m in contingent payments. The contingent payments are structured in tranches tied to sales-gas milestones, after 10, 20 and 30 petajoules of sales gas, with extended timelines built into the arrangement.

Recently, Comet Ridge launched a A$5m Share Purchase Plan at A$0.1025 per share, forming part of a larger raising of around A$40m. A general meeting was scheduled for around recently, with settlement expected in mid-August.

Why the development matters

Moving toward 100% ownership of Mahalo matters because it would give Comet Ridge full control of its flagship asset. Full ownership can simplify decision-making and allow a company to capture the entirety of a project's potential value, though it also concentrates the associated risks and funding requirements on the acquirer.

The renegotiation to softer terms in May 2026 is significant. Reducing the initial cash consideration to A$18m and adding A$10m in scrip, alongside up to A$30m in contingent payments tied to sales-gas milestones, reshapes the near-term funding burden and links part of the consideration to future project performance. This structure can ease upfront pressure while aligning payments with milestones.

Contingent, milestone-linked consideration is a common feature of resource transactions. By tying up to A$30m of the price to the achievement of 10, 20 and 30 petajoules of sales gas, the structure means a portion of the payment is made only if the project delivers those volumes. For an acquirer, this can reduce the upfront cost and share some of the development risk with the vendor, though it also creates future obligations that arrive if and when the project succeeds.

The July 2026 capital raising matters because funding is one of the conditions attached to the transaction. Raising capital, including the A$5m Share Purchase Plan within a broader roughly A$40m raising, is part of assembling the resources needed to advance the project and complete the acquisition.

Company background and business model

Comet Ridge is a Queensland-focused gas developer. Its business centres on developing gas resources, with the Mahalo Gas Project in the Bowen Basin as its flagship. As a developer, the company's value is tied closely to the progress of its projects from appraisal through development toward potential production.

The Mahalo Gas Project sits within Queensland's established gas province, a region central to east-coast supply. For a developer, advancing a project through engineering and design stages is a key part of demonstrating its viability and moving toward a final investment decision.

Because development-stage companies typically invest ahead of generating production revenue, funding is a recurring theme. Capital raisings, partnerships and staged project milestones are all part of how such companies progress their assets, which is why the July 2026 raising and the structure of the Santos acquisition are so central to Comet Ridge's current position.

Comet Ridge (ASX: COI) project progress and the Santos transition

Project progress during 2025 provides important context. The Mahalo Gas Project advanced through two front-end engineering and design, or FEED, processes. An Upstream FEED was managed by Santos, and a Pipeline FEED was managed by Jemena. FEED is an engineering stage that helps define scope, cost and design ahead of a potential final investment decision, so completing these processes marks meaningful technical progress.

The role of Santos is evolving. Historically a joint-venture partner in Mahalo, Santos is transitioning from that role to become a vendor of its interest and a prospective shareholder in Comet Ridge, given the A$10m in scrip forming part of the renegotiated consideration. This transition reframes the relationship between the two companies around the project.

Taken together, the completed FEED processes and the reshaped ownership structure position Mahalo for a potential next phase. The Upstream and Pipeline FEED work addresses both the gas resource and the infrastructure needed to move gas to market, two elements essential to any development. However, progressing further depends on completing the acquisition and securing funding, conditions that remain outstanding.

The involvement of Jemena on the Pipeline FEED highlights the importance of infrastructure to any gas development. Even a well-understood resource cannot reach customers without a means of transport, so engineering the pipeline in parallel with the upstream work helps ensure the two elements are aligned. Completing both FEED processes therefore represents progress on the full pathway from resource to market, even as the final decisions and funding remain ahead.

Strategic implications

Strategically, consolidating Mahalo under full ownership could allow Comet Ridge to pursue development on its own terms. Control over a flagship asset can support clearer planning and the ability to align the project with market opportunities as they emerge.

The timing intersects with a shifting policy backdrop. Australia's east-coast gas supply debate has intensified, and a mandatory east-coast gas reservation has been a prominent feature of that debate. In an environment focused on securing domestic supply, new sources of Queensland gas such as Mahalo could attract greater attention, though the extent of any benefit depends on the project reaching production and on prevailing market conditions.

The financing structure also carries strategic weight. By combining reduced upfront cash, scrip and milestone-linked contingent payments, the renegotiated deal spreads consideration over time and ties part of it to project performance. This can help a developer manage the balance between advancing a project and preserving financial flexibility.

The policy environment adds a layer of strategic context that is difficult to quantify but hard to ignore. When domestic gas supply is a prominent public concern, projects that could add new volumes tend to attract interest from potential customers, partners and policymakers. For Comet Ridge, that heightened attention could be helpful in advancing Mahalo, though it does not change the fundamental requirements of completing the acquisition, securing funding and executing the development.

Sector and competitive backdrop for Comet Ridge (ASX: COI)

Comet Ridge operates within Queensland's gas sector, a key contributor to east-coast supply. The broader market is shaped by the interplay between LNG exports and domestic demand, and by policy measures aimed at ensuring adequate domestic gas, including the reservation framework at the centre of recent debate.

As a developer, Comet Ridge sits alongside larger producers and other project proponents across the region. Its competitive position rests on the quality and progress of the Mahalo Gas Project and its ability to fund and execute development. Relationships with infrastructure providers, such as Jemena on the Pipeline FEED, are part of the picture, as pipelines are essential to moving gas to market.

The evolving relationship with Santos, moving from partner to vendor and prospective shareholder, illustrates how positions in such projects can change. For Comet Ridge, the opportunity lies in advancing a potential new supply source at a time of heightened focus on domestic gas, while the challenge lies in meeting the funding and completion conditions.

Potential opportunities

Several potential opportunities are visible. Full ownership of Mahalo, on completion, would give Comet Ridge control of a flagship asset and the ability to capture its full potential value.

The completed Upstream and Pipeline FEED processes represent technical progress that could support a move toward a development decision, subject to funding and other conditions. In a policy environment focused on domestic supply, a new Queensland gas source could be well placed to contribute, though this depends on the project reaching production.

The financing arrangements offer flexibility. Milestone-linked contingent payments of up to A$30m tie part of the consideration to future sales-gas volumes, aligning payments with performance. The July 2026 capital raising is intended to help fund the company's plans. Realising any of these opportunities depends on execution, completion of the acquisition and market conditions.

Material risks and uncertainties

The risks are significant and warrant balance. Most fundamentally, the acquisition of Santos QNT's 42.86% interest remains subject to completion, approvals and funding. Until these conditions are satisfied, full ownership is not assured.

Funding risk is prominent for a development-stage company. The July 2026 raising, including the A$5m Share Purchase Plan within a roughly A$40m target, reflects the need for capital, and the ability to raise sufficient funds on acceptable terms is not guaranteed. Capital raisings can also dilute existing shareholders.

Project and execution risk applies to Mahalo. Advancing from FEED toward development and production involves technical, cost and timing challenges, and a final investment decision would depend on multiple factors. Commodity prices, regulatory and approval processes, and the practical implementation of gas policy all add uncertainty. None of these factors points to a predetermined outcome.

What investors may watch next

Investors may watch several signposts. The first is completion of the Santos QNT acquisition, including satisfaction of approvals and funding conditions, and the outcome of the general meeting scheduled around 6 August 2026 with settlement expected in mid-August.

A second is the outcome of the capital raising, including the A$5m Share Purchase Plan at A$0.1025 per share within the broader roughly A$40m raising, and how the funds are applied.

Third is project progress at Mahalo following the Upstream and Pipeline FEED work, including any steps toward a development decision. Developments in Australia's east-coast gas policy will also form part of the context for how the market assesses Comet Ridge (ASX: COI).

Balanced conclusion

Comet Ridge (ASX: COI) has taken clear steps that could give its Mahalo Gas Project fresh momentum: an agreement to move toward 100% ownership, renegotiated to softer terms in May 2026, and a capital raising launched in July 2026, all set against a shifting east-coast gas policy backdrop that has sharpened focus on domestic supply.

Balanced against this are real conditions and risks. The acquisition remains subject to completion, approvals and funding, and as a development-stage company Comet Ridge faces funding, execution and market uncertainties. On the available facts, the picture is one of a Queensland developer working to consolidate and advance its flagship asset at a notable moment for gas policy, with the outcome dependent on meeting the conditions still ahead.