What the Completion of the Mahalo 100% Acquisition and 361 PJ 2P Reserve Position Mean for Comet Ridge

Sonal Goyal

29 September 2026 10:54 PM AEST

What the Completion of the Mahalo 100% Acquisition and 361 PJ 2P Reserve Position Mean for Comet Ridge

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Comet Ridge Limited (ASX:COI) announced on 24 August 2026 the completion of the Acquisition of Santos QNT Pty Ltd's 42.86% interest in the Mahalo Gas Project, making Comet Ridge the 100% owner and operator of the entire Mahalo Gas Hub. The transaction was originally announced in December 2025 and amended in May 2026. Cash consideration of $24.42 million was paid to Santos and 83.78 million Comet Ridge shares were issued as the up-front consideration. A further $30 million in contingent payments is payable in three equal tranches as cumulative gas sales reach 10, 20, and 30 PJ, deferring a significant portion of the consideration until the project is generating cash flow. Comet Ridge now holds 361 PJ of 2P Reserves and 676 PJ of combined 2P Reserves and 2C Contingent Resources across the 1,850 km² Mahalo Gas Hub.

Transaction Terms

The final cash consideration of $24.42 million was determined after including agreed past costs, licence fees, interest, and other adjustments. Comet Ridge issued 83.78 million shares to Santos, priced on a 10-day VWAP prior to settlement. The $30 million contingent payment is structured in three equal tranches at 10, 20, and 30 PJ of cumulative gas sales — aligning remaining consideration with production milestones and deferring the balance until the project is generating strong positive cash flow.

Mahalo Gas Hub and 100% Ownership Benefits

Comet Ridge now holds 100% ownership and operatorship of the Mahalo Gas Hub, comprising approximately 1,850 km² across the Mahalo Gas Project, Mahalo North, Mahalo East, Mahalo Far East, and Mahalo Far East Extension permits. The total resource is 361 PJ of 2P Reserves and 676 PJ of combined 2P and 2C. The project is in Queensland's Bowen Basin, within reach of both the domestic gas market and the Gladstone LNG precinct. Jemena recently received a Pipeline Licence to connect Mahalo into existing gas network infrastructure. Managing Director Tor McCaul described sole ownership as removing the joint venture constraint that had previously complicated funding and offtake discussions.

About the Company

Comet Ridge Limited is an ASX-listed Australian energy company focused on the development of Natural Gas resources for the east coast Australian market. Following the Mahalo acquisition, the company holds one of the few development-ready gas positions on the east coast in a gas-supportive Queensland jurisdiction. Comet Ridge is progressing toward a Final Investment Decision for the Mahalo Gas Hub.

Risks

The project remains pre-FID. Achieving FID requires binding offtake agreements, project financing, and regulatory approvals — none yet in place.

Comet Ridge issued 83.78 million shares to Santos, diluting existing shareholders. Further Equity may be required for the development capital structure.

The $30 million contingent payment to Santos is an obligation payable from production milestones — it creates a deferred Liability contingent on project success.

East coast gas reservation policy uncertainty was specifically cited by management as having weighed on sector sentiment. Adverse policy could affect Mahalo's commercial terms.

Queensland CBM development requires environmental approvals, water management planning, and community engagement — all of which can extend development timelines.

What to Watch Ahead

Gas offtake agreement announcements — securing binding customers is the key commercial prerequisite for FID and project financing.

Project financing progress — discussions with banks, infrastructure funds, or government financing vehicles for a Queensland gas development.

Jemena pipeline connection milestones — the Pipeline Licence has been awarded and physical connection to the gas network determines market access options.

FID announcement — Comet Ridge describes optimising project Economics as a 100% owner in combination with adjacent assets, with FID as the near-term milestone.

Any announcement of adjacent asset integration or synergies between Mahalo Gas Hub permits and other Comet Ridge Queensland holdings.

FAQs

Q: Why does 100% ownership matter so much for Mahalo's FID prospects?

A: In a joint venture, all material development decisions — including FID, capital structure, offtake contracts, and timing — require partner agreement. Disagreements between JV partners can delay or prevent FID even when one partner is ready to proceed. As 100% owner, Comet Ridge can make all development decisions unilaterally, negotiate offtake and financing on its own terms, and set its own development timeline without requiring another party's consent. Managing Director Tor McCaul specifically identified the JV structure as a prior constraint in funding and offtake discussions.

Q: What is the Jemena Pipeline Licence and why does it matter?

A: Jemena recently achieved a Pipeline Licence to connect the Mahalo Gas Hub into the existing Queensland gas network infrastructure — a key regulatory milestone that confirms a commercial pipeline route exists between Mahalo and the broader Queensland gas transmission grid. Without a confirmed pipeline connection, Mahalo gas could only reach customers in limited ways. The Jemena pipeline licence provides optionality over whether gas flows to domestic east coast customers, to the Wallumbilla hub, or is ultimately exported via the Gladstone LNG facilities.

Q: What does 361 PJ of 2P Reserves mean in practical terms?

A: 361 petajoules (PJ) of 2P (Proved plus Probable) Reserves represents a substantial volume of independently assessed, commercially recoverable gas at the Mahalo Gas Hub. For context, the entire Australian east coast domestic gas market consumes approximately 700-800 PJ per year across all sectors. Mahalo's 361 PJ of 2P could supply approximately 6-10 years of substantial contracted gas volumes to major industrial or energy customers, providing a strong commercial foundation for long-term gas supply contracts and project financing.

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