Policy Uncertainty Forces Comet Ridge to Delay and Dilute Mahalo Acquisition

Acquisition Terms Reshaped Amid Market Uncertainty

Comet Ridge Limited (ASX:COI) has restructured the terms of its acquisition of Santos QNT Pty Ltd’s 42.86% stake in the Mahalo Gas Project, responding to fresh uncertainty around the Federal Government’s yet-to-be-detailed gas reservation policy. The revised deal slashes the upfront cash component to $18 million, supplemented by $10 million worth of Comet shares issued to Santos, while pushing the completion deadline back by three months to late September 2026. This adjustment aims to give Comet more runway to secure funding on terms that protect shareholder value.

Managing Director Tor McCaul praised Santos for its cooperative stance, noting that while Mahalo is not a priority for the oil and gas giant, its support is crucial for Comet’s ambition to bring the project into production amid Australia’s tightening gas supply landscape. The company’s move to full ownership of the Mahalo Gas Hub consolidates its position in a strategically important segment of the East Coast gas market, with 2P Reserves and 2C Resources now totaling 677 petajoules.

Strategic Benefits of Full Ownership

Securing 100% ownership unlocks multiple advantages for Comet Ridge. It enables optimisation of development sequencing and capital efficiency by integrating Mahalo North and Mahalo East resources into a cohesive plan. The increased scale also offers flexibility in gas delivery and cost management, while full operational control facilitates strategic decision-making tailored to market demands. These benefits come as Comet pushes forward with near-complete Front End Engineering Design (FEED) work and holds production licences covering key acreage near Gladstone.

The acquisition’s contingent payments, potentially adding up to $30 million, hinge on achieving gas sales milestones of 10, 20, and 30 petajoules, aligning vendor returns with project performance. Shareholder approval for the $10 million share issuance to Santos is scheduled before 30 September 2026, a condition precedent alongside funding arrangements extended to mid-August 2026.

Market Suspension Lifted as Update Released

Trading in Comet Ridge shares was suspended on 19 May 2026 pending this acquisition update, a move designed to protect investors from trading on incomplete information. The ASX lifted the suspension immediately following the announcement, restoring liquidity to the stock. This follows a series of regulatory approvals and engineering milestones that have steadily advanced the Mahalo Gas Hub’s development, including environmental clearances and pipeline design nearing completion.

Comet Ridge’s recalibrated acquisition terms reflect a pragmatic response to a shifting policy and funding environment, allowing the company to maintain momentum while managing financial risk. The company’s broader strategy to transition its Mahalo assets into meaningful east coast gas supply remains intact, with sequential development options across its 100%-held permits offering further upside potential.

As the market awaits clarity on the Federal Government’s gas reservation policy and Comet’s funding execution, the company’s ability to finalise this acquisition on favourable terms will be pivotal for its role in addressing Australia’s gas supply challenges.

Comet Ridge’s acquisition update builds on earlier progress, including its halted March share placement and recent engineering design and environmental approvals that underpin the Mahalo Gas Hub’s development trajectory.